Data utilization at finnish water and wastewater utilities: Current practices vs. state of the art

This paper analyses the current role of data assets and information systems at water and wastewater utilities in a context where most utilities are small to medium sized. Special focus is put on big data and open data, and existing information systems for their management. Based on a survey and the available literature, we conclude that water utilities could benefit from developing their data assets, and that increasing amounts of data will require utilities build in-house competencies related to management, technology, and security.     

The effects of ownership,board size and board composition on the performance of Italian water utilities

This article analyses the effects of ownership, board size and composition on the performance of 72 Italian water utilities. Information about the utilities' 335 directors was collected. Our main findings indicate that private or mixed-ownership utilities show higher profitability than entirely publicly-owned firms, even if the latter are less debt-dependent. Furthermore, our results show that the boards of Italian water utilities are dominated by politically connected directors, who boost access to debt and negatively affect the firms' capital structures. This study also shows that board composition, in terms of the age and educational background of members, influences economic performance, since graduate and senior directors exert a negative influence on profitability.     

Overcoming missing data bias in water utility indicators by using nested balanced panels

This paper demonstrates a methodology for calculating trends in unbalanced panel nonrandom sample datasets, using the International Benchmarking Network for Water and Sanitation Utilities (IBNET) dataset on more than 5000 utilities. The methodology can be used for any dataset and calculates the change, or delta, between the same unit of observation (in this case, a utility) over two consecutive years and nests these deltas to calculate an average trend for a given variable over the longest time horizon possible. We use this method to show trends in water utilities’ performance between 2004 and 2015 at a global level and to reveal differences in performance between groups of utilities. For the sake of comprehensiveness, the representativeness of IBNET is also discussed to provide more context to the dataset used. A probit analysis, conducted to shed light on the representativeness of utilities in the IBNET dataset over time, reveals that the utilities that reported their data in earlier years, in general, have a higher number of connections and perform better than the utilities that reported their data in later years. This implies that over the years, as the number of utilities reporting their data increases, more utilities outside of the bigger (more connections) and better performing utilities start reporting. In other words, in the earlier years it is the bigger and better performing utilities that first report data. In the later years, the smaller and not so well performing utilities also start reporting their data.     

Efficiency of urban water supply in Sub-Saharan Africa: Do organization and regulation matter?

Using the model developed by Battese and Coelli (1995), we compare the technical efficiency of urban water utilities in Sub-Saharan Africa countries. We examine how private-sector participation, economic regulation, and their combination affects technical efficiency. We find that regulating water utility operations via performance contracts leads to higher technical efficiency compared to control by an independent regulatory agency. Private-sector participation in management has a positive effect on technical efficiency. However, there is no evidence of a statistically significant difference between the technical efficiency of publicly and privately owned utilities, respectively, when they are regulated by either an independent agency or a performance contract.     

Benchmarking the efficiency of natural gas distribution utilities in Italy considering size,ownership, and maturity

In light of the reform of the Italian natural gas distribution introduced in 2007, this work performs a benchmarking and productivity analysis of distribution utilities, identifying the characteristics allowing greater efficiency. Using a Data Envelopment Analysis (DEA) and the Malmquist Productivity Index (MPI), we analyse the performances of utilities and compares them in terms of size, ownership (public or private), and maturity (pre or post-liberalization establishment). The results show that the more efficient utilities are mainly publicly owned and pre-liberalization established. Small and medium-sized utilities operate less efficiently than large ones, revealing the scale inefficiency of the sector.     

Assessing the dynamic eco-efficiency of Italian municipalities by accounting for the ownership of the entrusted waste utilities

This study evaluates and compares the dynamic eco-efficiency of municipalities with publicly owned, privately owned, and mixed ownership solid waste utilities by estimating the Meta-frontier Malmquist-Luenberger productivity index for a sample of 68 major Italian towns. On average, the eco-productivity of Italian waste service providers increased by 8% from 2016 to 2019. Although municipalities with private utilities improved their eco-productivity most, the differences among the three clusters reflecting utility ownership are not statistically significant. The results show that publicly owned waste operators drive technology and that the technological levels of private utilities have deteriorated relative to global technological progress.     

Comparison of operational energy requirements in publicly and privately owned U.S. water utilities

One question in the ongoing discussion about privatization in the water industry is whether publicly or privately owned water utilities are more efficient. This study examines the question from an energy perspective using new data from water systems in the United States. Economic theory predicts that privately owned water utilities should use less energy relative to output than their public counterparts. However, no statistically significant difference was found between the two types of systems. This finding aligns with others indicating that privately owned water utilities do not necessarily perform better than publicly owned water utilities and suggests that energy management policies and practices should regard both types similarly.     

Cost and productivity effects of demographic changes on local water service

We investigate the impact of demographic changes on local public services taking the case of water service. We apply a structural production function approach to a large panel of German water utilities between 2003 and 2014. Exploring variation of population density and the population age structure across service areas and over time, we provide evidence that demographics and their changes significantly affect the utilities’ productivity and costs. We find that demographic changes cause significant cost increases in rapidly shrinking and ageing regions. Our results provide important policy implications regarding the prevention of growing regional disparities in public services.     

Exploration of the relationship between water main breaks and temperature covariates

Water utilities (especially in colder climates) often experience an increase in water main breaks in colder seasons. Some observers argue that this increase largely occurs during the period when there are sudden and prolonged changes in water and air temperatures, which typically occur during the late fall to early winter (temperature drop) and late winter to early spring periods (temperature rise). This paper examines the impact of temperature changes on observed pipe breakage rate for three pipe materials, namely, cast iron, ductile iron and galvanised steel. Several water and air temperature-based covariates were tested in conjunction with a non-homogeneous Poisson pipe break model to assess their impact on water main breaks, using data sets from three different water utilities in the USA and Canada. Temperature-based covariates, such as average mean air temperature, maximum air temperature increase and decrease, and how fast the air temperature increase and decrease over a specific period of days, were found to be consistently significant. While the availability of water temperature data (which most utilities do not have) can enhanced the prediction of water main breaks, it appears that air temperature data alone (which most utilities can access) are usually sufficient.     

Drivers of non-revenue water: A cross-national analysis

Reducing water losses is seen as key to sustainable water management, but turns out to be challenging. This paper applies a panel data analysis with fixed effects to assess the major drivers of non-revenue water, some of which are under the control of utilities and some of which are not. The analysis finds that the most important drivers are population density per kilometer of network and type of distribution network, which are mostly resulting from urbanization patterns which are factors mostly out of the control of the utility. Yet, low opportunity costs of water losses and high repair costs of water losses have an important adverse effect on water loss reduction. We also found that the country environment in which the utility operates has an important impact on non-revenue water levels.     

The efficiency of post-reform water utilities in Mexico

The efficiency of Mexican water utilities was studied by applying double bootstrap data envelopment analysis (DEA). Efficiency scores were calculated and regressed against a set of explanatory variables to analyze the effect of type of management and reform policies on efficiency. Results indicate that the few privately managed utilities in the sample, which are subject to local regulation, may be more efficient than publicly managed utilities operating at different governmental levels. The creation of decentralized autonomous water utilities did not appear to increase efficiency, as was expected from the reform. The policy of cutting water service to non-paying customers, indicating a business orientation, was found to be positively correlated with efficiency.     

Does public ownership of utilities matter for local government water policies?

What differentiates local governments that implement water policies on equity and the environment? Analyzing a 2015 national survey of 1,897 U.S. municipalities, we find municipalities that own their water utilities are more likely to report policies to protect low-income residents from disconnection and implement water resource management. Respondents from 8% of municipalities report protecting residents from disconnection. State economic regulation of municipally owned utilities and Democrat-majority municipal governments are positively associated with local policies to protect low-income households from shutoffs but bear no association with resource management. Both municipal ownership of utilities and state economic regulation may play a role in meeting certain local water policy goals.     

Social equity implications of advanced water metering infrastructure

Many water utilities across the United States have recently launched efforts to replace household water meters with advanced metering infrastructure (AMI), or “smart meters,” to track and bill water use. In this exploratory research article, we use interviews and water utility data, and we review scholarly and grey literature to present five equity implications of AMI transitions: affordability, job loss, access and use of the technology, trust between households and utilities, and communications are ways residents can experience harm. These implications illustrate that AMI can disproportionately burden residents and highlight water utilities’ critical role as community institutions.     

Optimal water tariffs and supply augmentation for cost-of-service regulated water utilities

We describe how a common method for regulating water utilities, cost-of-service regulation, can both in theory and practice result in the premature and economically inefficient water supply augmentation. Using a dynamic model calibrated to demand and supply conditions in Sydney, Australia we show how to optimally determine the time to supply augment using a ‘golden rule’ that minimises the average volumetric price paid by consumers. Our results show that, the greater the water scarcity and the longer the operational life of the additional supply, the sooner is the optimal time to augment. Based on our findings, we recommend that price regulators of water utilities adopt an historical cost less depreciation basis for a regulated asset base and a fully flexible and dynamically efficient volumetric pricing that accounts for the marginal opportunity cost of water supplies.     

Results of an urban water distribution network performance evaluation attempt in Greece

The need for efficient water resources management is currently more pressing than ever, considering population growth and increased reliability requirements, under climate change conditions. On average, one-third of the total water abstracted for urban uses is being lost due to leaks and breaks occurring in water distribution networks. This means that significant amounts of water and revenues are being lost, forcing water utilities to consider developing effective water loss and Non-Revenue Water reduction strategies. Additionally, all water utilities operating in EU countries should, by the end of 2010, develop and implement appropriate water pricing policies that will guarantee the recovery of the full cost of the water being used. This strict obligation makes the reduction of water losses an even more urgent goal that the water utilities have to achieve. The first step towards all the above-mentioned goals is to safely evaluate the performance level of the water network. Thus, the IWA Task Forces on Water Losses and Performance Indicators (PIs) developed specific tools (e.g., the standard international water balance and various PIs), to help water utilities use a common language that will assist know-how and experience exchange through an effective benchmarking process. The paper presents the results of using the above-mentioned IWA tools, in the case of the Larisa city water distribution network in Greece. This is the first time that such an attempt has taken place in Greece. During this process, the problems faced and the ways to tackle them are analyzed, focusing on the role of key factors that had to do with local conditions. Larisa's results are compared to data available from similar cases. Sensitivity analysis was used to check the impact of the variables' uncertainty to the results. Finally, water loss reduction measures are proposed towards an effective pressure management strategy and a proactive pipe maintenance policy based on safely estimating the pipes' optimum replacement time.     

Do political links influence water prices? Determinants of water prices in Germany

We explain water prices in Germany by analyzing demand and cost drivers, governance structures and political links to local politicians. First, we find evidence for economies of scope between supply and wastewater treatment. Soil rigidity significantly influences water prices, and prices tend to be higher in municipalities with declining populations. Second, we analyze governance structures and political links between local mayors and water utilities. We find weak indication that these factors influence prices. The existence of multiple political interests in the governance bodies overseeing water utilities tends to coincide with higher prices. As most of our governance and many of our political factors lack statistical significance, we conclude that it is mainly cost and demand factors that determine prices, and political links play a minor role.     

A composite indicator for measuring the environmental performance of water,wastewater, and solid waste utilities

The aim of this paper is to measure and benchmark the environmental performance of Portuguese utilities jointly active in the three sectors of water supply, wastewater collection and solid waste management. To do so, we suggest the use of a traditional (optimistic) directional distance Benefit of the Doubt index. We complement the analysis by considering also the pessimistic version of the proposed BoD and by implementing a robust and conditional approach. The obtained results show that there is space for improvement in the pressure balance of these utilities, especially for small and very large units, mostly operating in urban areas.     

Regression versus data envelopment analysis for efficiency measurement: an application to the England and Wales regulated water industry

Regression analysis (RA) and data envelopment analysis (DEA) are two techniques widely used in comparative efficiency exercises of regulated utilities. The prevailing impression is that these techniques are to a significant extent substitutes. This paper identifies and discusses important differences between these two techniques. The theoretical issues are illustrated with the help of an application of RA and DEA on recent data from the regulated water industry in England and Wales.     

Quo vadis efficiency analysis of water distribution? A comparative literature review

Recognizing the growing importance of scientific benchmarking in water distribution, we provide a comprehensive survey of the available literature. We begin with a discussion about the (limited) use of benchmarking in the regulation of UK water utilities, and then extend the analysis to regulated water sectors in other countries. We find no clear impact of public or private ownership; instead, the institutional settings appear to be a dominant driver of efficiency. Quality and structural variables are significant parameters; and water losses and population density are also important drivers. Analysis reveals that economies of scale only exist in fragmented water industries, whereas economies of density are omnipresent. We find evidence suggesting important economies of scope (e.g. between water and sewerage). Finally, we summarize the tensions that exist in attempting to measure efficiency in the water industry and draw conclusions about how to improve efficiency analysis in the future.     

Worldwide evidence of corporate governance influence on ESG disclosure in the utilities sector

This paper examines the impact of corporate governance mechanisms on Environmental Social and Governance (ESG) disclosure in the utilities sector. We collected data from the Eikon Refinitiv database on 265 worldwide organisations operating in the utility sector during the 2011–2019 period.Findings evidence that board independence and the existence of a specific Corporate Social Responsibility (CSR)/sustainability committee constitute positive drivers of utilities’ overall ESG disclosure levels. Also, board size positively influences environmental and social disclosure.The study would encourage utilities to define their internal corporate governance mechanisms carefully, devoting primary attention to an accurate selection of the board of directors members.