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over which they have control than do the residents, who basically control just their own domestic use. This has significant policy implications because as properties are converted to submetering and RUBS billing programs, owners no longer receive an effective price signal from the utility bill. This implies that the impetus to reduce demand and conserve water on the part of managers and owners is all but lost once a billing program is implemented. While the impact of water pricing is then passed on to the residents, it is apparent that they are much less sensitive to price than are the owners. Because many residents rent their dwelling units, they are unlikely to invest in water conserving fixtures such as toilets, clothes washers, showerheads, faucets and leak repair. In many cases residents may not be permitted to install new fixtures. Leak repair remains the responsibility of the property manager and should be performed as a routine matter. Interior Retrofits and Billing Programs These results suggest that if utilities are interested in accelerating the installation of water conserving fixtures and appliances in their service area, it may be necessary to mandate these installations as a condition of conversion to a water and wastewater billing program. Once a water and wastewater billing program is implemented, most incentives to make these changes will be lost (except in common areas) and it is unlikely that residents will make these changes to their own units. Incentive based programs have spurred fixture change out and utilities may wish to encourage installation of water efficient fixtures in conjunction with their approval of water billing program in their service area. Summary of Elasticities and Comparisons with Other Studies As noted earlier, the price elasticity values found in this study are quite comparable to values found in other research conducted over the past 35 years. A comparison of the results from this study and other elasticity studies is shown in Table 6.8. This table is truncated from Table 2.1 in Chapter 2 and contains only the elasticities that offered a reasonable comparison (i.e. indoor use, non-drought pricing). The elasticities found in this study fit squarely with results from other research starting with the classic Howe and Linaweaver work from 1967 that found a residential indoor use elasticity of –0.231. The 1999 Goodman study that extrapolated multi-family elasticity from single-family demand reported an elasticity value of –0.7. This is substantially higher than the –0.27 elasticity found in this study. Goodman’s elasticity is near the top end range of all the elasticities shown in Table 6.8. Selecting an elasticity value for a rate 204
study is often more art than science and typically the value selected is one the rate planner is comfortable with and can defend to supervisors and the general public. The elasticities developed in this study represent one of the few attempts to empirically determine an exclusive price elasticity for the multi-family sector. As such, it contributes important information to the body of literature on the subject. Table 6.8 Comparison of selected price and elasticity studies Researcher/Study Price Elasticity Notes Howe and Linaweaver (1967) -0.231 21 areas in US: Residential indoor use. Camp (1978) -0.03 to -0.29 10 Northern MS cities: Linear equation. -0.35 to -0.40 10 Northern MS cities: Logarithmic equation. Danielson (1979) -0.27 Raleigh, NC: Using disaggregated data for total residential demand. -0.305 Raleigh, NC: Using disaggregated data for winter demand. Billings and Agthe (1980) -0.27 to -0.61 Tucson, AZ: Using two price variables and increasing block rates. Carver and Boland (1980) -0.1 Washington, DC: Short-term residential demand. Howe (1982) -0.06 21 areas in US: Residential indoor use. Planning and Management -0.2 to -0.4 National: Total residential water use, reviewed over 27 water demand studies. Consultants (1984) -0.06 to -0.8 National: Indoor residential water use, reviewed over 5 water demand studies. -0.262 Columbus, OH: Long-term residential. Schneider and Whitlatch (1991) -0.119 Columbus, OH: Short-term residential. Hanemann (1998) -0.01 to -1.38 National: Reviewed municipal and industrial water demand studies from 1951 to 1991. Goodman (1999) -0.7 57 US cities: Extrapolates from single-family to multi-family sector. National Submetering and Allocation Billing Program Study (2004) -0.27 12 US cities: Multi-family indoor use -0.07 to -0.16 Submetered indoor use. 26 multi-family properties in 3 different geographic regions. ECONOMIC COMPARISON OF SUBMETERING AND RUBS BASED ON CONSUMER CHOICE THEORY Consumer Choice theory can be used to analyze the economic implications for submetering and RUBS schemes. 33 33 This analysis was developed by team economist Dr. Stephen Fisher and Dr. G. Hossein Parandvash, Principal Economist for the City of Portland, Bureau of Water Works to examine the economic theoretical underpinnings of the submetering and RUBS systems. 205
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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
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Table 5.13 Continuous factors from
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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 252 and 253: concluded that if a single elastici
Page 254 and 255: esults from this analysis point to
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
Page 302 and 303: (2) Twisted or kinked flex supply l
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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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