Unlike your favorite TV show, college football, or even your cell phone, water is a truly vital part of life. However, many Americans may still not have affordable access to this necessity. The question of whether or not water is “affordable” in some communities is an ongoing debate. State laws, aging infrastructure, lack of funding, and many other challenges can limit a utility’s ability to address affordability concerns. However, some states have provided a framework for utilities in their state to address the challenges utilities face to provide affordable access to water for all. Customer Assistance programs (CAPs) are utility-sponsored programs that help provide low-income customers with affordable access to water through various discounts or other cost reduction methods. California, West Virginia, and Washington, discussed in detail below, currently have laws in place that enable water utilities to create CAPs.
Water pricing is a delicate art, as utilities often must balance competing priorities when setting rates. How can the utility set rates that ensure financial sustainability for the system while also balancing affordability concerns for customers? With any rate increase, the ability of customers with low income (sometimes on fixed income) to pay their bills in full and on time is a crucial consideration. Establishing an equitable rate structure benefits not only these ratepayers, but also the utility, which can now more confidently project revenues. Utilities employ several mechanisms to help customers afford and pay their bills. One mechanism is to develop a Customer Assistance Program that helps individual customers pay part of their water bills when they cannot afford to pay on their own.
In previous posts, we have talked about publicly available data on inflationary measures including the Consumer Price Index and the Construction Cost Index as well as on commercial energy use from the US Energy Information Administration (EIA) and the US Census. The US Census also has a rich set of data on the financial position of households within our community. These data are especially relevant and helpful for determining the affordability of government utility services such as water and wastewater rates.