How Sensitive Is Household Affordability to Changes in Water Bills?

Abstract

Key TakeawaysThe prevalence of low incomes in the United States is the primary driver for unaffordable water services.Minor rate increases or higher volumes of water usage can have a substantial impact on the pervasiveness of unaffordability.With the cost of water likely to continue increasing, utilities can play a role in protecting customers at all income levels through their rate structures.Affordability elasticity—the relationship of water bills to income distribution—is an important factor to consider in rate design.