Money Motivator: Rising Water Prices Will Follow Oil and Food Prices (LeakBird)

Jun.01, 2008 in Public Works, Water Conservation

“In my mind, money is always the biggest motivation for everybody. If you stick it to their pockets, they will fix the daily stupid things,” said the water works chief of Jamestown, Rhode Island last year, regarding Jamestown’s successful water conservation program.

And that is just what will happen, the same as it ever was, as this last week General Electric announced that water scarcity would be the next global scourge, following the release of the new US Government climate report.

From The Guardian article:

The next scourge to afflict the global economy after soaring oil and food prices will be a surge in the cost of water brought on by growing scarcity, one of the world’s biggest companies warned yesterday.

To bring it a little bit closer to home, Why should a tenant care if his toilet is running and wastes 45,000 gallons in 2 weeks, if he’s not paying for it? And now that potable water is becoming more and more expensive to produce, treat, store, and distribute to customers, well, the government’s not going to pay for it, nor the water utilities, nor…you guessed it…the landlords. Tenants and homeowners are going to pay for it, and they had better be prepared.

A running toilet can waste 2 to 5 gallons a minute. According to the American Water Works Association’s 2001 Handbook of Water Use and Conservation, the average American household uses about 70 gallons per day, 8.2 gallons of which can be attributed to the toilet. These numbers seem a little small to me, but we can at least use them as a benchmark. I would put it more at 100 gallons per household, at the very least.

1000 gallons of potable water costs on average about $2 in the US, and that doesn’t include “increasing block rates“, as defined by Syracuse University’s prestigious Environmental Finance Center, aka “tiered water rates”:

With an increasing block rate, the water rate increases as the amount of water used increases. Each succeeding consumption block is more expensive. This rate structure assumes water rates should promote water conservation. For example: $14.00 for the first 1,000 gallons used, $2.00 per 1,000 gallons from 1,000-5,000 gallons used, $2.50 for between 5,000 and 10,000 gallons, and $3 for everything over 10,000 gallons. Advantages: Promotes conservation, especially important in areas with limited water supplies, or with systems with high treatment costs. Promotes smaller wastewater treatment facilities (less water used, less wastewater produced). Disadvantages: Higher costs for high usage; may discourage industry from locating within service area.

Some cities, like Honolulu, are even adding surcharges to water rates:

The “power cost adjustment” will appear on water bills beginning July 1. The surcharge is 9.4 cents for every 1,000 gallons of water used. The average household, using 13,000 gallons a month, will see $1.22 per month added to their bills.

And in states like Florida, particularly the city of Orlando, folks ought to prepare for “sticker shock at the faucet“, DeKalb county Atlanta citizens have been ordered to install low-flow toilets in all houses built before 1993 in the wake of an historic Southeast drought, while in Europe Barcelona has begun importing its water from France, and in the UK, headlines scream, “Water poverty is just a meter away.”

In fact, perhaps what the Orlando Business Journal suggested last week was most shocking to me:

The cost of developing water supplies could jump up seven-fold from the current price of $1 or less to obtain 1,000 gallons of water to $7-plus.

And in other words, just like with oil and food, this is a global problem — not a local or national problem!

If water conservation measures aren’t taken, which in order to work have to stick it to the pockets of American consumers, then the big question becomes: Where in the world is all of the water going to come from? And perhaps even more importantly, Who in the heck is going to pay for it?

The answer: You and me, so those who are most prepared will either pay the least and/or profit.

If you are interested in How You Can Increase Your Cash Flows by $2,500.00 Every Year and Never Pay for High Water Bills Due to Your Tenants’ Running Toilets, sign up for our Free Report here.

Abendigo Reebs is the VP of Business Development for LeakBird Industries LLC in San Francisco, CA. He may be reached by email at ben@leakbird.com

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