“For government to do its job – safeguard the public – it cannot trust alone, it must verify,” National Transportation Safety Board Chair Deborah Hersman said after a fatal pipeline accident by a negligent utility company in 2010. She concluded that paraphrase of President Reagan’s famous quote with an addendum: “And where the trust is not merited, make sure the penalty is high.”
On Nov. 19, the San Antonio City Council will vote on a proposed rate structure and a proposed rate increase. A Water Policy Study was commissioned, and it was decided the study would support that vote. The study was leaked in draft form and promptly criticized by SAWS CEO Robert Puente. “People haven’t taken the time to see what a joke this is,” Puente told the San Antonio Express-News Editorial Board. “This is embarrassing. It’s embarrassing for SAWS, embarrassing for the city, embarrassing for the city of Fair Oaks, embarrassing for Texas A&M, embarrassing for (Councilman) Ron (Nirenberg) … for SAWS to have to talk about this report.”
Puente is right. Maybe not for the reasons he originally thought. And he may not have been right at the time, but he is now.
The draft report had its flaws. It had factual errors, erroneous conclusions, poor academic rigor, poor sources, and other issues. The final report, officially authored by the institute led by Roel Lopez, is worse.
It’s worse because now it has the veneer of a peer-reviewed report that has been subjected to a higher level of scrutiny, therefore it should be more accurate. It’s not. The anonymous scientific review panel (SRP) that was recruited by Texas A&M’s Institute of Renewable Natural Resources included the following criticisms/recommendations for the draft report:
"The SRP determined areas for improvement within the report regarding data used to support conclusions. Some examples include overstatements based on available data on per capita water use and misrepresentation of population estimate data. Conclusions drawn from data must directly be supported by validated data. Other limiting items in the draft included use of non-peer-reviewed literature and self-citations as illustrated above. See Appendix A, Data Used to Support Conclusions, for further details."
Appendix A repeated this admonition to the original author(s).
Data used to support conclusions should be provided
- Avoid “self-citations.”
- Avoid non-peer-reviewed literature.
- Avoid overstatements from data used (e.g., per capita water use) or data mispresented (e.g., discrepancy in population estimates).
- Report should be supported by appropriate citations.
- Conclusions drawn should be supported by data.
Why, then, did the institute modify the section on residential rates and rate structure to include unsupported conclusions? Why did it leave intact, or further exacerbate obvious errors in data analysis? The following paragraph appears in the final report:
"Considerations: San Antonio has the most successful water-conservation program of the four major cities compared. The city also has the least expensive water and the least difference between blocks in its block-rate structure of the four cities. Moderate residential water users are not penalized by a steep rate increase for high water use. SAWS' Rate Advisory Committee (RAC) recommended and SAWS proposed a new rate structure, which will soon present to the SAWS Board and the COSA City Council for their consideration. SAWS officials suggest that the proposed rates and structure would serve to address several issues. The new rate structure would increase rates for all but the lowest-water-use households (27% fall in this category) and higher water usage blocks would be responsible for steeper increases in rates. However, under the new rate structure, the weighted average of consumption less than ~6,000 gallons actually would result in a lower bill. It is suggested that the changes to the water rates for residential ratepayers will protect families through a 'lifeline' water rate, and will have more water-conservation impact than the current rate structure."
The final report took the effort to re-work the section, even adding additional information about how the new rates would result in a lower bill. It’s unsubstantiated, and even incorrect, but it was somehow included. What else, specifically, is unsubstantiated or flawed according to the SRP’s own recommendations?
- What metrics constitutes a “successful” conservation program? Where is the peer-reviewed data that supports those?
- How is “least expensive water” defined? At what consumption level? Does the data used support that?
- What are the definitions of “moderate water user” and “high water use?” What rate or bill change would constitute a “penalty” for transitioning to high use?
- Where is the before-/after- comparison showing a bill reduction for a less-than-6,000 gallon user? The bill is reduced by how much? Is the reduction incidental, or significant?
- Is SAWS the only source for this analysis, or are there other peer-reviewed perspectives?
- By whom is it suggested the new structure will protect consumers and increase conservation? SAWS officials, or the authors of the study? The awkward wording is unclear.
Compare the post-SRP version to the draft version. The draft version is not without similar issues to those cited above. But it is also more nuanced and less bold in its conclusions.
Significant Issues (from the final version):
"San Antonio has the most successful water-conservation program of the four major cities compared in this issue paper. Based on the rate comparisons for a basic residential meter, the city also seems to have the least expensive water and the least difference between blocks in its block-rate structure. Residential water users are not penalized by a steep rate increase for high water use. At the behest of its Rate Advisory Committee, SAWS has proposed a new rate structure which it will soon present to the SAWS Board and the San Antonio City Council for their consideration.
"SAWS officials expressed the belief to the authors of this paper that the new rates and structure would further address several of the issues raised in this paper. The new rate structure would increase rates for all but the lowest-water-use households (27 percent fall in this category) and higher water usage blocks would be responsible for the steeper increases in rates. For more information on the rate proposal, a “pro” and “con” article, “The Price of Water,” by W. Carroll Jackson and Meredith McGuire was published in the San Antonio Express-News (Section F, Opinion) on Sunday June 21, 2015.
"The contention is that the changes to the water rates for residential ratepayers will protect families through a “lifeline” water rate, and will have more water-conservation impact than the current rate structure. "
Again, what constitutes a “successful” conservation program? Where is the peer-reviewed data that supports that? In the draft, the basis for water pricing is clear (rate comparisons) and the assertion is less strong “… seems to be …” This is because there is no data for Houston’s rates, therefore the conclusion is weaker.
No distinction is made for “moderate water user” because the analysis appears to cover all blocks, but “high use” remains undefined. There is no mention whatsoever of the less-than-6,000 gallon user, and his allegedly, but unsubstantiated lower bills.
A reference to an outside perspective is included, which may not be an appropriate source, but it would appear to be a suggested counter-analysis to the perspective of the SAWS source, thereby avoiding reliance on a single, non-peer-reviewed analysis, i.e. SAWS.
The “contention” language is still somewhat awkward, and could be construed to potentially be from the opinion piece, although it is most likely SAWS. It is clearly however, not the author that asserts rate protection and conservation, but some external source.
The draft is not perfect, but it’s not as flawed as the final version.
Some facts: San Antonio has a good conservation program, but the entire conservation section of the report is flawed based on its reliance largely on single source data from its lead author, now-retired Calvin Finch, or also on dated, non-peer-reviewed data from SAWS. The institute could have highlighted that. Claiming it is the “most successful” without supporting documentation is hyperbole. Suffice to say, citing a PowerPoint slide from a co-worker is usually not deemed sufficient for peer-review. The Policy Report, in both draft and final, cites numbers regarding conservation from 2007 to make that case.
In 2014, Politifact strongly rebutted CEO Robert Puente’s claims about San Antonio’s conservation performance, to which he agreed the percentages “need to be updated.”
In April 2015, Circle of Blue, a water industry publication, chose another Texas city as having a leading conservation program, “Austin, Texas, for example, sold nearly 10 billion gallons less water in 2014 than in 2011, a 20 percent reduction.”
San Antonio does not technically “have the least expensive water” as the institute modified the paragraph to read. Later in the report it cites the fact that San Antonio has the highest meter charge in the comparison, and then adds that sometimes the volumetric rates are lower and sometimes higher. Nowhere in the report is a comprehensive assessment of the combined effects of San Antonio’s high charge and the sometimes-higher/sometimes-lower volumetric rates.
While inserting commentary about the “reduced rates” in the new proposed rate structure, the final report omits an accompanying mention about the increased meter charges. These charges, based on data publicly available to authors at the time of the review, are set to increase by 41% from 2015 rates, or $7.57 (as noted in the report) to $10.73. If the institute felt inserting a claim about reduced bills for less-than-6,000 gallon users was relevant, the increase for the meter charge should be correspondingly relevant. That less-than-6,000 gallon user (technically 5,984) will also not see the claimed decrease inserted by the intitute. He’ll see a $3.49 increase, or 6.4%. The final draft included unsubstantiated data, and that data was wrong.
There are other errors in the rate structure section that should have been caught by the SRP and corrected, or at least commented upon. The institute significantly reworked the rate structure paragraph. It more than doubled its size and added an additional chart and significant commentary. It even included the phrase “research suggests…” but then failed to cite which research, or further substantiate the source of the claimed effect – some research, by someone, somewhere, apparently. In that same paragraph, the draft report stated the sewer charge was “in the middle” which was modified to say “average.” The institute took the time to modify the description of the sewer rate. The attached table is a reproduction of information from the Policy report. San Antonio’s sewer rate, posted prominently at the top of the table is neither average nor middling. It’s over 20% higher than its nearest neighbor, and nearly 300% percent higher than the lowest rate.
If a city has the most expensive meter charge, and sometimes higher volumetric rates, and the highest (by far) fixed sewer rate, it seems quite a stretch to make an unsubstantiated assertion that San Antonio water is “the least expensive.” This is particularly glaring in light of the available, third-party, peer-reviewed sources with the sole purpose of comparing water bills in the US. A 2011 benchmark study prepared for Austin Water and including San Antonio, El Paso, Dallas, Houston, Arlington, Ft. Worth, Amarillo and other cities showed that San Antonio frequently had total bills higher than Dallas, and almost always higher than El Paso. They were usually lower than Austin.
There are other flaws with the report, not associated with rates, but the Council is going to vote on the rate structure. This SRP-informed report does little to help the Council make an informed decision.
Unfortunately, the Council’s other source of data is not much better. CEO Puente was right about the report having flaws, but he should also look inward at his organization’s own data. SAWS officials briefed the council on the rate increases on Oct. 6. Their data included comparisons from 2015 to capture the percentage and total increases. Their presentation to the Council was also flawed.
The slides were prepared not using current 2015 data, but used the proposed rate structure data. There is a footnote on the bottom of the slide, but the column is clearly marked “2015.” The net effect of this discrepancy is that the increases for all water users except those below 2,992 gallons were too low. On the attached slide, for example, the 2015 water delivery charge is listed $16.51 with a 2016 increase to $18.15 This is $1.64, or 9.9%. It is also incorrect, or at least misrepresented. The real 2015-to-2016 increase is from $15.20 to $18.15, or $2.95 (19.4%).
SAWS fee structure is complicated, and Water Delivery is comprised of the Water Service Charge (meter charge) and the Water Volume Charge. If the restructuring and rate increase are both approved, the meter fee will jump 41% in one year, from $7.57 to $10.72. That fixed fee increase of 41% will remain on the bill no matter how much a user cuts back in an effort to conserve water and/or money.
This slide also says “Total with fees,” but even that is incorrect, or maybe just incomplete. It omits the City Stormwater fee of $3.22. The “Total with fees” is really $61.82. SAWS has this data, it simply chooses to not share it with its customers, or apparently, the Council, in it’s complete form. The actual 2015 numbers are shown below, from SAWS bill estimation tool.
SAWS repeats the Policy Study’s contention that “SAWS Remains the Lowest of the Five Largest Cities in Texas” and provides a single data point to make its case: an average user (minus the City-imposed stormwater fee) will pay less for the same usage compared to other cities. But a separate analysis shows that Dallas has lower bills at every major point when compared to SAWS. Dallas also has a stormwater fee, and includes bulky trash pick up in its water bills. In San Antonio, this service is billed by CPS. Houston is also significantly lower until 6,000 gallons. 26 % of SAWS customers use less 3,000 gallons, 59% use less than 6,000 gallons.
In late October SAWS mailed the October Waternews. It stated “Customers who are low water users will actually see a total price decrease in their bill of 9.2%, or $1.32, thanks to the proposed rate structure change.” A cursory association of $1.32 as 9.2% does not seem possible for a total price decrease for a realistic water bill. It’s not. It’s extracted from a regulatory finding and has nothing to do with a total bill. It is only the price of water. Not sewer. Not fees. Not SAWS-stated “total price decrease in their bill.”
The same mailing made another claim about “Lifeline” block users receiving an 8.8% reduction or $2.82, carefully parsing the language to specify only “water and sewer costs”. To achieve this value, SAWS has to exclude $4.60 in fees, then apply a discount of $2.14. Since customers also have to pay the fees, this seems a bit dishonest and misrepresentative. It is an accurate number though. SAWS could have simply calculated the final bill and said 7.2% and $2.67 of your total bill. SAWS appears to work quite hard to represent an extra savings of only $0.15 on a total bill of $33.92.
It appears SAWS has not yet provided a single, complete assessment of the effects of an increase on a ratepayer’s bill, despite the word “total” appearing frequently. The real bill, the one on your SAWS statement – the bottom line- is always higher than SAWS has disclosed thus far.
In 2014, Politifact said of Puente’s claims “Those are cherry-picked, out-of-date stats, vintage 1984-2009. Up-to-date figures available when Puente spoke, covering 1986-2011, show that as the population served grew 52 percent, water usage increased 21 percent.”
It appears the same is still true. Cherry-picked, not-quite complete stats are used in order to manipulate data that presents SAWS in the maximum favorable light when better data is available that would probably be good enough. The differences are sometimes tiny, frequently fractions of a percent or a few pennies. Why can’t SAWS just present data clearly, accurately and completely?
The City may or may not need Vista Ridge. The rate structure and increase may or may not be both beneficial in motivating conservation and appropriate to pay for needed infrastructure. It would be nice to have some sound analysis supported by valid data to make that decision.
Trust but verify, indeed.
*Top image: Alan Montemoyar holds up a sign in opposition to the rate structure of the Vista Ridge pipeline during a recent committee meeting. Photo by Scott Ball.