WATER DEMAND COMMITTEE
ITEM:		ACTION ITEM
2.	REVIEW A&N TECHNICAL SERVICES ANALYSIS OF NON-RESIDENTIAL WATER USE FACTORS AND CONSIDER RECOMMENDATION TO BOARD
Meeting Date:			September 29, 2011	Budgeted:	N/A
From:			David J. Stoldt,	Program/	N/A
			General Manager	Line Item No.:
Prepared By:			Stephanie Pintar	Cost Estimate:	N/A
General Counsel Review: N/A
Committee Recommendation: N/A
CEQA Compliance: N/A

SUMMARY: The District contracted with A&N Technical Services to review the District’s Non-Residential Water Use Factors (NRWUF), which had last been reviewed in 1992. When a Water Permit is issued, the factors are used by the District to estimate the water use capacity of a project, which determines the appropriate Connection Charge for the permit and the amount of water that must be available in a Jurisdiction’s Allocation. The factors are also used by California American Water to determine base rates for its tiered rate structure. The factors are based on regional averages by type of use (e.g., the water use for a full service restaurant is determined by the average water use per seat of full service restaurants on the Monterey Peninsula, and the water use of a retail business is determined by the average water use per square-foot of local retail businesses). The goal of this project was to update the Non-Residential Water Use Factors using current District Water Permit data and California American Water customer consumption data. Attached as Exhibit 2-A is A&N Technical Service’s Analysis of Non-Residential Water Use Factors.

DISCUSSION: Only 11 business type categories had a sample size that was greater than or equal to a sample size of 30 customer accounts. The regression models suggested that a small negative trend, reflecting ongoing efficiency improvements, was detectable in many business type categories. This result was anticipated considering that twenty years have passed since the last review and water saving technology has dramatically improved.

Several types of use require additional review before any recommendation to the Board to change the current factors. Staff will review the data for accuracy before any recommendations are proposed. Changes to the factors would be done by Resolution amending Table 2: Non-Residential Water Use Factors.

The conclusion and recommendations of the study indicate that the use of the District’s NRWUF for Rationing and ratemaking is not appropriate. Three major reasons for this recommendation are cited below:

a. The number of measurement units is missing for almost 38 percent of the active non-residential accounts.

b. The reliability of existing measurement units is unknown.

c. The use of a single measure to standardize constitutes an extremely crude form of a water budget. This estimated water budget can be expected to be an inaccurate definition of efficient water use for most customers.

d. The combination of inaccurate water budget and steep rate tiers will magnify the economic impact of erroneous definitions of water budgets. Customers will rightfully perceive the situation as illogical, unfair, and economically unjust.

In addition to these issues, there were other problems with the data. A&N found that approximately 38 percent of the Non-Residential customers (1,744 out of 4,613 unique active non-residential accounts) were missing documentation to verify the allotment of water assigned to each account. The missing data was collected via mail-in surveys during the implementation phase of the original tiered rate structure in the late 1990’s. When California American Water changed billing systems around that time, the survey information was lost.

The second area of concern related to a lack of common fields in the District and California American Water’s databases. Specifically, neither system has common identifiers such as the Assessor’s Parcel Number or APN used by the District or the water customer’s account number that is assigned by California American Water. The use of property addresses is problematic due to multiple users located at a single address. A&N recommends that this data incompatibility be addressed to improve coordination and water conservation planning between MPWMD and California American Water

RECOMMENDATION: Staff is not recommending any modification to the Non-Residential Water Use Factors at this time. The final report needs to be received by the Board and a recommendation for acceptance is appropriate. This item will be submitted to the Board at its October 17, 2011 meeting.

Staff will work with California American to find a mutually agreeable common data field. Finding a way to cross-reference data will be needed to expedite rationing enforcement. Staff is scheduled to renew coordination with California American Water on the Standby Rationing Plan in October.

IMPACT ON STAFF/RESOURCES: N/A

EXHIBITS

2-A Analysis of Non-Residential Water Use Factors

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