Do Americans Pay Too Little For Water?

Americans pay far too little for water, according to a recent column in Ensia.

"Water is the most essential utility delivered to us each day, meeting our drinking and sanitation needs and many others, from fire protection to irrigation. Incongruously, it is also the resource we value least," the column said.

Americans pay less than people in many other countries, according to the column.

"In the U.S., we pay less for water than for all other utilities. That remains true in these times of increasing water stress, said Janice Beecher, director of the Institute of Public Utilities at Michigan State University, whose data show the average four-person household spends about $50 a month for water, compared with closer to $150 for electricity and telephone services," the column said.

The price of water is a key issue as utilities face the question of how to fund water infrastructure upgrades.

"Americans got used to paying little for a whole lot of pristine water. At the same time, many utilities delayed the long-term capital investments needed to maintain their pipes and plants," the column said.

Meanwhile, federal funding is dwindling. "A Reagan Administration phase-out of water-infrastructure grants began 25 years ago. Over the past decade, U.S. Environmental Protection Agency water infrastructure funding has declined (with the exception of 2009, the year of the American Recovery and Reinvestment Act), and policy has shifted from grants to loans," it continued.

Water rates are going up, but that may not suffice. "Increases in U.S. cities’ water rates have risen faster than the cost of living since 2007, but not fast enough to fund the estimated $1 trillion in projected new investments and repair costs for water resource infrastructure, [the Ensia column] continues," Triple Pundit reported.

How are utilities tackling the problem at the moment?

"At the local utility level, higher prices and tiered price structures, in which households that use more pay more, are both working to encourage conservation. Utilities are also turning to new types of bonds to cover long-term projects, such as the 100-year 'green bond' sold this summer by the District of Columbia Water and Sewer Authority to finance environmentally friendly stormwater solutions," the column said.

Check out Water Online's green bond coverage here. 

Many voices say ratepayers should have to face higher bills.

"Water should be more expensive overall, and heavy users should pay much more. The impact of realistic pricing will be on water’s major consumers, agriculture and industry. More accurate pricing will allow the creation of a market in water rights, too. Basic everyday use, especially among the poor, is easily shielded," according to a recent Bloomberg Businessweek column.

The value of water is of pivotal importance to the water industry. In 2014, the American Water Works Association (AWWA) ranked value-of-water issues as top concerns among water professionals. Numbers four and five on AWWA's list, respectively, were "public understanding of the value of water resources" and "public understanding of the value of water systems and services."