In times of drought, a water utility needs the help of its community to extend its resources. In many cases, the utility compels that help through mandatory restrictions. While outdoor water-use restrictions are effective in conserving a dwindling supply, utilities that rely on consumption for a significant portion of their revenue can suffer financially when sales drastically decline. Some utilities have used temporary drought surcharges to both promote conservation and revenue stability.

The Environmental Finance Center has researched and developed tools to help utilities consider the impact and feasibility a drought surcharge in their community.

Development

Developing a Drought Surcharge for Conservation and Revenue Stability (pdf)
This handout introduces a four-step methodology to drought surcharge development. Presented at October 2008 North Carolina WRRI Water Resources Research Conference.

Communication

Gauging the Understanding and Support of a Drought Surcharge in Mecklenburg County

• 5 page report (pdf)
• Appendix (pdf)
• Presentation (pdf)
  Given March 17, 2009 at NC AWWA's Financal Aspects of Drought Management seminar

This research used focus groups and interviews to gauge common themes of customer and City Council member perspectives on a proposed drought surcharge in Mecklenburg County, North Carolina. Insight from this research can help utilities in their consideration, development and communication about drought surcharges in their own communities.