In a bid to create greater incentives for water conservation, the State Senate adopted legislation in a bi-partisan 30 to 4 vote.
Fresh water is a precious resource. Even though we do not face the same water shortage issues as our friends in the Southwestern states, we must still be mindful of the need to conserve. It’s a matter of public health and safety.
Under current law, water companies and water authorities actually face compelling incentives not to save water, but to sell more. This bill will help to change that by creating new incentives and supporting investment in more efficient infrastructure. The result will be less water used, which in turn creates savings for consumers. Water companies and authorities in Connecticut currently face a disincentive when it comes to water conservation: the less water they sell, the less money they make.
In an effort to “decouple” water company revenues from the amount of water sold, today’s bill would require the Public Utilities Regulatory Authority (PURA), which oversees water rates, to authorize only rate structures proposed by water companies that promote both supply and demand side water conservation. A corresponding revenue adjustment mechanism particular to each company would be determined during their periodic rate case before PURA.
In setting such rates, PURA must consider demand projections that recognize the effects of conservation, metering and measures to provide price signals to consumers, measures to reduce system water losses, and alternative rate designs that promote conservation. Legislative bodies which govern municipal water authorities must adopt rates guided by the same standards.
To aid water companies in efforts to make their infrastructure more efficient, the legislation also allows for an expanded Water Infrastructure and Conservation Adjustment (WICA) from 7.5 to 10 percent of a water company’s annual revenues, reflected as a charge or credit to customers' rates. The resulting funds could be used to finance the purchase of energy efficient equipment, capital projects to comply with river and stream flow regulations, and other improvements.
The bill also requires PURA to conduct a study to identify new water and energy conservation programs that might be implemented by water companies in the future.
The legislation now proceeds to the House of Representatives to await further action.
