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Water Conservation Programs and Associated Rates

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Presented at TWCA Mid Year Conference - June 13, 2014 Presented by: David S. Yanke NewGen Strategies & Solutions …

Presented at TWCA Mid Year Conference - June 13, 2014 Presented by: David S. Yanke NewGen Strategies & Solutions

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  • 1. Texas Water Conservation Association Mid-Year Conference | June 13, 2014 Water Conservation Programs and Associated Rates Presented by: David S. Yanke NewGen Strategies & Solutions
  • 2. NEWGEN STRATEGIES AND SOLUTIONS, LLC Water Rate Design Options General Rate Setting Goals: • Rates that are equitable and reflect the cost of service to each customer class • Rates that ensure the financial stability of the utility • Rates that promote conservation 2
  • 3. NEWGEN STRATEGIES AND SOLUTIONS, LLC Conservation Based Pricing Conservation Based Pricing – is the use of rate structures that discourage the inefficient use or waste of water. 3
  • 4. NEWGEN STRATEGIES AND SOLUTIONS, LLC Water Rate Design Options The most common types of water conservation oriented rate structures: • Drought demand rates • Excess use rates or excess surcharges • Inclining block rates • Seasonal rates 4
  • 5. NEWGEN STRATEGIES AND SOLUTIONS, LLC Options to Reduce Water Consumption Rate Structure Impact Drought Demand Rates Reduces demand during drought (average and peak demand) Excess-Use Rates Reduces peak demand Inclining Block Rates Reduces average and peak demand Seasonal Rates Reduces seasonal peak demand 5
  • 6. NEWGEN STRATEGIES AND SOLUTIONS, LLC What About Raw Water Providers? • Rate design options limited by take-or-pay pricing provisions, etc. • Restrictions more common • Ex. Stage 2 Drought – 20% mandatory reduction to wholesale customers 6
  • 7. NEWGEN STRATEGIES AND SOLUTIONS, LLC What is Happening in Texas? • 10-30% reduction from “normal” summer peak (wholesale) • Drought surcharge - $10/month (retail) 7
  • 8. NEWGEN STRATEGIES AND SOLUTIONS, LLC Challenges: • Demand hardening – inability to further decrease usage significantly a) A hospital b) Past investments in conservation • Measuring impact of conservation based rates a) San Marcos – rapid growth makes impact of rate changes difficult to quantify 8
  • 9. NEWGEN STRATEGIES AND SOLUTIONS, LLC For Conservation Based Pricing and Drought Restrictions to be Successful: • Customers must be educated • United Water in Idaho – advance notification of 25% summer increase • Seattle Public Utilities – citizen workshops • many utilities – mailers, email, etc. • Billing software must be capable of monitoring customer usage 9
  • 10. Questions or Comments? Mr. David S.Yanke dyanke@newgenstrategies.net Direct: (512) 649-1254 Cell: (512) 773-5494 3409 Executive Center Drive Suite 128 Austin,TX 78731 Phone: (512) 479- 7900

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