Using Conservation-Based SDCs to Reduce Demand and Ensure Equity

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While growth continues, many utilities scramble to meet future water demands. Conservation has always been the go-to strategy for demand management, but what if there was a way to reduce water consumption before a home is built?

Western Resource Advocates (WRA), a nonprofit based in Boulder, CO, sought to answer that question. Their recently released, A Guide to Designing Conservation-Oriented Water System Development Charges, offers various approaches adopted by Colorado utilities who designed conservation-oriented fees for new development that incentivize water efficient homes and landscapes. Raftelis offered some insight on how these types of fees could be developed considering industry standard principles.

New and infill development has changed significantly over the past few years. High-density residential and multifamily housing has challenged the typical method for applying system development charges (SDCs). The approaches described in this guide demonstrate some proven ways of addressing new development. Customized SDCs based on specific development types eliminate the one-size-fits-all approach, encourages builders to incorporate water wise efficiencies into new homes, and helps the new owners reduce their water bills. These conservation-based SDCs have been successful in several Colorado communities.

In addition to providing the framework for building these rate structures, the guide also offers tips for implementation—hint: communication and stakeholder engagement play a huge role in their success. Raftelis Senior Manager, and project lead working with WRA, Todd Cristiano points out, “Conservation-oriented SDCs can help utilities reduce water demands in new development, and even better, they can improve rate equity among customers.”

In the past, widespread water savings have generally been achieved through regulation, with the use of water restrictions, however, in many communities that option just isn’t politically viable, or water utilities have no authority to require such restrictions, and worse, the utility suffers the revenue loss. The conservation SDC is a particularly attractive alternative as it can be voluntarily adopted by the utility, can help mitigate revenue loss, and is an equitable way to allocate costs.

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