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concluded that if a single elasticity value were to be selected, the preponderance of the results from this analysis point to an elasticity of –0.27. However, the linear model result clearly shows that elasticity varies with price and this should be taken into account when applying these values to planning and rate models. 70 Avg. Water Use per MF Unit (kgal) 60 50 40 30 20 10 y = 80.613x -0.2752 R 2 = 0.5477 y = -2.5969x + 66.617 R 2 = 0.6437 0 0 2 4 6 8 10 12 Combined utility water and sewer rate ($/kgal) Figure 6.1 Demand curve and demand equations, elasticity analysis #1 (utility rates) Table 6.6 Elasticity values, analysis #1 (utility rates) Price ($/kgal) Straight Line Model Power Curve Model Elasticity Elasticity 2.83 -0.1240 -0.2752 2.85 -0.1250 -0.2752 3.56 -0.1611 -0.2752 3.72 -0.1696 -0.2752 3.85 -0.1766 -0.2752 3.99 -0.1842 -0.2752 4.67 -0.2226 -0.2752 6.48 -0.3380 -0.2752 6.68 -0.3521 -0.2752 8.38 -0.4852 -0.2752 8.53 -0.4982 -0.2752 10.11 -0.6505 -0.2752 Conclusion: Elasticity = -0.27 200
Elasticity Analysis #2 Submetered Water Use The second elasticity analysis examined the price elasticity of water use based on water and wastewater rates charged by third party billing service companies. The actual commodity charge for water and wastewater was calculated for each of the approximately 40 submetered bills provided by residents responding to the resident survey. Some bills came from the same property and other did not provide sufficient information required to calculate the actual commodity charges. Ultimately only the data from 26 individual submetered properties could be used in the elasticity analysis. Average annual indoor per unit water use for each property was extracted from the billing database to conduct the analysis. The actual commodity rates charged by the third party billing service companies to residents ranged from $1.05/kgal up to $15.40/kgal for combined water and wastewater. This is the commodity rate only and does not include any service charges or flat fees. Since all of these submetered properties reside within the service area of one of the 13 study sites and the commodity rates in those areas are known to range from $2.83/kgal to $10.11/kgal, it is apparent that some service companies are under charging customers and some are clearly inflating the commodity rate substantially. The practice of inflating the water and wastewater commodity rate is illegal in many jurisdictions and could subject the property and billing company to a raft of local and national regulations. Two regression equations and curves were fit to these data to determine the price elasticity of demand – a straight line and a power curve. These curves are shown Figure 6.2. The fit of both models was poor, substantially worse than for the utility rate analysis. The resulting elasticities are somewhat smaller than what were found in analysis #1. However, the range of elasticities calculated fits well with previous research in this area. The straight line model had the lowest coefficient of determination (r 2 ) value of 0.0368. Elasticities calculated through the straight line model ranged from -0.02 at $1.05/kgal to –0.35 at $15.40/kgal with an average of –0.10 and a median of –0.07. The constant elasticity power curve model had a higher, but still rather low coefficient of determination value of 0.1199. The elasticity calculated through this power model was –0.16. These results are shown in Table 6.7. Because of the limited available data and the extremely poor fit of the demand curve models, the research team concluded a single elasticity value should not be selected. A preponderance of the 201
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NATIONAL MULTIPLE FAMILY SUBMETERIN
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CONTENTS LIST OF TABLES............
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Matched-Pair Analysis .............
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LIST OF TABLES Table ES.1.1 Breakdo
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Table 6.6 Elasticity values, analys
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Figure 4.30 RUBS water bill #6 ....
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investigated local water savings as
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We are grateful to the members of a
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quantitative aspects of separate bi
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3. Owner/postcard survey: To identi
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"averages" of impact property water
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in-rent properties, others used the
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of these models included the billin
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70 Average Annual Water Use Per Uni
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COSTS AND BENEFITS Beyond quantifyi
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service charge, then the resident w
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Billing Method Efficient Fixtures?
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70 Avg. Water Use per MF Unit (kgal
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REGULATORY FRAMEWORK REVIEW The fra
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Table ES.1.12 NSUAA Summary of Stat
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above, the researchers offer the fo
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service is preferable, and would he
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practices (BMPs) should be implemen
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infrastructure of the building and
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multi-family housing. The transfer
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CHAPTER 1 INTRODU CTION More and mo
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In 1998, 15.0%, or 15.4 million, of
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TERMINOLOGY AND DEFINITIONS OF BILL
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submetering. With utility-submeteri
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all the two bedroom units for $20 p
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HOW TO USE THIS REPORT This report
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CHAPTER 2 LITERAT URE REVIEW As the
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A review of the literature unearthe
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The price elasticity of water deman
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expected. Additionally, McClelland
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submetered and five control (in-ren
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Another study might want to target
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CHAPTER 3 RESEARC H METHODS, APPROA
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1. Selection of participating study
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STUDY SITE SELECTION The Study aime
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Figure 3.2 National Multiple Family
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Matched pair protocol/survey - conf
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information given the available bud
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survey. Service companies that prov
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in “business to business” calli
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MATCHED PAIR SAMPLE The purpose of
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The second part of the visit requir
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epresentative of a known population
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51 Table 3.7 Postcard survey statis
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Table 3.8 Comparison of annual wate
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postcard survey. Nevertheless, exam
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confidence interval ranged from 49.
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particular property (e.g., the mont
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State PUC officials - water commiss
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10. The PROPID number appearing on
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These costs represent the commodity
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The postcard survey provided inform
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Table 4.4 Average number of units f
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Two-thirds of the properties that r
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Percent of Surveyed Properties with
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$700 Average Rent Per Bedroom ($) $
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Percent of Surveyed Properties with
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Impact properties were also more li
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Table 4.8 Issues considered before
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Percent of Surveyed Impact Properti
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60% Percent of Surveyed Properties
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From the visits, it was found that
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100% Percent of Surveyed Residents
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Roughly similar proportions of resi
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inserts for toilets (21%) or low-fl
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proportion were unsure, 37% from su
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Table 4.18 Ownership and rental rat
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Figure 4.17 Submeter water bill #1
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wastewater rates are not shown so t
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Figure 4.23 Hot water hybrid water
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RUBS Sample Bills Seven sample RUBS
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wastewater rates are not shown so t
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Figure 4.28 RUBS water bill #4 from
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Figure 4.30 RUBS water bill #6 RUBS
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directly to and then paid by the th
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never subtracting for common area w
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Late Fees At the start of water bil
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124
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intuitively clear, and matches comm
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Indoor water use was normalized on
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Table 5.3 Summarized water use anal
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easonable assumption since there is
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Figure 5.1 shows the frequency dist
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40 Difference in Annual Water Use p
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after 1995. By including only those
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70 Average Annual Water Use Per Uni
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Table 5.11 Statistical tests compar
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Factors that Influence Water Use Th
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Table 5.12 Association of categoric
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Indoor Water Use per Unit in 2001 I
Page 202 and 203: Table 5.13 Continuous factors from
Page 204 and 205: Multivariate Models to Determine Im
Page 206 and 207: properties built before 1995 were c
Page 208 and 209: 70 Average Annual Water Use Per Uni
Page 210 and 211: A = Beta coefficient for “Propert
Page 212 and 213: substantially reduces the sample si
Page 214 and 215: Table 5.17 Model #2 coefficients an
Page 216 and 217: 0.00 indicating that whatever fit d
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Page 220 and 221: properties having generally lower w
Page 222 and 223: 110 Average Annual Water Use Per Un
Page 224 and 225: analysis, intended to control best
Page 226 and 227: Table 5.27 Paired samples test, all
Page 228 and 229: Table 5.30 Estimated water use befo
Page 230 and 231: Table 5.33 Comparison of water savi
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Page 234 and 235: sector only reduced usage by 18% (A
Page 236 and 237: Table 6.1 Avoided costs from submet
Page 238 and 239: submetered. Complete responses of c
Page 240 and 241: included in this cost/benefit analy
Page 242 and 243: Table 6.3 Cost and benefit for owne
Page 244 and 245: Perceived Concerns In the resident
Page 246 and 247: With a service fee, residents could
Page 248 and 249: Table 6.4 Economic return for a res
Page 250 and 251: ANALYSIS OF PRICE ELASTICITIES Econ
Page 254 and 255: esults from this analysis point to
Page 256 and 257: over which they have control than d
Page 258 and 259: According to the basic consumer cho
Page 260 and 261: The consumer choice problem can be
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Page 264 and 265: water systems from compliance with
Page 266 and 267: and methods of practice. NIST publi
Page 268 and 269: Table 7.1 NSUAA Summary of State Re
Page 270 and 271: New Surveys of State Agencies and W
Page 272 and 273: the AWWA WaterStats 1999 database.
Page 274 and 275: Measures, which dispatches a public
Page 276 and 277: Mississippi, Missouri, Pennsylvania
Page 278 and 279: 226 Table 7.6 Summary of utility re
Page 280 and 281: DISCUSSION - KEY EXAMPLES OF STATE
Page 282 and 283: ill. Condominium associations are g
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Page 286 and 287: Weights and Measures Regulation In
Page 288 and 289: from the submetering. Meter testing
Page 290 and 291: clean and decent housing or the lac
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Page 294 and 295: NATIONAL ORGANIZATIONAL STRUCTURE F
Page 296 and 297: complaints in all 50 states and app
Page 298 and 299: - Meters must demonstrate in testin
Page 300 and 301: - Plumbing systems are space constr
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(2) Twisted or kinked flex supply l
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252
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Estimated Water Use By Different Bi
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there are clear benefits to these s
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study site. These values were then
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immediately strengthens the owner's
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among the nation's key strategies f
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all repair and replacement decision
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These findings underscore the obser
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varies with volume of use) for mult
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Recommendation 6 - Efficient plumbi
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financially responsible for their o
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individual unit, the volume allocat
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RECOMMENDATIONS FOR FURTHER RESEARC
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Fixed rates - Part of a master mete
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Total-capture submetering - a type
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282
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Corral, L.R. 1997. Price and Non-Pr
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McClelland, L. 1980. Encouraging En
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Young, C.E., K.R. Kinsley and W.E.
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