Our study shines a light on the high‐level trends that affect water utilities’ bottom lines. Instead, we used water consumption and billed revenues as a proxy for water utility operational and financial performance during this pandemic. This study did not seek to establish direct causation between COVID‐19 prevalence in a community and changes in water utility consumption and revenues. Denton experienced several months of double‐digit decreases in nonresidential revenues from April to June 2020, but then saw double‐digit increases in nonresidential revenues from July to September 2020. Although the year‐end numbers show relative stability of revenues (except for Denver, Marana, and Raleigh, which experienced considerably increased revenues), the month‐to‐month picture shows that some utilities experienced significant fluctuations. The seasonality of revenues is apparent, as was the case for consumption. While a positive result, some utilities did not meet planned revenues, which can significantly affect utility finances, even if the difference is only a few percentage points.įigure 2 shows the monthly patterns of billed revenues for the residential and nonresidential groups in 2020 compared with 2017–2019. Put another way, none of the water utilities experienced a dramatic drop in total billed revenues in 2020. Overall, billed rate revenues were higher than the three‐year average in all but one community, exemplifying these water providers’ general financial resilience. Still, revenues did not decrease as much as consumption did, possibly a result of recent rate increases and stable revenues from fixed charges. Nonresidential billed revenues decreased in three communities (Arlington, Austin, and Raleigh) compared with their three‐year historical averages. Percent values represent difference between 2020 and average of 2017–2019. However, in no case did communities raise rates enough to completely explain the large increases in residential billed revenues. In addition, each of these utilities has increased its rates since 2017, making comparison of 2020 revenues with historical billed revenues difficult. Inclining block rates, in addition to the bump in consumption from a dry and hot summer, may explain the large increases in residential billed revenues observed in those communities in Table 3. For example, Denton, Denver, and Marana have inclining block tiered rates in which the cost of water per unit doubles or triples at certain use thresholds. The utilities included in the study each apply a fixed charge, regardless of the amount of water a customer consumes, and the rate structures incentivize water conservation. Except for the Lehigh County Authority, which uses a uniform volumetric rate structure, all utilities in the study use an inclining block rate for residential customers. Revenue Trends Reflected Changes in Consumption and the Influence of Inclining Block Ratesīilled user charge revenues are directly related to water consumption, but the relationship between the two may vary with the percentage of revenue recovered from fixed charges and the price per unit of water used. The differences in customer base, climate, and rate structure would become relevant to the financial impact of COVID‐19 for each utility. Historical data were collected from years not affected by COVID‐19 (2017–2019) to compare with 2020. The study team recruited 11 water utilities that agreed to provide monthly water consumption updates and billed revenues. Raftelis teamed with researchers from Duke University to further explore these anticipated trends and study water utility consumption and revenues during the COVID‐19 pandemic. In April 2020, a Raftelis report, produced in collaboration with AWWA and the Association of Metropolitan Water Agencies (AMWA), predicted an overall negative impact of US$13.9 billion nationwide on drinking water utility revenues due to changes in consumption patterns, increased delinquencies, the temporary elimination of shutoffs for nonpayment, lower customer growth, and other indirect impacts (Raftelis 2020). An AWWA survey sent to utilities in March 2020 showed utilities were shifting operational and business practices, and 80% expected revenue and cashflow problems (AWWA 2020). As the first wave of COVID‐19 hit the United States in early 2020, utility leaders across the water industry wondered what the pandemic would mean for their worker safety, continuity of operations, and ultimately, their bottom line.
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