Partnerships Program Introduction

Water conservation program partnerships can take many forms, but usually involve two or more utilities or organizations that share a common goal and/or common service territory.  There are many motivations to form a partnership including: reducing program costs; consistency in functions across service territories, consistency in shared service territories, shared conservation goals,  eliminating duplicative efforts, purchasing at volume discounts, enhanced offerings to customers, and cost-sharing.  Partnerships usually require more initial effort to form the needed agreements, but can yield great benefits over time.  An overview of motivations and benefits are as follows:

Cost Reduction with Economies of Scale  – General overhead costs, and the costs to initiate and establish an active conservation project are high, especially when the project requires dedicated office space, specially trained staff, and computerized processing (such as rebates, vouchers, applications, etc.)  Often, the project start-up costs range from 20% to 30% of the entire project budget.  Examples of start-up expenditures includes: employee recruitment, hiring and training; computer hardware and software; computer programming; marketing design and printed materials; establish banking procedures; contract negotiations; etc.  General overhead costs are also high, and can overwhelm project costs at low volumes of activity.  The costs of overhead and start-up remain relatively constant without regard to volume.  By increasing volume of program participants, the apportioned costs to decrease per unit of activity. 

Consistency of Conservation Messages and Programs – Where different water utilities have adjoining territories, the utilities generally share the same news media, especially in tight urban areas.  A surprising number of customers are not sure who provides their water service.  Partnerships with neighboring water utilities reduce confusion, and allows for easier marketing messages, program eligibility, and administration.  There are varied estimates on water and energy savings for different devices; and the customers become skeptical or confused when the message varies.  Partnerships allow the organizations to agree on savings estimates along with the other messages; avoiding conflicting or confusing information being distributed by two different organizations.  Where different utilities provide different services (gas, electric, or water) to shared customers, the consistency of messages and programs are more important than preferences in style and insignificant details. 

Reduction of Duplicative Efforts – Often multiple organizations have overlapping goals.  Common examples are promoting showerhead early replacements and high-efficiency washing machines because they save both water and energy.  The local energy utilities operate incentive programs to reduce energy usage, while water utilities operate programs to reduce water usage.  Where service territory is shared, both utilities are targeting the same customers for participation in the efforts.  When the utilities implement separate programs, the efforts are often duplicated and wasted.

Volume Discount Advantages - The cost to purchase products and services is often based on volumes purchased.  Both product manufacturers and service providers offer more competitive pricing as volume increases.  Joining multiple programs using identical products and/or services will garner lower price quotes than if the programs are bid individually.  Partnering to obtain volume discounts often requires all partners to compromise on individual preferences to unify project parameters and product specifications. The advantages of the partnership generally far outweigh the needed compromises of each partner.

Enhanced Program Incentives and Offerings – Pooling resources and finances can have a positive symbiotic effect on project success.  High-Efficiency clothes Washers (HEW) offer an excellent example of this effect. 

An electric utility might have an avoided cost of $100 for a HEW, the gas utility might have an avoided cost of $250, and the water utility might have an avoided cost of $150.  An HEW costs approximately $500 to $900 more than a low cost water-wasting clothes washer.   A customer looking to buy a new washer will probably not view a $150 rebate as an effective incentive when the customer has to pay $700 more for the HEW.  On the other hand, a $500 rebate ($100 + $250 + $150) is likely to change the decisions for many customers.

Partnerships can also enhance conservation services in the variety of services and products offered, improving the appeal and participation of customers.  In several areas of the country, water utilities have partnered with energy utilities to offer energy and water conservation services in one site visit.  The home survey can include water and energy conservation services in one visit, improving customer participation and conservation of resources. 

Cost Sharing – The benefits of water conservation are often shared by several entities, including: water wholesaler, water retailer, energy utilities, community groups and environmental organizations.  It is therefore logical that all those benefiting have an interest in program success, and often a financial stake.  Utilities can easily estimate financial benefits by performing a benefit-cost analysis to determine the avoided costs of conservation.  It is sometimes more difficult for environmental organizations and community groups to calculate financial benefits, but this does not mean they cannot contribute to the project in non-financial means (community support, endorsements, marketing assistance, etc.).  Partnerships facilitate a means for all beneficiaries to support the project; improving cost-effectiveness for all partners.

The advantages of forming partnerships are numerous and valuable.  The costs, time and effort to organize, negotiate and administrate a partnership is well worth the benefits received, depending on the scope of the project.  Compromises are often necessary to achieve the greater and common goals among the partners.  Partnerships give the water utility the means to leverage its strengths to garner results not attainable by operating a project alone.