The shift toward conservation rate structures, although they may provide better incentives to use scarce water wisely, changes who pays what and can increase the variability of future revenue streams to the water agency. Though the definition of the "correct" rate structure varies by community, the managerial strategies necessary to cope with the uncertainty brought about by conservation rate structures apply universally. Revenue instability directly increases water suppliers' borrowing costs and adds indirect costs in the form of more complicated planning to provide for a reliable future water supply. This article describes an empirical study using data from two water agencies that have adopted conservation rate structures. The article proposes ways quantitative tools may be used to: measure and cope with added uncertainty; and make explicit the magnitude of trade-offs between revenue stability, equity, and the provision of incentives for efficient use of water resources. Includes 15 references, figures.
| Edition : | Vol. 88 - No. 1 |
| File Size : | 1
file
, 1 MB |
| Note : | This product is unavailable in Ukraine, Russia, Belarus |
| Number of Pages : | 12 |
| Published : | 01/01/1996 |
