Tap water will become increasingly expensive, a fact of life with many explanations — supply, quality, safety, and demand — and few practical responses. The halcyon era of inexpensive water, low-tech metering, and quarterly billing is definitely over, even in areas like ours with reliable supplies, such as the Delaware River. But there’s good news: Just as we can better steward our water resources, we already can do something about our bills besides merely complain.
A recently published Electricity Journal study by Rutgers-Camden’s Richard A. Michelfelder and consultant Gary D. Shambaugh, both of whom are utility industry veterans, warns of an inexorable rise in rates due primarily to higher costs to maintain and update drinking water storage, treatment, and distribution infrastructure. “It’s a wake-up call," said Michelfelder, a clinical associate professor of finance at the School of Business. “The phone is ringing.”
Citing a 2011 Drinking Water Infrastructure Needs report by the U.S. Environmental Protection Agency, the authors write that $384.2 billion in system upgrades will be required just to maintain drinking water safety. They estimate this capital expenditure will by 2030 translate into a $682 annual increase in water bills for an American household of four.
Michelfelder and Shambaugh liken the coming rise in rates to a similar acceleration in electricity rates in the 1970s. and blame much of the rise on decades of deferred maintenance, particularly on the part of municipal systems. Their paper was published before the current lead crisis in Newark, NJ, which, like the 2014 lead debacle in Flint, MI, dramatizes the inherent risks of relying upon aging infrastructure. As does the separate issue of higher treatment costs that utilities are facing to remove contaminants known as PFAS, which were discharged into the environment when wastewater treatment regulations were less stringent.
Locally, private, investor-owned utilities such as American Water, headquartered in Camden, are updating their own and buying and updating public systems, and Philadelphia’s Water Department and other public systems also are making investments. Customers, aka ratepayers, will see the costs of these improvements reflected in their water bills.
But utility consumers have a role to play that goes beyond simply writing a check to pay their water or electricity bill or buying a more efficient dishwasher or washing machine. Consumers should be pushing on their elected leaders at the local, state and federal level — to demand higher standards not just in regulating water safety but in insuring that infrastructure and maintenance needs of our water systems are not deferred.
Taxpayers also need to be prepared to increase their investments in making this happen. If we insist on cheap water or other utilities, we have to remember that nothing comes for free. Deferring maintenance may give us cheap water now, but we’ll pay the price down the road — and by then, the cost will be higher than any of us want to pay.