Financial and Economic Aspects of Water Demand Management in the Context of Integrated Urban Water Management

Water Demand Management is considered in the framework of Integrated Resource Planning, as a suite of options for managing users ’ demands for water-related services, to be compared with supply-side and source-substitution options. These options are compared using levelised costs, and the paper describes the use of Average Incremental Social Costs (AISC) for this, including how environmental, social and carbon externalities can be included, referring to recent guidance used in the UK water industry. AISC provides a common approach for comparing options of all types, and could be applied to other SWITCH workpackages. Demand management options to reduce water consumption include use of tariffs, and an example is presented from Zaragoza of the design of stepped tariffs and the use of incentives for customers to reduce consumption. At the utility level, the concept of Non Revenue Water is a key indicator of performance. This takes account of both commercial losses and physical losses. The concept of Economic Level of Leakage provides a target for leakage control to aim at, and is the focus of current research in Zaragoza, including sensitivity to changing energy costs. The incorporation of environmental, social and carbon costs into the Economic Level of Leakage is also discussed