Presented at TWCA Mid Year Conference - June 13, 2014 Presented by: David S. Yanke NewGen Strategies & Solutions

1. Texas Water Conservation Association
Mid-Year Conference | June 13, 2014
Water Conservation Programs and Associated Rates
Presented by:
David S. Yanke
NewGen Strategies & Solutions

2. NEWGEN STRATEGIES AND SOLUTIONS, LLC
Water Rate Design Options
General Rate Setting Goals:
• Rates that are equitable and reflect the cost of
service to each customer class
• Rates that ensure the financial stability of the
utility
• Rates that promote conservation
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3. NEWGEN STRATEGIES AND SOLUTIONS, LLC
Conservation Based Pricing
Conservation Based Pricing – is the use of rate
structures that discourage the inefficient use or
waste of water.
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4. NEWGEN STRATEGIES AND SOLUTIONS, LLC
Water Rate Design Options
The most common types of water conservation
oriented rate structures:
• Drought demand rates
• Excess use rates or excess surcharges
• Inclining block rates
• Seasonal rates
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5. NEWGEN STRATEGIES AND SOLUTIONS, LLC
Options to Reduce Water Consumption
Rate Structure Impact
Drought Demand Rates
Reduces demand during drought
(average and peak demand)
Excess-Use Rates Reduces peak demand
Inclining Block Rates
Reduces average and peak
demand
Seasonal Rates Reduces seasonal peak demand
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6. NEWGEN STRATEGIES AND SOLUTIONS, LLC
What About Raw Water Providers?
• Rate design options limited by take-or-pay
pricing provisions, etc.
• Restrictions more common
• Ex. Stage 2 Drought – 20% mandatory reduction to
wholesale customers
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7. NEWGEN STRATEGIES AND SOLUTIONS, LLC
What is Happening in Texas?
• 10-30% reduction from “normal” summer peak
(wholesale)
• Drought surcharge - $10/month (retail)
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8. NEWGEN STRATEGIES AND SOLUTIONS, LLC
Challenges:
• Demand hardening – inability to further
decrease usage significantly
a) A hospital
b) Past investments in conservation
• Measuring impact of conservation based rates
a) San Marcos – rapid growth makes impact of rate
changes difficult to quantify
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9. NEWGEN STRATEGIES AND SOLUTIONS, LLC
For Conservation Based Pricing and
Drought Restrictions to be Successful:
• Customers must be educated
• United Water in Idaho – advance notification of 25%
summer increase
• Seattle Public Utilities – citizen workshops
• many utilities – mailers, email, etc.
• Billing software must be capable of monitoring
customer usage
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10. Questions or Comments?
Mr. David S.Yanke
dyanke@newgenstrategies.net
Direct: (512) 649-1254
Cell: (512) 773-5494
3409 Executive
Center Drive
Suite 128
Austin,TX 78731
Phone: (512) 479-
7900