By SAM WADE
Retired NRWA CEO
Addressing aging water infrastructure is a priority, but rural systems are squeezed financially by an aging and shrinking customer base and increasing regulatory mandates. Much of the costs associated with infrastructure repair and replacement unfortunately has to be passed on to the customer.
However, aging infrastructure goes beyond rural utilities’ distribution system. Water service lines connecting homes to the local system are made of the same materials, with the same issues, as the aging water mains – and, just like those mains, they may leak.
The difference is that a service line leak can often go undetected until the next billing cycle, leaving the homeowner in shock after receiving a higher-than-normal water bill. Their first action is calling the water utility, during which the homeowner learns about the utility’s water loss policy and that the service line is the not the utility’s responsibility, but their own.
Typically, systems have two types of water loss policies, they include:
- Forgive the ratepayer for the excess billed water or a portion of it. The question is, is this fair to the ratepayers, who, as a whole, are paying for the excess water loss? The second question is whether everyone who has a leak is treated equally or is debt forgiven on a case-by-case basis? Debt forgiveness writes off revenue the system would otherwise receive, and the customer base absorbs the production and distribution cost of lost water.
- Make the ratepayer responsible for the entire bill, without forgiveness. This ensures the utility receives its revenue and all ratepayers are treated equally but places a financial burden on the ratepayer. In many cases, the utility will carry the balance of the bill forward over a long period of time – essentially operating as a lending institution. This creates work for administrative staff, increases accounting cost and typically results in a disgruntled customer who is facing a large bill.
Now, there is a program available that protects the ratepayer from a large water loss bill while ensuring the utility receives its revenue in full. It protects both the ratepayer and system from financial loss, treats all ratepayers equally, eliminates administrative burden and results in a satisfied and supportive customer.
This program was field-tested by the Tennessee Association of Utility Districts, beginning in 2014, and resulted in increases in customer satisfaction and acceptance by individual utilities. Since then, the ServLine program has become an affinity partner with the National Rural Water Association and expanded its customer service and claim resolution service under HomeServe USA. The survey results from customers speak for themselves.
Key points on the ServLine Leak Protection Program:
- The program is only available through the participating utility.
- The retention rate of customers who have the option of non-participation is more than 96 percent.
- Customer satisfaction rate of those who have had a loss and resulting claim is 91 percent.
- Customers reported 70 percent higher satisfaction with their service provider.
The data demonstrates ServLine is a service that meets ratepayers’ needs and allows utilities to be proactive in customer service. As rates increase and homeowner infrastructure continues to deteriorate, ServLine is, as one utility manager said, “a no-brainer.”
Bring your utility water loss policy into the mainstream and meet the needs of today’s changing customer base by offering them a ServLine customer service benefit while protect the ratepayers and your utility from financial loss.
Sam Wade began his career in rural water in 1972 as a water and wastewater systems operator and city manager in Minnesota before becoming the manager of the Minnesota Rural Water Association in 1982.
In 1985, Mr. Wade joined the National Rural Water Association (NRWA) as the Training Director and became the Deputy CEO and Chief Operating Officer two years later. For more than 30 years, Mr. Wade helped provide the leadership needed for the NRWA to train, support and promote water and wastewater professionals who serve rural America. Mr. Wade retired from the NRWA in 2019 and now works as an industry consultant.