Cal Water, the nation's third-largest water utility serving half a million California customers, announced on July 29, 2024, that its water efficiency programs have reduced customer water bills by 20.5 percent over the past 15 years.
This compares to what they would have paid without these initiatives. It's based on research by the Alliance for Water Efficiency (AWE), a respected Chicago-based nonprofit that advocates for water conservation and efficiency across the industry.
It may seem counterintuitive that a water utility would promote helping customers lower their bills. However, throughout California and increasingly nationwide, water efficiency delivers multiple benefits to customers, communities, and utility companies.
The AWE study explains this paradox: "When less water is used, costly investments required to produce additional water supplies [and deliver water supplies] can be deferred and potentially avoided."
Defining Water Conservation and Water Efficiency
It's crucial to distinguish between water conservation and water efficiency, as they represent distinct approaches to water management.
Water Conservation: Refers to a temporary reduction in water usage, typically implemented during specific events like droughts or water restrictions. It's a short-term response to immediate needs.
Water Efficiency: This is a long-term strategy focused on permanently reducing or eliminating water consumption. It involves:
· Making lasting changes to water-use habits in homes, workplaces, and schools.
· Replacing water-intensive systems with innovative, water-saving technologies, such as low-flow fixtures, waterless urinals, smart irrigation systems, and water recycling systems. These technologies reduce water consumption and contribute to cost savings and environmental sustainability.
This distinction highlights that investments in water-efficient technologies provide ongoing benefits, rather than just temporary relief.
How Cal Water Saved Their Customers So Much Money
Many experts credit Cal Water's 2009 implementation of a "tiered rate structure" (block pricing) as a pivotal strategy for achieving these cost savings. This system charges customers varying rates based on their water consumption: the more water used, the higher the rate.
Here’s How It Works:
· Commercial buildings are initially assigned a base water allowance at the lowest rate, determined by size and occupancy.
· Exceeding this base allowance triggers a shift to higher tiers (or blocks), resulting in increased water charges.
· This tiered system discourages excessive water use, particularly for non-essential purposes.
Cal Water's CEO, Martin A. Kropelnicki, highlighted that this tiered rate structure and water efficiency efforts have also reduced utility operational costs. This cost reduction allows Cal Water to request smaller rate adjustments, resulting in savings for almost all its customers.
There are also environmental benefits. For instance, when less water is used, the number of chemicals used to treat water decreases. The strategy also reduces energy consumption, which, in turn, lowers greenhouse gas emissions.
Benefits to Facility Owners and Managers
Water efficiency measures have also provided facility owners and managers with significant financial advantages. Between 2010 and 2022, Cal Water reports these customers have avoided water bill increases of 2-20% (depending on the district) thanks to tiered rate structures and water efficiency programs.
These findings highlight how proactive water efficiency measures directly reduce operating costs. Without these measures, facilities would face higher operating expenses, which would be particularly challenging today, as many commercial properties in California and nationwide struggle to control costs, reduce costs, attract new tenants, and recover from pandemic-related setbacks.
Klaus Reichardt is CEO and founder of Waterless Co, Inc., a pioneer in advancing water efficiency. Reichardt is a frequent author and presenter who discusses water conservation issues. He can be reached at klaus@waterless.com
Originally published in Facility Management Advisor, August 2024.
