The Water-Energy Nexus Hell - Higher Costs and Declining Revenue

Water and energy share a common concern.  Both industries rank as our most capital intensive.  Revenue growth matters to both industries - - both are in their comfort zone when revenue growth in electricity and water mirrors GDP growth.  But times are charging for both industries.  How would you like to manage in an era where your costs are going up 2% annually while your revenue is flat - - or actually declines?

Consider the following from the Wall Street Journal yesterday by Rebecca Smith, Electric Utilities Get No Jolt:

"Sluggish electricity demand reflects broad changes in the overall economy, the effects of government regulation and technological changes that have made it easier for Americans to trim their power consumption. But the confluence of these trends presents utilities with an almost unprecedented challenge: how to cope with rising cost when sales of their main product have stopped growing."

We are probably entering an era of disruptive forces - rate increases feedback loop.  Yes, you were a good economically inclined citizen and customer and you did the energy/water conservation projects.  And yes, you cut your energy/water consumption by 15% annually.  But a bunch of your neighbors did the exact thing that you did.  Revenue at the local water utility dropped by 10% and they cannot cover their fixed costs. You may never see the full savings and benefits of your conservation projects - - your rate will be going up by 10% next year.