[jorgem]

>> The unspoken fear of all utility managers is the “Death Spiral Scenario”.

>> In this nightmare, a utility commits to build new equipment.

>> However, when electric rates are raised to pay for the new plant, the rate shock moves customers to cut their kWh use.

We have a "death spiral" in water prices in my local (southern California) water district.

There was a drought. People were asked to conserve. People conserved too much. Drought ended. Water use did not return. Water companies then need to raise prices to meet their distribution costs. Which lowers demand further.

It can only end ugly.

[kiba]

It only end ugly for the water companies. On the contrary, it ends beautifully for the customer.

[jorgem]

Not really. The water company is raising prices on everyone because we're not using as much, but they still have same overhead. If the whole community hadn't conserved, we'd have gotten more water for the same or lower cost.

[pbhjpbhj]

>The water company is raising prices on everyone because we're not using as much //

If they're like the UK water companies then they'll be moaning they're suffering but still be making vast profits.

It's like "we can't fix the pipe network without increasing water bills and we already put them up 10% this year; oh and we made 20% more profit this year so we must be serving our customers well ....".

[caf]

If the water utilities are smart they'll increase the fixed "connection charge" component of their bills to cover more of the fixed infrastructure costs.

[jorgem]

Yes. That is why the water part of my bill is sometimes only $10, but the connection charge is $120. It's a worst case scenario in the few months where I hardly use water.

[maxerickson]

I doubt it gets that ugly. The per gallon charge for municipal water in the East Bay is ~$0.005. People like flushing their toilets and taking showers, so conservation only eliminates so much.

[jorgem]

I dunno. My water bills average $200/mo, for a single home (no pool, mostly drought resistent yard, etc). We're in an area with low density (out in the country).

I pay about $120 in fees. Then the water is the rest of it.

In winter, when we use less water, my bill goes down to about $130. $10 worth of water per month.

[pyoung]

They may be charging you more per gallon in the summer. Also, rural municipalities need to charge higher fees and taxes per person to recoup their costs. This is due to the fact that they have to maintain a water system that serves a larger area but fewer people.

[maxerickson]

I guess the $200 is ugly enough as it is.