The cost of water

hw coverHow many times have you heard someone say that water is cheap, priced well below its value? Probably a lot; and probably, like me, you’ve even said it yourself. Now imagine the opposite; imagine what it would be like if water was priced above its value. That’s much harder to envision, isn’t it? For some, though, water may already be too expensive.

Wrote David LaFrance in his column for the July issue of the Journal AWWA. Some cannot afford the water they need, but in the future we may not have the luxury of ‘low’ water prices. LaFrance notes that most utilities understand it’s important that water be affordable, but asks

Who is to say what is affordable and what is not and how that can be measured?… When properly set, the price of water and wastewater services is based on the cost of providing those services. For good reasons, the cost-of-service rate-setting methodology does not address the concept of the ability of each customer to pay.

LaFrance notes that rates will continue to increase.

Through the Winter 2013 issue of Headwaters magazine, CFWE reported on rate setting and the rising cost of bringing water to your faucet, and costs are rising.

Water rates have surged in the past decade, doubling across much of Colorado. Nationally, according to the American Water Works Association, water and wastewater charges for 1,000 gallons of water have increased annually by 4.7 percent and 4.9 percent respectively– a rate nearly double the annual Consumer Price Index increase of 2.5 percent.  (By comparison, the average electricity rate in Colorado increased by just 1.6 percent between 100 and 2011.) At the same time, the roles of water and wastewater utilities have changed, and the environment they operate in is wrought with expense. “I don’t think we’ve done a good job of making people understand, appreciate and support why our water bill is what it is,” Binney says [Peter Binney is manager of sustainable infrastructure for Merrick & Company and former director of Aurora Water].

Read more to discover the elements incorporated in water rates, why and how rates are on the rise and to learn more about water and wastewater utilities. From meeting the needs of growing communities and updating old infrastructure to meeting the requirements of new regulations– water rates deliver the water our communities need.
The US Environmental Protection Agency (USEPA) uses different measurements to assess water and
wastewater affordability, writes LaFrance.

For wastewater there is a twopronged test that includes the impact on individuals (as measured by median household income) and the community itself (as measured by a series of economic indicators). For potable water, however, affordability is measured on the basis of the impact to small communities in aggregate…The need to make sure that drinking water is safe and that wastewater is clean is important to everyone— whether they fall above or below the median. As providers and managers of the most precious resource on earth, we and the USEPA need to ensure that the price of water remains affordable for all customers—not just the top half of earners.

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2 Comments

Filed under Colorado Foundation for Water Education, Headwaters Magazine

2 responses to “The cost of water

  1. Pingback: Water Rates: New Financial Sustainability Tool and Webinar | Your Water Colorado Blog

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