Sep 01, 2004

Findings of Billing Conversion Programs Study Announced

A new two-year study of water billing practices in the
multi-family residential sector has just been released. The National Multiple
Family Submetering and Allocation Billing Program Study reports on water
savings and administrative issues associated with submetering and allocation
billing programs in multi-family dwellings. The study was motivated by the
water industry's interest in capturing potential water savings by multi-family
residents where there is currently no pricing signal to encourage efficient


The study found that the practice of installing individual
water meters (submetering) on multi-family apartment units and billing based on
actual consumption results in water savings of 15% or 8,000 gallons per unit
per year. However, the study concluded that water billing practices based on
allocation methods (commonly known as "RUBS" -- Ratio Utility Billing
Systems) did not effect any water savings.


Highlights of the study findings & conclusions include:


* Finding: Submetering can save around 15% or 8,000 gallons per
dwelling unit per year. Conclusion: Submetering should be fostered by public policies seeking
to encourage water savings, together with appropriate measures to protect the


* Finding: No water savings were found through allocated billing
programs (water fees are based upon such parameters as the number of people,
the number of bedrooms, unit area, etc.). Conclusion: Allocation programs should be
carefully bounded by public policy.


* Finding: The installation of water efficient fixtures will save
approximately 11,000 gallons per year per dwelling unit. Conclusion: The initiation of any separate
billing system should be coupled with complete plumbing fixture upgrades within
a specified time.


* Finding: There is little or no regulatory oversight governing
third-party billing practices. Conclusion: Widespread adoption of certified Best Management
Practices for water and wastewater billing could facilitate acceptance and help
remove existing barriers to implementation for residents and owners, while
enhancing water conservation opportunities.


Among the study recommendations were the adoption of
policies targeted at the mostly unregulated third-party billing industry to
protect multi-family residents, including recommending:


* The property owner should pay for billing service charges


* The installation of water conserving fixtures and toilet
tank leak repair before billing conversion programs are implemented


* Improved billing format that provides tenants with
itemized breakdown of charges and a comparison to the water (and sewer) rates
of the local utility


The study's five main objectives included:


* determining the water savings potential in the
multi-family sector resulting from both direct metering and allocation


* understanding the current regulatory framework governing
billing conversion programs across the U.S.,


* accessing the current business practices in the billing
conversion industry,


* drawing conclusions from the findings, and


* making recommendations that offer consumer protection and
capture cost-effective water savings.


It is estimated that 60 million people or about a quarter of
the population in the U.S. live in multi-family dwellings. In the past 10
years, the billing of the water and sewer directly to tenants by billing
entities has increased at the rate of about 25% per year. In 1988, there were
only two companies involved in third party billing. Today there are around 50
to 60 billing companies nationwide billing around 15% of all multi-family
dwelling units directly for water and sewer.


The study was conducted by Aquacraft, Inc., of Boulder,
Colo.; the National Research Center; and Potomac Resources. Project funding
partners included the US EPA, two national apartment associations and 10 water
utilities. Previously, only a few studies on this subject with relatively small
sample sizes had been conducted.


An electronic version of the final report is available for
free download from Aquacraft at www.aquacraft,com.