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Understanding Why Water Costs are Rising Across the U.S.

Rising water prices affecting families in search of economic relief
Understanding Why Water Costs are Rising Across the U.S.

Water has always been at the forefront of many debates because it’s a significant part of daily life. From bathing to cooking, doing laundry, and brewing a morning cup of coffee, people use water for everything. 

Families across the U.S. are learning that water is slowly becoming a commodity. According to Bluefield Research, water prices for U.S. residents have grown at an average rate of 5.5% per year since 2012 - outpacing inflation and other goods like food and gasoline - with average residential monthly bills rising by nearly 50%. This blog post intends to answer the following: 1) what regions are most affected, 2)Where do these numbers come from, 3) how do they break down across the country, and 4) Do environmental factors affect them?

Regions affected by price increases

Water Prices are surging across the country, with some areas significantly more affected. One of those areas is Baltimore county, where water has increased at an annual rate of 15% to help rehabilitate inadequate water and sewer systems. From 2018-2019 the increase for water and wastewater bills averaged $26.50 more per household. 

In El Paso, Texas, residents saw a 4% increase in water rates and an 8% increase in wastewater during the 2019-2020 fiscal year. Other cities affected by water price increases include San Diego, Cleveland, Durham, North Carolina, and Lowell, Massachusetts. 

Residents shaken by bill increases they don’t understand are demanding answers from water utilities. The situation highlights the lack of information residents and homeowners have about how water utilities treat and measure water and how they operate.     

How pricing models work

There are two kinds of water utility companies, also known as “private” or “public.” 

Private utilities are owned by individuals or single families, by real estate firms, or by mobile home park operators. On the other hand, public water utilities are those that issue stock their investors publicly trade. 

In the United States, privately owned water utilities only make up a handful of all water utilities. Most water systems in the United States are publicly owned by municipalities, counties, authorities, and government districts. One of the most considerable distinctions of public water utilities is that they operate on a not-for-profit premise.

In some cities, water companies set the rates and then bill the city or county for use. In other regions, the water utility is run and operated by the city.  

A primary example is Baltimore County and the city of Baltimore who share the cost of water utilities operated by the Baltimore Department of Public Works. The city of Baltimore is responsible for the water service for the county. It works via the department of Public Works who factors in county customers’ total annual water usage, and uses it to calculate how much the county owes the city.

 A considerable difference that sets water utilities apart is that each jurisdiction sets its rates and fees for water and sewer using a different rate model. Selecting a suitable rate model comes with its challenges.  

Water utilities must set their rates high enough to recover the cost of providing and treating water, and only some water companies operate using a fixed-rate structure. A fixed-rate system helps water companies forecast rates for the following year. Companies take into account the projected use per person when forecasting for the upcoming year. The question remains, do these fixed-rate structures work?

How water prices break down

Most homeowners see fees on their monthly bills that include : 

  • Service charges
  • Consumption charges
  • Conservation rates
  • Water quality & treatment charges

Rate structures help utility companies build and maintain water infrastructure, treatment plants, and underground water piping to deliver and return water for treatment. The problem with rate structures is not all are created equal. 

Historically, when water prices increase, low-income communities are hit hardest, and it’s primarily due to how rate structures are created. When costs increase, and customers don’t pay, water utilities refer to “the balancing act” to pay for the system. 

This balancing act suggests that when customers don’t pay their water bills and the utility is still managing equal if not higher amounts of water through its systems, everyone else ends up with higher bills. 

Since each city sets up its price models based on the city’s system for delivery, treatment, repair needs, infrastructure updates, and volume of water used, cities can vary drastically in what they pay. 

Most consumers don’t know that their household’s access to water and their rate directly correlates to the number of people living in their area. 

According to the Environmental Protection Agency (EPA), “the average American family uses more than 300 gallons of water per day at home.”

States who have experienced the fastest population growth over the last decade require a vast majority of water resources. Regions with a high growth rate tend to deplete their water systems, forcing them to source water from neighboring areas. 

The lack of funding and negligence of water systems has made it so that neighboring cities can’t always provide excess water to other municipalities. Unable to guarantee water supply to its residents forces states to enforce water conservation regulations to help preserve water.  

Grappling with aging water systems can be lethal, as proven by the water emergency of 2015 in Flint, Michigan. Newark, New Jersey, saw the same water crisis occur with lead found in the city’s drinking water only a few years after.

Failure to upgrade existing water systems creates hazardous living conditions for communities already at risk of contamination.

Water infrastructure across the country is old and in dire need of upgrading. As municipalities continue to roll out their annual plans for water rates, will residents be spared? Only time will tell who pays for repairs and updates. 

Environmental effects on water supply 

Climate change is most felt by how accessible water is. As the climate continues to shift, water availability has become less predictable, and increased incidences of flash flooding threaten to destroy sanitation facilities and further contaminate water sources. 

According to the World Meteorological Organization, climate change is projected to increase the number of water-stressed regions and exacerbate shortages in already water-stressed areas. Director Upmanu Lall of the Columbia Water Center seems to agree.  “Most of the climate change impacts come down to water.” 

Some of the challenges threatening water security begin with the destabilization of the water cycle. Evaporation, precipitation, clouds, and the ocean all make up the water cycle, and all are affected by the current climate crisis. 

Higher temperatures and more extreme weather affect the availability and distribution of rainfall, snowmelt, river flows, and groundwater. The uncertainty of these water sources results in further deteriorated water quality.    

In the United States, the Colorado River is the primary water source for the greater Southwest. It provides water to over 40 million people and irrigates about 5.5 million acres of land.  

The Colorado River experienced a reduction in water supply this year, placing millions of people at risk for a significant water drought. In late April, Arizona water management officials announced it expects to take 30% less water than usual since most of its water comes from the Colorado River. 

Another primary water source affected is Lake Mead which sits just outside of Las Vegas and is the largest reservoir on the Colorado River. Earlier this year, officials learned that Lake Mead was just 38% full, causing more concern. With water shortages in the region, many states who receive water from the lake can expect cutbacks to slow the decline in the system.

Water conservation officials warn that states impacted by drought and flooding can’t afford these cutbacks. Rising water prices only exacerbate the volatile climate landscape.  

What can you do to help, and how to save money? 

The fight for climate change is, in essence, a battle for human life. Clean and safe drinking water is a human right that must be within reach for every community. Collectively, communities can significantly impact climate change with small acts of everyday awareness towards the planet’s natural resources. 

Installing PowerX Water in your home can help you significantly reduce your consumption and save you nearly $400 a year on your water bill. 

PowerX Water alerts you to overuse, leaks and gives you tailored recommendations on your home's consumption so you can stop overusing and overpaying.

Reducing your water waste means a healthier planet and a brighter future.

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