California is in its fourth year of drought. As a water operator, you know that, and you have your coping strategy. Today, we’d like to share some of the strategies that our customers are using that might help you get through this difficult time by adopting some positive strategies.
We are not going to get into the question what is causing the drought since it really does not matter. The fact is that precipitation is very low. The snow pack is very light. Less water will make its way to our water systems. So, what do we do?
Know your assets
If you are in business and someone asks you what your assets are, you had better know your balance sheet. How much cash? How much inventory? You should know your assets.
But what about when we ask that question to you, a small water system operator? Your biggest asset is probably your water source. If you use groundwater, then it is how much water is available to pump from your well. When we ask small water system operators, most have no idea how much water they have in their wells before they start pumping, while they are pumping or how it recovers after they finish pumping. It’s like answering the question, “What are your assets?” and hearing the reply, “I have no idea!” So, our first statement is that you need to know your assets.
Know your production
The next thing that you need to know, we think, is, “What are you producing?” Most water operators can tell you the total that they delivered last year. But they don’t often know how much they produced last month until maybe the next month is over. What was your production yesterday? No idea!
We believe that to cope with the drought, you need to know how much water you are producing every single day! You probably only read your customer meters once per month, but you could read your production meters much more frequently. Why? You can have leaks. Your customers can have leaks. Although you might be tempted to say, “Well, Ms. Customer, your leak is your problem!” in reality, we don’t want to waste water anywhere.
Therefore, you would like to know your customer use on a daily basis, but that’s hard to achieve for a small water system because automatic customer meter reading systems are very expensive. So, the better place to look for up-to-the-minute information is on the production side. You have water meters that show how much water you are producing. You know that the use is less than the production because some of it leaks away.
Know your customers
There is no substitute for having good relations with your customers. For mutual water companies, that’s relatively easy since everyone is a stakeholder. Nonetheless, we find that the best way to know your customers is to share information with them. Knowledge does have power. If they know where they are, and if they know that someone is caring and even watching, then it is more likely that they will conserve water.
Water is too cheap!
Let’s face it. The crazy aunt in the basement (see sidebar) is that water is too cheap. Everyone knows it but everyone makes games that spending money on water conservation will somehow pay off. It won’t because water is too cheap. If you run the numbers, you will see that wasting water is cheaper than spending money to conserve it! Yes, totally counter intuitive and real feel bad, but we maintain that it is true. But we have a drought. We need to conserve. What do we do about the the crazy aunt in the basement?
Putting it all together
Of course, the knee-jerk reaction to what do we do about water that is too cheap is to say, “Raise the price of water!” But that’s what Perot meant. You could say, raise taxes to pay off the debt, or cut military spending. But that was never going to happen. We can’t simply raise the price of water by a factor of ten. It just won’t happen for a thousand reasons.
So, what do we do?
Our thesis at XiO is simple. To solve all the problems above, you need information. If you know how much water you have in the ground, if you know how efficiently you are pumping it, if you know how much water you are producing, then you can in good faith tell your customers that you know how much they are using, even compared to how much you could produce, then you can deliver less water for less revenue and still make do. At the same time, if your customers know how much water they are consuming, then they will become a part of the water watch mentality and pay attention. We have seen time and again that when water customers see how much water they are using, they conserve! Everybody wants a goal and to know where they stand in attaining that goal.
Our bottom line is that you need to run a tight ship to make it through the drought. Remember, conservation means less revenue or fighting for higher rates. If you become more efficient, you can thread the needle and deliver less of your product and receive less revenue but clean up the waste that was never doing anyone any good. You can make it through the drought! At XiO, that’s our two cents.
Here are our Rules to live by for the water operator:
- Save money to buy more storage capacity. With more capacity you have more flexibility about when to pump water.
- Save money by reducing operating costs
- Make money by becoming more efficient as an operator
- Save money by using electricity wisely by running the right pumps under the right conditions. Remember, 30% of electricity used in California is to pump water!
- Save money by pumping at the right time of the day and the right day of the week. In California, electricity costs just about four times more during the middle of the day compared to the middle of the night. And daytime electricity it is going up in price way faster than nighttime electricity. (A 40% increase for peak-rate compared to a 15% increase for off-peak in the last three years.)
- Treat your equipment well. Eliminate water hammers and shock loads. It’s bad on pipes, pumps and valves. You can reduce maintenance costs.
- Stay in compliance to stay out of trouble with regulators or customers. That’s a big waste of time and money.
- Reduce leaks. We have customers catching leaks very early. Although water is cheap, that’s dollars right off your bottom line. If it’s on your side of the meter, it’s on your tab.
Saving money on electricity and operations pays for conservation!