Water Need in the United States

The inability to pay for household water is a significant and growing problem in the United States. OCS’ Water Utility Affordability Survey Report,[7] found 16% of residential customers, on average, received a disconnection notice in 2022, and 5% were disconnected. One study of the largest drinking water providers in the United States (787 utility providers surveyed) found that one in seven households, or 28.3 million people, were experiencing undue hardships in paying their water bill.[8] Water affordability challenges disproportionately impact households with low incomes, rural communities, communities of color, tribal communities, and immigrant communities.[9] While water utility rates across the country vary significantly, research from the Legal Defense Fund indicates that all states have estimated water and sewer rates that are unaffordable for families at or below the federal poverty level. Duke University Nicholas Institute for Energy, Environment, and Sustainability indicates that in 29 states (including D.C.), households at or below the poverty level spend over 5% of monthly income on water and sewer bills.[10]

Households that cannot pay their water bills risk disconnection. Lack of water access can lead to:

  • poor sanitation,
  • disease transmission,
  • increased vulnerability of older adults, pregnant women, children, and people with chronic illnesses,
  • school absenteeism [11,12]

Water disconnections can also negatively impact household stability through:

  • property liens
  • foreclosure or eviction (resulting from a lien)
  • economic hardship
  • financial stress

In 2022, a survey of water utilities found that, on average, 16% of residential customers received a disconnection notice and 5% were disconnected.

The COVID-19 pandemic and resulting economic fallout exacerbated existing disparities in access to water and further strained individuals’ ability to pay their home water and wastewater bills. Though disconnections may have slowed during periods of the pandemic due to utility shutoff moratoria, when those were lifted, many households found themselves with unmanageable arrears and in need of financial assistance.[13] In 2020, the estimated financial impact of COVID-19 on drinking water utilities was $13.9 billion, stemming from shutoff moratoria, increased residential water consumption, and higher customer arrearages.[14] Lost revenue makes it difficult for utilities to keep up with expenses like water and wastewater treatment, infrastructure improvements and repairs, and administrative costs. Thus, the expenses of providing water services are rising, especially as much of the country’s water and wastewater infrastructure is nearing or beyond the end of its useful life.[15]

The estimated financial impact of the COVID-19 pandemic on drinking water utilities was $13.9 billion.

OCS Water Utility Affordability Survey:

Report Highlights

In 2023, OCS disseminated a survey to assess rates, customer debt, disconnections, fees, and other information from water and wastewater utilities across the United States.[7] At publication, it was the largest survey conducted in the country documenting rates, arrears, disconnections, and fees in one dataset. Responses from the survey were submitted from all but one state, totaling 1,882 responses, and several key findings emerged from the study:

  • Disconnection policies and arrearage amounts vary widely between large urban utilities and smaller rural ones.
  • Urban and rural areas also experience distinct affordability challenges.
  • Tribal communities face significant barriers to water access and affordability, with high debt per household and high proportions of households in arrears.
  • Water debt adds to economic instability for families with very low incomes — a target group that LIHWAP sought to assist. These families may spend up to 40% of their monthly income on water and wastewater bills.
  • Utilities of all sizes and locations experience financial strains in covering maintenance and infrastructure costs, particularly for wastewater infrastructure.
  • LIHWAP payments for fees in addition to base water and wastewater usage charges were critically important.

Other key findings from the survey included:

  • On average, 20% of households are in debt to their water utility. For tribal communities, that increases to 32% of households.
  • The average household debt per utility is $285, but among tribally owned utilities, the average household debt is $502.
  • Nearly all participating utilities charge late fees and disconnection or reconnection fees (88%).
  • For households at 75% of the federal poverty level, up to 40% of their monthly income is spent on water and sewer bills.
  • States with the highest average debt per household have significantly lower rates of disconnection than states with the lowest average household debt for their water utility.
  • An average of nearly $15 million is owed to each very large utility (serving populations over 100,000).
  • Most utilities rely on small numbers of administrative staff (55% had fewer than three administrative staff members).
  • Utilities experience financial challenges and note significant benefits from water assistance programs for both their own organizations and their customers.

Citations