Bipartisan Policy Center Report Makes Recommendations on Water Affordability
The enormous need for investment in America’s water infrastructure has resulted in ever-increasing rates for water systems across the board. Between 2012 and 2016, water rates increased nationally by about 7% a year. A recent report from the Bipartisan Policy Center (BPC) identified several factors that can help address water affordability challenges, including partnerships with the private sector, sound asset management and strategic infrastructure investment. By examining all of these elements independently and how they interconnect, the BPC was able to make several policy recommendations about water affordability.
The BPC acknowledges the significant role the private sector can play in ensuring water affordability and recommends policy changes that promote partnerships and regionalization, noting that these reforms can lower operating costs, improve service, de-politicize rates and provide necessary capital for infrastructure improvements.
“With their economies of scale and service efficiencies, private companies can bring savings in water system O&M costs of 15 percent to 30 percent, according to one estimate.”
The report also emphasizes the importance of utilities developing comprehensive asset management plans and provides further evidence of why low water rates should not be seen as a badge of honor. The report notes that “rates have historically been set too low due to political pressure, concerns over affordability, and limited understanding of all life-cycle O&M costs by utilities.” By adopting asset management plans and strategically investing in water infrastructure, the large rate spikes that put so much pressure on family budgets can be minimized.
Water affordability is a complex challenge and demands innovative and proven solutions, not a one-size-fits-all approach. NAWC members have a strong record of working with municipalities to address the unique water system challenges they face, bringing a high capacity for infrastructure investment, operating expertise and sound asset management to keep water service affordable.