by Heather Cooley, Water Program Director

A recent Washington Post article erroneously stated: “Federally mandated low-flow toilets, shower heads and faucets are taking a financial toll on the nation’s water utilities, leaving customers to make up the shortfall with higher water rates and new fees that have left many paying more for less.” The article tackles an important topic, albeit one that is all too commonly misunderstood. Two key facts are frequently missing from these discussions:

• • Fact #1: Water Conservation and Efficiency Reduce Long-Term Costs

Most areas have already developed the least expensive water supplies, and the next increment of supply is considerably more expensive. Water conservation and efficiency improvements are the cheapest, fastest, and most reliable “new supply.” Moreover, efficiency improvements save energy, reduce water and wastewater treatment costs, and eliminate the need for costly new infrastructure. This saves the customer money in the long term.

When it comes to looking at the relationship between the cost of water and conservation, the key question is “how much would we be paying for water if we had not conserved?” A recent study by the City of Westminster, Colorado tackled this question, and their answer is compelling. In 1980, the City’s per capita water use was 180 gallons per person per day (gpcd); conservation programs, progressive pricing policies, and national plumbing codes reduced per capita demand to 149 gpcd in 2010. If water use had stayed at 1980 levels, staff estimated that the City would have had to secure 7,300 acre-feet of additional water supply, requiring $591 million in new infrastructure costs and $1.2 million per year in operating costs. They estimated that, without conservation, the average single-family customer would pay combined water and wastewater rates that are more than 90% higher than they are today.

• Fact #2: Water remains cheaper than nearly every other utility.

Water conservation and efficiency reduces the long-term cost to provide water service – all else being equal. But all things are not equal; water costs are on the rise, and the major culprits are rising energy and chemical costs, coupled with a need to invest in aging infrastructure. The American Society of Civil Engineers recently graded the nation’s drinking water and wastewater infrastructure a solid “D,” and the EPA estimates capital needs of $384 billion for drinking water systems and an additional $298 billion (in 2008 dollars) for wastewater and runoff over the next 20 years, raising water system costs and customer bills.

Despite these trends, household water expenditures remain far below other utility expenditures.  An analysis by Jan Beecher of MichiganStateUniversity found that an average household of four spends $53 per month for water and other public services, compared to $134 for telephone services and $149 for electricity. So even today, after several years of rising costs, tap water remains cheaper than most other basic utilities. But ask residents of Toledo, Ohio or Charleston, West Virginia – major U.S. cities with a combined population of 700,000 whose water supplies were interrupted for several days this year – about the real value of a reliable, safe water supply. Water costs are on the rise, but it remains the best deal around!

^{Pacific Institute Insights is the staff blog of the Pacific Institute, one of the world’s leading nonprofit research groups on sustainable and equitable management of natural resources. For more about what we do, click here. The views and opinions expressed in these blogs are those of the authors and do not necessarily reflect an official policy or position of the Pacific Institute.}