Pricing the Priceless

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How to put a price on the priceless...That's something that water utilties grapple with as they figure out what to charge customers for this precious resource. As part of Connecting the Drops, our statewide radio series on water issues, Maeve Conran takes a look at how water is priced and whether we're paying enough.

David LaFrancethe CEO at the American Water Works Association. The AWWA writes the authoritative manual
on how to set water prices. The manual is used by water providers around the country. "The value of water
is frequently considered to far exceed its cost," LaFrance says. "In part, that's because water is important to
life, to the economy, to our way of being, to our public health."

Melissa Elliott with Denver Water says they chose the new three-tier price structure with conservation in mind. 
"We really felt like the structure that we picked really did encourage conservation and give our customers a lot
of information about the type of usage that they have by telling them, 'This is how much we think you're using
indoors, this is how you're using irrigating...'"

Marsha Holmes who lives in the Park Hill neighborhood of Denver has seen only a slight increase in her
water bill compared to 2015, butt here are now two fewer people living in her house. "The price is staying
the same but we're using less water."

• Headwaters magazine Summer 2016, Accounting for Water
• Watch the recording of this recent webinar to learn about Paying for Colorado's Water Future
• Listen to a longer interview below:

Charles Howe, professor emeritus in the Department of Economics, Institute of Behavioral Science at the University of Colorado, Boulder, has written several articles and books on pricing water and how it might influence consumer behavior. 

"We don't charge enough for our urban water really, because a typical water utility being publicly owned, simply does not charge the customer for the value of the raw water that they're treating and then providing to the customer." He recently co-authored an (unpublished) report on water utilities not listing the value of the water rights as part of the assets on which they can earn a return. Some water providers like Boulder and Denver own senior water rights worth millions of dollars. Listen to this extended interview with Howe for more.