Showing posts with label water managers. Show all posts
Showing posts with label water managers. Show all posts

19 August 2014

IB-NET's Bluebook on utility performance is available!

This book is by far the most useful publication relating to utility performance. Anyone at a utility in any country should buy it to understand how to measure performance and to see the rankings from utilities in 100+ countries. It's a bargain ($27 paper/$10 Kindle) when you consider the quality of its organized, analyzed and quantified data. You can learn even more from IB-NET's free online data bases.

Here's the publisher's blurb:
The International Benchmarking Network for Water and Sanitation Utilities of the World Bank’s Water and Sanitation Program (IBNET) has been involved in water sector monitoring since 1997. It has set a global standard for performance assessment of utilities, with information from more than 4,400 utilities from 135 countries. This edition of the Blue Book summarizes the water sector status from 2006 to 2011. It adopts the "IBNET Apgar" consolidated scoring system, which assesses a utility’s health based on indicators that reflect the utility’s operational, financial, and social performance, and a Water Utility Vulnerability Index (WUVI), a dynamic version of Apgar. Performance indicators of over 100 countries are featured in a statistical appendix. Since 2006, municipal water performance has improved despite accelerated urbanization and the impacts of the fuel, food, and financial crises. Overall coverage has increased, and piped water supply and wastewater services has become accessible to more people. Many operational and financial indicators have also shown improvements. An increasing number of utilities are operating in a corporate manner, and are actively handling water billing, collection, and water management through metering. Yet, since the financial crisis, coverage has not kept up with population growth due to a deceleration of investment in the sector. At the same time, labor and energy’s share in total costs has increased, suggesting that the decline in investment has been accompanied by delays in maintenance. The results show that rapid economic growth can have a positive effect on utilities’ performance, while improvements remain vulnerable to economic developments such as the fuel and financial crises.
Bottom Line: I give this book FIVE STARS. The World Bank should support more projects like IB-NET.

06 August 2014

Speed blogging

  1. Managing (and trading groundwater rights in) the High Plains Aquifer (KS, NE, TX) and how the French decentralized groundwater management

  2. Utilities can "increase their supply" by plugging network leaks. Why don't they do it more often? It's usually cheaper to take more water -- even by desalination -- than repair a leaking network

  3. California's regulation requiring water metering within irrigation districts (IDs) increases costs. This ID will sell water to pay those costs. Why should we care about WHO uses water within an ID, as long as its total diversion/use is tracked?

  4. Tracy Mehan's review of a book on public finance [pdf] points out the obvious (the gov't is broke) and a solution (more reliance on debt markets) for those who want to invest in water and environmental projects with cash flow. That's a good idea, given that 2/3rds of US utilities cannot even afford to maintain their systems

  5. Should government own water? No. Should government regulate water allocations? No. If you disagree, then please explain why government MUST intervene in these stages, as opposed to establishing regulations for in-stream flows, etc.
H/Ts to JC, SC and RM

25 July 2014

The Starfish and the Spider -- a (mini) review

Over-controlling CEO or empowering Catalyst?
CH sent me this book by Brafman and Beckstrom, which I started -- and stopped -- this morning.*

I stopped because the prose was far too excited for the authors' point, which is that a starfish has a decentralized "leadership" that allows individual arms (even polyps) to "decide" what to do, without consulting any center. A spider, OTOH, needs to keep the entire web in order if it's going to eat. The obvious figure at right "explains."

This analogy is meant to apply to organizations (hence all the CEO endorsements) that want to balance between centralized and delegated control.

I get it. You get it. The main question, then, is HOW to find that balance.

When it comes to water, for example, we can leave a farmer with a well or reservoir to decide how much of his private water to use. He knows how much there is and how much he wants to use, and his decisions do not affect the water of others.

Change that scenario to a bunch of farmers sharing the same aquifer or reservoir, and there's a need to coordinate their use. This can happen by allowing each the same quantity of water, auctioning rights to the "sustainable" yield, etc. A "spider" needs to keep track of aggregate use, but there's no need to track the "why" of use (trees, row crops, pools, etc.) because we can assume the farmers know what they're doing.

Take it one step further, to water prices in cities. Water managers can try to tell people how much to use, when and for what. Or they can move towards a starfish type of management by setting a price that will keep total consumption within an acceptable range. The managers will not know who uses how much water for what (except when sending bills), but their ignorance does not matter. They don't know who should use how much water, and they should not try to understand. They only need to keep aggregates in balance.

If you like airport business books, then check out Starfish. If you want better perspectives on these ideas, then read Two Cheers for Anarchism or the founding papers on these topics: Hayek's 1945 "Use of Knowledge in Society" [PDF] or Coase's 1937 "Nature of the Firm" [PDF]

Bottom Line: I give this book TWO STARS for lacking anything sticky to hold me.

* This is a mini-review because I didn't read the whole book. I may have missed a masterpiece (correct me, please), but I cannot spend too much time looking when one may not be there.

09 July 2014

Do you trust your neighbors?

A few months ago, I participated in a brainstorming on the future of water (American Water was paying) where this quandary came up:
How do we get good regulators* who can balance between the long term needs of the community (reliable water service) and short term temptations of the utility (less work, more profits)?
One suggestion struck me as perfectly appropriate: regulators should be drawn from the population of citizens in the same way as jurors, to serve for a year or so (i.e., meeting a few times per month, with compensation).

What I like about this idea is that it guarantees fresh, outside perspectives on the regulatory balancing act. Fresh perspectives will be neither "conventional" nor "captive" to the goals and views of water managers. Rather than being a drawback, I see regulators' lack of technical experience as a plus, as it will force managers to explain the projects and funding they need in common sense terms.

Is it possible that the regulators will be manipulated or deceived by their permanent staff or the utilities? Yes,  but those who understand their ignorance will be wary enough to make sure they have enough information to make an appropriate decision.

Your thoughts?

Bottom Line: The community needs to regulate its water services, so why not have members of the community appointed (by lottery or vote) to carry out that role?

*I discuss the dynamics of this "principal-agent-beneficiary" problem in this paper on international aid, this paper on a human right to water, this chapter on selfish water managers [pdf], and this exploration of customer power and customer service.

03 July 2014

Speed blogging

More pictures of this amazing "Heavy lift ship" here
  1. An overview of the process for adaptive planning at water utilities

  2. A group of authors has written chapters on water economics; transboundary water; water and development; water and energy; and water concepts for Global Water, a 240pp book that's free to download. It's more academic than my End of Abundance but a great resource

  3. A new report by political heavyweights (Bloomberg, Paulson, et al.) explains the economic effects ($ losses) from climate change -- building destruction, lower farm yields, heat exhaustion/deaths, etc.

  4. Groundwater banking beats desalination "when the water's available," which applies to places with seasonal water flows. This related piece looks at water banking in Arizona. The irony is that water is only "available" there because it's taken from elsewhere

  5. Prepaid irrigation meters in Bangladesh help with accounting, corruption, pricing, and sustainability
H/T to MGC

26 June 2014

Acknowledge success but work on failure

I often point out how politicians and water managers fail when it comes to making and implementing policies.

Do not take my criticism as disrespect for ALL politicians and managers. Many are quietly and competently working for us.

I don't know the real ratio of fail:success for politicians, managers or policies, as nobody collects or quantifies those data. I'd guess that the failure:success ratio is probably 1:9.

When I began writing this post, I thought of asking you to name your favorite managers and politicians, but such a listing would neither help people in other jurisdictions nor give an objective standard of performance.

Instead, perhaps you can suggest how some politicians or managers have designed or implemented policies that can be reproduced elsewhere.

Moving along, let's remember that the greatest harm comes from policies or practices that:
  1. Cost too much money than better alternatives;
  2. Divert behavior from the "right" to the "wrong" road;
  3. Direct water to a less socially valuable use; and/or
  4. Result in direct and visible failure.
Note that the last outcome is the one we see most often, even though the other failures are either more costly in aggregate or precursors for later failure.

As an example, consider the billion dollar "third straw" project in Las Vegas, a pipe that will allow Vegas to take water from Lake Mead when it's nearly empty. That expensive project does nothing to reduce demand or increase supply. It is literally a cynical, "race to the bottom" means of keeping Vegas grass green for a few more years, until the water level drops below its intake.

This, and other examples of impending or unfolding failures are easier for people who ask the "and then what?" will be the implication of any given policy.

Consider these examples (one for each of the practices listed above):
  1. San Diego is building a desalination plant for $1 billion to "meet demand" that could be reduced by a slight increase in water prices;
  2. Farmers are given subsidies to install "high efficiency" irrigation equipment while they continue to unsustainably overdraft groundwater;
  3. States allocate water to favored locals instead of either marketing the water within the state or allowing cross-border trading; and
  4. Water utilities with revenue equal to less than 50 percent of their costs cut back on safety and maintenance spending.
Bottom Line: Lots of managers deserve an A for success. Those who are getting Bs (or worse) need to be encouraged to work harder at meeting the needs of their communities.

24 June 2014

Stabilizing water utility finances in Germany

Siegfried Gendries (German blog) wrote this on the balance between fiscal stability and conservation incentives (my post on implementing the same idea in Davis, California*):

The water industry in Germany is facing more and more challenges due to decreasing water consumption from both, the household sector and the commercial and industrial sector. Since the majority of the water supplier charge an high degree of volumetric price elements, the turnover in the industry is decreasing nearly simultaneously. Due to the inverse cost structure in the asset heavy industry this leads to significant problems for the water companies. As an answer, the regional water company RWW Rheinisch-Westfälische Wasserwerksgesellschaft, a subsidiary of RWE, developed and introduced a new pricing system which is based on a weighted consideration of fixed and volumetric price elements in order to stabilize the turnover and therefore not at least the cost coverage.

The water price and water saving challenge
In the eighties of the last century the water demand projections of scientific institutes targeted on 250 liters per capita and more. Therefore the water testament plants and pipes constructed afterwards especially in the Eastern regions of the former GDR considered these numbers. Also the industrial and commercial water consumption patterns were estimated at a significantly higher level than today's reality. Regarding households, the assumptions failed by more than 50 %. Today the numbers are at 121 liters and less (incl. commercial and mid/small industries). The Eastern regions of Germany are below 90 liters per capita at present.

Under these circumstances it would be nightmare to assume that the water supply in Germany could be stabilized on the satisfactory level. Since with each cubic meter consumed less, the cost coverage failed by 60 percent and more. The usual reflex are price increases. This can't be recognized as a sustainable solution due to the more intensified focus of anti trust authorities on one hand and price elasticity effects of those consumers which have the opportunity to react on the other hand. The latter one must result in a price spiral.

Reasons for water demand decreases
The consumption levels are recognized by four effects:
  1. Autonomic effect: technological changes lead to less water consumption (incl. energy nexus),
  2. Ecological behavioral effect: people want to save water since there is water stress in some regions in the world or due to their ecological attitudes
  3. Economical behavioral effect: people want to save money by saving water (a target which is supported by the volumetric price)
  4. Demographic changes: the population in many regions in Germany is decreasing, which lead to less consumer.
With regard to a price adjustment process we analyzed the impacts of the four effects. The first one explains 60% reduction in our supply region, the two behavioral aspects 20% and the demographic change 20%. Therefore it can be stated, that the room for influencing the water consumption behavior in order to reduce the economical impact is quite small. That means on the other hand a price increase will not have the impact as usually assumed.

New water price system to stabilize service and quality levels by ensuring cost coverage
As a water company with nine small and larger water works, 2,900 km pipes and mains serving 800,000 people and 10,000 commercial and industrial customer RWW had to find a solution to react on a 1.5% y/y water demand decrease. Although the price structure was already 20% fix and 80% variable, we had to find a economic solution accepted by both, the customers and the shareholders.

One problem had to be solved at first: the structural difference between costs and prices. The objective was to rise the fixed price element on a 50% level and to reduce the variable price element at 50% as a countermove. Although it seemed to be easy at the first view, it was impossible to adhere at the usual water meter as the base for charging, since the group of one-family houses would have been burden unacceptable. In order to reduce the viable unfairness the „size of the meter“ was replaced by the number of „housing units“.

The next challenge was to avoid the unfairness deriving from the fact that a linear price system would multiply the fixed prices depending on the number of units in a house. Households in multifamily-house would have been discriminated against those in smaller houses. The solution was a regressive fixed price algorithm per housing unit.

In order to stabilize the total turnover and to avoid profit by the introduction, we reduced the volumetric price from 1.62 Euro per cubic meter to 1.21 by 40%. Therefore the price system change became neutral for the totality of the customers.

With regard to the communication strategy we anchored the fix price element at the water supply system in order to convince people that they are paying for pipes and water works. Consequently we called that element "system price," therefor we consequently named the tariff the "System Price Model for Drinking Water."

Two years after introduction there is an increasing interest in the German water sector to introduce a comparable price system for water. Meanwhile two companies changed their water prices according to system price model and six water companies are in preparation of the same step advised by RWW.
* Addendum: Wow. There's an amazingly weird discussion of "wet fixed costs" justifying higher water charges (and lower fixed charges) in Davis. I left this response:
Fixed costs include current spending and debt repayment that does NOT change with daily volumes of delivered water. They average 80 percent at most utilities. Taking 87 percent of revenues from water sales is ASKING for financial instability. It also does nothing extra to reduce use, versus CFPR.

@Matt — you’re proposing that people pay for 87% of their driving with gas, with the other 13% coming from the cost of buying the new car. This is silly.
On the one hand, I think it's really annoying to have to fight with these funny interpretations. On the other, it's great to get a public debate on how water pricing works.

21 June 2014

Flashback: 16-22 Jun 2013

A year later and still worth reading...
...and happy summer solstice!

16 June 2014

Monday funnies

Totally appropriate (via MV):

Feeling the pain?

LA sent this article, entitled "Why so many Americans don't care about the drought," to which I left the following comment:

The effects of the drought are being mitigated by groundwater mining and diversion of water from the environment. The impacts of those actions will be felt in the future.

As an interesting parallel, consider how the Iraq War was funded by borrowing and fought by "volunteers." Most Americans did not feel its effects, unlike the Vietnam War's immediate impact in tax increases and dead (drafted) neighbors.

Bottom Line: The costs will arrive, but they will wear us down slowly.

27 May 2014

Mulroy needs to think a little MORE different

RM sent Pat Mulroy's "think different" views on water in the US.* I left this reply:
Wow. She's all over the place, and -- unfortunately -- not coming to any conclusion ("sustainability is a journey, but it is not a journey that we can travel alone"?). It's nice to see Pat talking a *little* more about sustainability, but she still hasn't stepped out of her bubble. I'll offer one insight for perspective: Israel and Singapore both run their water systems as single utilities where everyone pays money and benefits from water flows. Tax subsidies in one area are not very controversial because the benefits of those subsidies often go back to payers or -- at a minimum -- their neighbors. The Colorado Basin (or US) does NOT run a unitary system. Detroit is not sharing water with Vegas. That's why Pat spent most of her career trying to take more water and money for Vegas, and that's why Vegas is still (1) unsustainable and (2) a bad neighbor.

My only hope is that Pat spends more time in different communities and less time opining on how we need a grand strategy or -- god forbid -- trying to implement one, nationwide.

Oh, and she also needs to remember that people in Israel and Singapore use about 30 gallons/capita/day -- about 15 percent the 220+gcd people use in Vegas. I think that's a good place to start talking sustainability.

* She just retired as water czarina of Las Vegas, which robs me of a straw woman for how NOT to do things (she appears in 49 posts!). Any nominees for unsustainable water managers?

I do appreciate the vast majority of managers who run a tight ship, fiscally and environmentally. It's perhaps unfortunate that we don't recognize integrity and competence more often. Do we need to in water? I'm not sure we do it very often for competitive businesses (their reward is profit), and we certainly do it too much for the 1%, but managers of monopolies should get some recognition for emphasizing their customers and social mission over their personal beliefs or bank accounts.

17 May 2014

Flashback: 12-18 May 2013

A year later and still worth reading...

02 May 2014

Speed blogging

  1. Portland's water managers drain a massive reservoir after someone pees in it. I reckon they care more about their reputation (risk aversion) than customers' money. They've learned nothing since 2011

  2. OTPR points out that "local control" often means "don't bother us while we ruin our water supplies." I left this comment:
    There's some truth to the benefits of local control versus delegation to a regional or state authority. Let’s be generous and say local = watershed or aquifer. In that case, local control would be best EXCEPT if locals have a short-term view AND either ecosystems (public goods) will be negatively impacted by poor management OR non-locals will be obliged to bail out locals who ruin their water. Those conditions are pretty common in Calif., so now we see the nature of the problem — and solutions. Regional or state take-over to protect public goods and/or and end to bailouts.
  3. There's a water cap and trade webinar on 13 June (contact to register). To read more about the project (and access background materials on markets in Europe, Chile and the US), go here

  4. Steve Maxwell's 2014 Water Market Review (of companies dealing with water, not water-the-commodity) is available for free download. Its 28 pages have LOTS of industry insights

  5. A "Turkish Peace River" will flow to Northern Cyprus via an 80km undersea pipeline. This $450 million failure-in-the-making is unlikely to bring peace (the water is NOT to be shared with the Greek side of the island), economic growth (much of it will be used for "food security" irrigation), or environmental benefits (it's diverting 10 percent of a mainland river)

25 April 2014

Speed blogging

  1. "The thematic page ‘The Underground Drought’ contains videos, webinars, resources, links, discussions, articles and blog posts related to groundwater and is in need of your comment, your opinion, your knowledge, and, last but not least, your videos. What has led to the underground drought? What is being done and what can be done to address it? By whom? Add to the discussion on The Water Channel"

  2. An excellent post advocating a flexible approach to providing water to the poor in LDCs

  3. "California's water wars reach 'new level of crazy' this year" -- they need more markets and prices and less laws and lobbying

  4. Another article on the Dutch teaching Americans how to live with water instead of fighting it

  5. An idealistic government's prohibition on science buries citizens under landslides

  6. A good overview on watershed protection as a means of improving water quality
Hattips to CD and RM

12 April 2014

Flashback: 7-13 Apr 2013

A year later and still worth reading...

The nexus of bullshit -- don't try to manage energy and water until you can manage water!

Question of the week -- the generation gap may mean that people think differently. I'll add that they also learn and communicate differently. This can lead to confusion and inhibit cooperation.

To centralize or not to centralize? Depends on information, distribution of costs/benefits, politics, etc.

22 March 2014

Flashback: 17-23 Mar 2013

A year later and still worth reading...

18 March 2014

Fresh Water Scarcity

Alvin Chien writes:*

In many ares of the world fresh water is scarce. Smart water management can help preserve this resource, and reduce the costs of treating or importing water. What are the causes of water scarcity? Water scarcity is caused by environmental and human factors. In hot dry climates, such as deserts, there is a general lack of fresh water sources. Some areas also experience temporary or seasonal droughts that limit the amount of available fresh water. The state of California in the U.S., for example is currently experiencing a severe drought.

Human factors also contribute to scarcity. Water is used for irrigation, as well as many other purposes like drinking, cleaning and washing. How people collect and recycle water also has an impact on the amount of fresh water available for various uses. Fresh water scarcity can have severe effects. Crops can die, and people can go hungry or suffer serious health problems from the resulting lack of food and drinking water. Water scarcity affects every part of an ecosystem, including all plants and animals.

Bottom Line: Proper water management is therefore very important. Water management solutions include collection and storage, rationing, water treatment centers, and even importing/exporting. Applying these solutions effectively means that water can be shared between places that have lots and those that do not have enough, and conserved in places where scarcity exists.

* These guest posts are from students in my resource economics class at Simon Fraser University. Please leave feedback on their logic, ideas and style and suggestions of how to improve.

12 March 2014

Speed blogging

  1. The Economist on resources, the high seas and environmental backlash

  2. A judge is ruling that Metropolitan Water District overcharged the San Diego County Water Authority. I've agreed with that for awhile, but the lawsuit is going to be appealed and there's no improvement in water management or pricing. FAIL.

  3. China's South-North water transfer looks unfair, unsustainable and uneconomic

  4. Politicians around the world undermine flood insurance by mispricing risk. Expect human and financial disaster

  5. Some southern California water managers say there's no shortage of water, but Long Beach declared an "imminent water shortage." What's that mean?
    Residents will now be barred from watering their lawns except on Mondays, Thursdays, or Saturdays, and restaurants cannot serve water to customers unless they request it.

    In addition, Long Beach has ongoing prohibitions on watering between 9 a.m. and 4 p.m. and hosing down sidewalks and driveways without specialized hoses.
    If you want to know how pathetic that is, read this ("water crises are never just about water; they are always interconnected with other social, political, economic, and environmental factors")

  6. Cool photos of Montreal's water, sewer and storm tunnels
H/Ts to RM and DV

18 February 2014

Speed blogging

  1. The SW US drought is in the news, but droughts are not new. More disturbing, the lack of action/reform or progress since the last drought (2008-9) depresses me. One silver lining is that I can refer you to old posts that are just as relevant today:

  2. Robert Pyke deconstructs Bay-Delta propaganda [pdf] and concludes: "The BDCP is more about water quality and safeguarding the power of the Metropolitan Water District and its board’s pensions than it is about safeguarding water supplies"

  3. I've been talking a lot to the public and reporters on the drought:

  4. OTPR debunks California farmers' claims that we'll starve if they don't get water

  5. Fleck on overdrafting groundwater. Emergency today means tragedy tomorrow

17 February 2014

Ugly Californication

I've been following water policy ever since my dissertation on conflict and cooperation in water management in Southern California, but I ran across some new ideas on my recent visit to talk to water managers about "supply augmentation" via WaterSavr (a compound that reduces reservoir evaporation).

These observations can flow in any order, as they have numerous reciprocating links:
  • Managers are deathly afraid of adding anything to water, as regulators at Fish and Game and the regional Water Resources Control Boards are very fast to condemn and punish, often cheered by environmentalists. The cliche is that they've let "the perfect become the enemy of the good," but they're now at the point where it's better to continue a disastrous tradition than try something new.[1] One water quality guy was so concerned about protecting fish from contamination that he forgot that no water means no fish to protect.[2]

  • Water managers are far LESS worried about this drought than average people I spoke to. The managers say there's enough water (they are good at their job), but those statements contradict the state of drought emergency and elephant in the room: what if the drought of 2012-14 runs for 3-4 more years? There's no reason why it shouldn't. Cycles, supercycles and climate change are more likely to reinforce drought than abundance. Texas is in drought now, but it's still suffering from the last one.

  • Population growth puts California in a vulnerable position. It's easier to reduce use by killing lawns than it is to stop use inside houses. Lower per capita use is a triumph in some ways, but it means that there's very little wiggle room if supplies fall.[3] For some, this means desalination should be used for urban water supplies, but California is decades behind Israeli-style desalination independence (that may not be a mistake). In the meantime, untracked groundwater mining depletes storage and robs neighbors of water. Those actions are surely greedy, myopic and stupid, but that doesn't mean they do not attract sympathy and waste money.

  • Some Southern California water managers have "no sympathy" for others in the state that did not spend billions on storage and reliability, but that fuck you attitude will backfire if the north stops exporting water from the Delta (I support that move). It's also a bad way to think of neighbors (the Dutch are better on this!)

  • Amidst those social failures, I have friends who are innovating in amazing ways to improve water policy, use and function, but they are having a hard time getting attention from managers who know best and have no reason to look for change.
Bottom Line: The sun is shining, cars are jamming, and people are drinking, but California is dying. Governance failure, regulatory lockup, and mutual antagonism remind me more of a developing country than the future of humanity.[4] That's why I'm reversing my parent's migration and returning to Europe in May.

  1. Environmentalists, e.g., blocked the power transmission lines that would bring solar power in deserts to people in coastal cities.
  2. This is in the context of WaterSavr, which is EPA- and Nevada Fish and Game-certified as safe for fish (and shown to be so), but it's the general principle I'm talking about here.
  3. Monterey faces this wall, as regulators have redirected its river water supply to the environment. That's why I support their desalination plant.
  4. A subsidized farmer said this in the last drought, but he wanted more water for himself. I was going to say California is like Mexico, but that may be unfair to Mexico in terms of relative trends. Argentina seems to be a relevant twin to the Golden State.
H/Ts to CF, SK, DL, DV and Morris-the-scientist