Economic Development

Not Wet Enough

Even in the most unlikely places, local governments are grappling with demands for water that exceed existing supplies. And conservation isn't turning out to be easy or cheap.
by | August 2000

By all appearances, neither Seattle nor Tacoma, Washington, should be worried about running out of water. Rainfall averages nearly 40 inches a year at the airport they share, and both cities border Puget Sound. When the clouds lift, residents revel in glimpses of white-capped Mount Rainier, whose melting snow replenishes the watershed every spring.

But even Seattle and Tacoma have learned that their water supply isn't limitless. While winters there invariably are wet, precipitation dwindles from May through September, just as water consumption spikes upward. Local water officials have come to accept that it would be prohibitively expensive to develop additional supplies just to cover peak-season surges.

The larger issue, though, is that the region's population is expected to swell by 25 percent in the next two decades. Bracing for that growth, Seattle and Tacoma have concluded that the cheapest way to meet future demand is to conserve the water supplies they've already got. Even in the Pacific Northwest, "conservation costs about half as much per gallon as the supply option," says Allan Dietemann, a Seattle Public Utilities water conservation analyst.

So in different ways, the two cities are campaigning hard to stretch a precious resource. Since Tacoma is a heavily industrialized port, officials have focused efforts on persuading the municipal utility's biggest commercial customers to cut back their consumption. Seattle's economy is more diverse, so city water managers are counting on a broader conservation program to curb water use by both businesses and homeowners. Over the past decade, for instance, the city's public schools cut water use in half by replacing 2,200 toilets, including some installed in 1917, with more efficient models. In addition, the Seattle Public Utilities reworked its water rates--charging commercial customers double during the summer months.

To make conservation work, Seattle and Tacoma must perform a difficult balancing act. They have to extend limited supplies to supply a burgeoning population and water-intensive high-tech industries. But even as they discourage wasteful use, they've got to sell enough to cover the capital and operating costs they'll incur to deliver clean and healthy water. Seattle already has begun raising rates to pay for new pipelines and a $70 million filtration plant for its primary Tolt River water supply. But now that Seattle boosts summertime rates to discourage use, "if consumption goes down because there's a wet, cold summer, our revenues go down by quite a bit," notes Jerry Allen, the Seattle Public Utility's rate manager. "It's a matter of balancing conservation with revenues, and at the present time we're being careful with that balance."

"This is something that water systems around the country are going to be facing," says Thomas W. Chesnutt, a San Diego-based water-planning consultant. As if coping with growth- or drought-related water shortfalls weren't daunting enough, the American Water Works Association and other infrastructure groups reported this spring that drinking water and wastewater utilities need to invest $1 trillion over the next 20 years to replace pipes, rehabilitate aging facilities and meet tightening water quality standards. Covering just those costs could double consumers' water bills, a most unwelcome prospect to the mayors, city councilors and county commissioners who oversee water agencies. At the same time, local governments have to figure out how to stretch supplies with conservation programs that will require most Americans to pay even more for water.

Delivering water to a community is, by nature, a monopoly. Courts, legislatures and state regulators have traditionally prevented abuse of that power by basing rates on a municipal water supplier's cost of providing service. With little incentive to conserve, water agencies merely calculated expected demand, built capacity to meet it and set rates to cover the cost of acquiring, treating and pumping the water to customers' faucets. Some utilities continue to reward heavy use by cutting rates for commercial customers who buy large volumes of water.

In the West, moreover, federally subsidized dams have kept water prices artificially low. Some Northeastern and Midwestern communities have refused to risk politically unpopular water rate hikes in order to repair leaks in aging systems. Local governments all over the country have kept water charges down to attract industrial development, and the potential for incurring the wrath of rate payers has made elected officials reluctant to meddle with what local utilities charge residential customers. As a result, water-system planning "has been like a treadmill, and artificially low prices have kept the treadmill running at a fast pace," Chesnutt observed in a 1998 study he co-authored with Janice A. Beecher, an Indiana University research scientist.

Those assumptions are beginning to change, however, as more communities are running up against the limits of water resources. Coping with recent drought emergencies has convinced some state and local officials in the Northeast that they need to make conservation a routine part of water-planning operations. In fast-growing cities in the South and West, state and local governments face the very different challenge of supplying water-gulping growth that comes with retirees, golfers and microchip manufacturers flocking to naturally dry desert surroundings.

In central Texas, Austin and San Antonio have launched conservation efforts to preserve dwindling groundwater aquifers that support endangered wildlife species. Florida's efforts to restore water flows through the Everglades are forcing communities to husband limited supplies. For the past century, California has fought epic battles over control of limited water supplies. In the March California primary, however, voters enacted a multi-faceted Water 2000 bond initiative that provides $155 million for conservation projects across the state, including $30 million in loans for governments in urban areas to expand water-saving efforts.

Technology can help municipalities conserve substantial amounts of water. It's relatively simple, for instance, for homes, schools and businesses to cut indoor water usage by installing low-flow toilets and showerheads. Governments can influence outdoor consumption as well by encouraging residents to replace their lawns with native vegetation and install more efficient sprinkling systems. Parks, golf courses, industrial parks, car washes and factories can use recycled wastewater instead of wasting fresh water that's been fully treated so people can drink it safely.

To stretch its supply of drinkable water, for instance, Honolulu, Hawaii, has agreed to purchase half of the 12 million gallons of sewage effluent that U.S. Filter, a water treatment company, will produce with a $34 million wastewater recycling plant scheduled to open in August. In the meantime, however, the Honolulu Board of Water Supply has asked residents to voluntarily cut consumption for the rest of the year by curtailing yard sprinkling, checking for leaks, taking shorter showers and running dishwashers and washing machines only after they've accumulated full loads. This summer, drought forced Atlanta and other U.S. cities to impose similar emergency measures.

Twice in the past dozen years, Seattle and Tacoma suffered through summertime shortages and barely skirted dire economic consequences. During a drought in the late 1980s, Tacoma was forced to cut back deliveries to its biggest customer, the Simpson Tacoma Kraft Co. paper mill, forcing the company to lay workers off until rain began falling again three weeks later. "That's the kind of thing that motivates a company like Simpson and the water utility" to reassess how much water the city can count on, notes Anna Thurston, a water conservation specialist for Tacoma Public Utilities.

Since then, Tacoma has been working closely with the mill and other major industries to curb industrial water consumption. Simpson Tacoma Kraft still uses 30 percent of the city's water, but since 1990, the company has reduced the amount it buys by roughly one-third, conserving 10 million gallons a day. This year, mill executives worked with city utility experts to identify steps that will cut the plant's consumption by an additional 2 million gallons daily. "That's a pretty big chunk of water for us that can be plugged into the system" to supply other customers and head off future shortages, Thurston notes.

For the paper mill, water conservation "isn't a highly profitable investment, but it's necessary for us to stay in business," says Dave McEntee, the firm's environmental health and safety director. For the city of Tacoma, the mill's savings go a long way toward keeping fire hydrant pressure from dropping too low in summer months, when water consumption is peaking. Tacoma's utility has even sold water to nearby communities where short supplies had forced local governments to impose moratoria on new construction.

Seattle has moved faster to curb residential use because homes and apartments consume larger shares of its water. Seattle Public Utilities distributes to 1.3 million people in the city and 27 suburban communities and water districts. While conservation is imperative, city officials have instructed the utility to pursue water savings "without drastic changes in people's lifestyles," says Rich Gustav, the Seattle utility's resource conservation manager. "We're not going to tell people they can't grow lawns anymore."

Toward that end, Seattle distributed 330,000 water-saving showerhead kits door-to-door, offered cash rebates for residents who bought efficient front-loading clothes washers, and paid for installing new showerheads and repairing toilets in apartments and condominiums. The city recycles 500,000 gallons of wastewater a day for irrigation use, and local governments have begun enforcing a revised state code that requires new construction and remodeling projects to install state-of- the-art plumbing. Extensive public education campaigns have promoted water-conserving landscaping, and the utility also is chipping in to help stores, offices, hotels and factories install more efficient plumbing and industrial equipment. "Typically, we go 50-50, and that enables the customer to realize a return on the investment within a couple of years," Gustav says.

Seattle officials credit peak summer rates for roughly a third of the 30 million gallons the system already saves every day, bringing total consumption down to its 1980 level even amid a booming economy. The utility charges residential customers $1.60 per 100 cubic feet of water used--up to a maximum of 500 cubic feet. The rate then jumps to $2.53 for every hundred cubic feet exceeding that base level. Commercial customers pay $1.11 per hundred cubic feet for all the water they use during winter, but the rate escalates to $2.29 in summer. As a rule of thumb, Seattle planners assume that consumption will drop 15 percent every time water rates are doubled, says Allen, the city utility's rate manager.

This year, Seattle followed up by launching a 10-year campaign to cut per-capita water consumption by another 1 percent annually. "That allows us to match the forecasted rate of growth so we can keep demand flat" at current levels, explains Gustav.

Economic purists think the most logical step would be to create full- fledged water markets, then charge all customers what the water is really worth. Such an approach assumes that both commercial and residential consumers can figure out for themselves how to take advantage of cost-saving technologies. In reality, Chesnutt points out, "the fact of the matter is that conservation information is not only not perfect, it's expensive. There's a strong case for governments to take collective action" to promote water-saving decisions.

Seattle is committed to spending $4.8 million a year on its 10-year campaign to promote further conservation. That averages out to $1.52 for every hundred cubic feet of water that the utility won't have to acquire, pump, treat and deliver to homes and businesses. On the other hand, Dietemann points out, "the storage and transportation and treatment of water is very expensive, and the last increment of water is a lot more costly than meeting average demand. Our whole goal with conservation is to keep the peak season as low as possible."

Seattle officials figure that expanding the system to supply that last peak of demand would cost $2.41 for every hundred cubic feet. Compared with that, spending $1.52 to save the same amount is obviously a bargain. Nevertheless, if Seattle can't meet its current 1 percent per year goal, within a dozen years the city will need to either adopt even more rigorous conservation steps or somehow find more water. Realistically, however, "we just can't go out and take more water from a river or drill another well," Dietemann says. "We do have some limits."


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