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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water sales of more than 75 MGD; Group B, which includes utilities with water sales of between 20 and 75 MGD; and Group C, which includes utilities with water sales of up to 20 MGD. National And Regional Rate Trends Water rates are trending upwards on both the regional and national scale. Rates have increased across the board since 2006, and the magnitude of rate increases tends to outpace the CPI. Figure 2 demonstrates the annual increase for a typical residential customer in national and regional rates. Rate changes represent rate increases from 2006 to 2016, based on the change in median monthly bills for residential customers with 5/8" meters and monthly consumption of 1,000 cubic feet of water. Figure 2 shows rates in the West have changed the most by percent (an increase of 117 percent between 2006 and 2016), while rates in the Northeast have increased the least by percent (an increase of 28 percent between 2006 and 2016). For reference, the CPI increased by 19 percent during this timeframe. Water rates are also trending up for utilities of all sizes. Figure 3 demonstrates the trend of median monthly bills by utility size. Water Bill Affordability By Region The median household income (MHI) by utility size tends to be less variable than the regional MHI, with a range of only approximately $3,000 between the highest income systems (Group B), and the lowest income systems (Group A) in 2016. However, as demonstrated in Figure 5, in 2016, individuals getting bills from the smallest water systems (Group C) paid approximately 33 percent more as a percentage of their income than did those receiving bills from midsize systems. In fact, the midsize utility systems have been the most affordable at the median income level for the last decade. Interestingly, not only do Group C utilities pay the highest percentage of their income for water bills, but almost 15 percent of the Group C utilities already exceed, or are more than 75 percent of the way to, the EPA's 2 percent affordability threshold. None of the Group A systems and only 1 percent of the Group B systems are this close to the threshold. This disparity is likely due to economies of scale. Utilities tend to have high fixed costs associated with operating, debt service, and capital improvement programs. Smaller systems have fewer accounts to spread these costs among. Discussion Water rates are increasing in all regions and for all sizes of utilities. However, despite having outpaced the CPI for the last 10 years, RATESETTING Innovative Chemical Feed Solutions JCS Industries, Inc. I PO Box 90028 I Houston, TX 77290 Ph: 281-353-2100 I www.jcsindustries.us.com Industries Inc. wateronline.com n Water Innovations 33

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