News Feature | November 15, 2016

Study Asks Ratepayers How Water Dollars Should Be Invested

Sara Jerome

By Sara Jerome,

One of the toughest challenges for water utility officials: Convincing ratepayers they should pay more to offset the cost of infrastructure investments.

A new study conducted by University of Delaware researchers, published in the journal Agricultural and Resource Economics Review, attempts to clarify how the public feels about paying for water at a time when infrastructure spending is sorely needed.

“This study uses a field experiment involving 251 adult participants to determine which messages related to climate change, extreme weather events, and decaying infrastructure are most effective in encouraging people to pay more for investments that could alleviate future water-quality risks,” the study said.

“The experiment also assesses whether people prefer the investments to be directed toward gray or green infrastructure projects. Messages about global warming induced climate change and decaying infrastructure lead to larger contributions than messages about extreme weather events,” it continued.

The findings: People are more eager to pay for “green infrastructure” than “gray infrastructure.” The researchers defined “gray infrastructure” as including traditional treatment plants.

Kent Messer, one of the researchers, explained: "People are much more willing to pay for conservation. They like the idea of permanently protecting the waters from their source and avoiding having to do technological fixes."

Study participants “earned” money within the research project that could be donated toward water causes as they wished. They had the choice between donating to the American Water Works Association (AWWA), representing the traditional gray infrastructure, or the Conservation Fund, representing green infrastructure, according to a statement from the university. More people chose the Conservation Fund.

The study also found that survey participants changed their choices depending on how the messaging was delivered.

"The big surprise was that messages stating that 'storms are increasing in frequency due to extreme weather events,' led to a dramatic decrease in people's willingness to pay for either conservation or gray infrastructure," Messer said. "This has important implications for how politicians and conservation leaders talk about drinking water protection."

“If it's just decaying infrastructure, normal storms, or even climate change, then people might feel they can do something about it. But when you start really emphasizing these large magnitude storms, there becomes a sense of hopelessness,” he continued.

Ratepayers’ reluctance to pay more for water despite towering infrastructure investment demands across the country is a deep challenge for the water and wastewater sector.

Just ask George Hawkins, the CEO and general manager of DC Water. Ratepayers don’t realize “what a miracle of modern civilization it is” when they drink tap water, Hawkins said in a wide-ranging interview with Bloomberg BNA.

“We have done well for decades in most cities, so most people in the United States who walk up to a water fountain or a spigot expect it,” he said.

To read more about communicating with ratepayers visit Water Online’s Consumer Outreach Solutions Center.