CAROLINA JOURNAL – A monthly journal of news, analysis and opinion from the John Locke Foundation (A conservative think tank located in Raleigh)


RALEIGH     North Carolina

Approaches Abound About How to Ensure Adequate Water Supply
Coercive government methods vie with free-market methods

By Sara Burrows
Associate Editor

North Carolina does not have
adequate water supplies to
support anticipated population
growth over the next 30 years, the
General Assembly’s Environmental
Review Commission reports. Lawmakers,
academics, and industry leaders
are scrambling for solutions. Everyone
agrees water is scarce. What they don’t
agree on is what to do about the scarcity.
At a water sustainability symposium
held July 14 at North Carolina
State University, environmentalists and
leaders in the irrigation, landscaping,
and agricultural industries suggested
government incentives and mandatory
to get people to save water.
Free-market economists say that strategy
is the wrong approach. They say
prices, rather than government regulations,
should determine water use.

Consumers queried
North Carolinians would rather
face mandatory water-use restrictions
than pay higher prices, said Barbara
Fair, a horticulture professor at N.C.
State. She drew those conclusions from
a survey conducted by the university.
Water customers were asked
whether they would prefer a $20
monthly increase in their water bills
to outdoor watering restrictions. More
than three of five respondents — 62
percent — chose restrictions. From
this, Fair concluded, “The vast majority
of people do not want to be charged
higher prices.”
Fair noted that “watering restrictions
did not seem to reduce water
use,” but still said restrictions were
preferable to price increases.
Rep. Ruth Samuelson, R-Mecklenburg,
said the survey results were
not surprising. “People tend to think
the restrictions are going to hit somebody
else,” she said. Or those surveyed
may have been thinking of more innocuous
water restrictions “like low-flow
showerhead and low-flow toilet and
other conservation measures, the kind
people don’t notice as much
. That’s
usually where they start — requiring
[new] fixtures and retrofits,” she said.
But as North Carolinians experienced
during the 2008 drought, watering
restrictions can turn into “water
police,” resulting in fines
when people
water their lawns or wash their cars
during restricted periods. And if conservationists
had their way, per-household
maximums would be imposed on
water users.

‘Cheap water’ won’t last
Samuelson said water prices
eventually will go up “because that’s
just how the market works. Pricing
is an issue people don’t want to talk
about and don’t want to deal with,”
she added. City-run utilities resist raising
prices because “politicians don’t
want to be responsible for a rate increase
on their customers.”
But even if consumers don’t see
the high cost of water on their bill,
they’re paying for it in taxes. Municipal
water departments are supposed
to be self-supporting, Samuelson said,
but most don’t charge enough to cover
their operating costs and end up turning
to local and state taxpayers to make
up the difference.
Those who use the least water
(residential customers) end up subsidizing
those who use the most (commercial
customers). An increased
water rate wouldn’t hurt residential
customers very much, Samuelson said.
“So your bill goes up from $32 a month
to $38 a month. Who cares?”
But commercial customers notice
rate hikes. “Think about the cost
of running a Coca-Cola bottling company,”
she said. “If you jack their water
price up, that’s going to hit them bad.”

Carrots instead of sticks
Brent Mecham of the Irrigation
Association, the trade group for irrigation
contractors, spoke at the symposium
about “successful incentive programs”
municipalities could use to get
their customers to conserve water. Irrigation
contractors would be involved
in many of them.
Some of the “carrots” Mecham
said municipalities should offer include:
• Rebates on equipment such
as “smart controllers” (weather-based
or soil-moisture-based sprinkler timers),
high-efficiency nozzles, micro
or “drip” irrigation systems, and rain
• Free audits and inspections of
residential properties to ensure sprinkler
systems are working correctly. Inspectors
should tell customers where
water is being wasted and what needs
to get fixed and create an irrigation
schedule letting them know how many
minutes to water each month.
• “Follow-ups” on audits to
make sure people are getting their systems
repaired. “It’s kind of like a nagging
phone call … saying ‘we want you
to call a contractor and get them fixed
and we want to find out that you’ve
done it, because we’re not doing this
free service so you can continue to
waste water,’”
Mecham said.
Similar programs

Charlotte-Mecklenburg Utilities
has a similar incentive program up and
running, the Liquid Assets Program.
Before a water customer enrolls
in the program, he must have the
property audited by a licensed irrigation
contractor, have a smart irrigation
controller and high-efficiency spray
heads installed and programmed, and
agree to annual inspections to ensure
the customer hasn’t “tampered with”
the system.
It’s an expensive process, but a rewarding
one, said Maeneed Klein, the
utility’s water conservation manager
and member of the Irrigation Contractors
Licensing Board.
In return for letting the city
control their sprinkler systems, participants
are exempt from watering restrictions
during the first three stages
of drought. Participants also would be
capped at the third-highest tier of the
city’s four-tier rate structure — a structure
that penalizes people with higher
rates for using “too much” water.

Prices, not government
A bill that recently became law in
North Carolina directs municipalities
to include in their local water plans “a
plan for the reduction of long-term per
capita demand for potable water.”
The law is a mistake, said Michael
Sanera, director of research and
local government studies at the John
Locke Foundation. The government
needs to stop “fixating” on controlling
demand and focus on increasing supply
he said.
And how do you increase the
supply of water? “You increase the
price,” Sanera said. “How is the supply
of any resource increased? Price.”
Conservationists contend water
is a finite resource in short supply, but
Sanera said that’s a misconception
This is a recurring theme with
everything — with electricity, with water
and everything the environmentalists
think we’re running out of — but
the whole concept is bogus,” he said.
“When the price of a resource goes up,
people look for more resources.”
“The reason we don’t desalinize
seawater is it costs too much,” Sanera
said. But if the price of fresh water got
high enough, we would.
The price should reflect the scarcity
of the resource
, Sanera argued.
When water is plentiful, it should be
cheap. When it’s scarce, it should cost
“Prices should ration water, not
,” agreed Roy Cordato, JLF
vice president for research.
Getting away from rules

Since government owns the water,
government has to set the price,
Cordato said, but it doesn’t have to
dictate how water can and cannot be
“We want to get away from rules
and regulations that say during a
drought you can’t water your lawn or
you can’t wash your car or you can’t
power wash your house,” Cordato
said. “Just raise the price, and let people
respond accordingly. Let people
cut back in areas of their choice.”
Regulating only outside uses of
water “discriminates against people
who like dirty bodies, but clean cars,”
Cordato said. Or people who’d prefer
to water their vegetable garden and
cut back on laundry. CJ
Coercive government
methods vie with
free-market methods

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