Utilities, Cities, Stupid

Some basic economics lessons for civic leaders ought to be a prerequisite for office. The stupidity is astonishing in light of the inability to grasp something so simple. Check this out, regarding water rates, from ABC News:

The grim economy is hitting some consumers in the wallet in yet another way: their water bills.

Many water utilities are raising rates because water use is down, in part because manufacturers have closed or are cutting back, tourism has fallen and the real estate market is in the doldrums.

and

Water companies for the most part get their money from customers. When water consumption goes up, revenues go up — but when consumption falls, so do revenues.

Water companies often raise rates to pay for high-priced capital expenditures, such as new water lines or treatment plant expansions. But they also have to hike rates when water use goes down to bring in enough money to pay their basic operating costs.

They have it exactly backward, in the same way as cities screw up on tax policy. If demand is low, you're going to jack up the rates? But that will just further drive down usage!

Cleveland didn't (doesn't) get this. Population starts to leave, so in an attempt to keep the tax revenues from falling, they jack up the rates... which makes more people leave, so they jack up the rates... Duh!

If you want to attract people top cities, or encourage water usage, LOWER the rates. People will have more incentive to come to the city, or to use the water. If you want to cut costs (the other, more greatly neglected way to strike a balance), lose some employees. After all- usage is down! Less for them to maintain.

As for me, I'm not entirely unhappy that water usage is down. Water resources are scarce, and lower usage natioally might allow some aquefers to recharge. Many desperately need to be. Raising rates is an excellent conservation tool. Idiot utility managers are accidental environmentalists.

New Linkage

My friend Steve has been avidly reading on water policy, and has turned me on to some interesting reading- such as the book Cadillac Desert, which chronicles our disastrous western water policy.

Another great read is the Aguanomics blog, by economist David Zetland. He's a free-market economist, and lately, he's been showing example after example of how the government monopoly utility method of water allocation is ensuring environmental disaster. He believes markets would inject higher prices, which would be a good thing, for it would cause people to be less wasteful and more judicious in their water usage.

The link has been added, at the right.

Lake Mead Bathtub Ring

(Boulder City, NV)- Been to Hoover Dam lately? It's always a spectacle to see, but as this protracted drought continues, the West's misguided water policy becomes highly visible- in the form of a "bathtub ring". It's a marking along the walls of the Black Canyon on the Colorado River, showing where the water levels once peaked.

Here are some of my pics. The first two are taken from the sidewalk on the upstream side of the Dam.

I estimate the water level to be down 50-60 feet. Note the vehicles parked beyond the Arizona water intake, for perspective.

Lake Mead / Colorado River. What? There's a drought? In the desert?!?

I was with Steve Wainstead, who turned me on to the enlightening and enfuriating book, "Cadillac Desert", which chronicles the water policies of the West. I highly recommend it to anyone who believes that only business pollutes or rapes the earth, while the government is a steward of the land. Not to say that business doesn't or hasn't caused environmental problems, but a reading of Cadillac Desert, and a trip to Hoover Dam, shows that no business can rape the earth on the scale a government can.

Standing in Las Vegas Bay- a tributary flowing to Lake Mead. I'm standing in the river bed, about 8' below the old water level, with another 10' or so below to the current water level. The boaters simply use other sites... for now.