DRAFT
Draft - version 5d
CUWCC Utility Operations Committee Report
BMP 1.3.G.3: Potential water use efficiency impacts and
cost-effectiveness of transitioning to monthly billing
schedules for all accounts.
Part I: Preliminary Findings
The Utility Operations Committee (Utility Ops) of the CUWCC is responsible for addressing the
issue outlined above. Utility Ops will complete this work through two or more reports, or “Parts”.
This initial report is Part I: preliminary findings.
This is a very rough draft of the first report on this subject. This draft
does include the basic structure of the first report.
Introduction and purpose of this report ....................................................................................... 2
As a practical matter, the issue is limited to transitioning just from bi-monthly to monthly billing
............................................................................................................................................... 2
Only about 1/3rd of water agencies bill bi-monthly ................................................................... 3
Two potential WUE impacts have been identified ................................................................... 4
Significant challenge: municipal water agencies may not have the authority to transition to
monthly billing ......................................................................................................................... 4
Non-WUE issues .................................................................................................................... 5
Potential WUE impact of quicker leak detection ......................................................................... 5
Monthly reads will identify leaks on customer lines sooner than bi-monthly reads .................. 5
The WUE impacts will vary from water agency to water agency ............................................. 6
Possible Tool: what are the most effective means of using billing information to identify leaks
on customer properties? ......................................................................................................... 7
Possible Tool: Once a potential leak has been identified, what are effective strategies for
getting customers to actually repair the leaks? ....................................................................... 7
No WUE impacts of transitioning to monthly billing where AMI is used ................................... 8
Potential WUE impact of increased messaging .......................................................................... 8
DRAFT - WUE Impact of Monthly Billing - Part 1: Preliminary Findings
What has the more powerful “message”: receiving two small bills or one large bi-monthly bill?
............................................................................................................................................... 8
Multiple utilities on a single bill will dilute the WUE impact ...................................................... 8
Messaging benefit: customers receive more immediate feedback on peak summer demand . 9
The problem of autopay and paying on-line or with smart phones .......................................... 9
Possible tool: are there effective ways for water agencies to “message” customers that use
autopay, on-line payment and smart phones? ........................................................................ 9
Increased messaging will have no WUE impacts on certain sectors, such as multi-family ...... 9
Potential tool: are there other options that are at least as effective as more frequent
messaging? ...........................................................................................................................10
Cost of Transitioning to Monthly Billing .....................................................................................10
Is a new billing system required? ...........................................................................................10
Monthly reads will roughly double the cost of meter reading ..................................................11
Monthly billing will roughly double the cost of billing customers .............................................11
Transition to monthly bills but not monthly reads ...................................................................11
Next steps include the following ................................................................................................11
Tool that might help water agencies estimate the feasibility ...................................................12
Messaging in a world without paper bills ................................................................................12
Survey water agencies that have migrated from bi-monthly billing to monthly ........................12
Further Study.........................................................................................................................12
Introduction and purpose of this report
The MOU (BMP 1.3.G.3) states:
“Within three years from the date this BMP revision is adopted, the CUWCC will complete
an evaluation of the potential water use efficiency impacts and cost-effectiveness of the
following for consideration as future BMP revision(s)… 3) Transition[ing] to monthly billing
schedules for all accounts.”
The purpose of the report is to determine how much water is conserved, if any, when an agency
transitions from bimonthly to monthly billing; and whether that transition can be done in a costeffective way.
As a practical matter, the issue is limited to transitioning just from bimonthly to monthly billing
CUWCC summarize the billing frequency of its member water agencies, as reported by the
members to CUWCC, comparing their billing frequencies in 2009 versus in 2010. First, no
water agency reported billing less frequently than bi-monthly; that is, all the water agencies
either billed monthly or bi-monthly.
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DRAFT - WUE Impact of Monthly Billing - Part 1: Preliminary Findings
The report also shows that many water agencies do a mix of monthly and bi-monthly billing,
depending on customer class. Here’s a summary of the 2010 findings:
c
Customer Type
Single-Family
Multi-Family
Commercial
Industrial
Institutional
Dedicated Irrigation
Agricultural
Fire Lines
System Flashing
Recycled
Other
TOTAL
Monthly
111
106
120
94
95
77
34
20
77
734
# of Agencies
Bi% Bimonthly monthly
79
42%
74
41%
72
38%
40
30%
44
32%
64
45%
15
31%
19
49%
41
35%
448
38%
Total
190
180
192
134
139
141
49
39
118
1,182
Other than fire lines, dedicated irrigation customers are the customer class most often billed bimonthly, with 45 percent of water agencies reporting bi-monthly billing for this customer class.
Residential customers is the customer class most often billed bi-monthly after dedicated
irrigation: with a little more than 40 percent of water agencies reporting bi-monthly billing for
single family and multi-family customers.
Along with agriculture, the customer classes that are least often billed bi-monthly are CII
customers.
What may drives these difference in the frequency of billing is the average volume of water per
account: accounts using large volumes of water (CII) are more likely to be billed monthly.
The difficulty this presents for this report is that in order to develop the most accurate estimate
of the WUE impacts of transitioning to monthly billing, this report would have to understand
whether there are differences in the WUE impacts between these different customer classes. At
least for the initial review, this report will not differentiate between the different customer
classes.
Only about 1/3rd of water agencies bill bi-monthly
The issue of transitioning to monthly from bi-monthly is one that effects only about one in three
water agencies. Raftelis Financial Consultants, Inc. and California-Nevada Section of the
American Water Works Association surveyed water agencies about a number of rate-related
issues including the frequency of their billing. The survey findings are published in the “2013
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DRAFT - WUE Impact of Monthly Billing - Part 1: Preliminary Findings
Water Rate Survey”. Of the California water agencies responding to the survey, 61% billed
monthly and 36% billed bi-monthly.
Billing Frequency
Monthly
Bi-monthly
Tri-monthly
Other
TOTAL
Count
Percent
133
61.3%
79
36.4%
2
0.9%
3
1.4%
217
100%
This is very similar to the CUWCC data discussed above. Of course, as we saw in the CUWCC
data, many of these agencies probably do a mix of monthly and bi-monthly billing.
Nevertheless, the data imply that this report need only consider the WUE impacts of the one
scenario: of transitioning to monthly billing from bi-monthly.
Two potential WUE impacts have been identified
Converting from bi-monthly to monthly billing has two potential WUE impacts:

If the monthly billing is accompanied by monthly reads, than leaks on customer’s service
lines will be found sooner, on average; and

Because the customer will receive twice as many water bills per year, there will be twice
as many opportunities for messaging.
The potential WUE impacts and cost-effectiveness of these issues are the focus of most of this
and future reports.
Significant challenge: municipal water agencies may not have the
authority to transition to monthly billing
Transitioning to monthly billing may not be possible where the water agency is a part of a larger
organization, such as a municipality, where the water bill is a subset of a municipal bill that
might include electricity, gas, refuge, sewer and/or other services provided by the municipality.
In order to transition to monthly billing for water, it will almost certainly require these other
utilities and/or the city governance to agree to also transition to monthly billing. In other words,
the water agency may not have the authority to make the decision about whether to transition to
monthly billing.
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DRAFT - WUE Impact of Monthly Billing - Part 1: Preliminary Findings
Non-WUE issues
Potential beneficial, yet non-WUE issue: does monthly billing result in fewer
collection problems?
Although this is not a WUE issue, anecdotal “evidence” suggests monthly billing results in fewer
collection problems. The assumption is that the smaller bill is more manageable for many
households. This is something water agencies might want to consider, but because it has no
WUE impacts, it is not an issue to be further explored in these reports.
Potential WUE impact of quicker leak detection
Monthly reads will identify leaks on customer lines sooner than bimonthly reads
This only applies to those water agencies that have a system in place that can identify
customers that may have leaks and are able to notify those customers. If the system is not in
place, than there will be additional costs to creating and implementing such a system.
If a water agency has a system for identifying and notifying customers that may have leaks, and
the customers take action based on the notification, about 32 percent less water might be lost if
the notification is based on 30-day reads rather than 60-day reads.
Assume one new leak occurs each day and each leak loses one gallon per day. And assume
that the water agency is able to identify 100% of these leaks through it system of monitoring the
meter reads. And assume that when a leak takes place the customers is not aware of it until
notified by the water agency. And finally, assume that every customer notified of a leak fixes
the leak and fixes it immediately. In this scenario about 465 gallons would be lost in each of the
30-day period before notification would be made, or 930 gallons for a pair of 30-day read
periods (for a total of 60 days). But 1,830 gallons would be lost in each 60-day read period
before the notification would be made. The difference, or about 900 gallons, would be saved in
the two 30-day read periods; for a savings of about 49-percent.
Water saved in hypothetical example of monthly vs. bi-monthly reads
"Savings" = bimonthly read
30-day
Double the
60-day
minus 2 monthly
Read
30-day Read
Read
read periods
% Savings
465
930
1,830
900
49%
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DRAFT - WUE Impact of Monthly Billing - Part 1: Preliminary Findings
The WUE impacts will vary from water agency to water agency
The above is, of course, a hypothetical case. Among other things, the WUE impacts will vary
from water agency to water agency based on a number of factors. These factors include

The actual amount of water lost due to leaks on customer property. For example, it
could be the case that newer communities have fewer leaks per 1,000 customers, and
older communities have many more leaks per 1,000 customers. In other words, all else
being equal, monthly reads might make more sense in an older community than a newer
community.

The responsiveness of customers to the awareness that there may be a leak. The latter
could be influenced by things such as income, water rates, and whether the person
being notified is the property owner or a tenant.
The following is one way to think about how to measure the WUE impacts of monthly reads on a
strictly hypothetical water agency; that is, the values are not based on actual data and are not
even meant to represent averages or estimated actuals. Also, these values would be different
for each water agency. This scenario estimates the potential WUE impacts on the hypothetical
water agency per 1,000 accounts of a particular customer class. The purpose of this example is
simply to present one approach to estimating the WUE impacts of monthly reads.
Assumptions (different for each water agency)
For each 1,000 customer accounts, how many ACTUALLY have leaks
5% which =
50 accounts actually have leaks
Of those that actually have leaks,
how many can be found per 60-DAY PERIOD by a review of the meter reads
50% which =
25 accounts with leaks are found per 60-days
Of the leaks that are found in the 60-day period,
how many of the customers, when notified, fix the leak
75% which =
19 leaks are fixed
Average water loss per day per leak
0.2 HCF/ day lost per leak
Net water saved over 60 days using monthly vs. bi-monthly reads:
Water lost per one 60-day read period:
114 HCF
Water lost per two 30-day read periods:
58 HCF
= WUI impact (water saved) over the 60-days
56 HCF
To reiterate, this above only works where monthly reads take place. Although the MOU does
not ask about the WUE impacts of transitioning to monthly reads (it only addresses monthly
billing), the two issues are intertwined with respect to the WUE impacts of customer leak
detection and are therefore considered in this report.
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DRAFT - WUE Impact of Monthly Billing - Part 1: Preliminary Findings
Possible Tool: what are the most effective means of using billing
information to identify leaks on customer properties?
Key to the effectiveness of this type of program is for the water agencies to be able to effectively
identify potential leaks on customer property using meter reading data. So the purpose of the
tool would be to help water agencies create the optimum means of identifying accounts that
might have leaks. What is the optimum means for identifying these accounts?

Focus just on customer classes that have somewhat predictable water usage?

Comparing one read period with the same period in the previous year?

Looking for increases of 10%, 20%, 50%?

What about accounts where the leak has been growing almost imperceptivity over
years?
A tool such as this might not only help agencies estimate the feasibility of transitioning to
monthly reads, but help every water agency that has or is considering a program of identifying
accounts that have leaks.
Utility Ops may undertake additional work on this issue in future reports.
Possible Tool: Once a potential leak has been identified, what are
effective strategies for getting customers to actually repair the leaks?
Once a water agency has identified a potential problem on a customer’s property, what are the
most effective strategies for using that information to achieve real water savings?

Send letters to the customer?

Ask conservation/ high bill staff to extend an offer to perform an audit?

Call the customer if the leak is greater than a certain amount?

Take more direct measures as the certainty that a leak is really taking place increases?
Taking the water lost from the leak into account?

Create positive and/or negative incentives for customers to repair leaks ASAP?
Research such as this might help every water agency that has or is considering a program of
notifying customers of possible leaks on property.
Utility Ops may undertake additional work on this issue in future reports.
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DRAFT - WUE Impact of Monthly Billing - Part 1: Preliminary Findings
No WUE impacts of transitioning to monthly billing where AMI is used
Transitioning to monthly reads and billing will have no WUE impacts with respect to improved
lead detection where AMI is used because AIM will notify water agency and customer of leak
separate (and nearly instantly) from meter reading and billing.
Potential WUE impact of increased messaging
[This section needs a lot of work; basically what is in this section now
are essentially just notes]
There are at least two “messages” customers receive on the water bill:

The bill amount (more expensive bills encourage customers to conserve more); and

Messages the water agency includes on the bill to encourage conservation, such as
charts that compare current to past water usage.
The following will consider both these messages.
What has the more powerful “message”: receiving two small bills or
one large bi-monthly bill?
When part of the “message” is the actual bill amount that must be paid, it could be the case that
receiving one very large bill very two months has a more powerful WUE impact than receiving
two small bills.
Multiple utilities on a single bill will dilute the WUE impact
It is often the case with municipal water agencies that customers receive a bill that includes
multiple utilities, such as water, power, sewer and refuge. These bills are two, three, four or
more times more complex than bills which simply invoice the customer for water. It is very likely
that as the number of utilities appear on the bill, customers are less and less likely to even be
aware of the water charges or scan the bill for WUE messages placed there by the water
agency. For this reason, both kinds of WUE impacts from messaging will be diluted. As the
number of utilities on the bill increase, so does the dilution of the message.
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DRAFT - WUE Impact of Monthly Billing - Part 1: Preliminary Findings
Messaging benefit: customers receive more immediate feedback on
peak summer demand
One of the potential WUE impacts of transitioning to monthly bills, if also transitioning to monthly
reads, is when customers get more immediate feedback on their water bills form their increased
using during peak summer months.
If they receive one or two bills that are large because of increased summer demand, the
customers may have time to moderate their summer usage. Conversely, if their receive bills
only bi-monthly, there may not be enough time to moderate their summer usage.
The problem of autopay and paying on-line or with smart phones
If there are WUE impacts related to doubling the messaging when billing monthly as opposed to
bi-monthly, are those impacts lessened or even non-existent as more customers transition to
autopay and paying by smart phones? That is, do the WUE impacts only apply to customers
receiving paper bills in the mail?

The percent of customers on autopay varies tremendously from agency to agency (Mesa
Water may have as few as 5%, Coastside about 25%, and Roseville as many as 52%).

Including water conservation messages in autopay communications with customers may
not be very effective. One agency reported that only 1% of autopay customers opened
the “auto” reply they received from the water agency after making their payment.

Unlike bills sent through the mail, there are many different types of autopay options.
This plethora of options may make WUE messaging more difficult.
The trend in the water industry is to every greater use of autopay and pay by smart phone; with
diminishing numbers of customers receiving paper bills in the mail.
Possible tool: are there effective ways for water agencies to
“message” customers that use autopay, on-line payment and smart
phones?
If there are WUE impacts of messaging, are there effective ways to “message” customers that
use autopay and pay using smart phones? Have some water agencies implemented or
explored various ways to “message” using these options?
Increased messaging will have no WUE impacts on certain sectors,
such as multi-family
Although there may be WUE impacts from increased messaging on some sectors, there will be
little to no impact on other sectors such as multi-family. The problem with multi-family is the
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DRAFT - WUE Impact of Monthly Billing - Part 1: Preliminary Findings
person using the water (the tenant) is not the person that receives the “message” (i.e., the
person receiving the water bill). Other examples are bills that are sent to property management
companies, bills sent to “corporate” headquarters that are located in distant cities, for example.
Potential tool: are there other options that are at least as effective as
more frequent messaging?
Central to the question of the WUE impacts of transitioning to monthly “messaging” is the
question “if there are WUI impacts, what is the cause of the impacts?” Are the WUE impacts
caused by more frequent messaging – monthly rather than just bi-monthly?
The reason for this question is there might be other actions water agencies are or can take to
increase messaging.
Impact of water agency programs that notify customers of high water usage and/or provide
periodic reports of their usage compared to past usage and/or that of other customers.

Do these programs have WUE impacts?

If so, are the WUE impacts of messaging on the bill lessened under these
conditions?
Cost of Transitioning to Monthly Billing
[This section needs a lot of work; basically what is in this section now
are essentially just notes]
The WUE impacts of transitioning to monthly billing are off-set by the cost of monthly billing and,
very likely, the cost of monthly meter reading.
The costs of transitioning to monthly billing and reading will be explored in future reports on this
subject.
Is a new billing system required?
In many cases the only feasible time for an agency to convert from bi-monthly billing to monthly
may be when a new billing system is installed.
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DRAFT - WUE Impact of Monthly Billing - Part 1: Preliminary Findings
Monthly reads will roughly double the cost of meter reading
The WUE impacts of quicker leak detection can only be realized if the water agency transitions
to monthly reads. But transitioning to monthly reads will likely double the cost to the water
agency of the additional reads.
So the issue is whether the WUE impacts of transitioning to monthly reads in conjunction with
monthly billing, must include an estimate of the cost-effectiveness of doing so.
So on the benefits side of the ledger is the question: is how much additional water is likely to be
saved by reading meters each month rather than bi-monthly? But on the cost side of the ledger
is the question: what is the additional cost of reading meters monthly rather than bi-monthly?

This may be particularly problematic if meter readers currently read gas and/or electrical
meters while reading the water meters, when those reads stay on a bi-monthly schedule.
Monthly billing will roughly double the cost of billing customers
Transitioning from bi-monthly billing to monthly billing will increase certain costs. Twice as
many bills will have to be generated and printed, twice as many envelops and postage used.
And on the back end, twice as many payments will have to be processed by accounting staff.
Transition to monthly bills but not monthly reads
If only transitioning to monthly bills, not monthly reads, than every other bill will be based on an
estimate:

The water agency will need to reprogram billing software to create estimated reads and
to reduce the bill in the month the reads are taken to account for the estimate. This may
be particularly difficult in service areas that have tiered rates.

Additional staff/ resources to deal with questions/ protects from customers who
challenge the estimates.
Next steps include the following
[This section needs a lot of work; basically what is in this section now
are essentially just notes]
Utility Ops will consider the following issues, research and actions in subsequent reports.
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DRAFT - WUE Impact of Monthly Billing - Part 1: Preliminary Findings
Tool that might help water agencies estimate the feasibility
Utility Ops will consider the feasibility of creating a tool to help water agencies estimate the costeffectiveness of converting to monthly billing.
Messaging in a world without paper bills
More and more water utilities and customers are moving away from the paper bill that comes in
the mail; migrating to auto pay, paying on-line and paying via smart phones. Does this
migration mean the end of effective messaging or does it mean water agencies must migrate to
new forms of messaging?
Utility Ops and/or CUWCC in general should explore the options for new, effective forms of
messaging in the non-paper world we are migrating into.
Survey water agencies that have migrated from bi-monthly billing to
monthly
CUWCC staff will provide Utility Ops with a list of water agencies that appear to have migrated
from bi-monthly to monthly billing and contact information at those agencies.
Utility Ops will survey those agencies in order to better understand their experience and the
WUE impacts and cost-effectiveness.
Luke is to provide the agency names and contact; the subcommittee will draft a survey
instrument and
Further Study
In order to document the water savings attributed to transitioning to monthly billing, Utility Ops
shall investigate:

Justin Finch will share some highlights from a study on switching to monthly billing.

Staff to contact AWE, Reinhard, Tom. C, and Steve Piper re: studies on the cost
effectiveness and water use efficiency savings of switching to monthly billing.

Staff to research possible sources: AWWA. Alliance for WUE.

Did the USBR rate study address this question? Does WaterSense have data on this?

Should CUWCC and/or some of its member agencies conducted original studies that
document the WUE impacts from transitioning to monthly billing?

Are there other means of estimating the WUE impacts of transitioning to monthly billing?
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