News Feature | November 19, 2013

Ratepayers Swallow Cost Of Unpaid Water Bills

By Sara Jerome

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When water customers fail to pay their bills, that cost gets passed on to some unsuspecting victims: other ratepayers.

And the cost can be high, according to a recent investigation by KFOX14 news into practices at El Paso Water Utilities in Texas.

"Based on public financial audits by the EPWU for fiscal years 2011 to 2013, in the last three years the utility has lost more than $2 million to write-offs for uncollected bills and drainage fees," the report said. 

Non-revenue water is another cost passed on to other customers. "According to the audits, the water leaked in 2013 alone would be enough to meet the city's entre water demand in 2012 at peak levels for two weeks," the report said. 

Those figures add up. "Even though the EPWU insists those are good figures compared to what other cities lose -- the benchmark is 8 percent nationally -- that is a lot of water and revenue lost, which is nearly $7.8 million for the last three years," the report said. 

"We make a very proactive effort on our side to make sure that number stays very low," said Christina Montoya, spokeswoman for El Paso Water Utilities.

Utilities also contend with customers who skip town without paying the bill. Las Cruces Sun News recently investigated how the city utility in its New Mexico town approaches the issue, which presents a heavy cost. 

"It's less than 1 percent of total billing yet, when added up, it's a huge amount of money the city is unable to collect after multiple attempts," the report said

Customers are not absolved of their bills simply because they disappear. "The debt is never forgiven: The customers who used the gas, water, wastewater and solid waste services are not off the hook; they still owe the money But from an accounting viewpoint, carrying over uncollectible debt for years and years becomes a nightmare," the report said. 

"When people don't pay their bills, it affects everyone. We must have all these services available for everyone, and that is a huge investment. So when some customers don't pay their bills, in essence, everyone bears the burden of that," Dr. Jorge Garcia, director of Las Cruces Utilities, said in the piece.

In recent years, utilities have stepped up their efforts to collect from delinquent customers. 

They say "they are under pressure to clean out accounts that are weighing down their books at a time when their stocks are being hammered and earnings growth has slowed," the Wall Street Journal reported.

For more on issues for ratepayers, check out previous coverage on Water Online. 

Image credit: "Pay Day," © 2012 401(K) 2013, used under an Attribution-ShareAlike 2.0 Generic: http://creativecommons.org/licenses/by-sa/2.0/

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