Percent Change as a Measure of Price Escalation in Water and Energy Utilities

We advance the idea of using percent billing changes as a simple measure of price escalation. This simple yet underused metric may help evaluate rate structure design in public utilities. We illustrate how price escalation may generate useful insight for utility managers by analyzing rate structures from water utilities in British Columbia, Canada. We observe that increasing block rates may send weaker relative price signals to users than a simple constant unit charge, and that low volume users tend to receive the strongest relative price signals. Measuring price escalation may also allow one to quantify the distortions generated by fixed charges. We conclude that analysts may find it useful to include measures of price escalation in their portfolio of metrics to evaluate rate structures in energy and water utilities.

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Households' preferences for water tariff structures in Kathmandu, Nepal

Water Policy ◽

10.2166/wp.2019.079 ◽

2019 ◽

Vol 21 (S1) ◽

pp. 9-28 ◽

Cited By ~ 2

Author(s):

Bhim Raj Suwal ◽

Jane Zhao ◽

Aditi Raina ◽

Xun Wu ◽

Namrata Chindarkar ◽

...

Keyword(s):

Water Use ◽

Probit Model ◽

Bivariate Probit Model ◽

Fixed Charges ◽

Piped Water ◽

Tariff Structures ◽

Tariff Structure ◽

Utility Managers ◽

Household Preferences ◽

Water Tariffs

Abstract Despite being politically sensitive, water tariffs are frequently administered without information about households' preferences for tariff structures. In this paper we examine the tariff preferences of 1,500 households in Kathmandu, Nepal. We first use a bivariate probit model to examine stated preferences for (1) an increasing block tariff (IBT) and (2) a positive fixed charge. We find that household preferences for IBTs and fixed charges are not easily explained by household socioeconomic and water use characteristics. Second, we ask respondents what they think a fair water bill would be for a randomly assigned quantity of water. We model the responses as a function of both quantity and household socioeconomic and water use characteristics. While households support a water tariff that results in a household's water bill increasing as a household's water use increases, we do not find evidence that households support an increasing, nonlinear relationship between water use and a household's water bill. Our results suggest that respondents desire affordable piped water services and water bills that are calculated fairly for everyone. Because the notion of fairness in Kathmandu varies, utility managers may have considerable latitude in choosing a tariff structure that focuses on other objectives, such as cost recovery, revenue stability, and economic efficiency.

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Technical inefficiency effects in a stochastic production function for managerial incentives in public water utilities

Water Science & Technology Water Supply ◽

10.2166/ws.2013.168 ◽

2013 ◽

Vol 14 (1) ◽

pp. 61-72 ◽

Cited By ~ 3

Author(s):

Silver Mugisha

Keyword(s):

Production Function ◽

Financial Incentives ◽

Stochastic Frontier ◽

Managerial Incentives ◽

Policy Implications ◽

Water Utilities ◽

Service Coverage ◽

Non Revenue Water ◽

Utility Managers ◽

The Impact

Performance of state-owned water utilities in developing countries is often weak. This study estimates the impact of managerial incentives upon efficiency using a stochastic frontier production function with revenue water as the output. The empirical analysis utilises unbalanced panelled data consisting of revenue water, connections, operating expenditure, water delivered and staff, from Uganda's 19 National Water and Sewerage Corporation (NWSC) sub-utilities for a 9-year period, 2002–2010. The inefficiency effects are modelled as a function of utility-specific variables: service coverage, level of financial incentives, target difficulty, and year of observation. While financial incentives and increased service coverage improve efficiency, targets (such as the reduction of non-revenue water) that are perceived as excessive by employees may reduce it. The findings suggest some policy implications: utility managers in the public water sector need to incorporate monetary incentives and increase service coverage to reduce non-revenue water. However, targets need to be set with great care and with transparency.

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Paying Returns to Shareholders of Water Utilities: Evidence from Italy

Sustainability ◽

10.3390/su11072033 ◽

2019 ◽

Vol 11 (7) ◽

pp. 2033 ◽

Cited By ~ 5

Author(s):

Giulia Romano ◽

Andrea Guerrini

Keyword(s):

Water Utilities ◽

Water Industry ◽

Water Utility ◽

Managerial Decisions ◽

Strategic Model ◽

Quality Water ◽

Utility Managers ◽

Privately Owned ◽

New Infrastructure

The debate about the role of corporations with regard to water also involves the influence that paying returns to shareholders could have on the investment policy of utilities, influencing the development of new infrastructure or the renewal of existing ones. This study investigated the dividend policy of water utilities by analyzing the data of 128 Italian firms during 2009–2014. Data show that the majority of utilities do not distribute any return to shareholders. On average, large utilities pay more frequent returns than medium-sized and small ones. Moreover, water utilities that are part of a group, multi-utilities, and those located in the center of Italy pay more frequent returns than do others. Southern firms usually do not pay returns. As expected, privately owned water utilities pay dividends more frequently and have higher returns to equity. In all the observed years, at least one-third of such utilities paid returns. Empirical results provide water regulators, water utility managers, and stakeholders with information that can impact future regulatory and managerial decisions related to management and strategic model choices in the water industry and how these decisions affect investments to improve water quality, water quantity, and/or water services.

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A Brief Comment on “Percent Change as a Measure of Price Escalation in Water and Energy Utilities” by Jordi Honey-Rosés and Claudio Pareja

Public Works Management & Policy ◽

10.1177/1087724x19865275 ◽

2019 ◽

Vol 24 (4) ◽

pp. 385-387

Author(s):

Philip Hanser

Keyword(s):

Price Index ◽

Alternative View ◽

Percent Change ◽

Price Escalation ◽

Energy Utilities

This comment discusses the article by Honey-Roses and Pareja (2019). It attempts to provide additional insights into their analysis by placing it in a price index framework. A simple example is provided, which demonstrates this alternative view along with other suggestions for the use of their analysis.

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Drinking water public right-to-know requirements in the United States

Journal of Water and Health ◽

10.2166/wh.2008.031 ◽

2008 ◽

Vol 6 (S1) ◽

pp. 43-51 ◽

Cited By ~ 4

Author(s):

Veronica Blette

Keyword(s):

United States ◽

Drinking Water ◽

Environmental Protection Agency ◽

The United States ◽

Water Utilities ◽

Right To Know ◽

Local Public Health ◽

Health Community ◽

State Compliance ◽

Utility Managers

The United States Environmental Protection Agency implements a national drinking-water program under the authority of the Federal Safe Drinking Water Act. Amendments to the Act in 1996 added new provisions to enhance consumer understanding of drinking-water issues. Notification requirements associated with annual consumer confidence reports, source water assessments and state compliance reports are intended to enhance the public's knowledge of the quality of their drinking water. Water utilities are also subject to public notification requirements to provide more timely information to consumers in response to violations of health standards. These right-to-know requirements are intended to build the public's confidence, but communicating with consumers can be challenging for both utility managers and government leaders. This paper discusses the need for timely communication, the challenge of providing information when there is uncertainty in the science and the importance of preparing to respond to critical incidents. Because surveys have shown that other members of the community may have better access to consumers or are more trusted, it is important for water utilities to establish relationships with the media and the local public health community.

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Impact of water volume on operating cost

Water Science & Technology Water Supply ◽

10.2166/ws.2014.040 ◽

2014 ◽

Vol 14 (5) ◽

pp. 804-811 ◽

Cited By ~ 1

Author(s):

L. J. Moffitt ◽

A. Danilenko

Keyword(s):

Water Conservation ◽

Unit Cost ◽

Operating Cost ◽

Water Utilities ◽

Water Volume ◽

Short Run ◽

Cost Variability ◽

Using Data ◽

Utility Managers ◽

The Impact

Sustainable water management relies on the ability to control operating cost which relies in turn on a working knowledge of factors which can affect this ability. The impact of water volume on operating cost is investigated for water utilities using data from the International Benchmarking Network for Water and Sanitation Utilities (IBNET) online database. Econometric models are estimated for water utilities located in Albania, Moldova, Brazil, Zambia, Kazakhstan, and Russia. Estimations provide similar quantitative findings and identical qualitative findings across locales. Results suggest that expected operating cost is inelastic with respect to water volume and that operating cost variability increases with water volume. Implications of these findings are that (1) current world-wide strategies to promote water conservation may necessitate an increase in the expected per unit cost of water supply and (2) policies framed as incentives for short-run cost efficiency may need to recognize the difficulty of reducing expected operating cost at existing output levels and that utility managers may face added difficulty in controlling cost if efficiency is pursued by expanding volume.

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LVSEM: Past Present and Future

Proceedings, annual meeting, Electron Microscopy Society of America ◽

10.1017/s0424820100180574 ◽

1990 ◽

Vol 48 (1) ◽

pp. 364-365

Author(s):

James B. Pawley

Keyword(s):

Field Emission ◽

Line Width ◽

Time Scales ◽

Silicon Oxide ◽

Beam Current ◽

High Brightness ◽

High Beam ◽

Fixed Charges ◽

Beam Voltage ◽

Deposited Metal

Past: In 1960 Thornley published the first description of SEM studies carried out at low beam voltage (LVSEM, 1-5 kV). The aim was to reduce charging on insulators but increased contrast and difficulties with low beam current and frozen biological specimens were also noted. These disadvantages prevented widespread use of LVSEM except by a few enthusiasts such as Boyde. An exception was its use in connection with studies in which biological specimens were dissected in the SEM as this process destroyed the conducting films and produced charging unless LVSEM was used.In the 1980’s field emission (FE) SEM’s came into more common use. The high brightness and smaller energy spread characteristic of the FE-SEM’s greatly reduced the practical resolution penalty associated with LVSEM and the number of investigators taking advantage of the technique rapidly expanded; led by those studying semiconductors. In semiconductor research, the SEM is used to measure the line-width of the deposited metal conductors and of the features of the photo-resist used to form them. In addition, the SEM is used to measure the surface potentials of operating circuits with sub-micrometer resolution and on pico-second time scales. Because high beam voltages destroy semiconductors by injecting fixed charges into silicon oxide insulators, these studies must be performed using LVSEM where the beam does not penetrate so far.

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