Rural Water - Quarter 2, 2009 - (Page 27)

Utility Management in a Down Economy BY DAVE LAWRENCE, ASSISTANT DIRECTOR, WISCONSIN RURAL WATER ASSOCIATION A COMMON MISCONCEPTION in the water and wastewater industries is that they are “recession proof.” In many cases, the thought is that people need water regardless of the economy, so life for utilities will continue with little change no matter what’s going on elsewhere. But like most businesses, water and wastewater utilities are not immune to the struggles of hard economic times. The most obvious way utilities are affected by a struggling economy is the drop in water use by their industrial and commercial customers. As people stop spending money on products, fewer products need to be produced. This can lead to layoffs, drops in manufacturing processes and in some cases, even closing the doors of long-standing business customers. And for utilities that have rate structures reliant on those industrial and commercial sources of revenue, this can have a trickle-down effect on the rest of their revenue sources. When people are out of work or looking for ways to cut back on spending, they become more conscious of utility usage at home. They may not shower, do laundry or wash dishes as often or as long. They may stop watering lawns or washing their cars entirely. While all of these are good for water conservation efforts, they also add up to reduced revenues for both water and wastewater utilities. With dropping revenues, utilities are forced to either fi nd ways to increase income or decrease expenditures. But in rough economic times, it’s usually not feasible to increase income through rate increases. (These times are another reminder to utilities to keep their rates up-to-date with the times through more frequent, less costly rate increases. While putting them off during good times may seem like a sensible thing to do, it’s much easier than than trying to get approval for a larger one now.) So in lieu of increasing rates, utilities are forced to look at ways to decrease expenditures and improve operational efficiency. In looking at ways to decrease expenditures, utilities must start Second Quarter 2009 • 27

Table of Contents for the Digital Edition of Rural Water - Quarter 2, 2009

Rural Water - Quarter 2, 2009
From the President
Energy Conservation for Small Utilities
Sounds Too Good to Bet True...But It's Real!
Algae to Biodiesel
Wind to Water
Utility Management in a Down Economy
Waterbrick: Bulk Water Delivery System Pulls Double Duty as Shelter
Five Attributes of Inspirational Leaders
Regulatory Update
Rally Wrap Up
Throwing My Loop
Index to Advertisers
From the CEO

Rural Water - Quarter 2, 2009