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Explaining water rate increases

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Explaining water rate increases

Some water utilities around the North America (Denver Water and Magnolia Utilities in Arkansas, for example) are announcing planned increases to water rates. Rate increases aren’t usually celebrated by consumers – especially among households struggling to meet essential needs -- but it’s worthwhile to consider for a moment why they are necessary.

Most importantly, it is crucial that we have access to safe and clean water, which is vital to several aspects of our daily lives.

Many dedicated people work very hard to ensure safe water reliably arrives at your tap. Maintaining – and in some cases improving – water pipes and treatment plants is an ongoing and expensive endeavor. AWWA’s report, Buried No Longer, in 2012 estimated a $1 trillion price tag to address aging drinking water infrastructure over 25 years in the United States alone.

AWWA’s Plain Talk Series explains how utilities spend their rate payers’ money. “Water suppliers have fixed costs—salaries, hydrant maintenance, mortgages and so forth. They must collect this money regardless of water use, so when water volume goes down because of conservation by the public, the cost of each gallon of water used sometimes is raised to provide the water supplier with the money it needs to maintain its system. However, water conservation can eventually lead to stable rates for a longer period of time, because capital improvements or new investments can be postponed if demand does not increase.”

Denver Water, which serves 1.5 million people, uses its rate revenue on capital projects, such as expanding a reservoir, building a new water treatment plant and implementing a lead service line replacement program.

After relying on grants to cover capital improvements in 2022, Magnolia Utilities will be using a two percent increase to water rates and one-fifth percent increase to sewer rates to keep up with evolving treatment costs and repair parts of the sewer infrastructure.

If you think about what it takes to collect, treat, and deliver, water remains a huge bargain. It provides huge health and hygiene benefits, and the convenience of having water flow from your faucets, showerheads and toilets on demand, every time you need it, is immeasurable and invaluable.

| Categories: | Tags: rates, afford, affordability, bills, consumer, pay, money, capital projects, infrastructure, improvement, Denver, Magnolia, Arkansas, Plain Talk, increase, Buried No Longer | View Count: (517) | Return
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