According to a Columbia University Report, water rates will likely increase in the short term as utility companies struggle with rising debt and the need to spend on infrastructure.
Columbia’s Water Center reported that utility debt increased on average 33 percent from 2000 to 2010, while water rates rose 23 percent. 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.
Escalating debt and rising rates can affect both poorly managed utilities and well-run utilities. Ed Pinero, head of sustainability for North America at Veolia Environment SA (VIE), explains “Many of today’s water managers are operating in an old framework that needs to be re-examined for the 21st century.”
A March 2013 report by the American Society of Civil Engineers states that Water infrastructure in the U.S. needs at least $1 trillion in investment to repair and replace systems. U.S water infrastructure has received a D grade, with 240,000 water main breaks annually and an average reservoir age of 52 years.
Various reports suggest that companies should improve operational efficiency, focus on environmentally sustainable water sources and explore alternative rate structures.