Water Pricing and Affordability
The costs of water are rising. There are a number of reasons for this including inflation, challenges associated with climate change, and reduction in funding for utilities. Since the 1970s there have been reductions of up to 74% in federal water infrastructure funding in the United States. The Bipartisan Infrastructure Law of 2021 reverses this trend, but enduring disinvestment in water utilities continues to impact their operations and their rates.
The rising cost of water disproportionately impacts low-income households often penalized by water shutoffs. The Freshwater Lab is committed to research and policy led by people directly impacted by unmanageable water bills and shutoffs. We host collaborative panels and workshops to pursue water access and affordability for all.
Decline in federal funding for infrastructure also opened the door to water privatization. A major wave of water utility privatization began in the 1990s and early 2000s. The private operation of utilities for profit often leads to a host of issues including skyrocketing rates, decreasing service, and switching to lower quality water sources. Changes of this nature have had deeply negative effects in places like Flint, Michigan and University Park, Illinois.
Remunicipalization – bringing utilities and other aspects of water delivery back under public control – is the opposite of privatization. The Freshwater Lab seeks to expand the definition and the practice of remunicipalization.
Water privatization takes many forms, yet efforts to reclaim water for the public tend to concentrate on reabsorption of utilities. This core focus is key, but, even when successful, it can still leave utilities vulnerable with essential monies hemorrhaging to private interests and budgets shaky enough to fall prey to private equity predation.
Maintaining and improving public water infrastructure depends upon an expanded definition of water remuncipalization that reclaims the full scope of revenue derived from water. Inspired by closed loop models of production that eliminate wastes, such a definition seeks to close the loop on profits gained from a particular watershed so that they can be reinvested in the operation and adaptation of connected waterworks. Approaches along these lines could answer the perennial quandary of how to maintain aging infrastructure with insufficient public funding.
Remunicipalization without additional streams of revenue could well lead utilities back to the very shortfalls that enabled privatization in the first place. The Freshwater Lab proposes a suite of strategies to increase funding for utilities while decreasing the cost burden for households.
They include:
- Running direct sale of water beverages out of the utility or an enterprise under its umbrella
- Reclamation of wastes for productive uses
- Higher rates for industrial and commercial users of water [Enterprises that profit from water pay more]
- Pay to pipe rates for new developments as part of zoning