Editorial: The Rising Cost of Water

The chart below recently caught my attention (1). It shows the changes in prices over time of residential “utilities,” that is, electricity, natural gas, water and sewage, and telephones. My attention normally goes directly to the familiar energy utilities, electricity and natural gas. But wait! Water and sewage prices—they are typically billed together—have outstripped all others. The prices for water and sewage have been climbing so rapidly that water-related expenditures now exceed those for natural gas and are about one third as large as the electricity bill. We can expect water costs to grow faster than energy because natural gas prices are declining while our decrepit water infrastructure is demanding huge new investments to chase smaller amounts of water (thanks to droughts and climate change).

So perhaps it’s time to redefine “weatherization” to include conserving water in homes. Most measures to save water heating energy already reduce water consumption, yet this is mostly a side benefit and not taken seriously. But saving water is a very different beast. Here are some reasons.

The institutions are different. There are about 50,000 water utilities in the USA—that’s fifteen times more than electric utilities—and most are operated by municipal authorities, each with its own peculiar regulations, tariffs, and water situations. And 15% of all homes are “off the grid,” that is, they rely on private wells and septic tanks. One example of the difference between energy and water: an individual customer’s water consumption is often public information. That’s why the City of Austin was able to publish a list of its top ten residential water consumers. This name-and-shame policy identified Lance Armstrong as the largest user. Many apartments and rental units include water and sewage in the rent, so there’s less incentive for the occupants to conserve water than for energy. Avoiding this landlord-tenant problem is why New York City replaced millions of high-flush toilets with low-flow models.

Trends in Consumer Prices (CPI) for Utilities

Water and energy consumption are different. First, residential water use is less than 10% of national water consumption. Farmers, power plants, and factories are the big players. Most energy use takes place inside the home but in many regions and neighborhoods, exterior water use is larger than interior use. Unfamiliar factors such as yard area, climate, presence of grass, and swimming pools determine water use. Consumers still pay sewage bills for that outside water use. Some clever Florida homeowners install a separate well for exterior irrigation; that way they avoid paying sewage charges on the outside water use. Is that a sensible water conservation strategy? This confusing situation means that it’s much more difficult to create consistent national strategies to save water.

An important step is to create a collection of documented studies of residential water conservation. Can inefficient water use be attacked in the same way that weatherization did with natural gas? Does it make sense to create a water-conservation retrofit package? How much can be saved and what are the payback times? How often do homes with high energy bills also have high water bills?

Water bills are not the only utility cost far outpacing energy. The price increases for garbage collection and – you guessed it – cable/satellite TV access are almost the same. When I figure out a way to conserve on my cable bill, I’ll write an editorial about it.

1. See: Beecher J., Trends in Consumer Prices (CPI) for Utilities Through 2011 and Consumer Expenditures on Utilities in 2010, Institute of Public Utilities, Michigan State University. March 2012. Available at ipu.msu.edu.

- Alan Meier

This blog originally appeared on HomeEnergy.org.

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Comment by Bob Sullivan on September 11, 2012 at 10:21am: Eurihea Speciale's comment is so true. We lived in Atlanta for 28 years; even kept a houseboat on Lake Lanier. People don't change unless faced with crisis. What may sound like a good business opportunity for weatherization folk is likely to become a trail of tears for those who invest time and equipment before realizing there's little demand for services. Stick with what you know and work to offer the best weatherization service possible to a ready market.

Comment by Eurihea Speciale on September 11, 2012 at 10:06am: Alan, this is a great editorial post. We have been screaming this for several years now. I lived in Atlanta when we had our drought and water wars back in the mid-late 2000's. They still haven't come up with a viable solution in Atlanta, and continue to use the water from Lake Lanier, illegally. Interestingly enough, the consumers in the Metro area started using less water, due to the drought - a lot less! So much less, in fact, that the water utilities started raising prices by as much as 10% per year, for multiple years in a row, to make up for all of the lost revenues. In this case, the cost to deliver water stayed the same, and the water supply improved, but the prices rose due to lack of demand and the need to sustain hard costs. The other kicker is that prices for the largest consumers drops the more water they use, which you would think is a bit counter-intuitive. Thus, the more inefficient they are, the cheaper it becomes for them to remain inefficient. Therefore, it would seem that the way to get the largest users to start using efficiency measures is to charge more at the higher usage levels, rather than the rather than vice versa. At any rate, our company became an EPA WaterSense provider a few years ago when the program started and have been amazed at the lack of demand for water efficiency, despite the rapidly rising costs, as you have pointed out. Perhaps the cost is still just too low for people to take notice or change their habits, similar to gasoline prices. People don't tend to change habits until it really starts to hurt where it counts the most, their bank accounts.

Comment by Thomas Billups on September 11, 2012 at 10:05am: I live in Georgia, and in the grips of the drought we've been in the last several years, water is on everyone's mind. Our state is battling Tennessee, Florida, and Alabama over water rights to area rivers. What surprises me is that rather than focus on conservation and upgrading broken systems known to lose millions of gallons annually, the focus seems more on damming streams to create more reservoirs. While some added reservoirs may well be needed, the first priority should be to better manage the resources that we have before we look for more.

Comment by Sean Feurtado on September 11, 2012 at 10:00am: I think energy consumption IS related to water consumption, Pumps used for water transportation use most of the planets energy. You address two issues when you assess water efficiency which is an approach most should be aware of.

Comment by Bob Sullivan on September 10, 2012 at 5:58pm: "Water and energy consumption are different." The writer said it all. Weatherization folk should stick with stuff they know e.g. where they provide useful services.

Comment by Morgan Hunter on September 10, 2012 at 7:51am: In the summer months my quarterly hydro bills are less than my quarterly water/sewer bills, only by about $10.00 but still water/sewer cost more than my hydro. I live in out in the country and in a country which has the world’s most fresh water.

Comment by Gjorevski Saso on September 6, 2012 at 1:42pm: Reading this i am happy that we have enough water in my country but this is not reason not to start thinking of how to start waste it reasonably.

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