Why is Water so Cheap?

For anyone who has not noticed, Georgia and many other parts of the country have problems with supplying enough water for all the current and expected near-future needs. Locally, the main reservoir, Lake Sydney Lanier, is dramatically low with boat ramps and docks dry and closed. Georgia, Florida, and Alabama are starting court battles over the amount of water being released from the lake with Georgia fighting to have it reduced and the others, along with the Federal Government in the form of the EPA, claiming requirements to keep a certain flow level for down-stream needs (of certain clams and fishes possibly). The levels in the main aquifers beneath the state, and that are shared with all the adjacent states, have been falling steadily for the past 40 years. Agricultural, industrial, and residential growth with its companion increases in water uses have grown at a steady clip in the state for the past half century. Every three or four years we hit a drought-level crisis and the response is the same: water restrictions, watering bans, closing businesses that depend on high water use such as car washes, landscaping, and water parks.

In 1978 I was stationed in Monterey, CA wearing a blue uniform and saluting older men with shiny bits of metal on their shoulders. As I was settling in for a year of language study to understand when some Russion pilot said he was dropping a bomb, Monterey county was coming out of a two-year drought which had seen such drastic measures and more. One that they used which has been discussed in this area recently is to use water meters that cut off at a set point (it was 1000 gallons in Monterey). If your meter shut off it cost $1000 to get it turned back on with repeat offenses escalating the fines. Paulding county Georgia has not started using auto-shutoff meters, but has implemented $1000 fines for violating the total outdoor watering ban. I expect that will be so difficult to monitor and enforce that the big brother meters will soon follow there and in other counties.

Such drastic measures might work, but there seems to be a method that is much simpler to implement and likely more effective in both driving conservation and rasing revenue needed to build infrastructure: raise the cost of water.

My family should serve as a somewhat typical example. We are a four-person household with two children, two dogs, and sundry other pets in a typical 2300 square foot middle class suburban home on a half-acre lot. We take no special efforts to conserve water, but do not over use it either. We do not water the lawn, but that is less conservationist bent than laziness on the my part. I made sure that the yard had reasonably drought tolerant varieties because I did not want to pay for sprinkler systems and knew I would never be interested in wasting weekends tending a lawn. We also do not wash the cars in the drive, but that is also less conservationist and more that the son finds the high pressure sprayer at the car wash more fun than the low pressure hose at the house. We all generally take showers and they probably average the average for folks like us. We adults are likely the most near average of the group in terms of time-in-shower. The son tends to take 5-second showers which he is forced to repeat once or twice until we are sure he has actually gotten water on most of his body. The daughter tends to shower until the hot water is gone. Between the two of them they average and average person of shower time. There is always laundry and dishes to be done and one or two loads of either are washed every other day or so. The dogs, fish, and bird also consume a sip or two every day.

In the six years we have lived in this house our monthly water bill has never exceeded the minimum required and is about $12 for the month. That is a crazy low cost for water given the current conditions which have not sprung up suddenly but have been on us for a very long time. On top of that we have no incentive to save more water over what we do now other than good wishes for our large community, because it will not cost us any less money (and money generally talks louder than good wishes). So the volume they are billing on for the minimum charge is probably too large and should be cut by something like 30% or so to get our attention.

Let's use that minimum monthly amount as a base amount and the current minimum billing for a base rate. I say we change the billing so that anyone going over that base amount pay considerably more than the base rate for the overage. Say 10 times more. Then keep going up the scale for anyone going over twice the base amount to 100 times the base rate for the charge per gallon over. Keep going higher them more they use and let each customer decide just how important the water is for there specific purpose. The only time you have to actually shut off someone's water supply is for nonpayment the same as now when there is not a drought crisis. Perhaps I have rigged this so my life habits do not have to change at all. Maybe the power of 10 increases are too much, or too little, I don't really know. The point is that people that use more should pay more and anyone who really wants to use more and can pay should be allowed to pay and go.

Sure you have to publicize this for several months before flipping the switch. That will give time for the billing department to update the software to generate the bills. The accountants and others might argue that is a massive procedure change, but, as a software guy, I assure you, it is a software change and a not very complex one at that. There will be no need to replace the existing meters with expensive auto shutoff meters. There will be no need to divert police or sheriff staff from important work or, worse, hire more water department staff to patrol for scofflaws. Just read the meter and send the bill the same way they do now. Sure, there will be bill collection problems, but we have those already.

If old Mr. Jones thinks his azaleas are worth $100 a month to water, good on him. If the car wash owner thinks he can raise costs enough to cover water expenses without driving away too much business, good on him. Perhaps the water costs go up enough to make it worth installing the higher volume water recycling system in the car wash. In both cases we all win. Most people use less water. Those who use more pay for it, convert to more efficient systems, or stop using it all together in the case of businesses that cannot profit at that cost.

The only addition I would make to the current infrastructure is for all wells to have meters and to be changed the same as if the water was coming from the public water system. If not exactly the same then being charged some rate that accounts for the reduced cost of not having to process the water out the first time through. The idea that sinking a well gets you free water is ludicrous to me. That well water comes from one of the few common supplies of water that we have. In north Georgia, sinking a well means you are tapping a common pool of water that serves everyone from Alabama to Virginia not a little private pool. The fact that it was not processed though a treatment plant and might not (maybe not) be sent back through that treatment plant saves some money on the use of that infrastructure, but does not account for the loss of the water from the common pool. It is no different than running a pipe into the local river or into Lake Lanier and I am certain that the Corps of Engineers would pitch a fit about that. I have not formulated a good argument for why this is different from building a cistern and catching rain water, but I am certain that it is.

I generally trust the free market to determine what is the best price for a good and how best to distribute things around. I am sure the anarcho-capitalists probably have some ideas on how to let the markets do their thing. I know California has done something with property rights when it comes to water in aquifers, but I am not sure how well that has worked out. Maybe Megan can point me to some resources on that. There might be a market that can handle the water resources and we might be able to get from where we are to there without too much disruption, but I don't see that as likely. In any case market based solutions need a long gestation period to grow from where we are to something else that will work without killing the host getting there. In the meantime, the resource is in the hands of the government at several different levels and the least painful way for them to manage the problem is to pretend to be a market and otherwise stay out of the way.

It would be important for the revenue from the increased fees from the water collections to be used for water infrastructure and not dumped into the general revenue pool. You have to do this both to keep the politicians from funding every pet project with the proceeds and to make sure that most of it actually goes into research and development of water resources and infrastructure. I would expect a large portion of it to go to refund portions of property taxes and other taxes in order to keep the overall affect of the cost increase mostly revenue neutral. Not completely neutral because we really do need more reservoirs, more treatment plants, incentives for large buildings to use gray water systems, money for cities to replace ancient underground transport (Hello Atlanta!), etc.

Come on Governor Perdue, raise the cost of water already. Then get out of our way.