8 May 2015

What's your class?

The February question for the 2015 Water Smarts Calender asked people to find their service class and compare the prices they paid (as homeowners) to the prices other classes (government, commercial) paid.

Note that farmers are NOT usually included in these comparisons because they do not usually buy (treated) water from utilities (they usually self-supply or get water from a irrigation district).

The answers from the few people who filled in this poll are interesting.

How do classes compare?
In Colombia the official name to an user is "subscriber." There are six residential subscriber classes (from 1 poorest to 6 richest, according to the quality of the house and neighborhood) and 3 non-residential classes: government, industrial and commercial. There are cross-subsidies with lower classes paying less than "economic cost." Residential class 4 and government pay cost.

I get water from a small semi-rural water district west of xx. There are 500+ homes and only a few commercial users. Base rate for water is $39.83/month plus $4.15/thousand gallons for the first 10,000 for residential and 38,000 for commercial. Rates escalate after that.
Do you pay more/less than non-residential classes?
  • Higher
  • Same
  • Much higher
  • Lower
  • Lower
These answers are not just interesting in revealing policy choices that favor one "class" over another. They also explain why users may use more or less water -- their water use is somehow special, in a political way.

Although some people think it's a good idea to subsidize poor people, I disagree. On theoretical grounds, I think it's better to give money to poor people.

On practical grounds, I worry that subsidies often go to the well-connected over the poor, especially when the REAL poor (in slums, favelas, etc.) are not even connected to the network. They may be willing to pay the full cost of service, but there's no legal way to charge them, and thus no financial reason to extend the network to their neighborhoods, leaving them at the mercy of tanker water sellers or dirty, self-collected water.

Bottom Line: All water users should be treated equally in getting access to and paying for utility water. The alternatives (subsidies to some, paid by others) just confuse people, invite corruption and encourage water waste.

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