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Revenue Uncertainty Impacts Local Water Utilities

Revenue Uncertainty Impacts Local Water Utilities

Conservation and improved technologies have contributed to lower water use in Hampton Roads and across the nation.  The region’s water utilities’ revenue is directly dependent upon the amount of water used by customers.  This means that the earnings are highly variable by both personal practice and seasonality.  When people use less water, less revenue is generated to support the costs of providing clean, safe drinking water and wastewater disposal.

Studies indicate that the decline in the number of individuals per household and the increased use of low-flow appliances are primary reasons for the decline in water use in single-family homes.  It is estimated that a home built in 2011 uses 35% less water indoors than one built prior to 1994.  This coincides with the start date of the federal Energy Policy Act.

Trends in non-residential water use, such as a sluggish economy, relocation of industry and more efficient industrial practices coupled with less revenue from new construction and water and sewer hookup fees also make water and wastewater revenues less stable.

This shift in revenue uncertainty may mean that utilities will have to adopt a more proactive and resilient business model to ensure that they are able to maintain the high quality treatment of water and wastewater we are known for in Hampton Roads--things we as consumers too often take for granted.