Journal ‐ American Water Works Association最新文献

Virtually nothing could be better or more successful without water services. As we all know, a community's water services provide unrivaled value to our communities, our health, and our way of life. What price would we pay for these benefits?

You may have heard someone say something like, “Water is so important that it should be priced to reflect its value!” That seems like a sensible point since we know water is the world's most vital resource. But should it really be priced that way? Pure value-based pricing would turn water into a luxury good, and the price would zoom upward beyond what most could afford.

Of course, pricing water properly is paramount for numerous reasons—and if not value-based pricing, what is the right approach? AWWA backs the vision that the public is best provided with water from self-sustaining utility services by pricing water using cost-of-service rates. Cost-of-service rates follow a generally accepted methodology that identifies the differences in the cost of providing service to each customer class and then sets rates designed to recover those costs from the customers who are responsible for the costs.

Although I can think of extreme exceptions, in general it would be safe to say that cost-of-service rates will be lower than value-based rates. Still, full-cost pricing is not simple or a guarantee of low-cost pricing. AWWA's 2024 State of Water the Industry report indicates that approximately one in four utilities struggles to, at best, slightly cover the full cost of providing water service (see the accompanying table). This is concerning given the same report ranks financial sustainability as the fifth greatest challenge facing the water sector.

Looking forward, AWWA's Water 2050 program stresses the importance of establishing pricing models that cover all of the costs of water service. It also promotes rate-setting that embeds costs associated with climate impacts, utility resilience, an evolving workforce, and infrastructure needs. Further, the Water 2050 program envisions the need for utilities to optimize efficiencies through a circular water economy, strategic partnerships based on shared economic interests, and the cost-saving efficiencies of technology. These considerations will affect, up and down, the level of future water rates.

What does all of this mean? First, setting the price of water is not an easy job that's free of controversy. Second, value-based rates would introduce new and complex challenges that are not necessary in the grand scheme of providing sustainable water services. And third, the methodology used to set cost-of-service rates is the best option. It results in pricing that recovers costs from a utility's customers in proportion to the cost of serving those customers and, importantly, supports the long-term financial sustainability of the community's water services. The immediate challenge, however, is that 26% of utilities already struggle to cover

The concept of water service affordability is a complex but unquestionably important topic for water systems and the communities they serve. There are numerous ways to measure what affordability is (too big of an issue for this column) and a variety of approaches to address it.

Drinking water, wastewater, stormwater, reuse, and other water services have been around for a long time, as have socioeconomic challenges including poverty and other hardships that have made it difficult for some customers to afford service. So why has affordability become such a big policy issue now? There is no single answer, but rather a combination of several factors coming together, which in aggregate have appropriately focused a lot of attention on this important issue.

On one side of the coin, there is no question that water systems will need to raise a lot of revenue. Infrastructure renewal and rehabilitation, inflation, and workforce concerns will cost hundreds of billions of dollars to US water systems. Additional drivers include the costs of meeting the updated Lead and Copper Rules, addressing per- and polyfluoroalkyl substances (commonly known as PFAS), adapting to climate change and preparing for extreme events, addressing cybersecurity, and a host of others. The substantial majority of costs borne by water systems are paid for through local rates and charges (or more simply, from payments of customers’ bills), and although some federal and state infrastructure assistance is available, it is limited.

Without the necessary financial resources (primarily derived locally), water systems simply can’t meet these challenges while continuing to deliver safe drinking water and provide clean water services. A challenge of affordability, in which some customers don’t pay or struggle to pay, harms water systems, depriving them of needed revenue and increasing administrative costs of collection. As noted in the AWWA Policy Statement on Financing, Accounting and Rates, the goal is full cost pricing that ensures “long-term financial integrity of the utility to provide safe, high quality, and reliable service to customers.”

The other side of the coin is equally compelling: water is essential to all aspects of life, and everyone needs it. Roughly 15% of people in United States get water from private wells, but most of the rest get it from public water systems. There's a compelling need for water to be affordable for health, safety, sanitary, and other reasons, with all these potentially being harmed when water is not affordable.

Still, water is typically a very small portion of a typical family's budget, even in a low-income household. In many places, charging one customer differently from others on the basis of income is simply not legal. The water sector can’t solve poverty and other economic challenges on its own. Addressing challenges with the costs of housing, food, medicine, and energy will inherently make water more affordable through