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Reduction in Water Usage Presents Financial Trouble for Water Utilities

Reduction in Water Usage Presents Financial Trouble for Water Utilities

Water Faucet filling a glassWater usage in Hampton Roads has decreased by 10% in the last decade even though our population has grown.  Residents and businesses are using less water.  Although water and sewer utilities are happy that water conservation has taken hold, the unexpected decrease in water use can create a financial challenge for utilities.  The cost of treating water and wastewater is at least 80% fixed. Fixed costs like debt service, billing and customer service staffs, and pipe maintenance don’t get any cheaper even though customers are using 10% less water.  Utilities in Hampton Roads and across the nation are taking a close look at their rate structures and considering new rates that rely less on per gallon billing and include flat fees per account.  HRPDC’s whitepaper “Water and Wastewater Utilities, Designing the Rate Structure of the Future (PEP13-12)“ provides more details about this issue.  The HRPDC Commissioners encouraged staff to provide more public outreach about this issue so upcoming newsletters will feature key facts about this trend.

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