January 2023

This report reveals a cost-based approach to pricing water, representing an opportunity to achieve greater equity by reducing water bills for most low-income households while preserving revenue and improving financial resilience for water utilities.

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About the Study

In partnership with Stantec Consulting Services, Inc., the US Water Alliance conducted this study to evaluate a promising pricing model that uses property-based characteristics to recover certain utility costs. The study used real data from two drinking water utilities—Greater Cincinnati Water Works (GCWW) and Milwaukee Water Works (MWW)—to explore the implications of the pricing model on customers and water service providers. Community-based social service partners in each city collaborated to weigh in on the modeling approaches and verify what the model data were showing. Their insight was critical to confirm how the proposed approach would impact different populations based on their relational and lived experience of different neighborhoods and populations. This report presents the key findings from the GCWW Case Study and discusses practical considerations for implementation, as well as potential obstacles and opportunities. This report will be updated to include key findings from the MWW Case Study, practical considerations for implementation, and potential obstacles and opportunities.

Defining Terms

This report focuses on water and wastewater affordability as a component of water equity. These are our definitions of the two terms, drawing from a range of sources.

Water equity: Equity refers to just and fair inclusion—a condition in which everyone has an opportunity to participate and prosper. Water equity occurs when all communities have access to safe, clean, affordable drinking water and wastewater services; are resilient in the face of floods, drought, and other climate risks; have a role in decision-making processes related to water management in their communities; and share in the economic, social, and environmental benefits of water systems.

Water affordability: Water affordability means that the costs of water systems are distributed equitably across society. When water is affordable, cost is never a barrier to accessing safe, clean, reliable services. For the purposes of this report, water affordability means that all residential customers in a utility’s service area—regardless of income—can pay for water and wastewater services without having to forgo or cut back on other necessary expenses like housing, food, medication, transportation, or other utility services.