QUESTION:

I have a friend who lives in San Antonio, Texas who bought a 1.6 gallon toilet and the San Antonio water department gave him a $75.00 rebate.

I called Phoenix Water Customer Services and asked if Phoenix offered such a rebate, and was told no. I was advised the toilet was a water conservation benefit to me. I agree but doesn't this not benefit the city at well?

What I don't understand is that living in a desert city where water should be our most treasured commodity I am just curious why Phoenix of all cities does not provide rebates.

ANSWER:

You pose an interesting question: Why does San Antonio offer a $75 rebate for the purchase of a 1.6 gallon toilet and Phoenix does not?

There are several reasons, but the primary one is that such a payment would exceed the value the city would receive from making it. That is, we would not see $1 worth of savings for each $1 spent. To give out rebates in excess of the value of the saved water would be fiscally irresponsible on our part. To do this on a grand scale would result in either a rate increase, or a tax revenue subsidy to pay for it. In either case, as a Phoenix water customer and a Phoenix resident you and other citizens would foot the bill. We don't think that is what the citizens of Phoenix want.

San Antonio's water supply situation -- and maybe more importantly their wastewater treatment capacity -- is different from Phoenix's. Their need to cut water use or reduce sewer flows may be much more critical and a $75 payment is prudent -- IF it stimulates a toilet change-out that would not otherwise happen. If it is just a reward for replacing a toilet that had to be replaced anyway, then San Antonio has spent $75 they did not need to expend. There is no need for, or any value to, providing an incentive if someone has to take the action anyway. At the present time, the only toilets on the market are 1.6 gallon capacity ones. Anyone who has to buy a new toilet will buy a 1.6 gallon model. I suspect if you check with your friend in Texas, you will find he did not change out his toilet because of the rebate, but rather because he had to. He is what economists call a "free rider." He took the rebate for doing something he had to do anyway. Who would not have done so? Were we to offer rebates, research shows us that they would mostly go to free riders. Paying someone to do something they were going to do without the incentive would also not be a fiscally prudent activity.

Phoenix studied a rebate program as early as 1992; and even evaluated the programs Glendale and Tucson Water had launched. No matter how we stretched the life cycle of the replacement toilet, the best we could come up with was a possible $30 payment. At that time, there were still 3.5 gallon capacity toilets on the market and a rebate might have impacted some customer's buying choices. Thirty dollars, however, was less than half of the difference between the price of 3.5 gallon toilets and the 1.6 gallon models on the market at the time. Additionally, there were problems with the early 1.6 gallon models, often resulting in double flushing and, ultimately, the removal of these toilets. We opted not to get into the rebate business.

Since 1990, all permitted new construction and all permitted reconstruction or renovation in Phoenix requires the use of 1.6 gallon toilets. In 1992 Congress passed the Energy Policy Act which prohibits the importation or interstate shipment of any toilet not complying with the 1.6 gallon per flush standard. The same year the Arizona Legislature passed a law prohibiting the sale of any toilet not in compliance. With these restrictions in place, we believe time and natural attrition will eventually end in replacement of older toilets without offering a rebate.