Water Online

September 2017

Water Innovations gives Water and Wastewater Engineers and end-users a venue to find project solutions and source valuable product information. We aim to educate the engineering and operations community on important issues and trends.

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By Rocky Craley and Catherine Carter C lean water represents one of the most basic and essential human needs. When setting rates, utility financial professionals have a lot on their minds — meeting debt service requirements, ensuring sufficient funds to support operations and maintenance needs, and building reserves for future activities. Unfortunately, the infrastructure costs associated with providing water service have increased substantially over the last 50 years, causing increases to water rates and ultimately customer bills. In considering the utility's pricing objectives, however, ensuring adequate revenues to support water service is increasingly causing affordability concerns for residents. This article utilizes the results of the 2016 Water and Waste water Rate Survey (Rate Survey) and previous surveys to consider how utilities have responded to the tension between revenue sufficiency and affordability. Beginning with a longitudinal look at water and wastewater rate and bill trends, rates have increased nationally and regionally at a rate greater than the Consumer Price Index (CPI). From there, the authors explore current day drivers, such as affordability, and discuss the potential customer impacts of the ever-increasing water bills. These trends will be considered within the contexts of both geographic regions and utility size. Data Source Using rate data from the biennial Rate Survey, which has been coproduced by the American Water Works Association (AWWA) and Raftelis Financial Consultants, Inc. (Raftelis) since 2004, this article considers rate trends on both the national and regional level. The Rate Survey series is one of the most recognized compendiums in the industry and provides information on utility characteristics and charges for a diverse and meaningful sample of U.S. urban, suburban, and rural systems. Analyzing rate trends at a regional level helps utilities to identify appropriate peer organizations, in terms of size, geography, regulatory requirements, and other factors, which ultimately provides a higher-quality comparison. The regions included in this analysis are defined in Figure 1. The Rate Survey series also categorizes water utilities by size into three groupings: Group A, which includes utilities with 32 wateronline.com n Water Innovations With infrastructure reliability on the brink, utilities are forced to raise rates to fund improvements. It's not a move that is undertaken lightly, nor should it be. The latest AWWA rate survey, produced with Raftelis Financial Consultants, highlights the plight of both utilities and consumers. Figure 1. Regions included in the 2016 Water and Wastewater Rate Survey Sur vey Reveals Water And Wastewater Billing Stats And Concerns

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