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Section 2 Conservation and Efficiency Technical Roundtable Tributary groundwater (senior Tributary groundwater (junior Non-tributary groundwater (not mined) Non-tributary groundwater (mined) Direct flow surface rights, no Direct flow surface rights, no storage (junior rights) _ _ ? + _ - Surface rights, with storage =/+1 = - (seniorrights) Surface rights, with storage + _ - Qunior rights) + Reliability increased - Reliability decreased = Reliability unchanged ? Depends upon the specific aquifer ~ Some water providers can't tell that their water system is experiencing drought conditions until a significant portion of the first year of the drought has past. This lack of forecasting ability hinders the capability to reduce demand through drought restrictions in the first year of a drought. It is significant to note that demand reductions from conservation measures would be present in the first year of a drought, increasing system reliability. 2.3.3 Financial Considerations (Question 3 Subcommittee) Fundamentals associated with the water providers' and customers' ability and willingness to pay for conservation measures were reviewed by the TRT. These included principles that Colorado water users have adopted such as the wise and efficient use of water, intolerance of water waste, and goals that should be adopted by water providers. It was agreed that, in most cases, the issue is not ability to pay, but rather the willingness of providers to charge customers. However, the ability of lower income customers to pay higher conservation-oriented water rates was not fully explored. In addition, some TRT members indicated that if the cost of water exceeds an acceptable level, lower income customers may not water and let lawns and landscaping deteriorate and become unattractive. Overall, the TRT was not able to find definitive information on ability and willingness to pay. However, the TRT did identify a few case studies that provide information on both financial and institutional issues that effect the implementation of water conservation measures. These case studies are presented below and in the following section. Colorado Springs Utilities Case Study Colorado Spring Utilities conducted customer surveys in 2004 and 2005 on the customer's willingness to pay. Both residential and business customers were included in the survey. Customers were asked a number of questions regarding willingness to pay for conservation measures. When asked about reasons why they might conserve water, the response was as follows: ~ Reducing the monthly bill - 40 percent ~ Ensure resources for future generations - 33 percent ~ Concern for the environment - 23 percent ~ Not sure - 3 percent FINAL DRAFT 2-13 _ _ ?