For Water Conservation, Pricing Trumps Prohibition

By Benita Dodd

Within the next few months, Georgians across the state will never again be able to water more than three days a week. State officials, working to foster a culture of conservation, called it “a very big step” for water conservation when the board of the Department of Natural Resources approved rules for permanent statewide outdoor water use restrictions.

Promoting a culture of conservation is a noble goal. Excluding agriculture, Georgia’s average daily per-capita water consumption is estimated at 168 gallons compared with a national average of 153 gallons. Our population is growing in leaps and bounds; we’re feuding with the neighbors over who gets what water, and new reservoirs are almost as scarce as hen’s teeth. Steps need to be taken to ensure that Georgia’s water supply continues to meet the needs of the economy, the environment and the population. Unfortunately, the DNR’s plan falls short of motivating Georgians to conserve water.

A one-size-fits-all mandate to water no more than three days a week, especially when there is no drought, is needlessly heavy-handed, even if local governments are allowed the “flexibility” of choosing those three days. Georgia’s average annual rainfall totals about 50 inches, but that ranges from 59 inches in Blue Ridge in the North Georgia Mountains to about 50 inches in Albany and 40 inches in coastal Glynn County, both of which are under moratoriums on new groundwater withdrawal permits. The varying range and regional differences cry out for reasonable local options. 

A conservation mindset isn’t fostered, achieved or maintained by prohibiting water use on certain days. In fact, just the opposite could occur. Certainly, Georgia’s public water systems will see some reduction in water use. But when Georgians are told they may water just three days a week, many will feel an obligation to water – and over-water – on “their” days. The opportunity to maximize efficiency, therefore, is lost.

Worse, water restrictions can harm conservation efforts by considerably reducing revenue to utilities and local governments, forcing rate hikes or shrinking funding opportunities for growth, maintenance and improvement of aging systems. Repairs and maintenance are a serious concern: Earlier this year, Baldwin in northeast Georgia revealed it loses half the water it buys before the water reaches customers. A leak-detection specialist said the city is just one of 54,000 water providers across the country experiencing high amounts of water loss – and that the loss is typical for North Georgia. The Environmental Protection Division’s goal is a maximum of 10 percent of water unaccounted for; utilities need the revenue to meet the goal.

Worst, Georgia’s mandated water restrictions make a mockery of conservation by offering so many exemptions that they pick only the lowest-hanging fruit: the hapless homeowner. Georgia’s conservation campaign includes a long-term public awareness program to reinforce the sought-after culture of conservation, and perhaps that will work. But nothing is more certain to promote efficiency among homeowners, business and water providers like an appropriate pricing structure will.

Appropriate pricing means eliminating flat rates for water use and encouraging the use of separate meters on every unit in Georgia’s apartment complexes. Of the 21 percent of Georgians who live in multi-family structures, many pay a flat rate to landlords, or utilities are included in the rent. Now that the federal government has lifted the regulatory burden surrounding sub-metering, landlords will find it easier to install meters to bill tenants for the water they use, and tenants will become conscious of the value of water and the price of excess.

Dynamic rates, which usually reflect seasonal supply and demand, also encourage customers to weigh their priorities. Long hot bath or shower? Sprinkler or soaker hose? New pond or xeriscaping?

In Georgia, one of the few water providers that come closest to an appropriate pricing structure is the Cobb County-Marietta Water Authority, which establishes a customer’s average water use at 125 percent of winter usage. Customers face a surcharge of 90 cents per 1,000 gallons in excess of the average; the excess is assumed to be used in outdoor watering. Cobb County and its cities and Gwinnett and Cherokee counties have implemented these summer surcharges.

Tiered rates don’t harm an average user; they motivate customers to use water more efficiently, and they bring home the value of the resource by charging more for excessive use. They delay the need for immediate utility expansions. Best of all, they allow utilities to recover the cost of providing services and adequately fund a business plan for the infrastructure maintenance, capacity expansion and upgrades required by aging, growing systems. Cobb’s good business plan is reflected in the fact that it has met the EPD goal of 10 percent of water unaccounted for.

The market approach is successful without being punitive. A 1999 survey of 12 utilities using a conservation rate structure revealed that yearly average consumption dipped 8 percent and peak-demand-month usage declined 7 percent.

Georgians who don’t like the idea of never being able to water on their own schedule will have to suffer the inconvenience for a while. But there is hope, thanks to the new law authorizing the state Environmental Protection Division to establish a comprehensive statewide water management plan. All that is needed is for water customers and water providers to demand that the plan provide for a commonsense pricing policy instead of command-and-control policies.

Benita M. Dodd is vice president of the Georgia Public Policy Foundation, an independent think tank that proposes practical, market-oriented approaches to public policy to improve the lives of Georgians. Nothing written here is to be construed as necessarily reflecting the views of the Georgia Public Policy Foundation or as an attempt to aid or hinder the passage of any bill before the U.S. Congress or the Georgia Legislature.

© Georgia Public Policy Foundation (May 28, 2004). Permission to reprint in whole or in part is hereby granted, provided the author and her affiliations are cited.