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Apocalyptic droughts aren’t helping the US raise the $300 billion needed to fix its water delivery system

While much of the world has been reeling from catastrophic floods this year, much of the US has been suffering through an extended drought. The US government signaled the severity of the situation on Aug. 16 when it announced it would be curtailing water deliveries from the Colorado River due to record-low water levels in the Lake Powell reservoir in Utah. The move will affect millions of people, farms and businesses in the western United States.

“This is the worst 14-year drought period in the last hundred years,”  Larry Walkoviak, an official with the US Bureau of Reclamation, said in a statement.

Shutting off the spigot grabs people’s attention but it belies an equally weighty if little-noticed dilemma: As climate change dries up water sources, the remaining infrastructure to deliver water is breaking down. According to a new report from Ceres, the Boston-based nonprofit that promotes corporate sustainability, the price tag to modernize pipes, pumping stations and other water infrastructure in the US will reach $300 billion by 2030.

But budget-stressed municipalities, which operate most of the water systems in the US, face a conundrum. Customers’ bills are based on how much water they use. But thanks to low-flow toilets and other water-efficient appliances, as well as successful efforts to promote conservation, revenues are dropping as customers use less water. That means less money to finance much-needed improvements to the water delivery system.

“At the heart of the issue is the inherent mismatch between the largely fixed-cost structure of drinking water service providers and the highly variable revenues they receive,” write Sharlene Leurig, who manages the Ceres insurance and water financing program, and Jeffrey Hughes of the University of North Carolina.

Take the situation confronting the Orange Water and Sewer Authority. The North Carolina utility saw its customer base grow from 13,000 to 21,000 between 1991 and 2012, but water deliveries—and revenues—remained flat. Why? Blame climate change, in part. A series of droughts over the past decade led to mandatory water conservation and once people became accustomed to using less water they continued their miserly ways, according to the report.

(Other areas of the US face different problems. In the dry desert city of Phoenix, for example, residents are charged a flat monthly water rate regardless of how much water they spray on their lawns, which encourages profligacy without raising additional revenues.)

So what’s the solution? Charging households a fixed base fee would ensure a reliable revenue stream to finance improvements to the water system, while charging the biggest water consumers higher rates would both bring in more money while encouraging conservation.

But the report’s authors caution there’s no national fix for a problem involving hundreds of water utilities. Each locality is beholden to its customers and the politicians who often control its decisions.

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