November 16,
2000 Meeting Minutes
University of
Idaho, McClure Hall Rm. 311
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UI: Larry Kirkland,
Facilities Engineer |
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WSU: Craig Benjamin
(Chair), Assistant Director of Facilities Operations |
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X |
UI: Jay Becker
(Vice-Chair), Assistant Director, Utilities and Engineering |
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WSU: Pete Grigas,
Facilities Planning |
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X |
Moscow: Gary Presol, Dir.
Public Works |
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Pullman: Mark Workman,
Dir. Public Works |
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Moscow: Steve Busch, City
Council Member |
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Pullman: Sue Hinz, City
Council Member |
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Latah County: Loreca
Stauber, County Commissioner |
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Whitman County: Les Wigen,
County Commissioner |
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Latah County: Tom
Townsend, citizen |
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Whitman County: Derek
Pohle, County Engineer |
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Executive Secretary and
Technical Advisor: Juliet McKenna |
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Kevin Brackney (UI), Bill French (Moscow resident), Art Garro (Pullman), Terry Ryan (WSU), Tom Scallorn (Moscow Water Dept.), Kathleen Warnick (Latah County resident), Jack Wenders (UI, invited speaker)
Vice-chair Jay Becker called the meeting to order at 2:35 P.M. Minutes were approved as presented. New PBAC representative for WSU, Pete Grigas, WSU Facilities Planning was introduced, along with WSU's new energy manager in Facilities Operations, Terry Ryan.
Jack is emeritus University of Idaho Professor of Economics with a background in regulatory economics that led to a long career consulting in pricing of natural resources and utilities. While at the University of Arizona in the 1970's, he became involved in rate setting for water. Following is a summary of some of the points he made:
1. Two factors traditionally influence water pricing: 1) focus on the supply side (the cost to supply more water) and 2) most water systems are publicly owned. In his experience, political considerations always override economic arguments when setting water prices and the challenge for sound water pricing policy is to reconcile the politics with the economics.
2. Demand Side. Jack argues for demand side pricing of water, or pricing water in order to reduce demand. Actual human need for water is 5-6 quarts per day compared to average national usage rates of 70 (indoor residential) gallons per person per day. Water used for drinking is a high value use; watering your driveway to clean it is a low value use. The consumer ultimately decides the benefit of each additional increment of water used, so water prices need to be set to encourage the highest value uses by the consumer and to discourage low value uses. [Note: Ashley Lyman, UI Economics Professor, has published work on the demand sensitivity to water rates.]
3. Marginal Costs. Water rates should be priced on the edge of system costs (marginal costs), not the average system costs. The history of the West is that the cheap water has been used up, and all areas are forced to use more expensive water. Examples of this are areas in the Southwest (S. California, Arizona), that have depleted local groundwater supplies and are now dependent upon imported Colorado River water, of lower quality. To reflect the cost of depleting the "cheaper" water, the current cost to the consumer should be the cost of the supplying the next (more expensive) increment of water.
4. Seasonal Rates. Expanding the peak capacity, is 2-3 times more costly than simply increasing from the baseline (see chart). Therefore, water rates during peak usage (summer) should be set 2-3 times greater than during baseline periods (winter). [Note: Pullman rates are $0.92 (Oct-May) and $1.13 (June-Sept) per 100 cf with a base of $13.92. Moscow rates are $1.10 (Oct-May) and $1.40 (June –Sept) per 100 cf with a base of $5.25.
5. Publicly owned utilities can easily avoid a the problem of making a profit by a variety of pricing structures. This concern should not be an impediment to demand-side pricing. For example, inverted rates charge low rates for initial increments (high value uses) and increase rates for higher usage (low value usage). Another example is to provide water free of charge in the winter, and charge marginal costs during the summer. In this manner, low value uses subsidize high value uses and a profit is avoided.
6. Price vs. persuasion. Jack has shown (reference available) that "persuasion" techniques are less effective than water pricing in getting consumers to use less water. He also argues that persuasion techniques (e.g. mandated water saving appliances, restricted sprinkling hours) can be coercive and infringe on an individual's right to choose. Pricing water according to its true cost allows the consumer to chose the value of a particular use of water.
Comments: G. Presol pointed out the number of engineers at the meeting and said that Jack was preaching to the choir, and agreed that many of these issues are political. He understands that political courage is needed to overcome the politics.
T. Townsend brought up the question of water rights - a complicated issue in both Washington and Idaho. Jack replied that if water rights were fully transferable, and the marketplace determined water use, water would only be used by the highest value user.
K. Brackney asked what the incremental cost was locally. G. Presol replied that Moscow's newest well cost approximately $1 million in 1985.
J. Becker reported that as soon as legal review is completed by the University of Idaho, a final version will be sent out to all Entities for signatures.
Idaho Representative Tom Trail and Senator Gary Schroeder have indicated their support of our request, and have asked for a meeting during the first week of December. At the request of Craig Benjamin, J. McKenna requested committee approval to draft a new proposal during December, if necessary. Pete Grigas motioned to approve a meeting between Juliet, Craig, and Larry and Representative Trail and to approve a new work proposal, if requested by Rep. Trail; but there may be a need for a special meeting before the next regularly scheduled meeting, or a comment period for PBAC members to approve any new proposal. Gary Presol seconded the motion; motion approved unanimously. J. McKenna will keep PBAC members informed of the progress on this.
J. McKenna stated that she has not been able to make contact with Washington representatives and would like the help of committee members who know these individuals. At the September 21 and again at the October 19 meeting, it was suggested a group work with Washington legislators on this request including Sue Hinz, Jay Becker, Derek Pohle, and Les Wigen.
The COE proposed a reduced scope of work from what PBAC originally requested and PBAC agreed not to pursue this work. Refer to the attached letter.
The speaker's slot has been secured by PBAC for the breakfast on January 10, 2001 at 7 am at the University Inn in Moscow. J. McKenna will work with Larry, Jay, and Craig on the presentation and will present an outline of the presentation at the December meeting. Others should let Juliet know if they want to participate in the presentation.
· Former conservation coordinator Helena Gregory completed the display booth. It is available for display at community events and contains water conservation information and information on the PBAC as well as activities for children
· Reminder of the AWWA Water Conservation Division is holding their annual national meeting in Portland, OR on February 1-3, 2001. J. McKenna requested Committee approval to attend. Grigas motioned, G. Presol seconded to approve Juliet's attendance at this meeting with expenses not to exceed $450. Motion passed unanimously.
· An article was just published by Kent Keller's research group describing the isotope study that concluded that groundwater in the Grande Ronde aquifer is at least 10,000 years old. This research was sponsored by PBAC. The reference is Larson, K.R., Keller, C.K., Larson, P.B., and Allen-King, R. M.; 2000. Water Resource Implications of 18O and 2H Distributions in a Basalt Aquifer System; Ground Water, November-December 2000; pp 947-953.
· PBAC received a resume from an individual who is moving to the Palouse and interested in applying her degree and experience in environmental education to water conservation issues. Tom Scallorn indicated Moscow may have a position open that matches her qualifications.
· EPA Grant - Earlier in the week, J. McKenna distributed an email about an EPA grant available for water quality or water efficiency projects. The grant amounts range from $10,000 to $500,000 with an average of $100,000. The deadline for a 3 page pre-proposal is November 27, 2000. J. McKenna felt that PBAC does not have a project ready that would match the grant criteria. At this point, only Moscow has expressed an interest in potentially meeting the deadline. [NOTE: Over the Thanksgiving weekend, J. McKenna helped Tom Scallorn of Moscow Water Dept. prepare a submittal for a $100,000 grant request to design and construct a line to go alongside a new sewer line that would pipe treated wastewater from the Moscow wastewater treatment plant to city-owned parks and ballfields. This would provide treated wastewater (reclaimed water) for irrigation at a number areas that are currently irrigated with pristine groundwater.
· J. McKenna feels the person in her position should dedicate more time to grant preparation and writing, and should seek out grants for entities and PBAC for water efficiency projects. She is beginning to form a list of potential projects that could be completed by each entity (e.g. appliance rebate programs, recycled water infrastructure, etc) and will also begin to compile a list of applicable grants. PBAC can serve an important role to bring in money to the community to fund projects that help reduce water demand, and alleviate the burden of financing these projects from the individual Entities.
Pullman is continuing to include brief water conservation tip in the “message” portion at the bottom of their water bills.
Drilling for Pullman’s new well has restarted.
UI has submitted a capital request to expand their recycled water irrigation system. UI has also joined the GemStars program, an energy and resource conservation program that involves recycling and education.
UI is in the process of interviewing applicants for a Resource Conservation Manager.
Moscow had half-day water festival for 6th graders at McDonald Elementary School in Moscow. Moscow also sponsored a Project WET (Water Education for Teachers) workshop on October 20-21. They are working with the school district to get water education programs accredited.
Moscow has begun construction on the new wastewater treatment plant.
J. McKenna reported that a team of citizens, and representatives from UI and the City of Moscow are working on a xeriscape demonstration garden concept. Hopefully, this will be approved at the December meeting of the Public Works at UI and Moscow.
WSU - the recycled water project will not be approved in the budget for this biennium; however the project will not be dropped and other ways to fund it will be considered.
Latah County - Tom Townsend reported that the Paradise Creek TMDL (total maximum daily load) project has approved a monitoring plan and the project is continuing.
Thursday, December 14,
2000 at 2:30 pm
McClure Hall Room 311
The meeting was adjourned by consensus.
Respectfully Submitted,
Juliet M. McKenna
Executive Secretary/Technical Advisor