Utilities, Activists At Odds On Infrastructure Funding

Water utilities, public officials, and consumer advocates all agree that there is a dire need for new funding to repair the nation’s crumbling infrastructure, but they sometimes disagree on where the money should come from.

The top concern for consumer activists is preventing customers from paying higher water bills, Indiana Public Media recently reported.

“Citizens Action Coalition Executive Director Kerwin Olsen says while the state contemplates how to stabilize revenues for utilities, it must also consider affordability for the customer. And he says that conversation has to begin with defining affordability,” the report said.

“Households in the upper income thresholds, in excess of $100,000, spend on average 2 to 4 percent on their utility bills,” Olsen says. “When you get to households making $50,000 a year or less, they have energy and utility burdens far in excess of 25-30 percent a month in terms of their disposable income.”

But other voices argue that prices must go up if the infrastructure crisis is going to be addressed. Economic columnist Eduardo Porter made this argument in The New York Times.

"Water is far too cheap across most American cities and towns,” he wrote. “The price of water going into Americans’ homes often does not even cover the cost of delivering it, let alone the depreciation of utilities’ infrastructure or their R&D. It certainly doesn’t account for other costs imposed by water use — on, say, fisheries or the environment — caused by taking water out of rivers or lakes.”

One thing is clear: The nation’s water infrastructure is in crisis. According to the American Society of Civil Engineers, "At the dawn of the 21st century, much of our drinking water infrastructure is nearing the end of its useful life. There are an estimated 240,000 water main breaks per year in the United States."

"Assuming every pipe would need to be replaced, the cost over the coming decades could reach more than $1 trillion," the American Society of Civil Engineers reported, citing the American Water Works Association (AWWA).

For more on the state of the nation’s water infrastructure, visit Water Online’s Asset Management Solutions Center.