Believe it or not, water is undervalued in many parts of the country. In fact, about 30 percent of all water utilities operate at a loss or a deficit. So where does all your money go?
The money you pay toward your water bill is stretched many different ways by utilities.
Water utilities, like any business, need to pay for operating expenses such as electricity, treatment chemicals, maintenance, and employee wages. On average, about 70 percent of your water bill goes to your water utility’s operating expenses.
As they work to collect sufficient revenue to ensure the availability of clean and safe water, municipalities and water managers try to keep their rates affordable. Even so, the cost of water and wastewater varies, and the factors that ultimately set the price differ from community to community. Many private water utilities serving smaller communities lack commercial and industrial customers that help keep costs to residents low. These utilities are sometimes forced to charge residents nearly double the national average to recoup operating expenses. In these communities, investing in water efficiency makes twice as much sense.
But that only makes up part of your water utility’s financial needs. Many water utilities need money to pay for improvement projects to upgrade infrastructure or increase capacity — meaning increasing the ability to provide water to an expanding number of customers — and they might also need to pay down debt just like the rest of us. In fact, EPA studies estimate that updating aging water and wastewater infrastructure could cost more than $500 billion over the next two decades. While many of the pipes that deliver water to American homes are relatively new, some pipes are more than 80 years old and well overdue for replacement. And this $500 billion does not include the funds that are needed to build new infrastructure to meet the demands of a growing population!
The good news is that there is something both utilities and consumers can do to delay these major investments and save money. WaterSense makes fiscal sense, both from a utility standpoint, and to consumers’ wallets. Many water utilities are promoting WaterSense-labeled products to help their customers save on water bills and to delay the utility’s need for expensive projects to increase capacity.
So if you’re looking for new ways to pinch pennies as a household, consider the following:
The average household can reduce its water bill by as much as 30 percent by installing water-efficient plumbing fixtures such as WaterSense-labeled toilets and faucets and ENERGY STAR-qualified appliances. Replacing older, inefficient toilets alone could save a family of four around $90 per year. These savings, coupled with potential rebates in your area, mean your bathroom makeover could pay for itself in no time — and pay the savings forward in your community for years to come.