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03

Making water and water services affordable

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Making water and water services affordable

We're tackling a difficult topic today, but bear with us because it's an important one. We all know the importance of having access to safe and clean water and how vital that is to our daily life, but something we don’t always consider is the cost of that water.

Behind our water service are many people working hard to treat it and then distribute it to our homes and businesses. They are also working to maintain the water plants and systems while keeping water service as affordable as possible – because it's our water bills that make it possible for water providers to get their important job done.

Unfortunately, those bills are going to go up in the coming years and finding ways to protect vulnerable customers who may not be able to pay has become a critical issue for water providers.

Rates across the U.S. are already rising and will continue to do so as water providers repair, replace and expand the country’s aging drinking water infrastructure. According to AWWA’s Buried No Longer report (2012), the price tag for this expansion is at least $1 trillion over 20 years. And that does not include the cost of addressing wastewater infrastructure.

Clearly, the path we’re on is unsustainable. Some in our communities already can’t afford their water bill, and with water rates on the rise, those in need will be pushed further down into debt. So the question is, is there a path forward to make water and water services more affordable?

A guide released by AWWA and several other water associations, with the help of the University of North Carolina’s Environmental Finance Center, focuses on the opportunity to help those in need through rate-funded customer assistance programs, or CAPs, while recognizing the need of raising water rates. This guide encourages utilities to work within each state’s regulatory and legal framework to introduce CAPs to their communities.

An article in last October’s issue of Journal - American Water Works Association further addressees this topic, making the case for CAPs to ease the burden of paying water bills for low-income households but also to ease the burden on water utilities having to collect on those bills. “Frequent service shut-offs and resolving bad debt from customers who cannot afford their rates can be more expensive for a utility than instituting a CAP and assisting customers in paying their bills,” the article states.

In Philadelphia, a city with a high poverty rate and rising water and sewer rates, 40 percent of customers are behind on their water bills. The city aims to lift that burden by use of a tiered assistance program (TAP) that, according to Water Finance & Management magazine, “has been designed to insulate the poor from rising water rates, while mitigating the rise of late and unpaid water bills.”

Similar programs are in place to help citizens in Detroit and Halifax, Nova Scotia (Canada) too.

These are just a few examples, but it's clear the water community sees this issue and is taking it seriously. The mission of each and every U.S. water utility is to protect public health and safety, provide services that support the economy and assure a high quality of life. All of this must be accomplished in a way that is affordable to all customers.

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