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Building Public Support For Efficiency-Oriented Water Rates Utilities have the tools to explain why costs must rise while use goes down. By Megan Chery W ater rates are on the rise as the water industry looks to fund unprecedented capital needs and cover increasing costs for everything from system maintenance to source water. Water rates increased by 23 percent from 2000 to 2010 1 , and prices for water and sewer maintenance continue to rise at a rate much higher than the overall rate of inflation 2 . Simultaneously, utilities are moving towards efficiency-oriented rate structures that encourage consumers to use water wisely in an effort to meet growing demand with finite supplies. As a result, utility managers find themselves facing the unenviable communications challenge of having to ask customers to use less while paying more. Water rates are typically subject to approval by at least one oversight body, such as a board of elected officials, who report to a diverse group of customers and stakeholders, requiring utilities to build external support for a rate change. Many utilities have struggled to effectively communicate the value — and cost — of a reliable supply of safe, affordable drinking water for today and for generations to come. With pipes buried underground and treatment plants far from view, water infrastructure and resource challenges have largely been "out of sight, out of mind" from the consumers' perspective. The result is a lack of awareness about the water service consumers have come to expect and the invaluable role of utilities. A 2011 survey from The Nature Conservancy revealed that 77 percent of respondents could not accurately identify the natural source of the water used in their homes 3 . The good news is that most utilities already have the tools to get their customers' attention, and new cost-free or low-cost resources can help managers succeed despite budget constraints and limited staff. With the right public engagement plan and by incorporating principles of good communications, utilities can smooth the way for rates that keep them fiscally healthy and ensure sustainable management of resources. Engage The Public As Partners The value of public participation in formulating policies has become increasingly important, and rate changes are no different. Involving customers and other stakeholders in the initial stages of rate revisions conveys the message that customer concerns will be taken seriously. A community that feels responsible for the stewardship of its water resources and has an opportunity to shape resource management is more likely to be receptive to and supportive of difficult decisions. There are numerous models for initiating productive dialogue with the public around a rate change. Town meetings provide open, informal, and participatory venues for sharing information and expressing concerns. Advisory committees or task forces can provide a more structured format but may also require more effort on the utility's part to manage input and process recommendations. No matter the format, a successful public involvement process requires including diverse interests — especially those that may be averse to or significantly impacted by a rate change. Utilities can also set themselves up for success by building dialogue with the public well before the need for a rate increase. Customer education should be a long-term effort and will result in greater public awareness over time. In 2013, the Albuquerque, NM Bernalillo County Water Utility Authority implemented Customer Conversations, an outreach program designed to generate public input regarding utility plans, policies, and programs 4 . Through interactive sessions regarding a variety of topics, they built a group of knowledgeable customers who, over time, became ambassadors for the water authority and set the stage to introduce needed rate adjustments to support revenue stability. Tell The Utility's Story Regardless of the model chosen, introducing a new rate structure to the public requires different preparation and a different approach than internal briefings. Utilities should be prepared to demonstrate how water use efficiency will benefit the community from social, environmental, and economic perspectives. An analysis of costs that can be avoided or deferred thanks to conservation can provide positive data points and messages for customers. For example, Westminster, CO, determined that conservation programs implemented since 1980 had saved customers 91 percent in rates compared to what they would have been had new facilities been built to meet growing demand 5 . Compiling this data point helped communicate to customers that rates are rising whether they conserved or not, but conservation would help slow or reduce those increases. Every utility's story will be different, but framing water use efficiency in terms of community well-being and providing backup data will help bring the point home. Managers should also be prepared for tough questions and be able to express complex topics in simple terms with the appropriate level of detail. Plan Beyond Approvals The approval of a rate structure change or rate increase is not the conclusion of the public engagement journey but rather the middle point. A well-organized implementation of a rate structure to the entire customer base is vital to the success of a rate structure in achieving its objectives. It is important to not overlook internal communications when preparing for a rate change. Customer service representatives and staff in the field are the utility's front line of interaction with customers, and they should be prepared to deliver the same messages as utility leadership. When Cobb County Water System in metropolitan Atlanta implemented conservation rates that would result in a 300 percent increase in water bills for some large users, they engaged the entire organization and paid particular attention to customer service and 18 wateronline.com ■ Water Innovations