Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Why districts are slow to charge market rates for water (2009)

onthepublicrecord.org

Post reply on HN
Print view View original

11–20 of 66 posts

Re: Why districts are slow to charge market rates for water (2009)

#11

Post by jandrese »

bin_bash wrote: post #10
jandrese wrote: post #7

Earlier quoted context omitted.

Sounds kind of like Ticketmaster. "Oh, the rates went up, that's not our fault, it's this private company." "Oh, so you're getting all of the extra money then?" "Not so much, well, the guy who set up the deal got a big personal payday, but we are getting only a tiny sliver of the ongoing extra revenue."

sort of, yeah, Ticketmaster sort of sells "accountability as a service" so fans don't get mad at the artists. I'm a centrist, but things like this push me further to the right personally. Governments can't charge what they ought to for parking/water and the people ultimately suffer the consequences.

Historically conservative governments have been more interested in making sure the water rates don't go up for corporations than pushing for conservation.

Re: Why districts are slow to charge market rates for water (2009)

#12

Post by joe_the_user »

Headline: Why districts are slow to charge market rates for water."

P1: Why don’t districts pass the marginal costs of water on to their constituents?

P2: HAH! Do you see what I did there? [switch constituents with customers]

Me: Actually, the thing I notice is the switch from "market costs" to marginal costs. It should be obvious that "market costs" are fiction for water districts since these districts are virtually always a monopoly charging the prices they choose.

On the other end of this, water districts are created by municipalities to foster the development of a town or city as a whole.

Sure, you can argue that "marginal costs" are the same as "market rates" but that's a long argument that makes the agenda involved much more clear.

I'd say in contrast, water fees are fundamentally taxes and so water districts are inherently supported by taxes and the talk are "market rate" is basically neoliberal ideology that aims to squeeze the average rate-payer/tax-payer in the name of "markets" but which doesn't actually use real markets.

That's not saying that municipal water districts shouldn't have fees to restrict usage - but they should be like other taxes, self-consciously charge people what's needed. The average person gets a low rate for what they need to consumer and the huge mansion pays a huge rate and appropriately so.

How could "market rate" mean anything for water?

Re: Why districts are slow to charge market rates for water (2009)

#13

Post by eru »

bombcar wrote: post #5
causality0 wrote: post #4

one side effect of Proposition 218, put forth by the Howard Jarvis Taxpayers Association, was that it became illegal to charge any household more than the costs of conveyance to that parcel. It was illegal to charge punitive rates to send a price signal to wasteful users. Why does punishing wasteful users require charging them more per unit? If I waste a lot of milk, like by bathing in it, I'm punished by having spen…

Because water is so cheap (cheaper than dirt) that it’s not punitive at all to pay for twice or ten or a hundred times normal.

On the one hand, if water is so cheap, why do you need to punish people for using a bit more of it, then?

On the other hand, if water is so scarce that you need to discourage people from using a bit extra, why do you price it so cheap in the first place?

Re: Why districts are slow to charge market rates for water (2009)

#14

Post by Spivak »

joe_the_user wrote: post #12

Headline: Why districts are slow to charge market rates for water." P1: Why don’t districts pass the marginal costs of water on to their constituents? P2: HAH! Do you see what I did there? [switch constituents with customers] Me: Actually, the thing I notice is the switch from "market costs" to marginal costs. It should be obvious that "market costs" are fiction for water districts since these districts are virtually…

Because it's not the market rate for water, it's the cumulative market rate for the goods and services purchased by the company needed to get that water to you.

Is the same "market rate" restaurants charge for fish sometime. Inside their restaurant they are the monopoly provider of fish to you and hence there's no market -- they're not competing with other restaurants in this moment. They are directly passing on cost of fish to you.

Re: Why districts are slow to charge market rates for water (2009)

#15

Post by eru »

joe_the_user wrote: post #12

Headline: Why districts are slow to charge market rates for water." P1: Why don’t districts pass the marginal costs of water on to their constituents? P2: HAH! Do you see what I did there? [switch constituents with customers] Me: Actually, the thing I notice is the switch from "market costs" to marginal costs. It should be obvious that "market costs" are fiction for water districts since these districts are virtually…

Your argument could just as well be used as one against local water monopolies.

See how eg the electric grid manages to have multiple suppliers for end users in many places around the world, despite there being only a single grid.

And, even with a single supplier only, you can still set market clearing rates. Those are not necessarily marginal rates.

(If you are worried about poor people: give them money.)

> The average person gets a low rate for what they need to consumer and the huge mansion pays a huge rate and appropriately so.

That's only 'appropriate' by fiat.

Re: Why districts are slow to charge market rates for water (2009)

#16

Post by eru »

AuthorizedCust wrote: post #8

The article is confused. Market pricing and conservation pricing are related but still different. I’m in Dallas. We have months long periods almost every year where all our lakes are so overfull, we’re simply dumping excess water down the Trinity River to Houston’s Lake Livingston, which during those periods is typically well over capacity, too. There’s no reason to conserve during those times. Want to grow a rain fo…

Sounds like you just need different prices in different times of the year?

Just like electricity often has different prices during different parts of the day?

Re: Why districts are slow to charge market rates for water (2009)

#17

Post by joe_the_user »

eru wrote: post #15
joe_the_user wrote: post #12

Headline: Why districts are slow to charge market rates for water." P1: Why don’t districts pass the marginal costs of water on to their constituents? P2: HAH! Do you see what I did there? [switch constituents with customers] Me: Actually, the thing I notice is the switch from "market costs" to marginal costs. It should be obvious that "market costs" are fiction for water districts since these districts are virtually…

Your argument could just as well be used as one against local water monopolies. See how eg the electric grid manages to have multiple suppliers for end users in many places around the world, despite there being only a single grid. And, even with a single supplier only, you can still set market clearing rates. Those are not necessarily marginal rates. (If you are worried about poor people: give them money.) > The aver…

See how eg the electric grid manages to have multiple suppliers for end users in many places around the world, despite there being only a single grid.

See how this system manages to be a fiction to support higher rates.

Re: Why districts are slow to charge market rates for water (2009)

#18

Post by simfree »

joe_the_user wrote: post #17
eru wrote: post #15

Earlier quoted context omitted.

Your argument could just as well be used as one against local water monopolies. See how eg the electric grid manages to have multiple suppliers for end users in many places around the world, despite there being only a single grid. And, even with a single supplier only, you can still set market clearing rates. Those are not necessarily marginal rates. (If you are worried about poor people: give them money.) > The aver…

See how eg the electric grid manages to have multiple suppliers for end users in many places around the world, despite there being only a single grid. See how this system manages to be a fiction to support higher rates.

Most utilities are natural monopolies, running water, sewer, gas, electric, telephone, cable and internet to a premise are expensive, generally thousands to tens of thousands per home passed.

Utilities celebrate when they can service an address for less than a grand in their public filings. For coaxial TV service the cable company is often required to cover the first $4200 in build out costs to a given address here in the USA.

Running parallel infrastructure of the same type is very expensive and damages the cost model of both providers, as they are forever fighting for market share.

Open access to shared infrastructure can work for some types of infrastructure like internet, but water, sewer, gas and electric where real time need needs to always be met with quality supply otherwise the infrastructure is damaged permanently makes it impractical to have multiple operators pushing water, gas, or electrons into a shared grid.

Reseller models like what Texas has developed disintermediate the customer from their actual electric provider. It's just a legal fiction effectively.

Re: Why districts are slow to charge market rates for water (2009)

#19

Post by joe_the_user »

Spivak wrote: post #14
joe_the_user wrote: post #12

Headline: Why districts are slow to charge market rates for water." P1: Why don’t districts pass the marginal costs of water on to their constituents? P2: HAH! Do you see what I did there? [switch constituents with customers] Me: Actually, the thing I notice is the switch from "market costs" to marginal costs. It should be obvious that "market costs" are fiction for water districts since these districts are virtually…

Because it's not the market rate for water, it's the cumulative market rate for the goods and services purchased by the company needed to get that water to you. Is the same "market rate" restaurants charge for fish sometime. Inside their restaurant they are the monopoly provider of fish to you and hence there's no market -- they're not competing with other restaurants in this moment. They are directly passing on cost…

Because it's not the market rate for water, it's the cumulative market rate for the goods and services purchased by the company needed to get that water to you.

Actually, it's not. That would be the average costs. The marginal cost of a good is essentially the cost to add one more final user, which can be higher or lower that the average costs provider pays to supply all their customers.

The author mentions the marginal cost in particular because by some theories, that's the price that would develop in a competitive market. But it's just a fiction. There's no reason for municipalities to charge either of these prices. There might be a beautiful lake that could be cheaply drained to everyone's water but that may well be undesirable in many other ways.

Re: Why districts are slow to charge market rates for water (2009)

#20

Post by joe_the_user »

simfree wrote: post #18
joe_the_user wrote: post #17

Earlier quoted context omitted.

See how eg the electric grid manages to have multiple suppliers for end users in many places around the world, despite there being only a single grid. See how this system manages to be a fiction to support higher rates.

Most utilities are natural monopolies, running water, sewer, gas, electric, telephone, cable and internet to a premise are expensive, generally thousands to tens of thousands per home passed. Utilities celebrate when they can service an address for less than a grand in their public filings. For coaxial TV service the cable company is often required to cover the first $4200 in build out costs to a given address here i…

Most utilities are natural monopolies

Yes, and they should be treated as such - regulated according good policies.

Reseller models like what Texas has developed disintermediate the customer from their actual electric provider. It's just a legal fiction effectively.

Indeed, moreover, the Texas system got "interesting" in a not-good way during the huge blackout a couple years ago when charges jumped to a $1000+/hour for retail customers gambling on the raw market rate systems, (in my memory of the events).

I don't think the legal fiction helps anyone here but well connected scammers (remember Enron?).

Post reply on HN