Water and Wastes Digest, one of the leading publications in the water and wastewater industry, recently published an article written by StepWise’s Jason Mumm. The article, entitled Fair Water Pricing discusses how the relatively low price of water and sewer services in America is a false indicator of its cost, and how those same low prices have led to many of the industry’s woes.
Go to the Water and Wastes Digest web page to read the whole article. Here’s a preview….
In the grand scheme of things, utility rates have long been ignored. If anything, the rates charged for those basic water and sewer services have been nothing short of a nuisance for utility managers and their elected officials. Raising rates is viewed by too many communities as a fiscal failure and a sign of mismanagement. Elected officials respond to community perception by resisting those increases.
That is a shame, because while rates may seem irrelevant, in the grand scheme of things they are an essential business requirement. A business requirement is not a goal or an objective, but rather a necessity for ensuring that a business model can succeed. The utility business model is not complex: it is to acquire assets and operate them in order to provide drinking water and sewer service to customers in exchange for a fee. That is all: Acquire assets, operate them, provide service, get paid. Fail to do any one of these things, and your business will fail.