Water Rates Poised to Rise Further as Utility Debt Grows

Water rates, which for some U.S. customers have more than doubled since 2000, are probably going to increase in the short term as companies struggle with rising debt and the need to spend on infrastructure, according to a Columbia University report.

Utility debt increased on average 33 percent from 2000 to 2010, while water rates rose 23 percent, a report by Columbia’s Water Center concluded. For a third of the more than 1,000 utilities surveyed by the American Water Works Association, debt and rates gained more than 100 percent in the time period.

“The problem of escalating debt and rising rates is not a problem limited to a handful of poorly managed utilities, but includes many well-run utilities,” Ed Pinero, head of sustainability for North America at Veolia Environnement SA (VIE), said in a statement today. “Many of today’s water managers are operating in an old framework that needs to be re-examined for the 21st century.”

Water infrastructure in the U.S. needs at least $1 trillion in investment to repair and replace systems, according to a report released in March by the American Society of Civil Engineers. The group gave U.S water infrastructure a barely passing D grade, citing almost 240,000 water main breaks annually and an average reservoir age of 52 years.

The report suggests companies should improve operational efficiency, focus on environmentally sustainable water sources and explore alternative rate structures.

Veolia Environnement, Europe’s largest water company, is one of several companies and organizations that fund the Water Center.

To contact the reporter on this story: Peter Ward in New York at pward41@bloomberg.net

To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net

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