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The Association of Metropolitan Water Agencies (AMWA) believes that all Americans should have access to safe and reliable drinking water.

Providing safe, clean, and reliable drinking water is an enormous undertaking and responsibility; it is also an undertaking of considerable expense. AMWA believes that individual water utilities are a community resource that should be self-sustaining, and that local water system budgets must be sufficient to cover the cost of properly acquiring, conveying, treating, and distributing drinking water on its journey from the source to customers’ taps. As such, all drinking water utility customers should be expected to pay their fair share of the community’s common costs through appropriate rates and fees established and charged by the local utility.

AMWA recognizes that rising water bills pose unique challenges to low-income households, and encourages communities to undertake efforts to work with at-risk customers. AMWA supports local initiatives to offer lifeline rates, bill discounts and credits, direct financial assistance, income-based repayment plans, or other methods that could help low-income households maintain water service sufficient for their health and safety needs.

AMWA understands that, due to legal restrictions in some states, some communities are unable to utilize ratepayer dollars to support certain low-income customer assistance strategies. States should examine policies that impede local affordability initiatives, and AMWA also encourages the federal government to explore a variety of assistance models that would benefit low-income customers. Such models could include funding assistance that helps communities establish or expand their own low-income customer assistance programs, or direct financial assistance that helps individual low-income households pay their water bills. However, before seeking federal assistance communities should first explore alternate, non-ratepayer-supported revenue sources that may cover the cost of their own customer assistance programs so ongoing reliance on federal assistance, on the part of both utilities and their customers, is minimized.

In addition to facilitating assistance programs to aid low-income ratepayers, federal policymakers must remain cognizant of the financial effects of regulatory mandates on local water utilities and their ratepayers. The costs of new water quality regulations should reflect the resulting public health benefits, and policymakers should consider affordability implications when developing other regulations that affect community water systems.

AMWA recognizes that the Environmental Protection Agency (EPA) uses a standard of 2.5 percent of median household income to determine whether the cost of drinking water service in a community is considered “affordable.” However, this standard is inadequate for many large communities where household incomes vary widely, and where 2.5 percent of the entire area’s median may remain well beyond the reach of the budgets of a water utility’s poorest customers. Alternative methods to describe affordability that may overcome some of those shortcomings are being explored, and AMWA is eager to collaborate with EPA and other stakeholders toward the goal of modernizing this standard.

Rationale:

  1. The cost of constructing and maintaining drinking water systems has primarily been a local responsibility, with only minimal direct investment by the states and the federal government. Local ratepayers should anticipate the need to support the cost of their local water service.
  2. While all households should contribute to funding local water service, the needs of low-income customers must be recognized. Communities should attempt to work with these customers on fair and effective payment plans, but ultimately each community is responsible for establishing a water rate structure that reflects the multifaceted needs of the community.
  3. Aging water infrastructure, increased capabilities to detect emerging contaminants in source water, emerging resilience needs, and expanded regulatory mandates are expected to put upward pressure on local water rates in the coming years. Policymakers must therefore consider how these escalating costs will affect low-income ratepayers, and craft new regulations in such a way as to minimize burdens on the public while protecting public health.
  4. The federal government has long-established programs that help qualifying low-income households pay for critical needs like nutrition and home-heating costs. Access to drinking water is similarly critical to public health, so comparable programs should be explored to help low-income Americans offset the cost of baseline water service.
  5. Recent studies have estimated that nearly 12 percent of U.S. households currently struggle to pay their water bills, and that this figure could triple to more than 35 percent in coming years if water rates continue to grow with current projections.1

1  A Burgeoning Crisis? A Nationwide Assessment of the Geography of Water Affordability in the United States,” Elizabeth Mack and Sarah Wrase, PLOS ONE, January 11, 2017.