Equity and Justice in Water Pricing and the Effects on Water Distribution System Management

Equity regarding access to potable water is paramount. Municipal Water Distribution Systems supply potable water to users and are essential to public health. To find the optimal price of water to maximize utility revenue and allow changes to the system components for capital and maintenance expenditures, network modeling was performed for 15 real MDWSs. A new power-law price-usage elasticity curve, entitled the Power Law Elasticity Function (PLEF), was used that allowed for various users, both high- and low-income, and a non-discretionary level of usage. It was found that- (1) the maximum profit was obtained when the price was approximately 0.8 (depending on the user) of the price that causes non-discretionary water use, which is the least amount of water necessary for the basics of a healthy lifestyle; (2) the factor of reduced usage ranged from 0.26 to 0.99 for a reduction in pump, or mainline size; (3) reducing demand by increasing price at junctions far from the water source(s) allows reduction of neighborhood mainline pipe sizes; (4) demand reductions at near or intermediate junctions may allow pipe size reduction only at pipes feeding those junctions. Municipalities should keep in mind the justice of not charging exorbitant rates for low-income users.