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Water service is becoming more costly, especially in jurisdictions with high summer peak use and where drought conditions frequently occur. As a means of addressing the problem, many researchers are encouraging states, municipalities and private water utilities to adopt an Integrated Water Resource Planning (IWRP) approach in which Demand-Side Management (DSM) options are employed in conjunction with conventional supply activities to address water shortage problems. The success of DSM will largely depend upon how water consumers respond to policy initiatives. Water conservation-oriented rates (WCORs) are an important component of DSM efforts. Quantitative analysis of consumer responses to WCORs can provide valuable information regarding the effectiveness and persistence of their implementation. This paper evaluates potential impacts of a series of WCORs on utility revenues, equity as it pertains to customers, and contribution to water conservation. Based upon this analysis, the authors design a revenue neutral and equitable WCOR option. Strategies for overcoming barriers to their implementation are identified. A series of sensitivity analyses were conducted utilizing a panel of 500 households for the period 1992-1997. The panel households were randomly drawn from the service area of Artesian Water Company, Inc., an investor-owned water utility serving northern New Castle County, Delaware, by the Center for Energy and Environmental Policy, University of Delaware. This panel dataset contains not only water consumption and bill information for the sample households during the summer quarters, but also information on their socio-economic characteristics that were obtained from surveys conducted in 1992 and 1994. These surveys incorporated questions involving 87 variables relating to water consumption and conservation behavior. In the sensitivity analyses, the 500 households are assumed to represent residential customers in a hypothetical water utility. Includes 35 references, tables.

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Edition: Vol. - No. Published: 01/01/2002 Number of Pages: 15 File Size: 1 file , 290 KB