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Billing Method Efficient Fixtures? Annual Water Use* (gal/du) Table ES.1.10 Cost and benefit for owners who choose to allocate Useful Life † (years) Annual Value of Water and Sewer Benefits ‡ PV of Benefits § Fixture Upgrade Cost ** ($/du) Annual Service Fee †† ($/du) PV of Costs B/C Ratio Yes 52,195 20 $275 $3,428 $ 0 $ 36 $449 7.6 RUBS No 52,195 20 $275 $3,428 $ 255 $ 36 $704 4.9 * Based on the total water use of the average in-rent unit (143.0 gal/du/day). † Assumes that the program will be in place for 20 years. ‡ Based on a commodity charge for water and wastewater of $5.27 per kgal (the average commodity charge for the thirteen study sites). § The present value of annually occurring benefits is calculated with a discount rate of 5%. ** Includes hardware and installation cost for a dwelling unit that is retrofit with 1.2 toilets for $234, 2 aerators for $4, and 1 showerhead for $17. Not applicable to dwelling units that have already been equipped with hardware operating within 125% of EPACT standards. Only accounts for the first time cost, does not account for any ongoing replacement/maintenance schedule at the property. †† Assumes monthly service fee of $3 is paid by owner. ‡‡ The present value of annually occurring costs is calculated at a discount rate of 5%. xxxiv
ANALYSIS OF PRICE ELASTICITY Economic goods have a downward sloping demand curve. This means that the higher the price of the good, the less of it that is purchased. Within this broad statement, specific goods respond very differently to price. Some goods respond very little to price change, and others respond strongly. Economists have developed the concept of “price elasticity of demand” to characterize these differences. Price elasticity of demand is defined for each point on the demand curve as: The percentage change in consumption per percentage change in price. Since elasticity is a percent divided by a percent, it is a unitless number. The elasticity analysis examined the price elasticity of water use based on utility water and wastewater rates. To simplify the analysis, the average non-seasonal (indoor) water use per unit per year in kgal (using 2001 and 2002 billing data) was calculated for each participating study site. These values were then plotted against the combined utility water and wastewater rate in $/kgal. The results are shown in Figure ES.1.3. The cost for water and wastewater ranged substantially from $2.83/kgal to $10.11/kgal, providing a useful data set for analysis. To improve the model fit, the data point from Indianapolis was removed from the elasticity model. Indianapolis was the only study site to feature a declining block rate structure (i.e. the more water used, the lower the price). All other utilities had either flat rate or increasing block rate structures designed to send an increasing price signal as demand increases. Two regression equations and curves were fit to these data to determine the price elasticity of demand – a straight line and a power curve. The fit of both models was quite good and the range of elasticities calculated fits well with previous research in this area. The straight line model had the highest coefficient of determination (r 2 ) value of 0.6437. Elasticities calculated through the straight line model ranged from -0.12 at $2.83/kgal to –0.65 at $10.11/kgal with an average of –0.29 and a median of –0.20. The constant elasticity power curve model had a coefficient of determination value of 0.5477. The elasticity calculated through this power model was –0.275. These results are shown in Table ES.1.11. The research team 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. xxxv
Page 1 and 2: NATIONAL MULTIPLE FAMILY SUBMETERIN
Page 3 and 4: CONTENTS LIST OF TABLES............
Page 5 and 6: Matched-Pair Analysis .............
Page 7 and 8: LIST OF TABLES Table ES.1.1 Breakdo
Page 9: Table 6.6 Elasticity values, analys
Page 12 and 13: Figure 4.30 RUBS water bill #6 ....
Page 14 and 15: investigated local water savings as
Page 16 and 17: We are grateful to the members of a
Page 18 and 19: quantitative aspects of separate bi
Page 20 and 21: 3. Owner/postcard survey: To identi
Page 22 and 23: "averages" of impact property water
Page 24 and 25: in-rent properties, others used the
Page 26 and 27: of these models included the billin
Page 28 and 29: 70 Average Annual Water Use Per Uni
Page 30 and 31: COSTS AND BENEFITS Beyond quantifyi
Page 32 and 33: service charge, then the resident w
Page 36 and 37: 70 Avg. Water Use per MF Unit (kgal
Page 38 and 39: REGULATORY FRAMEWORK REVIEW The fra
Page 40 and 41: Table ES.1.12 NSUAA Summary of Stat
Page 42 and 43: above, the researchers offer the fo
Page 44 and 45: service is preferable, and would he
Page 46 and 47: practices (BMPs) should be implemen
Page 48 and 49: infrastructure of the building and
Page 50: multi-family housing. The transfer
Page 53 and 54: CHAPTER 1 INTRODU CTION More and mo
Page 55 and 56: In 1998, 15.0%, or 15.4 million, of
Page 57 and 58: TERMINOLOGY AND DEFINITIONS OF BILL
Page 59 and 60: submetering. With utility-submeteri
Page 61 and 62: all the two bedroom units for $20 p
Page 63 and 64: HOW TO USE THIS REPORT This report
Page 67 and 68: CHAPTER 2 LITERAT URE REVIEW As the
Page 69 and 70: A review of the literature unearthe
Page 71 and 72: The price elasticity of water deman
Page 73 and 74: expected. Additionally, McClelland
Page 75 and 76: submetered and five control (in-ren
Page 77 and 78: Another study might want to target
Page 81 and 82: CHAPTER 3 RESEARC H METHODS, APPROA
Page 83 and 84: 1. Selection of participating study
Page 85 and 86:
STUDY SITE SELECTION The Study aime
Page 87 and 88:
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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Page 156 and 157:
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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
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properties built before 1995 were c
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70 Average Annual Water Use Per Uni
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A = Beta coefficient for “Propert
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substantially reduces the sample si
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Table 5.17 Model #2 coefficients an
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0.00 indicating that whatever fit d
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commodity charge for water and wast
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properties having generally lower w
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110 Average Annual Water Use Per Un
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analysis, intended to control best
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Table 5.27 Paired samples test, all
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Table 5.30 Estimated water use befo
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Table 5.33 Comparison of water savi
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180
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sector only reduced usage by 18% (A
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Table 6.1 Avoided costs from submet
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submetered. Complete responses of c
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included in this cost/benefit analy
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Table 6.3 Cost and benefit for owne
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Perceived Concerns In the resident
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With a service fee, residents could
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Table 6.4 Economic return for a res
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ANALYSIS OF PRICE ELASTICITIES Econ
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concluded that if a single elastici
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esults from this analysis point to
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over which they have control than d
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According to the basic consumer cho
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The consumer choice problem can be
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210
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water systems from compliance with
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and methods of practice. NIST publi
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Table 7.1 NSUAA Summary of State Re
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New Surveys of State Agencies and W
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the AWWA WaterStats 1999 database.
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Measures, which dispatches a public
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Mississippi, Missouri, Pennsylvania
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226 Table 7.6 Summary of utility re
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DISCUSSION - KEY EXAMPLES OF STATE
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ill. Condominium associations are g
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under construction after January 1,
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Weights and Measures Regulation In
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from the submetering. Meter testing
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clean and decent housing or the lac
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240
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NATIONAL ORGANIZATIONAL STRUCTURE F
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complaints in all 50 states and app
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- Meters must demonstrate in testin
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- 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
Page 330 and 331:
Fixed rates - Part of a master mete
Page 332 and 333:
Total-capture submetering - a type
Page 334 and 335:
282
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Corral, L.R. 1997. Price and Non-Pr
Page 338 and 339:
McClelland, L. 1980. Encouraging En
Page 340:
Young, C.E., K.R. Kinsley and W.E.
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