Managing Costs in Small Drinking Water Systems: Cost Recovery, Affordability and Revenue Shortfalls in the Alberta Context

Abstract

This thesis investigates the cost of providing drinking water to municipalities with populations less than 1 000 in Alberta, Canada. Unit costs were found to vary considerably with the volume of treated water and the type of source water. Of the 25 communities investigated, only one community recovered the full cost of treating drinking water, two communities recovered their portion of the capital costs as well as the marginal costs, while seven communities recovered the marginal cost of treating drinking water. In each scenario, the remaining communities recovered less than the cost.

Revenue and cost of drinking water treatment were evaluated in order to project the population below which revenue shortfalls can be expected. Recently published cost equations predict that revenue shortfalls will occur at considerably higher populations than predicted by the StatsCan-CRP equations. Alternative solutions are provided for decision makers to consider when planning water treatment plants for communities with small populations.