The document discusses the management of rate impacts related to water conservation efforts in Austin, beginning in the 1980s and evolving through various strategies including education, incentives, and code requirements. It highlights the challenges posed by a growing population and drought risk, alongside proposed changes to residential water rates and revenue stability methods to ensure financial sustainability. Key strategies include increasing the fixed billing portion, implementing a revenue stability fee, and restructuring volumetric rate tiers.

1. Managing Rate Impacts
of Conservation
June 13, 2014
Drema Gross
Water Conservation Division Manager
Austin Water

2. • Started in early 1980s, continued through 1990s
– Education, incentives
• Increased attention to conservation in mid-2000s
– Code requirements, watering restrictions
• Prepaid water supply up to 201,000 acre-feet
– Current use between 140,000 and 167,000
– Estimated ~$15M/yr payment when trigger reached
• Growing population, high drought risk
Austin’s Conservation History

4. FY2011 Residential Rates

5. • Increase fixed portion of bill
– Concern about conservation discincentive, “regressive” charge, impact
on low users
• Implement Revenue Stability Fee
– Build reserve fund to cover unexpected losses
• Restructure volumetric tiers
– Lower starting points for Tiers 2-5
• Consider drought rates
• Revise sales projection methodology
– Assume “new normal” starting in 2008
Revenue Stability Strategies

6. FY14 Residential Rates

7. Questions?