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Focus on Water Affordability

Challenges with water affordability for low-income households are longstanding, and as rates increase to address aging infrastructure and other concerns, the challenges increase.  Two recent actions indicate how those in Congress and the water industry are trying to address these problems.

On October 10, Senators Ben Cardin (D-MD) and Roger Wicker (R-MS) introduced S 3564, the Low Income Water Customer Assistance Programs Act.  The bill amends the Safe Drinking Water Act to establish pilot programs to assist low-income households with access to drinking water services.

Through pilot programs (based on population categories), the bill offers grants to community water systems to support low-income households.  Assistance may include options such as lifeline rates, direct financial assistance, bill discounting, special hardship provisions, a percentage-of-income payment plan or water efficiency assistance including the direct installation of water-efficient fixtures and leak repair.  State primacy agencies would be encouraged to apply and administer the program on behalf of smaller systems.  The pilot programs have a five-year term and no more than two eligible entities in each state shall receive grants.  Grant requirements would be determined within two years of enactment.  Similar provisions apply to wastewater entities.

No funding is authorized in this legislation to support the grant programs.  The bill has been referred to the Senate Environment & Public Works Committee.  To view a copy of this legislation, click here.

The American Water Works Association (AWWA), the Water Environment Federation (WEF) and the National Association of Clean Water Agencies (NACWA), convened a stakeholder meeting this week to gather input on an affordability project they are jointly undertaking. The water industry groups are developing recommendations on affordability for EPA as EPA prepares to respond to a report from the National Academy of Public Administration (NAPA).  Although the NAPA report is primarily directed at cost and affordability of wastewater and stormwater services, some of the same metrics are used when affordability for drinking water is discussed.  Also, many observers have long thought that all water costs should be considered together to judge the impact of rates on customers.

The water cost burden for customers has traditionally be defined in terms of a percentage of Median Household Income (MHI).  This is a simple metric to calculate but doesn’t account very well for all the complexities of affordability for low-income households, leaving many with unaffordable water bills. This industry-sponsored project is attempting to come up with a better overall framework for assessing affordability. The resulting metrics will help assess the affordability of water for customers.  Additional project deliverables will provide improved measures of financial capability for small water systems that are challenged to maintain an adequate level of service and comply with regulations.

The output from this project will be shared with EPA by the end of the year.  This should be in time for EPA to consider the industry recommendations as they prepare their own response to the NAPA report.  ASDWA will keep members informed as the work on this project progresses.