The recent experience of two very similar medium-sized water systems in Hawai'i provides a
case study in the role of an inverted block rate structure in helping to promote conservation. The
County of Hawai'i Department of Water Supply (Hawai'i DWS) serves potable water to
approximately 36,600 residential, commercial, and agricultural customers on the island of
Hawai'i. The County of Kaua'i Department of Water (Kaua'i DOW) serves approximately
18,400 residential, commercial, and agricultural customers on the island of Kaua'i.
In July 2001 both water systems implemented large rate increases (approximately 29 percent at
Hawai'i DWS and approximately 32 percent at Kaua'i DOW) to fund significant capital
improvements needed on each island. A major difference between the two systems, however,
was their rate structures. Hawai'i DWS has maintained an inverted block rate structure for all of
its customers for more than two decades. Kaua'i DOW previously had a uniform (flat) rate
structure and in 2001 initiated an inverted block rate structure for its customers. Although the
two utilities are similar in many aspects (including customer profiles and overall weather
conditions), a preliminary review of customer reactions to these two large rate increases
suggested a more significant reduction in water usage at Kaua'i DOW than at Hawai'i DWS
since 2001.
This paper compares the water usage experiences at Hawai'i DWS and at Kaua'i DOW since
2001. In particular, the paper examines and quantifies the effect of implementing an
inverted block rate structure at Kaua'i DOW in 2001. A review of water consumption patterns at
the two water systems is presented to compare whether Kaua'i DOW's switch from a uniform rate
structure to an inverted block rate structure corresponded with significant changes in water
demand patterns, and if these changes are different from those at Hawai'i DWS. Specifically,
this paper considers the hypothesis that an initial conversion to an inverted block rate structure
can reduce water consumption, but then, once an inverted block rate structure is established,
further changes in rate structure have less impact on water consumption. These and other rate
related water conservation topics are addressed in the paper. Includes tables, figures.
| Edition : | Vol. - No. |
| Number of Pages : | 7 |
| Published : | 06/17/2004 |
