In this video, I will discuss in more detail case two in our topology of information treatments. This is a case in which households are provided with long term objective information that they may not know. In this video, I will not present the results of a research study. Instead, I will discuss in more detail a type of information treatment that is not yet being widely used in developing countries but that I think has great potential. Information treatment involves a water utility providing information to its customers as a regular supplement to their monthly water bill. Alternatively, information could be provided bimonthly or biannually, but the key point is that, this type of information is not a one time event, but part of the utility's regular ongoing communication strategy. What type of information might a water utility provide in addition to the amount a customer has to pay? There are many possibilities. We will discuss a few of the most important in this video. I'm sure you will also be able to think of many more possibilities than we have time to discuss here, but just as one example, we have seen the customers have several ancient instincts about water and sanitation. One of which is a strong preference for free water services. So why utilities may want to explain to their customers what it costs to provide water services and who pays for current subsidies? Why would a water utility want to provide this kind of information to its customers? Again there are numerous reasons, but probably the most important is that customers need to be well informed to understand and participate effectively in the governance and regulation of both public and private water providers. My plan in this video is to start by showing you an example of the type of information that my own water utility regularly provides me in my home in Chapel Hill, North Carolina in the United States. Then I will discuss what other types of information water utilities in low and middle income countries might want to consider providing their customers on a regular basis. The water and sewer utility in Chapel Hill called the Orange County Water and Sewer Authority or the OWASA. A county in United States is a small geographical jurisdiction that is usually larger than a single city or town but much smaller than a state. This is the home page of their website. It is a publicly owned utility. It is governed by a board of citizens whose members are elected. The board hires the executive director of the losses, so that the management team of the water utility has a strong incentive to be responsive to the preferences of citizens. OWASA does not currently receive any significant subsidies from the federal or state government so its revenues must pay for its costs. If it needs to finance large capital investments it may decide to issue bonds. These bonds must be approved by voters in local elections and the interest and principle payments due on any bond financing must come from future revenues. So our water in sewer traps must be sufficiently high o generate revenues that will cover our cost of services. This provides OWASA with a strong incentive to communicate regularly with its customers. Every month, OWASA sends my household water bill. This is an example of my water bill for October 2015. As you can see, my bill tells me how many gallons of water I used last month compared to previous months. Here's the volumetric component of the tariff structure used to calculate my water bill. As you can see, OWASA uses an increasing blocked tear of structure to calculate the volumetric component of residential customer's water bills. This is shown in thousands of gallons, so let me convert this to cubic meters for you. For the first 7.5 cubic meters, the price is 70 US cents per cubic meter. The price in the second block is $1.70 cents per cubic meter. And if a household's monthly water use exceeds 60 cubic meters, the price for additional water is over 5 US dollars per cubic meter. The volumetric charge for water is only one component of the tariff. There's a fixed charge and a volumetric charge for waste water as well. OWASA also uses seasonal pricing, charging more for water in the summer when water use is higher than in the winter, when outdoor water use is minimal. Currently, my average tariff for water and sewer services combined is about 5 US dollars per cubic meter. So, if a household like mine that uses about ten cubic meters a month pays about 50 US dollars per month, my OWASA water bill is pretty normal in terms of the information it provides. Many water utilities in low and middle income countries provide similar information on water bills sent to their customers. However, periodically, OWASA sends me some additional information. This is an example of a brochure that OWASA sends me periodically called a Water Quality Report card. This for sure provides detailed information about the quality of the water the OWASA provides. OWASA wants its customers to have objective information about the quality water provided. Here is the second page of the OWASA water quality report card with a summary the test results for numerous water quality parameters. In fact, this is a summary of the quality of water when it leaves the water intake treatment plant. And also at selected places in the distribution pipes located underground throughout the town. It is not necessarily the quality of the water a household receives inside the house when a faucet is turned on. This is because water may become contaminated with lead found in the distribution lines in a house. But this problem is outside of OWASA's control and the brochure makes it clear to its customers that this is not a OWASA's problem. This brochure also includes additional information about OWASA's four reservoirs and the treatment processes that OWASA's uses to clean and disinfect the raw water supply. In developing countries, the problems water utilities face are different than in Chapel Hill. But the policy of regularly providing information to customers in their water bills still applicable. What kinds of periodic information might a water utility try to convey to its customers in a mega city of the global south? I suggest that we think about such information treatments in terms of our policy framework. The first thing I would suggest is to focus on problem description and status quo conditions. For example, the utility water could provide customers with information about its cost of service. The distribution of subsidies in the regional water resources situation, or utility might provide customers with a step by step diagram of the current water and waste water system, so they can better understand the utilities operations. Such a figure could show where raw water's abstracted, how it is treated and how it's delivered to households? Next, it would show the waste water side, how waste water's collected, where it is treated or if it's treated, and where the effluent is discharged back to the environment? Alternatively, the utility could show customers a set of performance indicators such as the number of customers per employee where the percent unaccounted for water. Such performance indicators could be used to benchmark utility that is compare to other similar utilities on the region. Another option is for the information treatment to focus much more narrowly on an issue of concern. Such as the problems post by metering shared connections or the number of customer accounts that are in arrears. The purpose would be to inform customers of the challenges confronting the utility. Second, the utility could provide customers with information about the dynamic baseline. In other words, information about, what current trends imply for a future conditions? For example, this could entail explaining ,how population economic growth would likely effect system wide water use. You tell it could also explain the customers how climate change could effect for water utilities raw water sources. Of course, if there's a climate change on surface water hydrology are uncertain, then this would need to be made clear to customers. However, as we discussed in the first part of this MOOC in 2014, there's much less uncertainty about rising temperatures. Increased temperatures, increased household water use and reservoir evaporation losses. The magnitude of these effects will differ in different places. So the information that a water utility would provide would need to be location specific. Third, the utility could provide customers information about policy interventions that are either underway or are being contemplated. For example, the tariff reforms or water conservation programs might be under consideration. Or, the development of new water sources might be in the planning stages. A key message from the utility might be, the sacrifices will start with us. For example, policy interventions such as labor reforms or other cost-cutting measures to deal with the problem. Fourth, the water utility could provide the information about what these policy interventions would mean for customers, how the policy interventions would change or shift the dynamic base line. For example, the water utility could explain how much an investment program would increase the number of hours of service or the quality of water provided by the utility or the effect of water quality improvements on health risks. The information treatment could explain the effect of seasonal pricing or increased temperatures on the need for the utilities capacity expansion or what increased debt financing would imply for tariffs? These are just a few examples to illustrate that a utility could share much more objective information with this customers and it's currently done in most cities. Not only could more information be shared, but also information could be shared in more ways. The traditional option is to include printed materials with the household water bills such as the OWASA brochure I showed you. The social media, radio and television could also be used. Utility web sites can easily include detailed information such as consulting reports and water quality test results. Members of the public in the study, the utilities problems in more depth that they wish to do so. Let me conclude with the caveat. I have referred to the information treatment in this case two of the topology as respecting consumer sovereignty. Of course, there's a continuum here. And the utilities management might hope that providing objective information about its problems, emerging trends and policy alternatives would cause customers to see the situation as the utility sees it. For example, providing customers with accurate information on the cost of service might make customers more minimal to tariff increases. Alternatively, engaging the public with objective information might result in new creative solutions coming from the public. Perhaps the utility management would change its own positions about possible solutions to problems. Or, working together, the utility and the public might find solutions that neither would have found if the utility had not provided its customers with more information. In the next two videos will discuss case three in our topology information treatments. As in side in making this video Duncan and I realized just how different our water bills are in terms of their information treatment contempt. Later in the MOOC Duncan will compare and contrast the information he receives from his water utility, Yorkshire water. The difference in information treatment between his Yorkshire water bill, and my OWASA bill is due to regulation in the water industry in the UK.
