Thoughts from Engineers: Water Infrastructure Woes Hit the American Pocketbook
The COVID-19 pandemic brought into sharp focus a few key realities about water service in the United States. Many millions of Americans worked hard to pay for water service before the pandemic hit, and many millions will continue to struggle to pay when rates of infection decline. The pandemic peeled back the veneer on a lurking problem, the solution for which is far from clear.
Due to badly deteriorating water infrastructure, shifting inner-city demographics and other factors, more Americans will see water-service rates rise. Many will be unable to cover their payment without cutting down on other expenses. As studies show, in many parts of the United States, water service isn’t cheap, but steep rate increases continue to affect a disproportionate segment of the population.
State and federal funding for capital projects has steadily declined during the last 20 years, which has shifted more of the financial burden to local communities. This means the ability to move ahead with costly repair or reconstruction still depends, for better or worse, on the relative wealth of the community in question. According to the American Water Works Association’s member survey conducted in 2020, utilities still consider rate hikes as the primary means of paying for capital projects. Here’s the problem: Many residents can’t afford the bill.
The American Society of Civil Engineers (ASCE) released “Failure to Act: Economic Impacts of Status Quo Investment on Infrastructure” in 2021 in which it identified an annual cost of roughly $3,300 to the average household and a cost to the United States of nearly $23 trillion in lost economic activity as a result of failing infrastructure.
What It Takes To Turn on the Tap
To effectively provide water service, funds are needed to: 1) operate the water utility, and 2) maintain, repair and upgrade infrastructure when necessary. Ideally, a utility will strike a fair balance between recovering the costs of maintenance and infrastructure upgrades with consumer affordability. Water rates rise if either the customer base decreases or the costs associated with infrastructure increase. In many cases, both of these factors are at play within the service area.
Rates also may be affected by the size of the service provider. Larger service providers—serving greater than 100,000 people—and smaller providers—serving less than 10,000—arguably have different types of issues. Some point out that smaller utilities have a greater number of challenges and fewer ways to make ends meet. In addition, although public providers presently outnumber privately run utilities, public providers may only set rates to recover costs; private utilities can realize a profit. Some anticipate that the number of private utilities will grow as the costs of rebuilding infrastructure continue to skyrocket.
In Line for Food—and Water?
Several studies have analyzed the affordability of drinking water in recent years. In research published in PLOS ONE in 2017, “A Burgeoning Crisis? A Nationwide Assessment of the Geography of Water Affordability in the United States,” Mack and Wrase from Michigan State University analyze the issue of water affordability for the general U.S. population now and in the future.
The Michigan State study used the U.S. Environmental Protection Agency income-based affordability standard of 4.5 percent as defined in the Federal Drinking Water Act to assess affordability of water for households across the United States. The study observed on average a 6 percent rise in water prices between 2014 and 2015, and a 41 percent increase across the country in water rates between 2010 and 2017. The authors projected comparable future water rate increases of at least this much in the years ahead.
With comparable rate hikes in the future, Mack and Wrase predict that 14.7 percent of Americans will not be able to afford a water rate increase of 6 percent, and 35.6 percent of Americans would find water rates unaffordable with a 41 percent increase. The authors emphasize that these forecasts are still conservative overall, noting that rate hikes of more than 50 percent were observed in several large cities such as Chicago; Tucson, Ariz.; and Charlotte, N.C., during this same time period. Analysis of the populations most at risk showed that 81 percent of high-risk or at-risk families are located in urbanized areas such as Detroit, Phoenix and Philadelphia.
A more recent (2020) investigation conducted by The Guardian in partnership with Consumer Reports and others showed that water and sewage rates in 12 U.S. cities between 2010 and 2018 increased on average 80 percent, with the minimum at 27 percent and the maximum at 154 percent in Austin, Texas. Unpaid bills result in disconnection and, in certain cities, tax liens on property. New Orleans has reportedly one of the strictest shutoff policies, which resulted in the disconnection of almost 1 in 5 households in 2016.
A Study in Contrasts
Issues such as this tend to starkly underline how the United States is a veritable study in contrasts. On one hand, the country sets the standard for innovation and creative solutions. Our world-class universities conduct research on everything from nanoscale technologies for water treatment to state-of-the-art electrochemical water sensors. But the raw disrepair that can be found in our inner cities is jarring. We’ve glossed over the declining 20th century infrastructure that anchors our largest cities for far too long. How did we get here? Judgment of past decisions aside, the country is primed to—and frankly must—shift course.
Like the chronically defiant kid who at last recognizes that cleaning up the mess in the basement can only be postponed so long, state and federal leadership now appear to be oiling the gears of action. The Biden administration is proposing, via the “American Jobs Plan,” to inject federal monies into the mix of funding sources for the nation’s water infrastructure on the order of $111 billion. If funds are authorized, countless unknowns still litter the path ahead. These relate to execution, accountability and the equitable distribution of funds to the communities most in need of support.
Regardless of how the country proceeds, this much is clear: Federal investment is necessary because our country’s water infrastructure demands it. Rate hikes alone are not enough.