| Population growth and economic development have put increasing strain on existing water supplies, driving the need for conservation efforts to reduce municipal demand growth. Conservation activities can forestall or eliminate the need for new water supplies that can be costly and environmentally burdensome, but can introduce financial challenges for utilities. This research compares demand management activities, from conservation pricing schemes to non-price measures, in terms of their ability to postpone a supply expansion for the City of Raleigh. Results suggest that modest conservation price increases can somewhat reduce the urgency associated with expanding water supplies; however, uncertainties in demand management associated with the demand elasticity and population growth translate into high customer costs and unpredictable utility revenues. Non-price conservation tactics may be used to reduce demand (though to a lesser extent) while posing fewer risks to water utilities and can be successfully combined with price-based tactics to further reduce demand. |
