Measuring water affordability and the financial capability of utilities

Abstract

The cost of providing water services is increasing, placing greater financial burdens on individual households and utilities. Five metrics were calculated at multiple volumes of water usage and were applied to 1791 utilities, estimating bills from 2020 rates data, to gauge financial burdens in four states. More than a fifth of the population in 77% of utilities was experiencing poverty, suggesting widespread poverty is a major contributor to utility financial capability challenges. The Income Dedicated to Water Service metric was developed to understand how many households share a similar financial burden, exploring both the depth and prevalence of affordability challenges. Depending on water use, a tenth to a third of households work more than a day each month to afford water bills. This approach and an interactive visualization tool bring greater transparency to understand the scale of affordability and financial capability challenges (https://nicholasinstitute.duke.edu/water-affordability/water-affordability-dashboard).