The Affordability Gap In Utility Services

Mark SchulingIowa Consumer Advocate

NASUCASanta Fe, New Mexico

June 2, 2014

ELECTRIC“By 2030, the electric utility

industry will need to make a total infrastructure investment of $1.5 to $2.0 trillion.”

-The Brattle Group, Transforming America’s Power Industry

GASThrough 2030, the gas pipeline

and storage utility industry projects investment needs of $133 to $210 billion in infrastructure.

- INGAA Foundation report October 20, 2009

WATER“The U.S. faces unmet water and

wastewater infrastructure needs of approximately $600 billion over the next 20 years.”

- NARUC letter to the Honorable Tom Reed May, 24, 2013

TREND TO WATER PRIVATIZATIONFive times as many deals in 2010

then in prior yearsBudget shortfalls and the need

for water infrastructure were the main factors

-Food & Water Watch November 2010

THE AVERAGE WATER BILLThe average water bill is $125 -ASK.com$100 for a house

-Wiki.Answers.com$80 in Des Moines, water and

sewer -Schuling.Answers.com

REASONS FOR PRICE INCREASESUpgrades and repairs to

infrastructureCosts of reservoirs and treatment

plantsFederal mandatesIncreased securityRising costsReturn on equity and riders

Water Affordability IssuesUnaffordability can pose a health

and safety issuesHigher prices affects disposable

income

First to be eliminated: Health insurance

  Paying utility bills in full

  Seeing a dentist when needed

  Paying rent or mortgage in full

  Seeing a doctor when needed

  Getting enough to eat

  Telephone service

  Child care

  Utility connections

Last to be eliminated: Avoiding foreclosure

HIERARCHY OF INCOME

“Risk Trade-offs in Public health when Water Prices Rise….” D. Crawford Brown, R. Raucher, S. Rubin and M. Lawson June 30, 2009

WATER AFFORDABILITY SOLUTIONSSubsidies to low income (utility

assistance)Pair conservation training with

solutionsLimit causes of arrearagesAppropriate fixed customer charge

HUMAN RIGHT TO WATER IN CA

Water Rates: Water Affordability Pacific Institute in partnership with the Community Water Center.

Questions