The myth
of water meters
Martine Ouellet
Vice-president of SOS Water Coalition Eau Secours!
Holder of a MBA from l’École des Hautes Études Commerciales and a Bachelor’s degree
in mechanical engineering from McGill University, she also was on the board of directors
and the executive committee of the Société québécoise d’assainissement des eaux (SQAE)
Excerpt from the study “Water meters to measure residential comsumption: a very bad idea”
(Les compteurs d’eau pour mesurer la consommation résidentielle: une très mauvaise idée)
by Gaétan Breton, PhD in Accounting (Sciences Comptables) and Marc-Antoine Fleury, researcher.
In collaboration with Pierre-J. Hamel from INRS-Urbanisation; with special thanks to Geneviève
Dubreuil for corrections.
Thanks to Andréanne Demers for the traduction.
22th September 2005
To debunk the myth of water meters . . . . . . . . . . . . . . . 4
An outline of water usage . . . . . . . . . . . . . . . . . . . . . . . . 4
Domestic water use . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Residential water meters: a lure . . . . . . . . . . . . . . . . . . . 7
To reduce consumption:
the better options are awareness and legislation . . . . 7
To put a price on water: municipal taxes . . . . . . . . . . . . 8
To preserve a public management of water:
we are better off without residential water meters . . . 11
Commercial and industrial water meter:
an essential tool . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Starting with leaks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
To debunk the myth of water meter
Water meters have been the object of many discussions and are often deemed news
worthy by the media. Although many things were said about them, usually in good
faith, in most cases the premises were false and the arguments unfounded. Throughout
this document, we try to explain simply and clearly the present situation and the
possible solutions. We also present the position of Eau Secours! in this debate.
It is important to fi rst separate residential water meters from indust rial water meters.
There is no logic behind the implementation of wa ter meters in residential areas. There
are many more efficient methods available to citizens to pay for the water they use.
Indeed, the service provided by aqueducts in Québec is not free because it is ge n e rally
included in municipal taxes. Some would like to associate residential water meters with
a reduction in individual water consumption. We will demonst rate that there are many
less expensive and more efficient ways to achieve this goal. We believe that th e re is a
hidden agenda behind the implementation of residential water meters: privatisation.
In order for a company to directly charge each household for its water consumption,
water meters will obviously be necessary. In our opinion, a private management of
water, essential to life, is unacceptable.
However, the situation is different when indust rial and commercial water meters are
concerned. Consumption of water by industries is variable according to the processes
and technologies invo lved. An accurate measure of volumes is required to ensure that
costs are proportional to water usage. The use of commercial and indust rial water
meters was found to be effective and financially profitable.
An outline of water usage
The latest available data on water usage in Montreal draw the following picture:
Table 1
Water consumption according to activity sector in Montreal, 2003
Daily consumption
Percentage
Daily
(million cubic
of total
consumption
meters, m3)
consumption
per person (litres)
Residential
consumption
147
20%
225
(commercial, industrial
and institutional)
239
33%
363
Leaks and municipal use
339
47%
516
Total
725
100%
1104
CII consumption
Source: Financement de l’eau, Document d’orientation, Ville de Montréal, 19 novembre 2003.
The City of Montreal est i m a tes that residential wa ter consumption averages
225 litres per person per day (Table 1). This estimate may vary up to 350 litres per
person per day according to other sources in water management. However, since
data in Table 1 are official and recent, we will use these estimates for the purpose of
our analysis.
4
We can see in Table 2 that the estimated average residential water consumption
of a Montrealer is comparable to the Canadian average, which is of 343 litres per
person per day. However, water consumption in Montreal is much higher than
consumption in France, which is 150 litres per person per day.
Table 2
Average residential water consumption per person per day (litres)
United States Canada
Italy
Montreal Sweden
France
Israel
382 litres
335
250
225
200
150
135
Source: Environment Canada web site on freshwate r: www.ec.gc.ca/water/images/manage/use/a4f4f.htm,
except for the Montreal datum which was taken from Table 1.
Residential wa ter consumption in Montreal is similar to ave ra ge consumption in
other Canadian cities, but total wa ter consumption (including all secto rs) in this city
is higher. The many leaks in the aqueduct, eva l u a ted to represent between 40%
to 50% of total volume, explain this diffe rence with other cities. When the volume
attri b u ted to leaks is excluded from the total 1104 litres per person per day, ave ra ge
wa ter consumption in Montreal is 588 litres per person per day (Table 1). This latter
est i m a te is closer the consumption volumes in other Canadian cities (Table 3).
Table 3
Production of drinking water in litres per person per day
(all sectors)
Montréal
Toronto
Calgary
Vancouver
Edmonton
1104 ou 588
594
568
563
543
Ottawa
415
Source: Financement de l’eau, Document d’orientation, Ville de Montréal, 19 november 2003
In Quebec, water is abundant and of good quality. Therefore, costs of treatment
for drinking water are low. Costs involved in water are those of drawing and treating
untreated water, the distribution of drinking water, as well as the disposal and
treatment of sewage and waste water. Table 4 lists the distribution and production
costs of drinking water and the cost attributed to sewage treatment in Montreal.
The price of water paid by the tax-payers (all sectors) of Montreal is 282 million $
per year. This sum is mostly paid by municipal taxes, but also with special charges.
5
Table 4
Costs of water production for the City of Montreal, 2003
Proportion total
Cost ($/m3)
production cost
Drinking water
0,195$
51%
Sewage treatment
0,190$
49%
Total
0,385$
100%
Source: Financement de l’eau, Document d’orientation, ville de Montréal, 19 novembre 2003
In Montreal, treatment of drinking and waste water costs around 40¢ per cubic
meter or 40¢ per 1000 litres (0.04¢/L). The cost of producing drinking water is
similar to that of treating waste water. However, owing to the high volumes
attributed to leaks, the actual cost of water used in the commercial, industrial and
residential sectors is of 73¢ per m3. On the island of Montreal, production of
drinking water and treatment of waste water are managed by a public entity: the
City of Montreal. The price of water in Montreal is one of the lowest in the country.
Water in Ottawa, Calgary or Edmonton costs three times more than in Montreal
(Table 5). Such a favourable comparison can also be done with water costs in Paris.
Table 5
Cost of water per cubic meter (m3)
Montréal
Toronto
Calgary
39¢
96¢
Ottawa
Edmonton
Paris
1,32$
1,41$
1,30$
1,27$
Source: Financement de l’eau, Document d’orientation, Ville de Montréal, 19 november 2003
Domestic water use
Despite a low-cost supply, Montrealers use only 30% of their water for non-essential
needs such as washing the exterior of the house or the car. Essential needs, such as
food, showers, house cleaning and toilets, take up the greatest part of water
consumption (Table 6).
Table 6
Distribution of water consumption in a house in Montreal
Type of use
Percentage of total
consumption
totale
Proportion for a
consumption of
225 l per person
Pro p o rtion for a
consumption of
350 l per person
30%
68
105
30%
68
105
20%
45
70
Baths and showers
9%
42
6
Food
1%
2
3
Total
100%
225
350
Exterior maintenance
(watering, pool, etc.)
Toilet (18 to 28 litres are
used for each flush)
Washing
(dishes and clothes)
Source: Ville de Montréal
6
Residential water meters: a lure
To reduce consumption:
the better options are awareness and legislation
The idea that wa ter mete rs will reduce wa ter consumption is unfounded. This
argument is often used to justify setting up residential wa ter mete rs paid by citizens.
Pro m ote rs of this idea believe that putting a price on the volume of wa ter used in
each household will automatically induce a better usage of wa te r. Some would say
that it is about time that we paid for wa ter. These people seem to forget that we
do, th rough municipal ta xes. It has been demonst ra ted that wa ter meter have no
significant effects on household wa ter consumption. Wa ter consumption in houses
is st ru c t u ral; awa reness and legislation will have a gre a ter impact than wa ter meters,
at a lesser cost .
Structural comsumption
As shown in Table 6, wa ter consumption in a house is most ly st ru c t u ral, i.e. it
depends large ly on number of users, equipment and appliances ra ther than
on consumer behaviour. Wa ter usage for ex terior maintenance will depend on th e
presence of a pool and ga rden size. Since only 30% of wa ter is used for ex te rior
m a i n tenance, ch a rging the volume of wa ter used will not ach i eve an importa n t
reduction in consumption, except perhaps in low-income families which might
atte m pt to reduce their bill to save money. Owing to the present low cost of wa ter
(0.04¢ per litre), it is like ly that few Montre a l e rs will significantly reduce their wa ter
consumption for ex te rior maintenance and washing their car.
Legislation
A new legislation for water-using appliances would reduce by 25% the present
residential water consumption. The mandatory use of 6 litres (or 3 litres) reservoirs
when replacing the present 14 litres toilet reservoirs (some go up to 18 or 28 litres)
found in a majority of houses today, would allow a reduction in water consumption
of 44 to 74 litres per day per person. Enforcing rules which compel people to buy
front load washer when replacing their present top load washing machine, would
bring about a 66% reduction in water used for laundry, which would represent 15 to
23 litres per person per day. A better legislation regarding exterior watering, which
would include fines high enough to be prohibitive (for example, 25$ for a first
offence and 100$ for a second offence), is more likely to have an impact on house
owners with a large garden. The latter, being able to afford a large land, are more
than likely to be able to afford a large volume of water, if water meters are fitted in.
However, if a proper legislation is in place, they will have to follow it, thus reducing
their water consumption, like any other land owner. Furthermore, this legislation
would allow a better control of water consumption during summer peak periods,
when a great strain is put on the aqueduct.
For all those understandably outraged by neighbours cleaning their driveway with
the water hose, enforcing the appropriate legislation regarding exterior watering
would have a greater impact than charging water per volume used. Indeed, a
normal water hose uses 1000 litres per hour, which would mean that someone can
hose down his or her driveway during one hour for only 40¢. This simple example
demonstrates that the cost of water is not prohibitive and that a proper framework
legislation, protecting the resource, will be needed to change people’s behaviour.
7
Public Awareness
A significant and durable impact on consumer behaviour can be obtained from a
public awareness campaign carried out in parallel to implementing new legislation.
This campaign could focus on a better use of water for personal hygiene. For example, prompting people to turn off the tap when brushing or shaving could save up
to 20 litres of water per person per day. Low-flow shower heads could save a further
65 litres per person per day, while reducing time spent in the shower would save 20
litres per minute. Awareness and legislation alone could save 10% of present water
used for exterior watering and baths and showers, which represents between 11 to
17 litres per person per day. When put together, the measures described above could
reduce the average residential water consumption by 30%. This reduction would
bring down water consumption between 154 to 236 litres per person per day, which
is comparable to the French, and quite exemplary.
Legislation and public awareness would allow a 30%
reduction in residential water consumption.
Public awa reness of the need for a reduction of wa ter consumption is important
in order to prevent ove rsized infra st ru c t u re, to keep treatment costs to a minimum
and to lessen pollution genera ted by wa ter treatment and usage. There is however no
need to be ove rly pessimistic. Cities which draw surface wa ter (for example Montreal
in the Saint Lawrence River) tend not to wa ste wa te r. In Montreal, wa ter drawn from
to the ri ver ret u rns to it in a proportion of more than 95%. When smaller ri ve rs are
c o n c e rned, wa ter ex t raction can be more problematic and affect wa ter level, th u s
affecting fauna and flora. Volumes of wa ter ex t ra c ted from ground wa ter can present
a problem which is difficult to predict. Quantity and quality of ground wa ter in
Quebec have yet to be fully documented and loading ra tes are often unknown.
Volumes ex t ra c ted could turn out to be exc e s s i ve and impair future needs.
To put a price on water: municipal taxes
The goal of having a water bill is to secure adequate funds for water treatment in
a spirit of equity and efficiency.
Equity is defined in two parts. First, it requires fulfilling a defined need, which in this
case consists of access to drinking water and in sufficient volume. Second, fairness
involves respecting the ability to pay. Water is essential to life and the aqueduct
is an essential service offered to all. Therefore, we must take into consideration
the financial ability of citizens to pay.
Efficiency refers to pricing. Rates will have to cover all costs related to services,
infra st ructure and their maintenance, while ch a rging methods should not
add to the price. One would also have to keep watch for any perverse effects,
such as excessive reduction in water consumption leading to an inadequate
personal hygiene.
We will further analyse the two usual methods used to price water: charges per
volume with water meters or charges with municipal taxes.
8
Water meter rates
Charges per volume require a water meter to measure the actual volume of water
used in each household and issuing a bill. Generally, clients are charged from the
first cubic meter of water used, but sometimes benefit from a lower rate for a set
volume of water (variable according to areas) which is usually sufficient for all basic
needs. To determine this basic volume is problematic. If it is set for a house or an
apartment, a person living alone will be at an advantage compared to multiple
occupants. However, if the volume is set to take into account the number of
occupants, it will be necessary to keep an accurate, and costly, census. There are
several types of price rate. With a fixed rate, consumers are always charged the same
price per litre no matter what volume is used. An incrementing graduated rate will
have a series of volumes for which the price per litre will increase as the next level
of consumption is reached; this type of rate is used to reduce consumption and to
have the largest consumers pay more. A decreasing graduated rate involves a lower
price once a certain volume is reached, i.e. buy more, pay less. This type of rate
assumes that basic infrastructure and maintenance costs are met with the base rate
and that beyond a certain volume, the price of a cubic meter of water is less.
Is pricing with water meters efficient? NO
To install water meters will be costly for municipalities and home owners. Cities
will have to buy the meters, put them in the system, and ensure maintenance
and regular reading. Furthermore, a service for billing, accounts and payments will
be needed. This service will have to monitor unpaid bills, cut water supply or even
seek settlement in court. Home owners will have to pay for any plumbing costs
related to the installation of a water meter (faucets, pipes, stop valves, etc.).
Presently, there are over 100,000 water meters on the island of Montreal, 91% of
which are in the residential sector and 9% in commercial and industrial buildings.
There are no water meters on the territory of the former City of Montreal; if the City
was to install meters everywhere, the bill would be rather high. We estimate that the
implementation of water meters in an area covering the former City of Montreal
(a little over half the present City) would cost close to 40 million dollars, while yearly
maintenance and management would add a further 4.3 million dollars every year
to this amount1.
Is pricing with water meters fair? NO
According to its pro m ote rs, pricing according to volume (with a wa ter meter) allows
to allocate a costs to a received service, which is fair because all will receive the same
service at the same price. We believe this point of view to be false. The major part of
c o sts related to wa ter is ta ken up by the infra st ru c t u re needed to treat, distribute and
collect wa te r. These costs are fixed and will remain the same re ga rdless of volumes.
Va riable costs such as energy or chemical products are negligible in comparison.
P ricing proportionally to volumes consumed will not be proportional to actual cost s
of wa ter production since these are essentially fixed.
P ricing per volume would be the same for all, re ga rdless of the ability to pay and
would const i t u te a bigger st rain on small budgets. Families or individuals with a low
income will have to dedicate a higher proportion of their budget to wa ter ch a rges
1
Adding up the bill: there must be a meter for each connection, there are 250,000
connections. Subtracting those already in place, we will need 248,500 meters at 70$ each
plus 90$ for fitting. The exact amount is 39,760,000$.
9
because, while the price of wa ter is the same
for all, income is not. Households with a
higher income will tend to consume more
wa ter because of wa te r-consuming appliances
or equipment such as pools, whirlpools or
spri n k l e rs. Home ow n e rs or tenants with a
high income can use a large volume of wa ter
w i thout dedicating a high proportion of their
budget to wa ter ch a rges, even if the price of
wa ter was to reach what is found in France or
the USA. This means that the prohibitive effe c t
of wa ter mete rs would not greatly affect th e
biggest consumers of wa te r. In fact, studies
have shown that pricing per volume has had
nega t i ve impacts on the poorer households. In
some cases, individuals with low income can decrease their wa ter consumpt i o n
below what would be considered healthy. Pricing per volume using a wa ter meter
will put a greater financial st rain on tenants in Quebec. Pre s e n t ly, municipal ta xes
include a wa ter ch a rge in most cities in the province. If wa ter mete rs we re introduced, a wa ter ch a rge would have to be paid in addition to the normal rent. As it is
unlike ly that neither municipal ta xes nor rent costs will decrease, tenants will end up
paying twice for their wa te r.
“According to a British researcher, the price of water charged
directly to the user is so high in the United Kingdom that public
health issues believed to have disappeared with the XIX century are
re-emerging.” (Lister, 1995)
Furthermore, unpaid bills will be rather tricky to deal with. The simplest way to
manage unpaid bills would be to cut water supply. In England, the system requires
that clients with a bad credit rate pay their water in advance, regardless of all the
problems this poses for low-income families. Do we think it acceptable that a family
unable to pay should be denied water? Water is essential to life and health; it should
accessible to all, at all times.
Pricing through municipal taxes
A tax, either fixed or variable according to certain criteria related to the type of housing
(bungalow, duplex, apartment building, etc.),
can also be used to charge for water. A fixed
tax is not a very sensible option because it
does not take into account volumes or the ability to pay. A variable tax, such as municipal
taxes, is determined with the evaluation of the
property. The more expensive is the property,
the higher is the tax. The more expensive houses generally have bigger gardens
(which require watering) and are equipped with water-consuming items such as
pools or whirlpools. In our opinion, municipal taxes are a better way to price water.
10
A fair price? YES
Paying water through municipal taxes will allow the distribution of the costs of the
aqueduct according to the ability of individuals to pay. Municipal taxes are also
generally proportional to water consumption because they change according to the
surface area of the property, the presence of a pool and the size of the house. We
can thus speak of lateral equity, because all taxpayers benefit equally from the same
service, and we can speak of vertical equity because people pay according to their
budget. A fair and progressive tax would include a water charge and it is indeed the
method used everywhere in Quebec, with few exceptions.
Is pricing with municipal taxes efficient? YES
Pricing water through municipal taxes is efficient because it does not add any
operating costs and it is already collected from all households. It is overall more
efficient than pricing with water meters. M. Henri Didillon, previous director
of Municipal Affairs at Raymond & Chabot, illustrates this with the example of a city
where costs linked to collecting a municipal tax are 62 times less than the cost
of charging for specific volumes of water (with water meters).
Furthermore, administrating taxes is a lot easier, particularly regarding unpaid bills.
It is rare that taxes remain unpaid, owing to the very stern measures put in place
by municipal administrations, such as seizing a property.
To preserve a public management of water:
we are better off without residential water meters
Taking into account all the facts demonstrated so far, it is easy to understand that
putting in water meters is opening wide open the door to privatisation. No one
must be taken in by this situation and the possibility for privatisation offered by the
installation of water meters. It is indeed the first step taken by public authorities to
give up this lucrative service to private interests. It is all the more appealing to
the private sector since publics funds finance the set up of the meters. Once
the aqueduct is privately managed, the price of water will depend on profits. Water
is an essential good which cannot be substituted.
The failures of the privatisation of water around the world have been well documented. In the past decades, several states privatised their aqueduct systems because
of the lack of public funds and in the hope that private management would be
more efficient. It is needless to say that the Thatchers of this world were seriously
mistaken. Cities can borrow money at a much lower rate than companies and can
offer a better service at a lesser cost. Private companies have only one goal: profit.
It is a legitimate goal, but it is inappropriate for something such as water. Public
administrations work towards several objectives, including serving the citizens,
promoting equity and public health, etc; and this at a minimum cost, therefore
excluding the notion of profits. This involves arbitration from public administration,
which is often complex, but necessary for a service such as water which is essential
to life and health and that has no substitute.
Privatisation requires that one company exerts monopoly over an area. There is only
one system of pipes joining houses to the aqueduct of the sewage treatment plant.
An individual could not shop around for the better price. The beneficial effects of
competition for clients could not occur in this situation. The company controlling
the water supply will control its price and thus its profit. In England, where water
11
was privatised during the Thatcher era, it was found that the private interests
controlling the aqueducts did not reinvest in the infrastructures, which are now
in a poor state. Companies often decided to invest in above-ground, visible,
infrastructures leaving the underground system, with its many leaks, untouched.
British consumers, which saw the price of water increase 5% more than
inflation between 1990 and 1995, are exasperated. Whilst private companies dealing with water published record profits, service remained
mediocre and involved supply cuts of several days (summer 1995).
(source: Isabelle Rivest, journalist; Privatisation de l’eau à Montréal:
Argent liquide; Vie ouvrière vol n. 26 may-june 1996)
Several cases of corruption were brought to light during the privatisation of water,
for example in France but also elsewhere in the world. On many occasions, private
interests were illegally lobbying public officials to obtain lucrative contracts. Water
is essential and cannot be replaced; a company which acquires the monopoly
over this resource gains guaranteed profits with almost no risk. A dream for any
company, but a nightmare for the trapped citizens.
We must not forget that the aqueducts in most cities were once privately owned.
Problems caused by a limited aqueduct system, poor quality water or important
financial deficit of the companies induced cities to take over the network.
Commercial and industrial water meter: an essential tool
Issues concerning the residential sector differ from those
of the commercial and industrial sector (CI sector). Water
consumption in the residential
sector is mostly structural but
it is not the case for the comm e rcial and indust rial secto r,
where it depends on the type of
industry, its processes and technologies. For example, a brewer
will require higher volumes of
water than a house care department store. Furthermore, water
consumption can vary greatly
a c c o rding to air conditioning
technology2.
Unlike the residential sector, in
the commercial and industrial
2
12
Article de Louis-Gilles Francœur, Des milliard de litres d’eau gaspillés,
Le Devoir, 9 octobre 2003.
sector, pricing per volume using water meters is rather effective. Significant
reductions in water consumption can be obtained when appropriate technologies
are used. Legislation would be difficult to put in place because of the variety of
processes and technologies involved. Awareness could have an impact, but not if
new measures affect profit. Charging per volume of water used would encourage
companies to make better choices in order to reduce their water consumption. It is
normal for industries which use water as their primary resource to pay for the
volume used, since the cost of water will be included in the price of the product. The
mercantile nature of the commercial and industrial sector as well as its great potential for water consumption reduction means that water meters would be the best
option to price water. In Quebec, experience shows that industries are able to drastically reduce their water consumption when the appropriate incentives are present.
Replacing cooling equipment (fridge, freezer) can reduce consumption 10 to
20 times. For example, a depanneur and a bakery in Laval saw their consumption
d e c rease from 7000 m3
to 200 m3 and 23,000 m3
to 940 m3 re s p e c t i ve ly
by replacing their ex i sting cooling system3.
The city of Sainte-Marie
de Beauce, while analysing the pro file of its
consumers during the
summer shorta ges, discovered that the greater
use of wa ter did not
come from wa te ring of
lawns or pools, but from
the air conditioning systems used in certain institutions and industries.
The implementation of water meters could uncover the overconsumers amongst
businesses, industries and institutions. These sectors often have very polluted waste
waters which contribute greatly to the price of treatment. Billing water according to
volume in this sector would be efficient because of the high volumes concerned. In
Montreal today, most of the great industrial consumers (100,000 cubic meters or
more) have water meters. However, there are only 9,600 meters fitted in while there
is a total need for 23,700 meters. An investment of 25 million $ will be necessary to
set up all these meters. It is about time that water consumption of the industrial and
commercial buildings is measured so that they can pay the fair price of water. It is
also time to start an awareness campaign in this sector to promote a more efficient
use of water.
Starting with leaks
Water leaks in the aqueduct system are thought to represent 20% to 50% of the total
production. It is imperative that this problem is addressed. The time for studies has
3
Louis-Gilles Francœur, Le Devoir, 9 october 2003.
13
passed and cities must carry out repairs to the network. It should indeed be their
first priority. By taking this simple and quick action, they will save the same volume
of water as the volume used by the residential sector. In order to evaluate the state
of the distribution network and to detect leaks, it could be judicious to install water
meters for whole neighbourhoods or at large intersections.
“What we need to do is to identify the large commercial, industrial and
institutional consumers. Then, we must tackle the problem of the two
activities causing overconsumption in the residential sector: lawn watering, for which we can legislate like we did here, and pools, which we can
tax like we also did in Valleyfield with no difficulty, in order to restore
a certain equilibrium between consumers. Finally, cities must address
the issue of losses and leaks in their network because they are the main
reason for the squander of water. It is not by fitting in water meters
at 150$ or 300$ a piece in houses or apartment, giving larger bills to
people living alone or to large families, that we will settle this problem.”
M. Denis Lapointe mayor of Valleyfield, president of the Union
des municipalités du Québec and engineer specialised in water
treatment, 2003.
14
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