Shadi Eskaf

As water utilities across North America undertake capital campaigns to finance the replacement and expansion of their systems, the need for confident revenue projections grows. Yet many water utilities are subject to factors that can affect revenue variability, including volatile weather patterns and a growing imperative to conserve scarce water resources. As a result, it is more important than ever to anticipate how changing water use patterns and rates drive revenue risk.

Despite being… Show more

As water utilities across North America undertake capital campaigns to finance the replacement and expansion of their systems, the need for confident revenue projections grows. Yet many water utilities are subject to factors that can affect revenue variability, including volatile weather patterns and a growing imperative to conserve scarce water resources. As a result, it is more important than ever to anticipate how changing water use patterns and rates drive revenue risk.

Despite being essential service providers, water utilities experience unavoidable variability in their revenue stream. This revenue variability is driven by many factors: changing population, varying customer demands, unpredictable weather patterns, and even rate structures. While it is unrealistic to expect utilities to eradicate revenue variability, utilities can understand its root causes and incorporate it into their overall resource and finance planning.

This report examines real financial and water use data from three North American water utilities to demonstrate how rate structures can mitigate or intensify revenue variability. It also introduces alternative financial and pricing strategies that can assist water utilities in stabilizing revenue without compromising the commitment to water conservation. Show less

Water pricing can be one of the most effective methods to driving conservation and is also the primary mechanism for recovering the revenue that a water utility needs to protect public health and the environment. The Environmental Finance Center at the University of North Carolina and the Sierra Club, Lone Star Chapter have written a report to help Texas water utilities use their water rates and financial policies to encourage customers to reduce their water use while maintaining the financial… Show more

Water pricing can be one of the most effective methods to driving conservation and is also the primary mechanism for recovering the revenue that a water utility needs to protect public health and the environment. The Environmental Finance Center at the University of North Carolina and the Sierra Club, Lone Star Chapter have written a report to help Texas water utilities use their water rates and financial policies to encourage customers to reduce their water use while maintaining the financial viability of the utility. Show less

The Environmental Finance Center at UNC, Raftelis Financial Consultants, and the Water Research Foundation partnered to produce a report that helps utilities address the challenges of revenue gaps, which are exacerbated by rising customer expectations, declining water consumption, aging infrastructure, and necessary integration of utility finance functions with asset management, environmental justice, risk management, and other initiatives. The report lays the groundwork for a shift in thinking… Show more

The Environmental Finance Center at UNC, Raftelis Financial Consultants, and the Water Research Foundation partnered to produce a report that helps utilities address the challenges of revenue gaps, which are exacerbated by rising customer expectations, declining water consumption, aging infrastructure, and necessary integration of utility finance functions with asset management, environmental justice, risk management, and other initiatives. The report lays the groundwork for a shift in thinking by utilities to modernize financial and management practices by strengthening linkages among systems, processes, and decision-making practices.

This report provides a large-scale, quantitative analysis of the financial reality of water utilities. In its entirety, the report serves as a utility financial review, grounded in practical and applied approaches to securing revenue resiliency. It brings together a myriad of datasets and reports that, taken together, combine to reflect current trends and practices in revenue resiliency. Show less

This guide published by the American Water Works Association (AWWA) is an informative tool designed for use by utilities looking for more appropriate conservation and financial planning strategies. The guide allows users to go beyond generalizing about customers using overly simplistic and generic classifications like average residential, commercial or industrial customers, and begin to segment them using nine concise indicators. The guide introduces metrics that every water utility can use to… Show more

This guide published by the American Water Works Association (AWWA) is an informative tool designed for use by utilities looking for more appropriate conservation and financial planning strategies. The guide allows users to go beyond generalizing about customers using overly simplistic and generic classifications like average residential, commercial or industrial customers, and begin to segment them using nine concise indicators. The guide introduces metrics that every water utility can use to segment its customer base by water-use patterns. Show less

This U.S. Environmental Protection Agency document was developed by the Managerial Capacity Workgroup (including Shadi Eskaf) for the state Capacity Development Coordinators seeking ideas for assessing managerial capacity of water systems in their states. EPA document #816-K-12-004, March 2012.

Installation of dedicated meters for residential irrigation systems, often called irrigation meters, can lead to unintentional consequences that may thwart a utility's intended purpose in promoting such meters. This article explores some of the financial and water use implications of separately metering and billing residential irrigation water under existing utility practices. The authors analyzed data on irrigation pricing and practices from 12 North Carolina utilities to draw generalizable… Show more

Installation of dedicated meters for residential irrigation systems, often called irrigation meters, can lead to unintentional consequences that may thwart a utility's intended purpose in promoting such meters. This article explores some of the financial and water use implications of separately metering and billing residential irrigation water under existing utility practices. The authors analyzed data on irrigation pricing and practices from 12 North Carolina utilities to draw generalizable observations about the effects of irrigation metering on customer expenditures and the inherent incentives on customer demand for irrigation meters and potential consequences on water use. This research found that water providers attempting to encourage water conservation by installing irrigation meters may be inadvertently providing incentives to increase irrigation water use. As they consider setting strategies and rates for their own irrigation-metering initiatives, utility managers can use the lessons learned here to better integrate their water conservation policies with utility finances. Show less

Every utility serves a unique customer base with its own water use and revenue generation patterns. Knowing its customers in detail helps a water provider customize policies and communication strategies not only for the customer base but also for smaller, targeted groups. This article introduces a relatively inexpensive way that utilities can use existing billing data to learn more about customer use patterns and applies this methodology at five North Carolina utilities. Developing smarter… Show more

Every utility serves a unique customer base with its own water use and revenue generation patterns. Knowing its customers in detail helps a water provider customize policies and communication strategies not only for the customer base but also for smaller, targeted groups. This article introduces a relatively inexpensive way that utilities can use existing billing data to learn more about customer use patterns and applies this methodology at five North Carolina utilities. Developing smarter revenue and water use analytics that take into account changes in use behavior helps utilities be proactive in planning for resources changes (and the resulting financial implications) and be more effective in their communications and marketing. By moving away from engaging with residential customers as one homogeneous mass and instead treating them as groups of customers with distinct habits and values, utilities can use targeted messaging and outreach to bring customers on board with new policy rollouts. Show less

This paper identifies opportunities to enhance management capacity for small community water systems through cooperative management. Shared management is a non-structural form of regionalization that would not require reluctant water system owners to give up ownership of their systems, thereby eliminating two of the main obstacles to regionalization. This paper provides a background on various aspects of small water systems, performance, and regionalization in North Carolina, before… Show more

This paper identifies opportunities to enhance management capacity for small community water systems through cooperative management. Shared management is a non-structural form of regionalization that would not require reluctant water system owners to give up ownership of their systems, thereby eliminating two of the main obstacles to regionalization. This paper provides a background on various aspects of small water systems, performance, and regionalization in North Carolina, before exploring the shared management regionalization alternative. We identify opportunities for cost savings through capturing economies of scale in this unique regionalization alternative by recognizing the tasks and duties of running a water system that would be affected by consolidation of management and operations. Finally, the feasibility of implementing a shared management regionalization effort is explored. Show less

This article tests the importance of cost, demand, institutional, and geographic factors on the bills that consumers pay for water and sewer service in North Carolina and the pricing signals that utilities send to customers. The authors apply spatial regression models to test whether other factors besides costs drive rate-setting practices. Results indicate that cost factors, operating ratio, temperature, the application of “outside” rates, and utilities’ primary importance on affordable rates… Show more

This article tests the importance of cost, demand, institutional, and geographic factors on the bills that consumers pay for water and sewer service in North Carolina and the pricing signals that utilities send to customers. The authors apply spatial regression models to test whether other factors besides costs drive rate-setting practices. Results indicate that cost factors, operating ratio, temperature, the application of “outside” rates, and utilities’ primary importance on affordable rates affect combined water and sewer bills at average levels of residential consumption. The study also finds that bills are significantly and positively correlated to bills paid in nearby utilities. Community income and the percent of customers below the poverty line are weakly associated with combined bills. However, utilities facing higher growth rates and those that value conservation are no more likely to send stronger pricing signals than others. Show less

A comprehensive analysis of the capital needs, funding sources and funding cap for all drinking water and wastewater infrastructure throughout the 410-county Appalachian region spanning 13 states.