Water Resources Management in the State of Rhode Island: An Institutional Recommendation

Water is an indispensable resource. Modern urban areas have come to rely on extensive water supply networks which collect, store, treat, and distribute massive amounts of water from remote locations. Most systems in the northeastern United States were constructed several decades ago and still function very well. End users of such systems have become accustomed to an abundant supply of cheap, high quality water. Rapid growth in population and economic development in recent years is placing a strain on existing water supply systems. At the same time, watershed and wellhead areas which are sources of supply are being threatened by increasing contamination sources resulting from intensified and sometimes inappropriate land use. Where the traditional solution to increasing demand is to create additional water supply sources, the fiscal and environmental impacts of such action are rapidly escalating. There is increasing interest a more comprehensive approach to the management of water, where a premium is placed on protecting surface and groundwater supplies, conservation, and the integration of the efforts of government and the water industry. The purpose of this research project is to describe and evaluate the water resources management institutional structure in the state of Rhode Island. Using selected criteria, a comparison is made with alternative institutional approaches in Massachusetts, California and elsewhere. Based on this analysis, a recommendation for a new water resources and waste water management authority in Rhode Island is presented.

If there is magic on this planet, it is in water.

-Loren Eisley
The order and manner in which decisions are made is critical to the effectiveness of any governmental body. This is especially true when resources vital to the public health, safety and welfare are in question. It is the basic responsibility of any government, regardless of its political, philosophical, or geographical orientation, to manage and regulate such resources as effectively as possible.
In recent years, population growth and the impact of economic development has strained traditional water supply systems. In response, government is increasingly broadening and making more regional its purview over water supply and delivery systems in acknowledgement of the many interrelated factors pertaining to water resources management.
Rhode Island's state government is presently in the process of reevaluating their institutional structure of water resources management. The first major demand forecasting study in 20 years is nearing completion. The Governor has recommended to the General Assembly a law which would place the Water Resources Board, a quasi-independent agency responsible for coordinating, regulating, and providing financial assistance for the activities of 1 the state's water authorities and private systems, under a new Department of the Environment.

Background
The existence of water is what differentiates the earth from all other planets. Water is essential to the support of all life forms. Water is also essential to countless human activities.
Water interacts between terrestrial and atmospheric conditions in a manner known as the hydrologic cycle. As precipitation falls to the earth's surface, it either evaporates, runs off the surface into water bodies, is absorbed by vegetation and is returned to the atmosphere in a process called evapotranspiration, or percolates through surface soils under the ground.
Groundwater flows along the surface of till or bedrock and accumulates in aquifers. Residual water then flows up towards surface water bodies, where evaporation again takes place.
This underground movement of water is a function of soil conditions. Soils of high transmissibility closer to the surface are known as outwash. Soils of low transmissibility resting on hard bedrock are known as till. As water drains through these soils, it takes the path of least resistance, flowing through outwash, and around till and bedrock. Groundwater reservoirs exist where the soils are saturated. The adjacent area of highly transmissive soils is known as a recharge zone. 2 A hydrologic system is based on the flow of water within the confines of a watershed. Water drains down from higher elevations to a central water body, usually a river, and corresponding groundwater reservoir.
Over centuries, man has developed sophisticated ways of collecting, storing, treating and delivering water for use in urban areas often many miles from the original source. The Romans constructed great stone aqueducts which delivered water to the cities from the mountains in the north. In the United States, the California Water Plan and the Central Arizona Project represent the largest water storage and transmission systems in the world, diverting the Colorado River and several rivers in northern California through pipelines and aqueducts to metropolitan areas located in the desert hundreds of miles away.
Treatment of raw water supplies removes sediment, impurities and kills harmful bacteria.
In recent decades, rapid population growth and out-migration from traditional urban centers has resulted in two dynamic conditions facing those responsible for water supply and delivery systems. The first condition is the increasing demand for additional water supply to accommodate population growth. Where water suppliers have initially relied on planning for the development of additional water supply sources, concern over environmental impacts of reservoir development has resulted in federal government discouragement of such projects. As a result, there is an increasing interest in encouraging more efficient use of existing supplies. Many feel an important conservation strategy is to price water in such a way that it becomes more The following man-made pollution sources constitute common threats to the quality of water resources: 1. Urban Runoff. Impervious surfaces created by buildings and pavement prevents water from percolating into the ground. Instead, water "runs off' in an accelerated fashion, carrying with it accumulated surface pollutants such as grease and petroleum, and metals such as copper, cadmium, lead, zinc and nickel. Runoff associated with storm conditions increases the likelihood of erosion and sedimentation. ~ '" "" ,,.,. measures are commonly used to extend water supplies" (RI Statewide Planning Program, 1988).
The current safe yield (defined as consistent and reliable minimum capacity) of public water supplies in the state is between 137.5 and 177.1 million gallons per day (MGD). Of this, between 110.1 and 149.7 MGD is drawn from surface reservoirs and 27.4 MGD (18% of the total water use in Rhode Island) is drawn from ground water wells (Arthur D. Little, Inc. 1990).
In 1980, 89.7% of Rhode Island's population received water from public suppliers (RI Statewide Planning Program, 1988). The Scituate water supply system services 600,000 residential customers, or 61 % of the state's population.
Of that, 36% is distributed through the PWSB system, and 25% is sold to other water authorities. Approximately 10% of the state's population relies on private water supply. Of all the water furnished from public systems, 50% is consumed for domestic purposes, approximately 33% is used for industrial, commercial and institutional purposes, and the balance is "unmetered" public and system use, and leakage (Arthur D. Little, Inc.1990).
In recent years state officials have been concerned with creating additional sources of supply, However, plans for a $300 million augmenting reservoir were vetoed this year by the US Environmental Protection Agency (EPA) because of its concern for the projected loss of sensitive wetlands. There is now more interest than ever before in a comprehensive state water resources management system.
In regard to the use of these water resources in the satisfying of public demand, Rhode Island State Guide Plan 721 makes the following observation: Several public water systems which formerly relied on groundwater, in whole or in part, as a supply source have recently switched to a much greater reliance on surface water supplies. This has been due to increasing problems with contamination and, in some cases, in anticipation of degradation of groundwater supplies from encroachment by intensive land use activities. The most common solution for many of these systems has been to tie into the Providence water system. This tendency to rely on the largest water system in the state, which has the most widespread and sophisticated distribution system, points out the apparent paradox of water supply issues in Rhode Island. The relative abundance of the resource is a false measure of its adequacy. The accessibility of high quality water within the economic parameters of public water system operations is a more accurate indicator of the problems which exist.
In this project I will describe the institutions responsible for the management of water resources in Rhode Island, and evaluate how the efforts of these agencies could better be integrated to carry out the goal to "provide for the cooperative development, conservation, and the use of water resources" (RIGL 45-15-2, 1967) in the state of Rhode Island.
In this project I also identify at what point on the comprehensive water resources management spectrum the state appears to be. At one end of the spectrum, water is marketed and regulated as a public commodity, and the management's orientation is on water supply and demand. At the other end of the spectrum, water is managed as a scarce resource. In this approach, water supply and distribution is highly integrated with conservation and ground water protection.
Based on my analysis and conclusions, I will recommend an institutional arrangement which would best facilitate the most efficient water resource management structure for the state of Rhode Island.
Chapter 2: The Evolution of Water Resources Management in Rhode Island Emotionally, people are able to look only two generations back and two generations forward. We need to see farther than that.
-former Sierra Club Executive Director David Brower, from Encounters With the Archdruid, by John McPhee In many ways, Rhode Island typifies the institutional water management approach of the regions of the northeastern United States. Since colonial times, urban centers have been the developers of central water supply and delivery systems. These cities most often secure supplies by the construction of reservoirs and delivery systems originating far from their geopolitical boundaries.
In recent years, the unrestricted development of water resources are coming under a progressive number of constraints. States and the federal government are enacting regulations relating to the environmental impacts of the constructing of surface water reservoirs. Population out-migration from central cities to previously undeveloped areas result in increased land values, increased threats to groundwater quality, and proportionally increased political power in areas in which potential future water supply sources for urban centers are located. In addition, water distribution systems originally developed by and for urban populations spread to become regional networks.
As a result of these developments, there is a growing interest in developing a regional approach to water resources management. States are 13 moving to establish some degree of control over the activities of the water supply systems within their jurisdiction. The following describes such an experience in the State of Rhode Island.
Providence Establishes the First State Water System.  Established within the enabling authority in Chapter 64 of the RI Public Laws of 1866, the City of Providence has ever since been the central water supply management institution in the state. The Providence Water Works developed the state's principal water supply resources, including the Scituate Reservoir (1924-29), constructed and managed an extensive distribution system, and was providing supply to at least 9 municipalities by 1964.

The modern Providence Water Supply Board (PWSB) was established per
Chapter 1278 of the Public Laws of 1915. This Act also gave certain communities the right to receive from the PWSB water originating from the Scituate Watershed. Control. 1955-67 Before 1955, the state limited its role in public water supply management.

State Begins to Assert
The Department of Health maintained continuous quality monitoring of public drinking water supply starting as early as the 1870's.
The Water Resources Coordinating Board (WRCB), established in 1955, created a seven member body whose function was primarily advisory. The duties and responsibilities of the Board included reviewing and evaluating current studies and water conservation and development programs relating to state and municipal agencies, looking to a long-range ground water protection program, and to assisting in "devising and perfecting ways and means for accommodating the distribution of water supplies of the state" (P.L. 1955, ch.

3562, sect.3).
As an advisory body, the WRCB was charged with recommending legislative and other initiatives to the governor to promote a coordinated water resources program and with "making surplus water supplies in one area available to any other area in the interest of all the people and for the advancement of the economy of the state" (P. L. 1955, ch. 3562, sect. 5). The City, making no secret of its willingness to develop the reservoir, commissioned a $27,000 preliminary engineering study in September 1967.
Providence Mayor Joseph Doorley subsequently proposed his own $48 million plan to develop the two reservoirs. Providence Water Supply Board Chief Engineer Philip Holton went so far as to say that the State, after 16 years of struggle in planning for the new reservoirs, "has been unable to muster the drive and initiative to get the problem advanced beyond the study stage" (Providence Journal 9/20/66).

Quest For Big River Reservoir. 1967-85
In 1967, the state established the Rhode Island Water Resources Board (WRB) as a quasi-governmental state agency to replace the WRCB. By this act, the State asserted its authority to "provide for the cooperative development, conservation and use of water resources by the state, municipal agencies or departments, or privately-owned water systems" (RIGL 46-15-6( d) 1967). The Act recognized that the water industry's "capabilities and experience must be brought to bear on the total problem of water resources development in a coordinated manner if the proper development, conservation, apportionment, and use of the water resources of the state are to be realized" (RIGL 46-15-1, 1967).
Perhaps the most important feature of the Act was the provision which prohibited public or private water authorities from acquiring additional water supplies, condemning lands for additional sources of water supply, extending distribution to new service areas outside of its jurisdiction, constructing extensions of transmission lines, extending special water district boundaries, or supplying water to other municipal water districts without approval of the WRB. Such operations within the existing districts were permitted, but an enforcement provision allowed for a Superior Court injunction against any authority, upon application of the board.
The new law also gave the WRB the authority to acquire and develop properties for water supply, treatment and distribution, absorb public or private water authorities, regulate development performed by water authorities, borrow temporarily from a Water Development Fund, to make loans to public water authorities, and to "regulate, manage, or perform related functions on any lands or waters acquired under the provisions of the Big River-Wood River Reservoir Site Acquisition Act (P.L. chapter 133, 1964)" (RIGL 46-15-6, 1967).
Two years later the General Assembly passed the Administrative Procedure Water Development Fund Act establishing the WRB as a facilitator of financing of capital development for water supply and distribution system projects. This measure allowed the WRB to use the proceeds (up to a balance of $1 million) of the sale and lease of gravel mining and timber harvest rights on the Big River site as working capital for the Board's operations, debt service, and loans to water suppliers. The Water Facilities Assistance Program Act of 1980 established a 25% grant program for public water supply systems that constructed approved water transmission facilities.
The Water Supplies Facilities Act of 1970 empowers the WRB with bonding authority based on the value of its assets. The bond funding designates for the costs of surface water supply development (especially Big River).
Through the Act, the General Assembly established a sister body to the WRB, commonly known as the 'Board Corporate'.
Amendments to RIGL 46-15-6 in 1981 grants the WRB additional authority to acquire or merge with any public or private water authority, and to lease, sell or convey reservoir sites or facilities to any public or private water authority. At the same time, the WRB is relieved of the obligation to submit its transactions to the of the State Properties Committee. Previously, the WRB had no authority to perform such arrangements with public water authorities. completing several studies forecasting the need for the reservoir, and forwarding various proposals to construct the system.
In the meantime, momentum was building for more comprehensive demand management policies for the state. As early as 1973 Audubon Society of Rhode Island Executive Director Alfred Hawkes advocated a state water conservation program (including pricing strategies designed to reduce demand), as well as 'linking both ends of the pipe' -a concept embodying centralized management of both water supply and waste water treatment. In 1979 the Division of Statewide Planning urged that in the event Big River was built, municipalities receiving supply from that source would be required to submit a water conservation plan targeting a reduction in sewage flows and pollution. Management, 1985-90 Starting in 1985, a number of initiatives marked a departure from the state government's past priority of engineering an increase in supply as the solution to future water needs to a more balanced approach, which includes planning and comprehensive water resource management. In the process, the WRB saw of its original policy-making authority transferred to other agencies.

Emergence of Planning and Comprehensive Resource
That same year, the General Assembly empowered the Division of Statewide Planning to develop State Guide Plans for the management of Rhode Island's physical resources. RIGL 46-15-25 formally transfers such authority from the WRB to Statewide Planning. Such plans recommend "specific guidelines, standards, and programs to be adopted to implement strategic planning" to the State Planning Council, whose members include the Director conservation, and coordinate water system development with implementation of the land use plan and waste water disposal needs", the Guide Plan states in regard to assuring an adequate water supply that "it is no longer logical or feasible to pursue that end using only the traditional capital development program approach." In regard to planning and institutional policies of the state, the Guide Plan recommended the following: 1. the state should develop long-range plans and improve coordination between all agencies involved in water resources, 2. more planning should take place at the state, municipal, regional and water system level, 3. approval of any development should be conditional upon the availability of adequate supplies, 4. there should be a central repository for all water resource data, 5. water system's management plans should be more comprehensive, 6. "the state should take an active role in guiding the resource management activities of public water systems through incentives, conditional financial assistance programs, and formal review procedures", 7. "in recognition of the interrelationship of waste water treatment requirements, the quantity of water made available to an area should not exceed the capacity of the treatment and/or disposal systems serving the same area", and 8. "the state should take an active role in protecting water supply watersheds, reservoirs, and groundwater aquifers." Also in 1985, the General Assembly enacted The Ground Water Protection Act, which authorized the Department of Environmental Management to survey and classify the quality of all groundwater aquifers in the state, for the purpose of protecting existing and potential drinking water sources. The General Assembly also directed DEM to recommend strategies for the protection of groundwater.
The passage of The Public Drinking Water Protection Act of 1987 enhanced the WRB's role as a facilitator of water supply capital project funding. The measure established a "water quality protection charge" for public water suppliers of one cent per 100 gallons. The General Assembly earmarked the proceeds from this charge for financing the acquisition of properties or development rights in critical watershed areas.
In a response to the contention of EPA that the state had failed to prepare a comprehensive water management plan, Governor DiPrete issued Executive Order no. 89-2 on January 25, 1989. This measure established the Water Resources Coordinating Council (WRCC), which was charged with the following responsibilities: 1. "to insure the implementation of a coordinated effort to preserve existing surface and underground water supplies", 2. "to insure the creation and the implementation of a comprehensive drinking water conservation program", 3. "to coordinate and review the evaluation of the need for new water supplies for the state and to advise the Governor", and 4. "to oversee the implementation of the provisions of the Federal Safe Drinking Water Act in Rhode Island".
Pursuant to this order the WRCC, using in excess of $550,000 in WRB funds, engaged the consulting firm of Arthur D. Little, Inc. of Cambridge, Massachusetts, to conduct a comprehensive water supply analysis for the state.
The WRCC has also implemented several demonstration water conservation programs, and coordinated a water efficiency audit of state owned buildings. By 1990, the state of Rhode Island has evolved towards a more comprehensive planning approach, but the organizational framework of water resources management is still segmented. The decision-makers have shifted responsibilities between various agencies, and added environmental protection and planning responsibilities to its traditional focus on maintaining adequate water supply.

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Chapter 3: Present Water Resources Management Institutions Born in a water-rich environment, we have never really learned how important water is to us ... Where it has been cheap and plentiful, we have ignored it; where it has been rare and precious, we have spent it with shameful and unbecoming haste ... Everywhere we have poured filth into it.

--William Ashworth
In Rhode Island, there are presently several institutions which play a role in the management of water resources. The following is a description of these organizations, and how each functions in their respective area of responsibility.

The Suppliers
There are 30 major public water systems in Rhode Island. Each is either chartered by the state or is a department or quasi-independent agency (fire district) of a municipality.
Of the 30 systems, 10 acquire supplies from the Scituate Reservoir system managed by the Providence Water Supply Board, representing 62% of all public water resources in the state. While Providence provides its own water, the city sells supply wholesale to the Cranston Water Department, the East Providence Water Department, the East Smithfield Water District, the Greenville Water District, the Kent County Water Authority, the Lincoln Water    The Regulators A complex system of governmental regulatory activities is intended to provide protection for water resources. The foundation of the government's efforts is in "command and control" legislation-measures designed to prevent pollution of natural resources deemed critical to the common good.

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The Federal Government The federal government first established standards for contaminants in public drinking water supplies in the 1920's in order to control such diseases such as typhoid and cholera. For fifty years, these standards remained relatively unchanged.
In recent years, the federal government has enacted two measures which have modernized the protection of surface water supplies in the United States.   WRCC has commissioned a major supply and demand forecasting study conducted by the consulting firm Arthur D. Little. This project will provide officials with the most comprehensive baseline information on public water use since the last time such a study was performed in 1967.
One key mandate for WRCC is determining the feasibility of various conservation strategies. WRCC has sponsored demonstration water conservation projects, including residential and institutional retrofits (the installation of efficient water saving fixtures), and the state's first "Xeriscape" conference, which has promoted the use of a landscape design technique pioneered in Arizona which maximizes the use of vegetation that demands little water). In addition, WRCC has coordinated a water use audit of all state buildings.
The Rhode Island Public Utilities Commission (PUC) plays a critical demand management role as the agency which has the authority to set conditions for any rate increases requested by 11 public water authorities and waste water treatment agencies whose service areas transcend municipal boundaries. The PUC requires water authorities account for volumes of water suspected of being lost in transmission and encouraged leak detection and 39 control programs. The Commission has recently required authorities to employ pricing standards which could encourage conservation. The PUC has required the PWSB to link its billing system to that of the Narragansett Bay Commission (NBC) in order to make clearer the relationship between the cost water supply and the cost of waste water treatment. In addition, the PUC has ordered water authorities to prepare emergency response plans, water supply protection studies, and water conservation plans.
The Rhode Island Building Code Commission is responsible for establishing standards for water consuming devices installed in buildings. In 1989, the commission followed the example of Massachusetts by reducing the standard for toilet flush capacity to the "ultra-low" standard of 1.6 gallons.

Rhode Islanders Saving Energy (RISE) is a non-profit organization which
provides an important function in the area of residential water conservation.
Since the late 1970's, RISE has been a public outreach agency that promotes energy conservation by offering home energy audits and low-interest loans for purchasing and installing such energy saving devices as insulation and water heaters. Funding comes from government grants and support from electric utilities.
RISE employs a field organization which performs energy audits in residential homes. In recent years, the installation of low-flow shower heads and faucet aerators has been added to the audit procedure because of the savings in water and energy required to heat the water. pricing policies that promote conservation and protect the interests of the poor and disadvantaged.
As with most states in the region, Rhode Island's government, water supply institutions and advocates for the public have been wrestling with the burgeoning problem of maintaining high quality water supply services in the face of increasing demand and environmental threats to water resources. There have been significant achievements in addressing a number of problems.
However, many programs are a product of individual initiative, and there is still enough of a lack of consensus and coordination that the state's ability to effectively resolve its water resources problems remains in doubt.

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Chapter 4: Evaluation Criteria The closed economy of the future might similarly be called the "spaceman" economy, in which the earth has become a single spaceship, without unlimited reservoirs of anything, either for extraction or for pollution, and in which, therefore, man must find his place in a cyclical ecological system which is capable of continuous reproduction of material form even though it cannot escape having inputs of energy.
--Kenneth Boulding, ''The Economics of the Coming Spaceship Earth", 1966 The water resources management institutional framework reflects the relative priorities of government. Where water supply is plentiful, administrative responsibilities are delineated based on tradition and political priorities. "But when competition for water becomes keener, the actions of the various departments concerned with water management come more and more in conflict with each other, and there is frequently overlapping and loss of efficiency. It then becomes necessary to plan and coordinate water use by setting up frameworks that can ensure an overall approach to water management" (Cunha et al, 1977).
Throughout the nation, water resources management is evolving. The traditional supply management approach is being augmented with increasingly sophisticated demand management techniques. In order to evaluate the effectiveness of a water resource management approach, I have established the following criteria.

A Integration
Integration is the degree to which management systems work together in a manner to achieve the highest degree of productivity, efficiency and equity in both short and long-range time periods. Successful water management approaches include organizational structures which encourage cooperation in the carrying out of regional goals and objectives.
One such system is the Massachusetts Water Resources Authority (MWRA). This agency was created by the state legislature in 1985 in an effort to consolidate the management of water supply and waste water management for 44 communities in the Boston metropolitan area. An independent public authority, MWRA is Massachusetts' largest water utility, serving almost half the state's population. "MWRA raises its own operating revenues by charging the local communities for the water they use and the sewage they generate. In turn the communities charge their service-area customers for their costs of maintaining their water delivery and sewage systems and for water consumption in homes and businesses" (Cote, 1990).
Because it is an independent agency, MWRA raises its own operating revenues. MWRA "is governed by an 11-member board of directors appointed by the Governor and chaired by the Secretary of Environmental Affairs. The board consists of one member each from the Merrimack River and the Connecticut River watershed areas, one member representing the town of Winthrop, three members from the City of Boston and three members from the MWRA Advisory Board. The Advisory Board includes representatives of the Authority's service-area communities, the Metropolitan Area Planning Council and the Governor (Cote, 1990).
The MWRA has assumed responsibility for the wholesale distribution of water and sewage disposal services for over 2.5 million people in 60 communities (Kempe, 1989). MWRA manages 130 miles of large aqueducts and 260 miles of large distribution pipelines. The 46 communities supplied by MWRA water manage their own distribution systems.
Previously, the management of water resources in eastern Massachusetts had been segmented. The Metropolitan District Commission (MDC) was responsible for water supply, treatment and delivery to local systems (MDC's present role is to continue to manage the watersheds and reservoirs supplying the MWRA service area). Community water authorities were individually responsible for metering, billing, conservation, and maintaining the efficiency of their transmission lines. Where some local systems aggressively pursued demand management practices such as leak detection and public education, many had done little to promote efficient water use. ''This had been largely a result of local funding difficulties, a relatively low cost of water and a lack of awareness of supply problems in general" (Kempe, 1989).
In addition to combining water resources and waste water management, the Authority centralizes a number critical functions. Goals and objectives reflecting regional priorities are now in place, enabling long-range planning strategies to be established. The main objectives of MWRA include "the cleanup of Boston Harbor, improvements to the aging water and sewerage infrastructure, provision of pure and adequate drinking water and the promotion of water conservation" (Kempe, 1989) for a service area greater than four times the size of that of the PWSB.
The MWRA approach also allows for the development of a common information database, management by watershed districts, the integration of management efforts between local and regional agencies, and provides a clear delineation of authority, where state, regional and local agencies have distinct areas of responsibility. The burden of complying with most environmental protection regulatory requirements is shifted to a regional authority.
Other variations of the MWRA approach exist. In California, revisions in the state Water Code in 1977 encourage public water utilities to adopt conservation programs which mandate the installation of water-saving devices.
As a result, water districts such as those in North Marin County and San Jose have instituted what are widely considered state-of-the-art conservation programs (Cote, 1990). In Connecticut, the 1984 Water Supply Plan Act requires all utilities serving more than 1000 people to submit plans for consideration and approval by the Department of Health Services, and the

Department of Environmental Protection and the Department of Public
Utilities Control for those systems they regulate (Jarema, 1987). In England, the 1973 Water Act consolidated the functions of almost 1500 management units into 10 "Water Authorities" whose areas are based on watershed boundaries. These Authorities are responsible for "water resource conservation, water treatment and distribution, sewerage, sewerage treatment and disposal, water quality regulation, pollution control, river management including flood alleviation and land drainage, recreation and amenity, fisheries, and navigation" (Parker and Sewell, 1988).

B. Supply Management
Supply Protection: Surface Water A watershed is an ideal geographic area for the purposes of water resources management. As humans seek to draw from surface and groundwater supplies, the common conditions which effect each source are rooted in an integrated hydrological system. Coordinated regulation of land use and disposal standards within a watershed allows the highest potential of ensuring minimum water resource quality standards may be met.
Watershed protection programs are one of the most effective means of protecting surface water supply. Water systems may delineate critical areas of the watershed, and target specific parcels for protection measures. It is not necessary for land to be purchased outright. A more financially effective strategy is to purchase the development rights or conservation easements. In this way, owners don't have to sell their land and the system doesn't have to exercise its eminent domain power to prevent development. Local municipalities can help protect surface reservoirs by creating watershed protection district zoning ordinances. In this, an overlay area of sensitive areas are designated, and strict land use and density standards are established.
Water systems should have drought emergency planning, where backup water supplies may be tapped when needed. In addition, supply "redundancy" (partitioning of surface water reservoirs so in the event of contamination problems authorities can still draw upon part of the supply source) is a desirable feature.
The achievement of conservation measures at the user's end of the pipeline may pale in comparison with the water lost through leakage in main transmission lines. Transmission and distribution system maintenance and repair is a common problem in older systems in the northeastern United States, where even today there is a day to day reliance on a few lines over 100 years old made of cast iron and wood.
Government financial assistance programs appear to be a mixed blessing.
In England, a reduction in federal support has increased administrative and economic efficiency, but "the renewal and replacement of assets have been dire" (Parker and Sewell, 1988). Some states have enacted financial assistance programs to enable community water suppliers to perform the capital improvements necessary to upgrade facilities prone to failures. Washington state pioneered asset protection assistance for water systems, providing 40% grants since 1973. Massachusetts, New Jersey and Pennsylvania have followed suit with grant or loan programs (Humphrey and Walker, 1987).

Supply Protection: Groundwater
The EPA has prepared guidelines for states to enact Wellhead Protection Programs. The focus of these programs is the prevention of contamination of areas which contribute water to public wells. The state initially identifies the critical areas for all public wells in the state. The municipality in which each well is located is responsible for identifying known and potential contamination sources. Management approaches and emergency contingency planning is then developed for the protection of these wells.
Another groundwater protection strategy is a municipal waste water management district ordinance. Areas of critical concern are designated, and land owners within these districts who have ISDS systems are required to keep them running efficiently.

C. Demand Management
In a world placing increasing demands on natural resources and delivery systems, government and water suppliers are accepting conservation as a legitimate strategy for satisfying society's needs. Where technical advances and immense capital investment in engineering solutions have been the modus operandi for developing urban systems in the past, significant population increases and the resulting development in spatially diverse areas have made the traditional approach of increasing supply a more and more expensive solution in keeping up with demand. Environmental externalities in the development of electricity, oil, nuclear, and water sources have become as much a concern as the increasing costs of their development.
The U.S. Government, in enacting the 1969 National Environmental Policy Act (NEPA), established among its objectives to "achieve a balance between population and resource use" and to "enhance the quality of renewable resources and approach the maximum attainable recycling of depletable resources." In 1968, Congress established The National Water Commission, which was charged with "finding alternative means of conserving and making more efficient uses of existing supplies" (Greenberg and Hordon, 1976). Clearly, at the federal level there is a mandate for water conservation. The question is how to effectively and pragmatically achieve such an objective.
Although cities in arid zones have historically been more interested in water conservation, in the late 1980's a wide array of water conservation strategies have been implemented throughout the country. Comprehensive programs have realized notable successes in such cities as Dallas, Los Angeles, Boston, Seattle, and Hyattsville, Maryland (Grisham and Fleming, 1989). These and other urban areas employ one or more of the following methods of demand reduction incentives: 1. modified plumbing codes, requiring 1.6 gallon "ultra low" flush toilets targets the single largest residential water use; 2. retrofitting showerheads, toilets, faucets, and heating/ cooling systems with more efficient units; 49 3. xeriscapin2, which maximizes use of vegetation demanding less water through appropriate landscape design; 4. water audits, in which inefficient fixtures are noted, and water consumption is documented in as small an area as possible, as frequently as possible; 5. leak detection, where state-of-the-art equipment can detect water loss in underground distribution systems; 6. universal metering, where every residential, commercial and industrial water customer's consumption is measured (enabling pricing based on actual use); 7. reuse of '2reywater' (once-used water) for use in industry and other processes not requiring "quality" standard water; 8. public education programs to heighten awareness of the need to conserve water and how to do it, and 9. water use restrictions in times of shortages in supply.
According to many authorities, the use of pricing possesses the greatest potential in reducing demand. However, it remains perhaps the most under used of all the water conservation strategies. In the implementation of such a conservation method, authorities should maintain the goal of minimizing any adverse impact of price increases on poor and disadvantaged populations.
Since governments have subsidized capital improvements in resource development and distribution systems, utilities have little incentive to employ traditional market pricing mechanisms which directly relate peak demand with corresponding higher prices (Greenberg and Hordon, 1976). Artificially low prices and flat and decreasing block rates which actually encourage consumption are still common throughout the country.
Water systems vary in their size, service areas, sources of supply, and capacities. They all share commonalities, including large fixed costs, and supplies which are negatively correlated with seasonal demand. In 1966, supply acquisition and distribution represented 74.2% of all capital costs of the nation's urban water systems (Mushkin, 1972).
Most water utilities practice pricing policies which not only ignore scarcity rents but also "base price on average, instead of marginal, explicit extraction cost" (Moncur and Pollock, 1988). Average cost pricing is based on the median cost of supplying product to all consumers. Marginal pricing is based on the actual cost of service to individual customers or consumer types. The general embracing of average cost pricing is due largely to the regulation and public ownership nature of water suppliers, where the common perception of such enterprises is that they are non-profit in nature (Moncur and Pollock, 1988).
Price levels are a function of demand, costs, subsidies and regulatory constraints. Price rates, however, may be structured "to encourage water conservation, reduce peak demand, attract industry, or help meet other goals" (Goldstein, 1986).
A flat (or uniform) rate is a standard price charged per unit, regardless of quantity consumed. A declining block rate is a structure in which each succeeding block of water consumed is priced at a lower rate than the previous block. Depending on the current structure in place, neither method provides incentives for conservation or equitable distribution of relative expense of water consumption between large and small users. Lippiatt and Weber (1982) reported decreasing block rate schedules accounted for 60% of the water supply systems in the United States, 69% in Belgium, and 34% of residential Canada (where 62% of systems are on fixed rates) (OECD, 1987 Two rate structures providing incentives for conservation are peak rates and increasing block rates. Peak rates increase prices during periods of peak demand (usually the summer months) either for all water consumed, or only that amount over average (off-peak) use. Increasing block rates are provide succeedingly higher prices for increasing increments of consumption. Peak rates have other advantages, including the generation of additional revenues at a time when capital maintenance and improvements customarily take place, and allows the utility to maintain off-peak rates as low as possible (Goldstein, 1984). Increasing block rates can prove to be a significant burden to large industrial consumers. It is also noted that block and peak rate structures require metering (as do other pricing structures) for each customer, in order to document consumption. Spatial Rate structuring has yet to gain popularity as a pricing method.
In this pricing scheme, long-term marginal cost increases incurred by the expansion of a utility's service area is reflected in rates based on geographic proximity to the source of supply (Mushkin, 1972).
So what are the constraints to implementing water pricing mechanisms which might encourage conservation? There are actually several incentives to maintain flat and decreasing block rate structures which are based on average costs.
The historic underpricing to consumers is probably the single largest inhibition to progressive pricing. In Providence, previous to March 15, 1988, water rates had been raised only four times in 62 years (Wyss, 1988). This is due in part to the fact that PWSB profits from the sale of Scituate water to other systems helps subsidize rates within the municipality. Water supply officials and the general public have come to regard water supply as a public service. Regulated prices have failed to take into account the full cost of supplying water to the public, and capital shortfalls have had to be covered with public subsides. The use of full-cost pricing represents a version of "sticker shock" to consumers. Indeed, as a result of an initial stab at covering longrange projected costs, the typical residential customer of the Providence Water Supply Board was projected to experience an increase of 49.9%, from $45.25 to $67.85, over the one year period ending March 15, 1989(Wyss, 1988. Even with this increase, Providence"s rate is one of the lowest in the state. Clearly, public recognition and support of progressive pricing measures is critical to the success of their use. Customers often have just a vague concept of water supply technology and financial considerations, and fail to recognize the true correlation between prices and actual costs of their service. In most cases, the rate-setting process is subject to intense political opposition to rate increases. "If no observable problem exists with the water supply system, citizens may consider rate increases unnecessary" (Goldstein, 1984).
The question is then raised of the appropriate management approach and pricing strategy which might provide realistic conservation opportunities for Rhode Island. If water utilities were to become financially self-sustaining, all direct and indirect costs would be recovered through consumer payment for services, even if price levels have to increase to cover the loss of public subsidies and other traditional income sources.
If political hurdles could be overcome, there are several benefits to such 'full cost' pricing. Conservation would be encouraged with the elimination of subsidies. Line items for maintenance would increase, raising the life expectancy of fixed assets. There would be increased incentives for improved administrative and financial management and planning. A change to full-cost pricing would draw public attention to the true value of water.
The rate structure of choice among municipal water systems located in regions in which water is considered a valuable commodity is seasonal 55 increasing block rates. The city of Tucson, Arizona achieved a 28% reduction in residential demand phasing in such a rate structure from 1975-79, and Santa Fe, New Mexico (which has one of the highest water rates in the country) reduced demand 39. 4% between 1974(Grisham and Fleming, 1989. There are two variations of seasonal rate schedules. The first is a simple winter/summer differential, which is relatively easy to administer. The second is a summer "excess charge" which is applied to summer consumption greater than (a) winter consumption, (b) winter consumption plus a percentage allowance, or (c) a given quantity per consumer" (OECD, 1987). Fairfax County, Virginia realized a 6% demand reduction from 1974 to 1980 by increasing the rate from 70 cents to $2.45 per 1000 gallons for summer use 1.3 times winter use. In Dallas, Texas, by charging a surcharge of 5 cents per cubic meter for all summer consumption over 120 cubic meters per month, the city achieved a peak day demand decrease of 12% on the previous 5 year maximum (OECD, 1987).
A pricing strategy which promotes conservation is to combine water and sewer rates. Both are based on water consumption, and are related by nature, as 'both ends of the pipe'. With this, consumers should become more sensitive to how much water they consume. Additionally, if water customers are billed more frequently (perhaps monthly or quarterly, rather than once a year), they will better appreciate their seasonal consumption patterns.
Seasonal and increasing block rate pricing structures and the assumption of full-cost pricing accounting represent the modern approach to comprehensive 56 water management. Comprehensive databases and modem management and accounting practices are required to achieve a relatively high standard of sophistication. By ending public subsides and implementing traditional market demand pricing based on marginal rather than average costs, consumers have the opportunity to respond to rates which are based on considerations such as periods of peak demand, the expense of extending a water supply distribution system, and consumption over prescribed levels. This approach is fundamental to the success of any serious municipal conservation effort.
Clearly, there are several water resources management models in existence which effectively consolidate and integrate critical functions in a comprehensive manner. The most important features of most models are the institution of watershed districts, the combining of supply and demand management, the addition of waste water responsibilities to traditional supplyorientation, the maintenance of infrastructure at the regional level, and the promotion of conservation by such means as retrofitting, public outreach, and progressive pricing structures. As the pressures of land development and concerns of environmental impacts increase, the need for more centralized and comprehensive planning increases.
Instead, the legislature has spread regulatory and planning authority and responsibilities among several state agencies.
Today a system exists in which local systems operate under a plethora of a state and federal command and control regulations. There are significant gaps and overlaps in these rules, and a general lack of coordination of efforts at the state level.
At the same time, other states are beginning to recognize that simply imposing a multitude of environmental protection and conservation measures upon local systems is like lassoing fish in a stream. It takes an inordinate amount of energy to impose the collective will of the larger geopolitical entity upon local systems who have a generally decent track record of service and operate within a maze of incrementally developed devices which often overlap or contain gaps in coverage.
A "comprehensive approach matrix" (figure 8) provides an opportunity to evaluate an approach to water resources management. At one end of the spectrum, water is managed as a public commodity, with the focus on maintaining adequate supply. This approach is called supply management.
At the other end of the spectrum, water is managed as a scarce resource. In addition to a focus on supply management, this approach 60 emphasizes demand mana2ement. In this scheme, methods which promote the conservation of water are employed.
lnte~ration is an additional measure of the potential effectiveness of a system. It is the degree to which the efforts of all agencies and parties relating to the management of water resources are integrated. This spectrum ranges from a segmented organizational structure to an integrated approach. By all indications, the state is moving in the direction of a more centralized and comprehensive water resources management approach.
However, there is a question whether Rhode Island is being aggressive enough, given the serious and growing threat of contamination of water supply sources.
As public demand increases and spreads out geographically and more and more of the state's population abandons local sources for the primate Scituate system, one has to wonder at what point the government must recognize the realities of Rhode Island's "spaceship" economy, and take appropriate action.
In order to place a premium on the importance of fresh water as a critical resource for the health, safety and welfare of the people of the State of transmission lines to water authority distribution systems, coordination of policy and operations of water authorities, and coordination with waste water management systems. This office would plan and administer the distribution of supply to the various water authorities.
Finance would be resemble the present Water Resources Board in its capacity as a central clearinghouse for grants and loans for capital improvements of transmission lines, pumping stations and treatment facilities. In addition, the finance office would administer water supply transactions with the water supply systems, as well as the acquisition of land and conservation easements in wellhead protection districts and watershed areas of critical concern.
The Program Development office would focus on creating comprehensive programs designed to further protect water supply resources, develop a common database on supply, demand, environmental concerns, and financial conditions of all public water resources and waste water management systems in the state.
In addition, this office would manage a central residential, industrial, institutional and commercial statewide conservation program, and maintain and accounting of the condition of water transmission lines.
A key feature of the new authority would be the RIWRWWA Planning RIWRWWA would control all sources of public water supply and main transmission lines between water systems. As in the case of the MDC in Massachusetts, it would be desirable to allow the PWSB and others to retain current water supply operations within the new hierarchy. This would centralize water supply management, and ensure consistency in meeting state water quality standards. This would also relieve local water systems of such responsibilities and allow them to focus on managing transmission systems at the local level.
This clear administrative delineation would create a sense of parity between water authorities as they would have a similar function, even though their service areas may vary in size and demand. This would also allow a certain uniformity in the relationship between the state and each water authority.
Instead of one city system dominating the Rhode Island region, the state would assert itself into the lead water resources management role, affording the opportunity for planning and management based on a regional perspective.
Another important benefit of this proposal is the ability for RIWRWW A to create a regional uniform pricing standard. Wholesale prices to water utilities would be based on increasing block rate and peak rate structures, and would address the need to balance the present spatial cost inequity experienced by systems such as Bristol County . State guidelines would provide incentives for local systems to adopt similar structure standards, and to establish residential retrofit programs for those in need of offsetting the inevitable rise in rates.
There is precedent for taking such action. In the area of waste water management, the General Assembly has established the Narragansett Bay Commission and Blackstone Valley District Commission. These quasigovernmental state agencies have relieved municipalities of waste water treatment functions, providing service on a regional basis. In the area of solid waste, the state has established the Solid Waste Management Corporation (SWMC), which operates a central landfill facility for all communities who may no longer legally operate municipal dumps within their borders. Operating capital for SWMC comes from a surcharge on "tipping fees" (service charge per truckload).
Given that most of the sources of supply and all transmission lines are presently owned and operated by local water authorities, it would be necessary for the state to compensate those from whom these facilities would be acquired. In the enabling legislation establishing RIWR WW A, a number of compensation options could be considered. It would appear a fee simple or eminent domain acquisition of wellhead areas, surface supplies, watershed protection districts and main transmission lines would be undesirable due to the immense cost to the state and the ultimate loss of local control of these resources. Instead, it would be desirable for the state to acquire these resources through long-term leasing of property and water withdrawal rights. Part of the compensation could include some quid pro quo agreements relating to wholesale water discounting and/or preferred financial assistance opportunities for authorities, depending on the amount involved in each transaction.
Recognizing the importance of linking water supply and waste water management, under the RIWRWA legislation, quasi-public waste water treatment programs would be absorbed into the new agency. A common database and billing arrangement with corresponding water authorities would be an objective of this move. Municipal waste water management agencies would be required to coordinate their practices with water departments.
There are many advantages to this new scheme. Making water resources more centralized in structure and and more regional in perspective would allow coordinated program development, long-range planning for maintenance and repair of aging systems, centralized pricing rate structure, and reducing of disparity between systems with ample quality water and those experiencing problems (especially in drought conditions). Further, surface and groundwater supply protection measures would fall under the purview of a central authority.

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Water authorities would also derive benefits. The larger systems would no longer be saturated with the abundance of federal and state regulatory actions. They also would fall from the purview of the Public Utilities Commission, and would be encouraged to price water according to the rates they would pay RIWRWW A for their supply.
This proposal is politically feasible. There are precedents both within the state and in other areas of the country. With its small size and relatively centralized state government structure, Rhode Island is in better position to enact such a comprehensive measure than almost any other state in the nation. As it has already done in the areas of solid waste management, recycling and municipal comprehensive planning, the Ocean State has the opportunity to move into the national vanguard. RIWRWWA represents an new approach whose time has come. 69