Water Affordability: Who's going to pick up the check?
Who is responsible for your water bill? If you're an ordinary college student living with your parents or on your own with all utilities included, you probably don't think about this matter very often. Unfortunately, many people living in disadvantaged neighborhoods do not have the luxury of not thinking about this issue, especially with water prices rising on a daily basis. Affordability of water and wastewater is regarded as a component of water equity. Water affordability refers to the ability of all residential customers in a utility's service region, regardless of income, to pay for water and wastewater services without having to abandon or diminish other necessary expenses such as housing, meals, medications, transportation, or other utility services. When water is affordable, money is never an impediment to receiving safe, clean, and dependable services. When water is unaffordable, cost is a key barrier, causing customers to miss payments and accumulate water debt.
Now that we've covered the fundamentals, let's take a look at how this is influencing us now and in the future. Water and wastewater service costs have increased by more than 43% in the last decade (about 2012-2021), with the average monthly combined water and wastewater bill reaching $111. This poses a consequential risk to low-income households, which spend an average of 12.4% of their monthly disposable income on water and wastewater bills, a 1.5% increase in only two years. According to Water Resources Research in 2022, water infrastructure investments are likely to reach $1 trillion over the next 20-25 years, significantly increasing service costs. Furthermore, they’ve discovered that roughly 1 out of every 10 homes spends more than 4.5% of their yearly household income on water and sewer service, and that affordability issues are connected to race after accounting for poverty levels.
Looking on the positive side, the lovely Garden State (aka New Jersey, my homeland) has recently enacted a new bill requiring public reporting in order to enhance water utility affordability. The law requires all water, sewer, electric, and gas companies to post affordability statistics on a monthly and zip-code basis, including rates, average and median customer bills and use, overdue debt, shutoffs, and tax liens sold on properties for nonpayment. The State Board of Public Utilities will be required to publish quarterly reports that analyze whether current assistance programs meet the needs of consumers who are behind on their utility bills.
With this new law, New Jersey now has the most stringent regulations for utility affordability in the country. Similar legislation applies in Illinois and California, although only investor-owned utilities are required to disclose this information. In New Jersey, public water systems serve 60% of the population and investor-owned systems serve 40%, and the new law applies to both. This is essential for water affordability because it would allow public water and sewer agencies to cut water, sewer, and stormwater utility fees for low-income residents.
All in all, with researchers working diligently to discover equitable water rates and new customer assistance programs emerging on a daily basis, we're on the right track toward everyone having access to safe, clean, and affordable drinking water and wastewater services.
In addition to all the efforts, community participation and outreach to residential water and wastewater customers would be impactful. This is critical for comprehending the issues and satisfying the demands of the local community. Education occurs when the utility sends information to the community, but engagement and outreach occurs when community people join in the discourse. Utilities can then leverage their customers' expertise and feedback in their communities to inform their work. Water affordability is achievable; we simply need to work together to make it happen.
Cardoso, D. S., & Wichman, C. J. (2022). Water Affordability in the United States. Water Resources Research, 58(12). https://doi.org/10.1029/2022wr032206
DiFilippo, D., September 20, N. J. M., & 2022. (2022, September 20). New law aims to improve water utility affordability by requiring public reporting. Retrieved May 30, 2023, from New Jersey Monitor website: https://newjerseymonitor.com/2022/09/20/new-law-aims-to-improve-water-utility-affordability-in-requiring-public-reporting/
Hara, M., & Take, J. (2022). A Promising Water Pricing Model for Equity and Financial Resilience (pp. 1–38).
Teodoro, M. P., & Saywitz, R. R. (2020). Water and sewer affordability in the United States: a 2019 update. AWWA Water Science, 2(2). https://doi.org/10.1002/aws2.1176
Up 43% over Last Decade, Water Rates Rising Faster than Other Household Utility Bills. (2021, August 23). Retrieved from Bluefield Research website: https://www.bluefieldresearch.com/ns/up-43-over-last-decade-water-rates-rising-faster-than-other-household-utility-bills/
Disclaimer: All information, content and materials on this blog are for general information purposes only. Any opinion expressed by the author is not necessarily the opinion of Penn Club H2O or University of Pennsylvania.