Volumetric pricing is a pricing strategy frequently used by the public utilities (e.g., water and power tariffs) where the fixed costs of the service are recovered proportionally to the amount of use. For example, under this approach a per-kWh pricing of an electric utility includes a small share of the monthly fixed cost of the utility, fixed (say, monthly) charges for the service are either absent of inconsequential.
The volumetric pricing, in addition to the easy-to-understand structure, encourages the customers to lower the use of the resource. For example, if the (very significant) fixed costs of the electricity service were recovered through the monthly fixed payments, then the per-unit price would have been much lower thus encouraging additional consumption. [1]
Conversely, the volumetric price disincentivizes the utility from investing in conservation: if the customers will use less of the resources, the utility sales will shrink, reducing the fixed-cost portion and causing the lost revenues and under-investment. Therefore this pricing strategy is typically coupled at the regulatory level with an annual rate adjustment mechanism (also known as revenue-decoupling policy). [1]
Volumetric pricing requires metering that can be expensive to implement, especially in the case of irrigation, alternatives include: [2] [3] [4]
For the electricity services, the number of alternatives is larger, Borenstein [5] provides a review of the ways that can be used by the electric utilities to recover the fixed costs.
Electricity generation is the process of generating electric power from sources of primary energy. For utilities in the electric power industry, it is the stage prior to its delivery to end users or its storage, using for example, the pumped-storage method.
Microeconomics is a branch of economics that studies the behavior of individuals and firms in making decisions regarding the allocation of scarce resources and the interactions among these individuals and firms. Microeconomics focuses on the study of individual markets, sectors, or industries as opposed to the economy as a whole, which is studied in macroeconomics.
A natural monopoly is a monopoly in an industry in which high infrastructural costs and other barriers to entry relative to the size of the market give the largest supplier in an industry, often the first supplier in a market, an overwhelming advantage over potential competitors. Specifically, an industry is a natural monopoly if the total cost of one firm, producing the total output, is lower than the total cost of two or more firms producing the entire production. In that case, it is very probable that a company (monopoly) or minimal number of companies (oligopoly) will form, providing all or most relevant products and/or services. This frequently occurs in industries where capital costs predominate, creating large economies of scale about the size of the market; examples include public utilities such as water services, electricity, telecommunications, mail, etc. Natural monopolies were recognized as potential sources of market failure as early as the 19th century; John Stuart Mill advocated government regulation to make them serve the public good.
A public utility company is an organization that maintains the infrastructure for a public service. Public utilities are subject to forms of public control and regulation ranging from local community-based groups to statewide government monopolies.
An electricity market is a system that enables the exchange of electrical energy, through an electrical grid. Historically, electricity has been primarily sold by companies that operate electric generators, and purchased by consumers or electricity retailers.
Efficiency is the often measurable ability to avoid making mistakes or wasting materials, energy, efforts, money, and time while performing a task. In a more general sense, it is the ability to do things well, successfully, and without waste.
Automatic meter reading (AMR) is the technology of automatically collecting consumption, diagnostic, and status data from water meter or energy metering devices and transferring that data to a central database for billing, troubleshooting, and analyzing. This technology mainly saves utility providers the expense of periodic trips to each physical location to read a meter. Another advantage is that billing can be based on near real-time consumption rather than on estimates based on past or predicted consumption. This timely information coupled with analysis can help both utility providers and customers better control the use and production of electric energy, gas usage, or water consumption.
Energy conservation is the effort to reduce wasteful energy consumption by using fewer energy services. This can be done by using energy more effectively or changing one's behavior to use less service. Energy conservation can be achieved through efficient energy use, which has some advantages, including a reduction in greenhouse gas emissions and a smaller carbon footprint, as well as cost, water, and energy savings.
Water supply is the provision of water by public utilities, commercial organisations, community endeavors or by individuals, usually via a system of pumps and pipes. Public water supply systems are crucial to properly functioning societies. These systems are what supply drinking water to populations around the globe. Aspects of service quality include continuity of supply, water quality and water pressure. The institutional responsibility for water supply is arranged differently in different countries and regions. It usually includes issues surrounding policy and regulation, service provision and standardization.
Municipalization is the transfer of private entities, assets, service providers, or corporations to public ownership by a municipality, including a city, county, or public utility district ownership. The transfer may be from private ownership or from other levels of government. It is the opposite of privatization and is different from nationalization. The term municipalization largely refers to the transfer of ownership of utilities from Investor Owned Utilities (IOUs) to public ownership, and operation, by local government whether that be at the city, county or state level. While this is most often applied to electricity it can also refer to solar energy, water, sewer, trash, natural gas or other services.
The energy policy of the United Kingdom refers to the United Kingdom's efforts towards reducing energy intensity, reducing energy poverty, and maintaining energy supply reliability. The United Kingdom has had success in this, though energy intensity remains high. There is an ambitious goal to reduce carbon dioxide emissions in future years, but it is unclear whether the programmes in place are sufficient to achieve this objective. Regarding energy self-sufficiency, UK policy does not address this issue, other than to concede historic energy security is currently ceasing to exist.
A feed-in tariff is a policy mechanism designed to accelerate investment in renewable energy technologies by offering long-term contracts to renewable energy producers. This means promising renewable energy producers an above-market price and providing price certainty and long-term contracts that help finance renewable energy investments. Typically, FITs award different prices to different sources of renewable energy in order to encourage the development of one technology over another. For example, technologies such as wind power and solar PV are awarded a higher price per kWh than tidal power. FITs often include a "digression": a gradual decrease of the price or tariff in order to follow and encourage technological cost reductions.
Electricity pricing can vary widely by country or by locality within a country. Electricity prices are dependent on many factors, such as the price of power generation, government taxes or subsidies, CO
2 taxes, local weather patterns, transmission and distribution infrastructure, and multi-tiered industry regulation. The pricing or tariffs can also differ depending on the customer-base, typically by residential, commercial, and industrial connections.
Irrigation in Colombia has been an integral part of Colombia's agricultural and rural development in the 20th Century. Public investment in irrigation has been especially prominent in the first half of the Century. During the second half, largely driven by fiscal shortages and a common inability to raise sufficient revenues from collection of water charges, the Colombian government adopted a program to devolve irrigation management responsibility to water users associations. Irrigation management transfer has occurred only partially in Colombia, as the government has maintained strong managerial tasks in certain irrigation districts.
Different methods of electricity generation can incur a variety of different costs, which can be divided into three general categories: 1) wholesale costs, or all costs paid by utilities associated with acquiring and distributing electricity to consumers, 2) retail costs paid by consumers, and 3) external costs, or externalities, imposed on society.
Irrigation is the artificial exploitation and distribution of water at project level aiming at application of water at field level to agricultural crops in dry areas or in periods of scarce rainfall to assure or improve crop production.
This article discusses organizational forms and means of management of irrigation water at project (system) level.
A water tariff is a price assigned to water supplied by a public utility through a piped network to its customers. The term is also often applied to wastewater tariffs. Water and wastewater tariffs are not charged for water itself, but to recover the costs of water treatment, water storage, transporting it to customers, collecting and treating wastewater, as well as billing and collection. Prices paid for water itself are different from water tariffs. They exist in a few countries and are called water abstraction charges or fees. Abstraction charges are not covered in this article, but in the article on water pricing). Water tariffs vary widely in their structure and level between countries, cities and sometimes between user categories. The mechanisms to adjust tariffs also vary widely.
Water pricing is a term that covers various processes to assign a price to water. These processes differ greatly under different circumstances.
Energy policy of Finland describes the politics of Finland related to energy. Energy in Finland describes energy and electricity production, consumption and import in Finland. Electricity sector in Finland is the main article of electricity in Finland.
Until relatively recently problems with water supply-demand balance were typically addressed through "supply augmentation", that is to say, building more dams, water treatment stations, etc. As long as water resources were considered abundant and the needs of the natural environment were ignored this reliance on the "engineering paradigm" made sense. Moreover, water utilities and governments have long preferred large capital projects to the less profitable and more difficult challenges of improving system efficiency and demand management. Water demand management came into vogue in the 1990s and 2000s at the same moment dams and similar supply augmentation schemes went out of fashion because they were increasingly seen as overly expensive, damaging to the environment, and socially unjust. Now, in the 2020s, it is accurate to say that demand management is the dominant approach in the richer countries of North America and Europe, but is also becoming more popular in less affluent countries and regions.