In Brazil, Water Is Power

Of the many stories I heard about the drought while I was in Brazil earlier this month, one stands out: a colleague was riding the elevator in her building and saw a note from a concerned neighbor. "Dear neighbors," the note read, "As you know we are in a severe crisis. Everyone must do their part to conserve water. That is why I have decided to only wash my car once per month. I hope everyone else can make a similar sacrifice."

I had just spent five days in Sao Paulo, visiting electric utility executives to imagine how software technology could better engage their consumers toward addressing the deepening crisis. Twenty million people live in Sao Paulo, which is suffering its worst drought the metropolis has seen in nearly a century. A couple of weeks earlier, during Carnival, some towns in the region had canceled street parades for fear there may not be enough water to clean the streets or cool down the crowds. Officials from Sao Paulo's water utility, Sabesp, had already begun rationing water.

The last time Brazil faced a water crisis of this magnitude, a small private utility -- the Sao Paulo Railway and Light Company -- was at work constructing the foundation of a modern infrastructure to supply water and power. Today, Brazil's system of reservoirs and dams provide not just drinking water; they supply more than three-quarters of its electricity generating capacity. So as the Cantareira's stores fluctuated like a dollar stock -- dipping to just five percent of capacity in early February  -- Brazil's utilities braced for an energy crisis.

The city and the utilities have begun awareness and conservation campaigns. Sao Paulo has set up booths around town to distribute faucet aerators. Eletropaulo  --  the massive Sao Paulo electric utility which grew out of the Railway and Light Company  --  was considering how to communicate Brasilia's new tariff warnings to consumers, which adjust the rate price of electricity according to the level of water in the reservoirs. Sabesp, the city's water utility, has begun to identify additional reservoirs that could funnel water into the starving Cantareira.

In spite of these efforts, there is one resource that Brazil is ignoring: its consumers. Provided with the right information, and engaged at the right time, millions of consumers could help stem Brazil's water crisis by saving water and electricity.

There are three things in particular that Brazil should do:

First, Brazil should encourage its electric utilities to provide consumers with better information about their energy consumption. Behavioral science tells us it's easier to save when we know how much we're using and how much our usage compares with others. Think about what happens to your driving, for example, when you see your car's gas mileage on the dashboard. Opower, the company for which I work, has proven this technique in partnership with nearly a hundred energy utilities around the world.

Brazil should try this with the water utilities, too. If the good Samaritan who had left a note in my colleague's elevator saw that most Paulistas  --  as Sao Paulo natives are known  --  wash their vehicles less frequently, maybe she would have felt less inclined to keep hers shiny and clean.

Second, policymakers in Brasilia should equip utilities with the right incentives to pursue smart policy. Because utilities are businesses, they survive on revenues. Convincing them to seriously pursue efficiency requires changing their incentive structure. When properly incentivized with cost-recovery mechanisms, utilities can form the institutional backbone of a system that scales quickly and cheaply, and advance good policy for the good of society. Research and experience bear this out: People trust their energy provider for information about energy; they want their utilities to give them more information about how they can save; and they are hungry for personalized information about their own consumption. Many governments in the U.S. and Europe have implemented innovative policies that remove the natural barriers that energy businesses face in pursuing efficiency. These policies could be implemented quickly in Brazil, too.

Finally, Brazil's utilities should take advantage of the technology that its peers in banking, telecommunications and transportation have already deployed to great success: proactive, preventative and personalized communication. I doubt it comes as much of a surprise that people generally spend little time thinking about their energy consumption. People are busy. Energy is boring. So utilities need to leverage technology and know-how to engage with their consumers when it really matters. For example, an electric utility that can warn its consumers when their headed for a high bill can reach consumers when it still counts  --  before the bill comes, and while the consumer can still save.

Implementing these three ideas would be a relatively quick and inexpensive way to help Brazil save a lot of water. This year, by engaging millions of consumers in places that have pursued these simple practices, Opower will save more electricity than is generated by the dam at Sao Paulo's largest reservoir. If Brazil tapped water and power consumers as a resource, maybe Sao Paulo could replenish its wells.