Evaluating Demand Management Aspects of Urban Water Policy. The ...

EVALUATING DEMAND MANAGEMENT ASPECTS OF URBAN WATER POLICY. THE CITY OF VOLOS CASE, GREECE E. G. KOLOKYTHA and N. A. MYLOPOULOS∗ Department of Civil Engineering, University of Thessaly, Pedion Areos 38334, Volos, Greece (∗ author for correspondence, e-mail: [email protected]; Phone: 24210 74168; Fax: 2310 995695)

Abstract. This paper examines the perspectives of the implementation of a demand-oriented policy concerning residential water use, which covers almost 70% of urban water. Water demand, water pricing policy, as well as building capacity are examined and evaluated in order to investigate the current situation in urban water management in the city of Volos with reference to residential water use. The application of IWR-MAIN model in order to estimate future water needs and form different scenarios for sustainable water resources management together with a field survey in various water issues conducted in 966 citizens of the city of Volos justify the urgent need for the adoption of a demand driven policy. Keywords: demand management, Greece, IWR-MAIN, public awareness, residential use, Volos, water pricing, water resources management

1. Introduction Taking into account the political, environmental and economic changes that are happening throughout the world, towards the implementation of the main principles of sustainable water management, demand management is considered to be the best potential solution to meet future needs. The concept of demand management can improve the efficient and effective use of water supply resources (Maddaus et al., 1996; Westerhoff and Lane, 1996; Winpenny, 1994). In some areas, growing demands on a limited number of existing and contemplated water sources require careful coordination and planning for achieving water conservation, cost recovery as well as environmental protection. The reorientation of the urban water management towards sustainability is closely connected with the use of demand management practices in order to achieve an appropriate balance between capacity expansion and water conservation (McNeil et al., 1991). This paper investigates the currently applied urban water policy in the city of Volos and the changes that should occur in order to shift this water policy towards more sustainable directions.

Water, Air, and Soil Pollution: Focus 4: 263–277, 2004. C 2004 Kluwer Academic Publishers. Printed in the Netherlands.

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2. Municipal Water Demand Management 2.1. O VERVIEW Traditional supply-oriented approaches proved to be insufficient to deal with strong competition for available water, growing per capita water use, increasing population, urbanization, pollution and shortages of funds. Water demand management is a new approach suggesting a fairly wide range of measures to cope with these problems. Many of the techniques used are not new. What is new though, is the combination of them in order to form a coherent water management strategy. These techniques can be classified into three categories (Flack, 1985): 1. Economic techniques 2. Structural and operational techniques 3. Socio-political techniques. Economic techniques rely upon a range of incentives and disincentives (taxes, rebates) to promote water conservation. Water pricing is a fundamental economic tool to influence water demand. Accurate water pricing is a means to control demand and generate revenues to cover costs. Structural and operational techniques such as metering, retrofitting, controlling flow and recycling, leakage detection and repair aim at improving existing structures to have a better control on water demand. Socio-political actions refer to policy options to encourage water conservation. Public awareness, information and education are the most common ones. Concerning residential water use, the economic techniques focus on water pricing policies using different water rates (flat and volume based). Flat rate reflects a fixed charge regardless of the volume of water used leading most of the times to excessively high water use. Volume based rates relate the amount of water paid with the quantity of water used. There are different types of volume-based rates (increasing, declining, seasonal etc.). A simple but effective pricing system is a two- part tariff. The first part is a fixed charge that recovers the fixed component of fixed costs shared equally among all customers and the second part would cover variable costs and would be based on the marginal cost of supply. Municipal water rates should be design taking into account social equity as well as economic efficiency which means full recover of costs for water infrastructure including expansion plans, repair and improvements of services. Metering, retrofitting and using dual systems are among the most popular structural and operational methods to reduce water demand in urban water sector. Residential retrofitting resulted to a 20% drop in water use in Ontario by using water saving devices (Barclay, 1984; Robinson, 1980). Dual systems or ‘grey water systems’ as they are called, can save up to 39% of water for indoor uses (Haney and Hagar, 1985).

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Sociopolitical techniques include the promotion of the advantages of all demand management practices, public awareness and partial privatisation of some parts of the water systems. 3. The Case of Volos 3.1. THE G REAT THESSALY A REA Thessaly, a region in central Greece, is probably the most prominent example of today’s water resources problem in Greece. The fact that it contains the most extensive plain of the country, which is being intensely cultivated, has led not only to a remarkable water demand increase, disturbing thus the hydrological balance, but also to a wide spread of polluting practices which degrade the quality of water resources. The traditional, centralized, segmental, and water supply- rather than water demand-based predominant water management policy, was responsible for over-exploitation and rapid depletion of water resources. In addition, the extreme meteorological and hydrological conditions during the past years, responsible for an unusually extended dry period in the region, have played an important role in deteriorating the already disturbed water balance and accelerating the degradation of water resources. The wider Volos basin (Figure 1), which extends from the sea up to mount Pelion’s ridge, including the city of Volos and its suburbs, faces all the

Figure 1. Map of the area under study.

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above-mentioned problems. On top of that, the city’s water supply, which runs today into 12 × 106 m3 of potable water per year, must be covered. To this, an extra annual amount of at least 4 × 106 m3 must be added in order to cover the increasing demand. Furthermore, pumping groundwater (representing the 4/5 of the total during the summer) has to be minimized, as the aquifer’s draw down has increased dramatically and saltwater wedge has advanced significantly causing groundwater salinization (up to 900 mg/L of chlorides) (Mylopoulos et al., 2001). 3.2. THE MUNICIPAL WATER U TILITY

OF THE

C ITY

OF

VOLOS

The Municipal Water Utility of the city of Volos (municipalities of Volos, Nea Ionia and Esonia), serves a population of 120 000 residents and supplies also water for industrial uses divided into 2 Industrial Zones (A and B I.Z.). Water is being supplied from 30 wells (or watering drills) inside and outside the city’s boundaries (the outside drills are situated 20 km at the west). The rest of the supplied water, comes from 5 springs of the Pelion Mount to the north. During the summer, 80% of the total volume comes from the wells, giving water of a very poor quality (water hardness 45–85 French degrees, 150–900 mg/L chlorides). In the winter, when the participation of the springs rises, the problem is generally less intense, although the last years even this is precarious due to the generalized drought in the region (Mylopoulos et al., 2001). 3.3. METHODOLOGY Data selected from the municipal Water Utility of the city of Volos concerning current water pricing policy, water consumption, water related problems and project funding are used to evaluate the currently applied water policy. The use of IWRMAIN model forecasts future water demand and evaluates water conservation measures. A field survey conducted in 966 citizens in the city of Volos help in understanding the preferences and attitudes of the people towards various water issues which should be taken seriously into account in the formulation of the proposed demand oriented policy of the city. Comparisons concerning all aspects under examination have been made between the great Thessaly area and the city of Volos. 3.4. D ATA A NALYSIS

FOR THE

PARAMETERS UNDER S TUDY

Data analysis was made using descriptive statistic analysis (cross-tabulation with absolute and relative frequencies, means, min, max and standard deviations). (Papadimitriou, 1994; Mylopoulos and Kolokytha, 1997). In order to overcome the differences in time periods and in scales of the tiered rate structure among the various cities in Thessaly, it was necessary to assume a uniform basis for the


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Figure 2. Water consumption in the city of Volos 1995–2000.

water rates. The water rate parameter that was introduced therefore, was the Volume Charge for the Consumption of Reference, (VCCR), which equals to the weighted mean volume charge for the first 60 m3 of water consumption. The corresponding uniform timescale was assumed to be 3 months. To calculate the volume charge for these first 60 m3 per 3 months consumption, the following equation was used: VCCR = 3[(a · b) + (c · d) + . . . ]/60n

(Wonnacott and Wannacott, 1995)

where a, c is the scale of the tiered rate structure for the b and d m3 till the first 60 m3 of consumption; n corresponds to the different timescales of the tiered rate structure in the various cities; 3 stands for the time period of the 3 months. It is found that 20 m3 per month is a reasonable water consumption concerning residential water use. 3.5. WATER D EMAND As shown in Figure 2 water demand is increasing throughout the years. That increase ranges between approximately 1–10%. In summer period, as it was expected, the water demand rises, especially in 1998. The scarcity of existing water resources though demands the development of alternative schemes in order to satisfy water needs. Water conservation and demand management approaches is the key to water problems. 3.6. F UTURE WATER DEMAND 3.6.1. Microfit Program Water demand for residential water use in the city of Volos, was found using water consumption data from the Municipal Water Utility of Volos concerning the period between 1994–1999 shown in Tables I and II. These data were inserted

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TABLE I The city of Volos (urban complex) 4-month period

Connections in use

Discharge (m3 )

Water consumption (m3 )

A-94 B-94 -94 -94 A-95 B-95 -95 -95 A-96 B-96 -96 -96 A-97 B-97 -97 -97 A-98 B-98 -98 -98 A-99 B-99 -99 -99

50936 51078 51394 51615 51686 52190 52537 52792 53000 53063 53397 53620 53764 53879 54206 54489 54734 54894 55150 55246 55355 55613 55956 56400

2419040 2692280 3067120 2703671 2677555 2975075 2930316 2804370 2522987 2863313 3068979 2834592 2571179 2955323 3234706 2895807 2668250 2879257 3333223 2967939 2729694 3113494 3363480 2911827

1380673 1632918 1848209 1552996 1429368 1580675 1773403 1610784 1482201 1561081 1782899 1708801 1374471 1766956 1697610 1626550 1558571 1730578 2077083 1673541 1648639 1735385 2243231 1727584

Figure 3. Network’s efficiency rate and unaccounted for water in the urban complex of Volos for the years 1994–99.


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TABLE II The industrial zone of the city of Volos 4-month period

Connections in use

Discharge (m3 )

Water consumption (m3 )

A-94 B-94 -94 -94 A-95 B-95 -95 -95 A-96 B-96 -96 -96 A-97 B-97 -97 -97 A-98 B-98 -98 -98 A-99 B-99 -99 -99

107 105 110 109 131 110 111 118 119 119 121 123 121 122 130 134 136 134 138 138 136 137 141 139

460240 375290 252600 362960 292480 300630 255885 316968 306150 302545 283673 337006 221509 310711 235790 281905 321148 264449 220855 328082 358512 372224 320630 364192

197668 143518 176016 294823 200731 177546 123794 140747 172435 167862 137545 191696 139375 178045 146272 133968 227588 164417 184752 223738 291999 137922 175265 223907

into a database, had been statistically analyzed with the program Microfit and then were used in IWR-MAIN, a water demand forecast model (AIWR, 1987) in order to obtain results concerning future water demand. Water demand was calculated separately for the urban complex and the industrial area of Volos. The ratio between the total charged water consumption divided by the total water production defines the network’s efficiency rate. The total number of consumers (connection in use) per 4 months for the time period between 1994–1999 was statistically analyzed with the linear regression method (Ordinary Least Squares) in order to estimate the relation between time and consumers. The following equations were used: Y = α + βT

(1)

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Figure 4. Network’s efficiency rate and unaccounted for water in the industrial zone in the city of Volos for the years 1994–99.

Figure 5. Correlation between VCCR-Sp.consumption in the greater area of Thessaly.

were Y = the consumers; T = time; and the coefficients α, β were found. The analysis was made with Microfit program and the results are: Y = 50772, 2 + 228, 2T R 2 = 99, 43%

tstat = 61, 9

Equation (2) was used to calculate the future number of consumers (future connections) for 2005 ˆ Yt+ j = Tt+ j ·β

(2)

−1 X Y . (Results are shown in Table III. The estimated future where βˆ = X X water demand is presented in Table IV.)


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TABLE III Future consumers in the city of Volos for 2005 4-month period

Consumers

A-2005 B-2005 -2005 -2005

61041.3 61269.5 61497.7 61725.9

TABLE IV Future water consumption in the urban complex of Volos for 2005 4-month period

consumers

Mean water consumption (m3 )

Estimated future consumption (m3 )

A-2005 B-2005 -2005 -2005

61041 61270 61498 61726

27.76 31.20 3.36 30.54

1694506 1911608 2174558 1885109

Taking into account that the network’s efficiency rate was found to be approximately 58% the total estimated water production for the city of Volos for the year 2005 is 13,216,863 m3 . Industrial zone in the city of Volos. Similarly using the same procedure, for the industrial zone in the city of Volos form data taken from Table II, using again Equation (1) the results were the following: Y = 105, 47 + 1, 52T R 2 = 96, 59%

tstat = 10, 7

From Equation (2) Taking into account that the network’s efficiency rate was found to be approximately 59% the total estimated water production for the industrial zone in the city of Volos for year 2005 is 1,751,520 m3 . The total water needs in the city of Volos for 2005 is estimated to be 14,968,383 m3 using the Microfit program. 3.6.2. IWR-MAIN Model The second method of forecasting future water demands in the city of Volos is by using the IWR-MAIN model which estimates total water consumption and applies different demand management scenarios for water conservation. Data used was the water consumption of year 1999, number of connection in use, for both urban

272


TABLE V Future consumers in the industrial zone in the city of Volos for 2005 4-month period

Consumers

A-2005 B-2005 -2005 -2005

174 176 177 179

TABLE VI Future water consumption in the industrial zone of the city of Volos for 2005 4-month period

consumers

Mean consumption (m3 )

Estimated future consumption (m3 )

A-2005 B-2005 -2005 -2005

174 176 177 179

1633.5 1347.43 1259.85 1614.66

284230 237148 222993 289024

TABLE VII Results from IWR-MAIN model concerning prediction of water demand in the city of Volos for the year 2005 Year 2005 Water Consumption(m3 )

A trimester

B trimester

C trimester

D trimester

Total

Low Predicted High

1636191 1817985 1999782

1720719 1911909 2103102

2218857 2465406 2711955

1701639 1890723 1890723

7277406 8086023 8705562

complex and the industrial zone of the city of Volos, future connections from the previous statistical procedure with a deviation of 10% for the urban complex and 1% for the industrial zone. It is obvious that due to deviation in the number of connections there are scaling consumption values namely low and high. The predicted value is that estimated from the previous procedure. The results are summarized in Tables VII and VIII. Taking into account that the network’s efficiency rate was found to be approximately 58% the total estimated water production for the city of Volos for year 2005 is 11498301, 12775916, 13754788 m3 accordingly.


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TABLE VIII Results from IWR-MAIN model concerning prediction of water demand in the industrial zone of the city of Volos for the year 2005 Year 2005 Water consumption (m3 )

A trimester

B trimester

C trimester

D trimester

Total

Low Predicted High

369294 373587 377880

175170 177183 179199

217527 220014 222501

285120 288342 291561

1047111 1059126 1071141

Taking into account that the network’s efficiency rate was found to be approximately 59% the total estimated water production for the industrial zone in the city of Volos for year 2005 is 1664906, 1684010 and 1703114 m3 accordingly. The total water needs in the city of Volos for 2005 is estimated to be 14.459.926 m3 using the IWR-MAIN model. From the application of both methods we conclude to similar results which lead us to the conclusion that we are accurate concerning future water demand forecast. But we need to emphasize that the impact of climatic factors like precipitation and temperature was not taken into account as it should. 3.7. THE FIELD SURVEY Population: The citizens of the city of Volos greater area using the services of the water authority was estimated to be 120 000 (62.200 connections in use). Sample size: 966 questionnaires corresponding to equal number of households were collected. This sample is satisfactory for the reliability of the results compared to samples of other surveys (sample 1: 60). Distribution of the sample: For a better representation of the population the Volos area is divided into 4 sections. Sections 1–3 represent the municipality of Volos whereas Section 4 includes the municipality of Nea Ionia and Esonia. Sampling methodology: Probability sampling was the method applied. It refers to any sampling procedure that relies on random selection according to which there is a known and equal probability for every unit to be chosen as a unit of the sample (Baumann et al., 1998). Survey method. Personal interviews were taken from the respondents (field survey). Data analysis. Data analysis was made with the S-PRO program (Statistical Processing Data) (Koutsoupias, 1999).

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Questionnaire. The questionnaire covers questions that concern: • Demographics of the sample (sex, age, education, family size, income etc.) • Water supply issues, (reliability of the water supply network and infrastructure) • Water quality issues (satisfaction with and reliability of tap water quality, use of additional cleaning devices, use of bottled water etc.) • Water demand issues (water consumption levels, classification of residential water uses, use of additional water deposit or pressure devices, acceptability of alternative water demand management practices) • Pricing policy issues (acceptability level of the pricing policy, willingness to pay, efficiency of economic instruments) • Project funding issues • Public awareness (Only part of the findings are presented, namely those that are relevant with the aspects under study.)

3.8. WATER PRICING POLICY Prior to 1985, the water utility had applied a uniform rate for its residential water use with fixed monthly service charges corresponding to a min water consumption of 5 m3 /month. In 1985, the tiered rate structure and specifically the ‘increasing block rate structure’ was introduced together with a fixed monthly service charge. With three blocks for residential customers and only a small incremental difference between these three blocks the water utility began promoting water conservation with its rates. In 1991, the rates consisted of four blocks. This method of billing water customers has been in use until today. Until 1988, every customer received a water bill every 2 months while from 1988 until today quarterly (Mylopoulos et al., 2001). The current average water price is 0.41 euros/m3 relatively higher of the average water price for all continental cities in Greece 0.34 euros/m3 (Mylopoulos et al., 1998). This price reflects totally the operation of the existing network, the water services of the utility as well as different investments. Part of the price justifies expansion plans and the renewal of the system. What is interesting though, is that according to the field survey results only 17.9% of the respondents approve the current pricing policy. The preferred pricing system is the charge proportional to their water consumption without any fixed charge. Even though 64.8% of the respondents don’t really know the price of water meanwhile 48% claim that the price of water is expensive. The current price of water can not promote its conservation since only 1 out of 6 respondents modify their consumption taking into account its price.


3.9. C ORRELATION IN T HESSALY

OF

WATER PRICE (VCCR)

AND

275

WATER C ONSUMPTION

Water rates in Thessaly vary substantially among the different cities. The price of water is considered low, and doesn’t work as an incentive for water conservation. Specific consumption varies from 125–310 L/cap./day. Specific consumption in the city of Volos is currently 190 L/cap./day. Taking into account the sensitivity of the area, concerning water resources availability, these specific consumptions are relatively high especially in Tyrnavos and Karditsa. 3.10. WATER R ELATED PROBLEMS The most common water related problems are water availability problems mostly connected with depletion of existing water resources in the surrounding area due to intensive agricultural uses and the difficulty in finding new water resources. Considering the current and future water scarcity of the region, as well as future projections of 14.5 × 106 m3 water to satisfy water needs (as found from IWRMAIN model) it is easily understood that the city of Volos is a typical case for implementing a demand-oriented water policy in order to balance water demand and promote water conservation. Water quality problems are more emphasized by the consumers comparing to water resources availability ones, since 48.96% are worried concerning water quality problems. Only 6.62% think that water availability problems are more important. Taking into account that water quality problems are mostly connected with longterm health risks, one can easily understand the respondents’ attitude. It is true though, that the quality of water coming from drills is relatively low. 3.11. I NCREASE

OF

WATER PRICE

The utility claims that an increase of 10–15% in the water price would improve current water services and would have been acceptable from the users. Changes in the water price at the moment follow inflation levels. From the field survey, it is also verified that an increase of 10% would be acceptable from the 90.2% of the respondents.

4. Concluding Remarks The case of Volos is a typical example where a demand oriented water policy is needed. This is clear due to the sensitive water conditions that occur in the greater area and the difficulty in finding new water resources, especially for residential water use since the existed water quality, although meeting the standards, is characterized

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as poor. Moreover the future water demand, as estimated urge for a more sustainable use of the current water resources. The only demand management practice applied so far is the tiered-rate. This water rate though is not acceptable from the majority of the citizens. The water rate should become more effective to reach cost recovery levels. It becomes evident that the current water rate structure does not work as an incentive for water conservation and a new pricing policy should be replace the existed one. The improvement of the water pricing policy alone would not lead to impressive results concerning water demand reduction because residential water use seems to be inelastic in some way concerning low levels of consumption. Changes should focus on the upper scales of the tiered rate structure. With more rational water pricing though, demand forecasts would be lowered delaying or even postponing the need for infrastructure expansion. On the other hand, reasonable high water rates would generate funds for system renovation and improvement. Industries connected to the municipal system will then apply conservation methods (recycling) helping in decreasing system demands. Concerning the operational techniques, the installation of electronic leak detection and the improvement of the reliability of the system would help developing water demand management in the city. The high level of public awareness concerning current and future water related problems claimed in the survey is an indication of the fact that there is ground for the implementation of a public information strategy promoting the advantages of demand management options in the urban water supply sector. The relative underestimation of the importance of the water availability problems in comparison to the water quality ones, shows the direction towards which the utility should move its public awareness policy in the future. The preferred maximum 10% raise in the water price is mostly connected with the low reliability of the water services. The current water price seems not to reflect the quality of services. It becomes clear that the acceptability and efficiency of any new water pricing policy is closely connected with the improvement of water services. Success depends on political sensitivity, administration reform, citizens participation and good information. Environmental concerns should be integrated into the development policy. References Army Institute of Water Resources (AIWR): 1987, IWR-MAIN Water Use Forecasting System, Version 5.1, Users manual and System Description, Ford Belvoir, Va. Barclay, D. S.: 1984, ‘Retrofitting apartment buildings to reduce costs and water demand’, J. Can. Water Resour. 9(3), 45–47. Baumann, D., Boland, J. and Hanemann, M.: 1998, Urban Water Demand Management and Planning, USA, McGraw Hill.


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Flack, E.: 1985, ‘Residential water conservation’, J. Water Resour. Manag. Plann. ASCE, 107(1), 85–95. Haney, P. E. and Hagar P. E.: 1985, ‘Dual water system design’, Proc. of AWWA Conference, Denver Colorado, No20189, USA. Koutsoupias, N.: 1999, ‘Statistical Data Analysis’, Paratiritis, Thessaloniki, Greece (in Greek). Maddaus, W., Gleason, G. and Darmody, J.: 1996, ‘Integrating conservation into water supply planning’, J. AWWA, pp. 57–67. McNeil, R. and Tate, D.: 1991, ‘Guidelines for municipal water pricing’, Environmental Canada, SSS No 25. Mylopoulos, N., Mentes, A. and Karamanlidou, M.: 2001, ‘Sustainable water resources management in the hydrological basin of volos’, Proc. International Conference: “Water Resources Management”, WIT Press, pp. 99–108. Mylopoulos, Y. and Kolokytha, E. G.: 1998, ‘Economic Aspects of Water Supply Policy in Greek Cities’, Proc. Inter. Conference on Restoration and Protection of the Environment IV, Chalkidiki, Greece, Vol II, pp. 903–910. Mylopoulos, Y. and Kolokytha, E.: 1997, ‘Social and economic aspects of sustainable water supply policy. The city of thessaloniki case’, in J. Refsgaard and E. Karalis (eds.), Operational Water Management, Balkema, Rotterdam, 41–45. Papadimitriou, I.: 1994, Data Analysis Methods, Thessaloniki, Greece. Robinson, J. E.: 1980, ‘Demand modification as a supply alternative: a case study of the regional municipality of Waterloo, Ontario, Canada’, Dept. of Environmental Studies, University of Waterloo, Ontario. Westerhoff, G. and Lane, T.: 1996, ‘Competitive ways to run water utilities’, J. AWWA, pp. 96–101. Winpenny, J.: 1994, Managing Water as an Economic Resource, Routledge, N.Y. Wonnacott, T. and Wonnacott, R.: 1995, Statistique, Economie, Gestion Sciences, M´edecine avec exercises d’application, Economica, Paris (in French).