05/26/2011 22:08

“Guilty until proven innocent” billing by utilities does a disservice to local consumers.
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In recent weeks, the Israeli investigative TV program Kolbotek has been airing a series on the method used by the water companies to charge customers. The story begins with faulty water meters: • One resident opens his faucet and the meters of all the neighbors begin to spin.

• One building uses water privately and the collective meter of the neighboring building turns.

• Medium-size buildings receive water bills that are more appropriate for a public swimming pool.

But this in itself is not the story.

Plumbing and metering systems are complex and confusing, and frequent mishaps are to be expected.

The real ethical issue is the reaction to these issues.

In billing disputes, water customers, like other utility customers, are in effect guilty until proven innocent. If the measured water consumption is excessive, the presumption is that there is a leak in the system, and it is the responsibility of the residents to find and repair the leak, or to prove to the utility that there has been a mistake.

In response, National Infrastructures Minister Uzi Landau ordered a committee to examine the findings and recommend an appropriate response.

What is the source of the problem, and what is the solution? An ideal billing system is one with maximum accountability. Accountability means that each side has the incentive to fulfill their responsibilities properly and pay for failure to do so.

The current system is good at making the consumer accountable: Individual water meters for each living unit make each family watch its water use; and the collective charge means that building residents will be on the alert for signs of a leak – one that they are presumably in the best position to detect.

But accountability is lacking for the utilities. Their job is to maintain the monitoring system so that it works accurately and equitably. If it doesn’t, they should lose. But they don’t; in fact, they actually benefit, since the mistakes typically involve double counting, enabling the utilities to receive payment for services they never rendered.

Private residents are the experts in economizing on water use, but the utilities themselves are, or should be, the experts in rectifying problems with the complex and frequently inaccurate measuring systems.

The average householder doesn’t know anything about underground leaks, crossed meters and double counting. Whenever a reasonable suspicion of a measurement problem or hidden leak arises, the water company should have the responsibility to send its experts.

Having the residents invite a regular plumber is a terribly ineffective solution; the average plumber is not an expert in measuring systems, especially not in the complex interaction among them, Kolbotek reported. If the utility was responsible for this, they would have a small number of plumbers or engineers who would rapidly become experts in this area.

It follows that the “guilty until proven innocent” billing system perpetuates the current lack of accountability. Once there is a reasonable suspicion of a problem affecting the whole system, the default response should be for the residents to be given an exemption, or even a refund, on undocumented excessive use.

Kolbotek suggested that there is a simple plumbing solution to the metering errors. The average person could know about this solution only through an investigative journalism program, but the water utilities should know about it as part of their professional training. If they don’t, then having to pay huge refunds would give them the incentive to find the answer rapidly; certainly they, and not the consumers, are in the best position to consider solutions.

An improved billing system would go a long way toward introducing accountability and efficiency in public utilities.

Asher Meir is research director at the Business Ethics Center of Jerusalem, an independent institute in the Jerusalem College of Technology (Machon Lev).