National Focus on Affordability
Affordability of water and wastewater service is an important and growing concern for many communities. The core issue is the balance between ensuring everyone has access to water and wastewater service, and the increasing operations and infrastructure costs facing utilities. Vulnerable populations – including elderly, disabled, and low-income residents – often struggle to pay their water bills. Decisions about water and wastewater infrastructure often rely on the Environmental Protection Agency’s (EPA) affordability calculations, which have been criticized as narrow, outdated, and arbitrary.
During the FY2016 Appropriations process, Congress directed the EPA to work with the National Academy of Public Administration (NAPA) on an independent evaluation of EPA’s affordability criteria and to create a framework for improved affordability metrics. The NAPA report concluded that while have implemented creative and innovative ways to address affordability, others still struggle with the tension between regulatory compliance and affordable water. The panel made more than 20 recommendations for EPA to consider but did not conclude which were the best affordability criteria to consider, what the best metrics for capturing those criteria might be, and which thresholds for determining where the line between affordable and unaffordable might lie.
Spurred by the recommendations in the NAPA report and anticipating new EPA recommendations and policies, the National Association of Clean Water Agencies (NACWA), the American Water Works Association (AWWA), and the Water Environment Federation (WEF) convened a working group to create a better framework for affordability that includes criteria, metrics, and thresholds to better define affordable and unaffordable water service. The US Water Alliance participated in the working group too, and offered our expertise on which frontline groups working to address affordability issue in their communities to include.
The working group organized utilities, water trade associations, environmental groups, state and local government groups, rural advocacy groups, and others to come together to discuss affordability and the arbitrary nature of the median household income (MHI) metrics currently used by EPA. Other issues included the desire to address the needs of multifamily residents that are not directly paying for water service, accommodating all household water costs (wastewater, drinking water, and stormwater), flexibility between different systems based on available data, and the full cost of providing utility services. In all, 18 potential criteria were discussed.
Congress is also interested in the affordability challenge. Last month Senator Ben Cardin (D-MD) joined Senator Roger Wicker (R-MS) to introduce the Low-Income Water Customer Assistance Programs Act of 2018. This bill would set up a pilot program of grants from the federal government to municipalities to help establish and fund customer assistance programs for drinking water and wastewater bills. These programs could take the form of direct financial assistance to customers, rate discounts, bill discounts, payment plans, and more, to help low-income customers cope with bills. The bill is structured to help all sizes of utilities, requiring equal groups of utilities from different size categories. The US Water Alliance signed on to a letter of support for the legislation. With this Congressional term ending soon, this bill probably won’t pass this year. But bipartisan support is growing, and it is likely to be picked up again in the next Congress.
Progress is not just on the national level – local efforts are making significant headway in tackling the affordability crisis. In the six Water Equity Taskforce cities, convened by the US Water Alliance, affordable water and wastewater service are top issues. Learning teams in Buffalo and Cleveland are looking to structure their rates to offer more affordable service to their communities, while balancing the utility’s needs for operating and capital expenses. Engaging with cross-sector stakeholders provides for a better process and outcome, because everyone has buy-in and understands the needs of each other. Whether its broad, national-level conversations about EPA affordability calculations and federal pilot programs or local, frontline struggles for community affordability improvements the Alliance will continue to press the One Water approach to this issue.