Water Pricing

Customer water-use data and analyses are essential to understanding water use among different subgroups of customers, planning and implementing successful water conservation programs with appropriate water-saving goals, and setting rates that effectively meet utility objectives. By segmenting a customer base by water use and benchmarking consumption over time, utilities can better design and target conservation programs and rate structures. Water-use indicators can be used to categorize each customer’s water use patterns over a period of time and identify subgroups of customers with similar patterns. These subgroups go beyond the sometimes ambiguous and generic classification of “residential” or “commercial, industrial and institutional (CII)” customers, to a more precise categorization of individual customers based on their own water-use patterns. This method segments a customer base further within the larger and more traditional classifications to help utilities better understand customer consumption patterns. Using the proposed indicators in this document will guide a utility to divide its customers into several subgroups based on unique water-use patterns.

This paper highlights key trends and projections in water scarcity, reviews the ways that water security and water scarcity are most commonly understood, and explores possible responses. Based on a selected review of the literature, an explanation is provided of ways that water pricing can be applied to respond to water insecurity from both a demand and supply perspective. 'Hard' and also 'soft' approaches that include stakeholder, policy and decision processes are briefly reviewed as ways to promote water security. Collectively, the paper provides a guide about how decision makers might efficiently and equitably respond to the 'wicked problem' of water insecurity. We need pragmatic thinking, bold decision and action in our approaches and solutions over water e.g. how to secure balance between competing demands over water resources ; how to adopt a balanced conservation and use across natural water ecosystems that transcend borders; how we develop and facilitate access to water-intensive technologies across communities and countries to save lives and livelihoods. The solutions and innovations should be such that these help secure water as a global common to the benefit of ordinary people. Prime Minister Sheikh Hasina, Prime Minister of Bangladesh (World Bank 2016a).

Increasing economic pressures on water resources are causing countries to (re)consider various mechanisms to improve water use efficiency. This is especially true for irrigation agriculture, a major consumer of water. “Getting prices right” is seen as one way to allocate water, but how to accomplish this remains a debatable issue. Methods of allocating water are sensitive to physical, social, institutional

Irrigation water pricing has been considered as a tool to enhance water conservation in irrigated agriculture. We have evaluated the effects of water pricing on water management practices in Awash Basin Authority (ABA). The water charge has been collected over years with the aim to generate money for the Awash Basin Authority to cover operational expenses. Both the authority and water users see the charges paid as the contribution than as water demand management tool. Widespread irrigation inefficiency and low performances are more due to low level of irrigator’s knowledge to manage water, poor water conveyance and distribution systems, public ownership over large and medium-scale irrigation schemes, and inability to measure and control water. Increasing water price under such service conditions will only add burden to farmers and unlikely to be feasible. Despite these poor water delivery services, users are willing to pay relatively more than they currently pay which could increase the income of the basin authority. Improvement in irrigation water management requires strengthening of irrigation research and extension services, building the capacity of irrigators, and improving irrigation system operation and maintenance services.

Irrigation water management in Central Asia is notorious for its inefficiency. We assessed the operational performance of the irrigation scheme in one Water Users Association (WUA), Shomakhulum, in Khorezm district, Uzbekistan, in 2007 to provide recommendations for strategic water management planning. Relative evapotranspiration (RET), delivery performance ratio (DPR), drainage ratio (DR), depleted fraction (DF), overall consumed ratio (OCR), field application ratio (FAR) and conveyance ratio (CR) were used as performance indicators. The components of the water balance were obtained through remote sensing techniques and hydrological field measurements. The surface energy balance algorithm for land (SEBAL) was applied to MODIS satellite data to derive actual and potential evapotranspiration. Inflows and outflows were quantified with field measurements in the irrigation and drainage network using discharge rating curves. Ponding experiments allowed determining canal seepage losses. Water balances at field level were established for application efficiency estimations. The indicator values were then compared to efficiency target values taken from the literature in order to assess the operational capabilities of the irrigation scheme. The general performance of the irrigation scheme is very poor. DPRs exceeding 1.0 indicate that more water is delivered to the system than is demanded. The seasonal DF of 0.4 is lower than the target value of 0.6. Losses during the field application averaged at 57%, which is 24% above target values. Seasonal DR, OCR, CR and RET are 0.55, 0.51, 0.76 and 0.82 against the target values of 0.1, 0.54, 0.84 and 0.75, respectively. We conclude that the distribution mechanism can be considerably improved. Besides improving water distribution (timing and equity) in the network, another recommended intervention would be to increase the DF, particularly by interventions at field level that raise the FAR, which in turn will improve DR and OCR. This can be achieved by introducing modern water management approaches such as laser leveling, double-sided irrigation, and control of inflow through flow-measuring devices installed at farm gates, and adequate water pricing.

This paper aims to highlight some of the main issues raised by developing and implementing the most appropriate approach to water pricing, and to induce a sustainable water management. Therefore, we define the concept and utility of water demand management as one objective of efficient water pricing. Next we analyse the basic economics and some important theoretical insights of water pricing. We further with state the main four inter-correlated principles of sustainable water pricing (full-cost recovery, economic efficiency,equity and administrative feasability) and the trends and challenges of their actual implementing in the water pricing policy of Romania and other EU countries. We end with a review of opinions, personal conclusions and recommendations on the actual opportunity, effectiveness and role of efficient water pricing in fulfilling the goals of sustainabilty.

Agriculture is the largest user of water in Turkey with 75 percent of the total consumption. Turkey has developed 50 percent of total irrigable land so far. Water is a limiting factor for agriculture throughout much of Turkey. The amount and distribution of precipitation is quite uneven. Turkey, like many countries today, faces challenges in efficiently developing and managing its agricultural water resources while trying to protect water quality and the environment. However, Turkey has some difficulties and problems ...

Large scale forest plantations in the Murray–Darling Basin are a possible carbon sequestration mechanism which may be adopted in response to the introduction of a carbon price. However, increased tree plantation will be associated with reduced inflows to river systems because of increased transpiration, interception and evaporation. This could have significant implications for regions vulnerable to drought. This study examines the interaction between carbon pricing, water pricing, and agricultural land use in the Murray–Darling Basin and its impact on water flow under current and climate change settings.

Because of the complexities associated with the water pricing and public-private partnership issue and their relevance to water management of the future, the Third World Water Centre for Water Management, the Inter-American Development Bank and the Agencia Nacional de Aguas of Brazil sponsored two focused workshops on water pricing in Brasilia, held on June 3rd-5th, 2002 and on public-private partnership in the water sector in Mexico City, held on September 25th-27th, 2003. The main objective of both the workshops were to assess the experiences from North and South America on the issues concerned in an objective and critical manner. Papers for each of the two workshops were specially commissioned. Following the discussions at the two workshops, the authors revised their papers, and this publication includes the selected and revised papers.