Replacing the Nation’s Deteriorating Water Infrastructure

Replacing the Nation’s Deteriorating Water Infrastructure While Maintaining Affordable Water Rates written by Neal Walters of the PPI Consumer and State Affairs team explores concerns about replacing the nation’s rapidly aging water infrastructure while keeping water rates affordable for consumers.

Water and wastewater systems are vital to the nation’s public health, protecting the environment, and supporting economic activities.  However, much of the drinking water and wastewater infrastructure in the nation is at or near the end of its useful life.  As such, it is necessary to replace and upgrade the deteriorating water infrastructure so it can meet the needs of the nation.

Keeping water rates affordable for consumers is an important issue as water rates are increasing at a much faster pace than inflation or other utility rates.  This is a particular hardship for those with low incomes or on fixed incomes as the percentage of their income needed to pay their water bill increases.  As a result, policymakers and regulators are seeking ways to keep water rates affordable while ensuring water utilities have sufficient funds to replace and upgrade the water infrastructure.  

The report’s key findings are:

• Water systems face challenges due to the deteriorating infrastructure that is in need of substantial upgrade and replacement.  The 2009 infrastructure report card by the American Society of Civil Engineers (ASCE) gave the nation’s wastewater and drinking water systems a grade of D-.

• Despite substantially increasing water rates in an effort to cover the expense of infrastructure repairs, there is concern that water utilities will not have sufficient funds available to make the necessary repairs.  This may create a gap between the amount of money needed for infrastructure repairs and the amount of money actually spent by utilities on these repairs.
  

• Consumer costs for water service are rising at a rate well above inflation and faster than other utility rates.

• Policymakers and regulators are seeking ways to close this funding gap using cost-effective solutions without making water rates unaffordable for low and moderate-income customers.