Water Affordability | Part 3

More than just a drop in the bucket: Ensuring long-term water affordability

Declining water consumption, reduced revenue, and tighter budget constraints—this has become the new norm for many of the nation’s water utilities. As utilities seek to address these challenges, they face the daunting task of keeping pace with an aging infrastructure system. In the first two installments of our water affordability blog series, we discussed the current state of our nation’s infrastructure woes and highlighted strategies for enhancing financial stability. In the final part of this series, we focus on conservation and specific ways utilities can leverage conservation efforts to protect the affordability of this vital service.

The Conservation Conundrum

Conservation is an integral component to ensuring the long-term viability of our nation’s water supplies. Reducing overall demands on a water system can lead to more reliable delivery for current residents as well as additional capacity for future growth. As conservation efforts continue to reduce overall demands, however, less revenue is generated to support a utility’s bottom line—unfortunately, tomorrow’s savings do not pay for today’s costs. Over the short-term, utilities may have to increase their water rates to fill the gap caused by declining water sales.

When evaluating a utility’s financial stability over the long-term, the benefits of conservation, both to the utility and its customers, easily outweigh these short-term revenue impacts. Through reduced municipal demand, utilities can offset the need for costly infrastructure upgrades, including additional treatment capacity and water supplies. In doing so, utilities can ensure more affordable water services for their ratepayers over the long-term.