Seven Strategies for Identifying Who Is Willing and Able to Pay for Household Water Services

Guest post by Urooj Amjad

Accurately identifying vulnerable groups and their commitment to pay, or incapacity to pay, is a timeless challenge in household water services. When consumers pay for household water service delivery, they are paying for the water, its delivery to their home, the infrastructure used in delivery, and the maintenance of supply and safety of their water. And depending on the water utility, sewerage charges are also calculated based on the water used. Similarly, the water provider depends on revenue from consumers for maintaining its services to be financially sustainable and aligned with public health standards.

However, not all households have consistent or sufficient income to pay for their water bill among other utilities, housing, and living costs. Adding to the challenge, some households may not perceive the quality of the water or its volume to be sufficient to fully pay their bills or on time. Some water utilities may already have a plan for supporting their most vulnerable consumers, or are exploring how to enhance existing plans. Strategies for identifying who are willing and able to pay could include:

  1. Develop a deeper understanding of who may consider themselves vulnerable in a utility’s service area and why. What factors change a person’s vulnerability, and what does “vulnerable” mean for such individuals? For example, a potential factor that determines vulnerability is the change in seasons. A person may be more or less vulnerable to hardship during winter months in cold climates due to higher energy costs and therefore less money for fully paying water utility bills on time. Another potential factor of vulnerability is health that may affect a person’s ability to maintain consistent, sufficiently paid work, and whether their illness requires more water and toilet flushing than other illnesses (e.g. Crohn’s disease). Learning about who are vulnerable individuals in a community could be effectively addressed by utilities consistently communicating with community groups that have reputable, long-term relationships within the community, and a track record of supporting vulnerable individuals.
  1. Clarify what affordability means for a utility, such as whether affordability definitions are clear in existing utility policies, and whether such policies are explicit in their limitations and strengths. Such clarification could be complemented with the Water and Wastewater Residential Rates Affordability Assessment Tool, which focuses on the perception of what is affordable, by how many people in a given community.
  1. Contact medical offices and emergency rooms to reach out to potential vulnerable groups through brochures and other related communication tools. Health facilities may have established processes for assisting their patients who are having difficulty paying their medical bills or who require payment plans. Utilities could provide contact information through such processes for vulnerable individuals to self-identify for help with paying their water utility bill. A utility staff member could discuss with medical staff how best to communicate options for vulnerable groups in such a health services setting.
  1. Communicate with other water utilities, as well as energy and telecommunication utilities to compare practices of how each entity approaches the identification of vulnerable groups. While water utilities would have a unique context because of water’s significance to health, water utilities could make relevant comparisons to communication styles, how each sector identifies vulnerable individuals, and how each sector designs appropriate payment plans that satisfy consumer and utility preferences.
  1. Create or enhance consumer focus groups from a utility’s consumer base to learn consumers’ criteria for service satisfaction, which could develop into a living, updatable index for willingness and ability to pay. Focus groups containing ten to twenty individuals from a cross–section of a community that are willing to volunteer short amounts of time in person or over the phone to provide their views could be a strategy for learning the evolving views of consumers. In addition, short surveys that are available on a water bill website or standard paper bill that contains two to three short questions could be a complementary way to learn of current views on service satisfaction and indicators for willingness and ability to pay.
  1. Join an existing program or create a program from which consumers can join a 0% interest, monthly payment plan to pay their bills in smaller amounts spread over a period of time. Such a program may encourage payment of bills in full, over an agreed amount of time, providing a constructive option for consumers and water utilities. The utility may still not recover full costs, but over time, may recover more than if such a program were not in place.
  1. Review and adapt approaches as needed. The above strategies require staff, time, and money for water utilities to address cost recovery that is equitable and sensitive to individuals’ needs. Some utilities, particularly ones with fewer staff, may not have such resources. In such circumstances, reaching out to organizations such as the National Rural Water Association’s Circuit Rider Program, and similar organizations, could be a starting point to pool together a group that can assist with daily operations of identifying and serving vulnerable individuals unable to pay, and satisfying consumer needs to gain their willingness to pay for water services.

What other strategies do you recommend from experiences at your water utility?

Urooj Amjad is an Adjunct Assistant Professor in the Economics Department of Queens College, City University of New York where she teaches Environmental Economics. She was a Postdoctoral Research Associate at The Water Institute, University of North Carolina at Chapel Hill, and received her Ph.D. from the University of London.

1 Comment

  1. In the role of Devil’s advocate, why should water utilities venture into this area? Shouldn’t existing social service agencies assume this responsibility? Our utility refers customers to local County DSS and provides a list of churches and other agencies which help with utility bills.

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