Water pressure

Long time readers will know that I have a minor fetish with respect to water, and water pricing, and water policing. For all that it is in short supply, water is ridiculously cheap. I estimate that we will pay about $400 this financial year (ending 30 June 2010) for our household water usage. That’s $400 that we would happily spend on other necessary items if we didn’t have to spend it on water, but it’s hardly a steep charge – less than $10 per week, even on SA Water’s new price schedule, which is much more expensive than the old schedule. Our annual water rates charge is much higher than that, but most of it is taken up by fixed charges which are completely beyond our control.

Because SA Water either can’t, or won’t, charge enough for actual usage, and so won’t send a decent market signal in order to limit water use, they resort to social pressure instead. The pressure is intensely felt by some people; an elderly friend of mine keeps a bowl of water on her bench to soak dirty plates in, rather than running the tap over them, saving maybe 5 litres a day. Even at the highest price that SA Water charges, that will save her about 0.1c per day, or 36.5c per year. So my elderly friend carries a weight of social responsibility, simply because her neighbours, and businesses, use water casually.

SA Water doesn’t just deploy social pressure to get us to minimise water use. They’re into propaganda as well.

We got our quarterly water bill a week or two ago. On the back of the bill was a chart showing us how our household water usage compares. We are invited to compare our water usage with other SA Water customers. We have a household of 5 people, and a large allotment. The “range of litres used per day” for a household like ours goes from 740 to 915. So given our actual usage, 621 litres, we’re looking pretty good.

wateruse

Not so fast. When SA Water ask, “How does your household water use compare?” they don’t say what the comparison is too. My assumption was that our usage would be compared to average usage. I think that’s a reasonable assumption.

But there’s a sneaky asterisk beside the column header, “Range of litres used per day.” It turns out that the range of litres used per day is based on “waterwise to average households…” Instead of giving us a standard comparator (average usage), they’ve given us a low one, and it takes a bit of careful reading to work out exactly how your own household is doing with respect to water usage.

I’m rather tired of the dishonesty around water. As you can see, our water usage isn’t too bad at all – well below average for the size of our household and allotment. Even if we figure that three kids are equivalent to say two adults in terms of water use, and look at the figures for a household with four members, we still do well. So this is not about SA Water trying to browbeat me into “better” behaviour. However, I wish they would trust us with accurate information, and treat us like adults, instead of trying to manipulate us.

What I would like to see is a change to pricing policy. I would like to see a very low charge for basic water use, so that people’s basic needs are met. After that, they should charge like wounded bulls. Any water use above the basic level should be very, very expensive, for households and businesses (including farms) alike. The profits (and I’m betting there would be a lot) should be used for all those fantastic projects that will help us to meet our water needs (damns, stormwater harvesting, rainwater tanks on public buildings, whatever).

And if SA Water really wants to apply some social pressure, then I suggest that they send their water inspectors out at 2am. You would be amazed by the number of watering systems that are in use at that early hour. I should imagine that most clandestine waterers would give up after too many nights broken sleep.

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10 responses to “Water pressure

  1. The problem for the water companies is that almost all of their costs are fixed, so a making more of the water bill variable just introduces risk for them with very little hope of reward. You can guarantee that if they ended up with a surplus there would be a surprise “dividend” payment to the owners (the state government, not the citizens) as well as a media outcry. Reward… well, they might get to keep their jobs. So they have every incentive to minimise usage charges in favour of supply charges.

    Here in Victoria it’s actually a problem – the drought and response has meant much less water use, so lower usage charges and corresponding budget shortfalls for the water boards. There is, of course, media mumbling about incompetent bureaucrats mismanaging the water supply and simultaneous complaints about the prospect of higher water charges needed to bring bills back to expected levels. Indeed, a no win situation.

    For that matter, we only just got our final rebate for water saving measures (four months after submitting the paperwork). With that in hand it will only take about another 58 years for the reduced usage to pay off the capital cost (assuming no inflation or interest payments).

  2. That’s interesting, I was just contemplating breaking my blog silence to write a post about how pricing doesn’t always work, using water as an example. Here in NSW, our domestic water consumption has dropped by around 30% in the last 10 years or so (total, so more per capita) without any pricing signals whatsoever.

    I don’t think it was moral pressure, though (we had some, but mostly comparing yourself to last year’s usage). I think it was outright banning, mostly that made a real difference (sprinkler systems, washing your car, hosing down pavements etc etc).

    I think for most people it would take a substantial increase in price to change behaviour, which wouldn’t be tenable for those on lower incomes. Of course, I’d love to see some price gouging of those people who still have an enormous swimming pool, etc, etc. But I suspect they’ve got enough money that they wouldn’t care.

  3. Price signals can also backfire – I worked for one person who said explicitly “I pay for it, I’ll use as much as I want”.

  4. Water usage in Canberra has dropped a lot in the last few years but they’ve had to increase water prices in response because as moz says most of their costs are fixed. They come in large chunks – eg build a new dam, build a desalination plant, etc.

    I’d guess they don’t want people to compare their water usage against average usage because people who use less than the average may get slacker and use more. And average water use is quite bad compared to what most households could do.

    I’d agree that simple price signals, say just changing the base price of water won’t work. But making water usage in excess of a reasonable amount for a frugal household very expensive can work. It will encourage people who want big gardens to look at alternatives such as water tanks, grey water systems and creating low water requirement gardens.

  5. Totally agree Deborah. It’s the same in all the states I think.

    In Victoria, they’ve only recently decided to put up the water bills, in spite of years of shortage – and now they’re linking the increase in water billsto a desalination plant they’re building.

    Right decision, wrong reasons. Water policy is full of these – right decisions made for the wrong reasons, wrong decisions made for the right decisions, or sometimes just the wrong decision made for the wrong reasons. Fun, fun, fun.

  6. My father, who is a fully paid up member of Pedants Anonymous, has sent me this message.

    Excuse the pedantry, but $400 a year is less than $8 per week.
    Love
    Dad

  7. Dear Deborah’s Dad,

    $400 per annum is approximately $7.67 per week. That amount is less than $8, less than $10 and also less than $100. It is, however, more than $7.

    Yours sincerely,
    Moz

  8. Deborah, perhaps you remember my solution to a similar problem in the Tragedy of the Commons/Prisoner’s Dilemma scenario from last year?

    Nothing like the fear of execution to get people using less water!

  9. Actually, I’d forgotten, Daniel. Which is good, because I got to laugh all over again!

  10. I know this is a slightly old post (go go browsing the archives) but it may interest some people to see what is going to happen with Auckland’s water pricing after all the water companies in the region are merged. The regional bulk water wholesaler Watercare announced before the merger that it was going to charge on a tiered basis (much like what you detailed you would like to see in your post). The water retail companies in the area that charge for water (some don’t) would have likely followed suit.