In the United States (U.S.), seven leading water associations have published a guide to assess the feasibility of rate-funded customer assistance programmes (CAPs) for low-income households in each state.
With water and wastewater rates in the U.S. sharply increasing as utilities continue to address aging water infrastructure, water treatment and regulatory compliance investments, and other expense, the increased rates pose a large challenge for customers who struggle to pay for essential needs.
The guide, Navigating Legal Pathways to Rate-Funded Customer Assistance Programmes, looks at the various legal frameworks that must be considered by utilities seeking to use rate revenue to fund programmes that assist low-income customers.
Produced by the Environmental Finance Centre at the University of North Carolina at Chapel Hill, the report was commissioned by the American Water Works Association, Association of Metropolitan Water Agencies, National Association of Clean Water Agencies, National Association of Water Companies, Water Environment Federation, Water Environment and Reuse Foundation, and the Water Research Foundation.
“It’s widely recognized that water service is underpriced when compared to its value, but that is small consolation to a household that cannot afford basic needs,” Adam Krantz, CEO of the National Association of Clean Water Agencies, said on behalf of all the project sponsors. “Water and wastewater utilities care about each household and want to provide assistance, and each state has its own legal framework that determines what programs are feasible. This new report is a helpful guide as utilities assess their options.”
Research findings contained in the guide include the differing regulation of water and wastewater pricing in some states; the regulatory frameworks that various private utilities, government-owned utilities, and non-profit utilities are under, and which also influences their abilities to use rate revenues to fund customer assistance programs; and the few states that have laws that clearly address the authority to establish customer assistance programmes from rate revenues, among others. The guide also gives readers three options for utilities in which state laws do not expressly cover CAPs.
On top of the state-by-state summaries of legal barriers and opportunities that include Puerto Rico and the District of Columbia, the guide also uses nine case studies at the utility level to show how CAPs were designed in light of relevant state regulations. Case studies include the City of Atlanta Department of Watershed Management, California Water Service, and the Detroit Water and Sewerage Department, among others.
The guide is available on sponsoring organisations’ websites, alongside the University of North Carolina at Chapel Hill Environmental Finance Centre (EFC) webpage.