Monday, April 5, 2010

Water Managers Nationwide Charging More For Product

In Towns With Hard Economic Prospects, Water Is Way High

When it comes to any commodity, greater supplies and fewer
buyers means lower prices, right?



Say what?

When it comes to commodities supplied as a public service,
the typical laws of supply and demand just don't apply.


Start with the word public. It means that no customer may
be turned away. Public means the public.

It costs just as much to gear up and supply water and sewer
services for a diminished number of customers as it does to
supply a full capacity number for which the treatment plants
and delivery systems were built to start with.

Debt service on public works projects does not suddenly take
a holiday just because the population has downsized due to
poor earning prospects in the local economy or the mass
closure of area manufacturing concerns.

That's why water departments nationwide have increased their
prices anywhere from 9 percent to a high of 74 percent in
one California community.

Plant closures, unemployment and the resulting foreclosures
and vacancies in housing have forced the managers of the
water system in Mount Pleasant, South Carolina, to go up by
9 percent.

In Sayreville, New Jersey, the price jump is by a score of
13 percent. In South Carolina, the Charleston suburb was the
fastest growing area in the state until the economy tanked
and people started moving out of their foreclosed homes.

Even though management cut costs by 10 percent and laid off
nine workers, they still had to go up on their price by 9
percent just make ends meet.

In Davenport, California, a suburb of Santa Cruz on Monterey
Bay, where a cement plant that has been in operation since
1906 suddenly closed, people moved away in droves.

To make ends meet, the managers of the water works are
charging a whopping 74 percent more.

Managers of the Baileyville, Maine, plant proposed an 80
percent hike when the owners of a local pulp mill said they
would have to close down and lay off hundreds of workers.

Fortunately, the corporation made a different decision,
found a way to stay open and thus averted a crisis for the
local public service departments.

In wet years, when water supplies are plentiful, consumption
goes down because people don't need to water their lawns.
When extended periods of drought come, they move away
because of the impact on the local economy. The net is
still a reduction of demand, an oversupply of product and a
result of a hike in the price.

How has this dynamic - diminished expectations in the
business sector, reduced numbers of homeowners, higher taxes
and costs of doing business, and the underpinning of
unemployment, especially in resort areas around lakes and
reservoirs - affected the costs of doing business and the
prices of wholesale water supplies to cities and towns,
water districts, agriculturists, power companies and

It's a fair question, one that community organizers could
well be asking the management of the Brazos River Authority
as they travel throughout their massive special district
addressing concerns of community organizations.

The Authority is charged by legislative intent to pass every
acre foot of water above flood stage along to consumers "for
any useful purpose." Its board is appointed by the Governor
and the hydroelectric power projects designed into its many
dams are regulated by the Federal Electrical Regulatory

It is not allowed taxing authority, only income from sales
of water and hydroelectric power, the odd grant and
divestment of property.

Surely, someone out there knows the answer to the question,
fair question that it is.

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