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Water: Sustainable Infrastructure

Water & Wastewater Pricing - Introduction

A century ago, the average American used only about 10 gallons of water a day to drink, cook, clean, and bathe. Today, Americans use 100 gallons a day per person1 on average, causing stresses on our sources of drinking water. However, the American household spends, on average, only $523 per year2 on water and wastewater charges, in contrast to an average of $707 per year3 on carbonated soft drinks and other noncarbonated refreshment beverages. Compared with other developed countries, the United States has the lowest burden for water/wastewater bills when measured as a percentage of household income.

Ultimately, prices signal value to consumers and it is important for prices to reflect the increasing scarcity of water. Part of this value includes the increasing financial obligation needed to maintain our water and wastewater systems' infrastructure. As detailed on the Office of Water's Sustainable Infrastructure page, our infrastructure is aging. While pipes are reaching the end of their life expectancy, economic and population growth are placing increasing demands on our systems. In addition to the problems caused by aging, stormwater and sewer overflow problems will demand additional resources. To address these needs, the Office of Water envisions a sustainable infrastructure supported by four pillars of actions. These four pillars are: enhancing utility management, saving water through efficiency measures, cooperative ventures via the watershed approach, and full cost pricing. The focus of this website is on the role of full cost pricing in providing safe and clean water.

Most of the funding for water and wastewater comes from the revenues generated by prices. Therefore, pricing water to accurately reflect the true costs of providing high quality water and wastewater services to consumers is needed to both maintain infrastructure and encourage conservation. This website provides information on the role of prices in piped water services and does not suggest any regulatory authority over the pricing structures chosen by utilities and communities. (Many of the resources posted on this website are for informational purposes only and may not support or coincide with official EPA policy.) This website provides:

1    U.S. Geological Survey, Estimated Use of Water in the United States in 1995, U.S. Geological Survey Circular 1200. Denver, Colorado. 1995 Exit EPA Disclaimer (info about pdf)
2   Raftelis Financial Consulting 2004 Water and Wastewater Rate Survey Exit EPA Disclaimer reports an average of $523 per household per year for combined water and sewer bills.
3   Total sales for bottled beverages in 2001 were obtained from the Beverage Digest Fact Book 2002,
Beverage Digest Company Exit EPA Disclaimer, Bedford Hills, NY. Total retail sales in 2001 for carbonated, non-carbonated, and bottled water was $82 billion. Dividing $82 billion by 116 million households in the U.S. (obtained from U.S. Census information Exit EPA Disclaimer) yields spending of $707 per household per year. These calculations were made by Holly Stallworth, Ph.D., EPA Office of Water economist.

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