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AWWA Rate Survey Experts Warn Against FWW Rate Comparison Practices

Earlier this year, the California-Nevada Section of the American Water Works Association (AWWA) released the 2015 edition of their annual water and wastewater rate survey. The survey is a powerful tool that provides insights into pricing practices by utilities across California and Nevada.

As is typical with rate survey reports, the authors of the analysis explicitly caution those who might misinterpret or misuse the data. The authors state in the report forward:

“Drawing conclusions from rate comparisons, however, should be done only after evaluating several community characteristics (such as geography, climate, and service area, as well as the use of taxes, subsidies and grants). The determinants of utility rates are varied and complex and do not necessarily reflect the true cost of service. A low rate or a high rate does not necessarily mean that a utility is more or less efficient, respectively. As a result, the survey findings alone should not be used to judge the performance of any individual utility or to generalize about all water-sector utilities.”

— 2015 California-Nevada AWWA Water and Wastewater Rate Survey

This is a very important point – there are dozens of factors that influence water rates, including investment levels, water source, geography and water treatment needs. Because there are so many cost factors specific to each service area (even within the same region), it is impossible to make an apples-to-apples comparison of rates between systems.

Despite our efforts, activist groups like Food & Water Watch (FWW) continue to ignore these warnings from experts and abuse rate survey data in their misleading reports. In fact, when writing reports on erroneous rate comparisons, FWW often cites the experts who warn against such rate comparisons! As we pointed out following the release of FWW’s “The State of Public Water in the United States” report in February of this year, “Citing experts that openly undercut the fundamental basis of your report is not the sign of a sound analysis.”

Utility costs and rates are important topics that shouldn’t be oversimplified. Experts agree that rate comparisons are misleading and foolish. Hopefully Food & Water Watch gets the message soon.

 

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