Archive for September, 2013

Like Water for Oil

Friday, September 13th, 2013

Though it is about energy, this article is highly relevant to managing our water resources as well:

Just substitute the word water for “energy”/”natural gas”/”electricity” wherever they appear in the article. The following tract gets at the conundrum the Madison Water Utility seems particularly stymied by:

“In addition, state regulators should reward utilities for helping residential, business and industrial customers use energy more efficiently, and stop the widespread practice of penalizing utilities when their sales level off or decline because customers are using less energy. When regulators set rates, they establish targets for utilities’ allowable revenues, and this unintentionally links the companies’ financial health to robust sales of electricity and natural gas. The problem can be solved if regulators allow modest annual rate adjustments that correct for any unexpected changes in utility sales.

“Half the states have instituted such “decoupling” systems for at least some of their investor-owned natural gas and electric utilities, but the process is taking too long and only one publicly owned utility, the Los Angeles Department of Water and Power, has adopted these reforms. The rest should step up.”

Indeed. And this a model for conservation that has been promoted by citizens in the past. Unfortunately, this is an economic model (Econ 101-level) that seems to be alien to MWU management. Instead, they perform their incantation rituals for more drought to fill the utility’s coffers:

It will be more than three years since water rates have gone up for Madison Water Utility customers. The Water Utility had planned to file for a 12% increase in 2013, but officials say it was not needed because of high water use during last summer’s drought.

A forward-looking lot over at Olin Ave…..