Why Are Water Prices Rising in the USA?
In November of 2002, San Francisco residents voted to end a seven year water price rate-freeze, allowing for increases in water rates "to operate, maintain, finance and improve" the water and sewer system. With water prices rising continually for the past twelve years and currently more than triple the cost of before—there may be some who regret it.
However, it seems that necessity is the mother of big spending in cases like this: San Francisco's water and sewer system dates back more than 160 years, with the bulk of it's 1,500 miles of pipeline installed 90 years ago. This means there's an increasing risk of expensive breakdowns due to aging infrastructure. And like every other water supply situation, the geography and geological makeup of the area comes with its own unique issues in getting fresh water to residents.
In the case of the tectonically precarious Bay Area, vital pipelines are located near fault lines. It's estimated that a major, disaster-related disruption to San Francisco's water and sewer system could cost the city in the tens of billions of dollars. Since earthquakes are more of an inevitability than a possibility there, all retrofits must have the ability to take a beating. So costly capital improvements must be made, and paid for somehow.
As extreme as the situation seems to be for San Francisco, the rising water prices there reflect a similar ballooning of water costs all over the country. Here are some select water price increases since the year 2000, as of 2012:
- Atlanta: 233%
- Philadelphia: 164%
- New York City: 151%
- San Diego: 141%
- Cleveland: 130%
Infrastructure issues, like those in San Francisco, are a major cause of these rising water prices nationwide. Compounding this is the fact that the upgrades local governments make are made even more expensive by national security requirements put in place after September 11th. To pay for the improvements, bonds are issued, the debt for which is passed on to residents through water costs. Additionally, increased water rates are commonly affected by:
- Rising electricity and treatment chemical costs
- Federal Clean Water Act compliance
- Increased pension and healthcare costs for utility workers
The good news is that conservation is up, with personal use actually down 13.2% over the past 35 years. Strangely, the act of conservation itself often drives water prices up. This is due to the fact that the debts owed by municipalities for their capital improvements must be paid no matter what—so fewer gallons sold inevitably equal higher rates.
Despite the frustrating irony of this, as we at WegoWise so often discuss with our clients—focus on usage over cost. It's the factor that you can control and if you work to reduce it, you'll always be paying less than your peers!