the mutual water companies analysis & alternate proposal r.11-11-008 bob burke regulatory...
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![Page 1: The Mutual Water Companies Analysis & Alternate Proposal R.11-11-008 Bob Burke Regulatory Liaisons Oct 13, 2015](https://reader031.vdocuments.net/reader031/viewer/2022032722/56649f515503460f94c74139/html5/thumbnails/1.jpg)
The Mutual Water CompaniesAnalysis
& Alternate Proposal
R.11-11-008
Bob BurkeRegulatory Liaisons
Oct 13, 2015
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Financial InstabilityUtilities & Customers
• The 30%/70% rule and Inclining Block Rates create leverage with Volumetric Sales
• Wild $ swings to Utilities & Customers are predicted by underlying math when computed using current methods
• The illusion of the Forecast• WRAM/MCBA amplify the risk
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Financial Instability:Today’s 30% / 70% Rule
30%/70% Rule
% Quantity Forecast Achieved
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Financial Stability:Stable Rate Design Rule
% Quantity Forecast Achieved
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Conservation via Mass Media Technology: Jan 17, 2014 - State of Emergency (419K web hits)
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Conservation via Mass Media Technology
March 19, 2015 – $1B Drought Aid404K web hits April 1, 2015 –
Brown’s Executive Order18.2M web hits
May 5 – SWCB’s Regulations1.02M web hitsApril 25, 2015 –
Brown’s Redouble Effort230K web hits
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Conservation via Low Flow Technology
– 38M California Population– 12.6M residences in CA, 1.8 toilets / residence– 475K hotel rooms in CA, 1.1 toilets / room– Approximately 21M high flow toilets in CA now– 8 uses per day / capita at 4 gal/flush vs. 1.3– 310 BG / Year saved if all 21M are converted =
1x - 2x the current drought annual savings rate
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Conservation via Rate Design
• About 10 out of 100 reports we found actually used statistical techniques to compute Price Elasticity
• Most saw volume decrease with price increase• We ran the numbers on our own price
elasticity in 2006• Consensus: Water Price Elasticity is in the
range of 20% to 25% of the CHANGE in price
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Financial Instability: The Design Flaw with Inclining Block Rates: too few get the
“conserve” price signal
Volume
Price
Block 1 - 100%of customers
exposed
Block 2 - 50%of customers
exposed
Block 317%
exposed
Block 43% are
exposedthe other 97% don’t
get this signal
No “conserve” price signal
Sent to those who use 0 to L
L M H0
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Step 1 - Barrier Block Rates
Volume
Price
Block 1 - 100%of customers
exposed
Block 2 - 50%of customers
exposedBlock 3
17%Block 3
3%
Inclining Barrier Blocks
DecliningOr Uniform Rate Blocks
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RoR $ / Customer with Today’s 30%/70% Rule & Increasing Rate Block Conservation Designs
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The Result Customers Get at Forecast Now:which persons and corporations are disadvantaged?