Equitable and Efficient systems of water utility charges in the face of a changing water supply mix

In this research we argue that for jurisdictions where desalinated water has been introduced as a major supply source such that long run marginal cost is rising, marginal cost pricing is: (i) efficient; (ii) delivers revenue sufficiency; and (iii) is more equitable than traditional pricing approaches. To illustrate our result we compare outcomes under different pricing structures in Western Australia, a jurisdiction where desalinated water is responsible for almost half total potable water supply. We also show that a pure volumetric charge for wastewater services is more equitable than property value based charges or a uniform tariff. The results are based on analysis of water charges for over 700,000 individual households.


Subject(s):
Issue Date:
Nov 09 2017
Publication Type:
Working or Discussion Paper
Language:
English
Total Pages:
29
JEL Codes:
K23; L95
Series Statement:
WP1706




 Record created 2017-11-09, last modified 2017-11-09

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