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MSU professor sees likely water bill increase in near future

February 20, 2017

One year ago, outdated water piping caused a health crisis in Flint. That crisis was emblematic of a larger national problem with water infrastructure, and geography assistant professor Elizabeth Mack said consumers are likely to bear the cost for necessary infrastructure upgrades.

“The main driver of (the) likely rise in water rates is the cost of infrastructure,” Mack said. “A lot of the infrastructure in this country is very old and needs to be repaired or replaced. And most people are serviced by public providers, and they price their water at cost recovery, so if their cost of providing service goes up so does the people’s water bills.”

An MSU study conducted by Mack and Honors College accounting senior Sarah Wrase with a National Science Foundation grant has concluded that, according to what Wrase calls a “conservative” estimate of water rate increases, in five years, 35.6 percent of households will be unable to afford their water bill. Affordability was defined as being unable to pay the water bill without budgeting more than the recommended 4.5 percent of income towards it. For comparison, at the current time, 11.9 percent of households cannot afford their water bill, according to the same criteria.

“The main driver of this likely rise in water rates is the cost of infrastructure,” Mack said. “A lot of the infrastructure in this country is very old and needs to be repaired or replaced. And most people are serviced by public providers, and they price their water at cost recovery, so if their cost of providing service goes up, so does the peoples' water bills.”

The study’s abstract cites an American Water Works Association estimate that it will cost $1 trillion to repair America’s infrastructure; as it stands, the bulk of those costs will fall to everyday citizens.

“If utilities are bearing the full burden of these infrastructure costs, then that’s going to get passed on to consumers,” Mack said. “I think some combination of state and federal subsidies, or even local subsidies, if the money is there to help pay for this infrastructure, are critical. And then also some sort of structure to help low-income households, or some sort of income-based billing for low-income households.”

Those at the highest risk of water shutoffs are low-income consumers who cannot afford even a small hike in water rates. Mack advised those at risk of water shutoffs to look into their water provider and the rate structure that the provider has set up. Those with an increasing rate structure can save money by cutting back on water use.

“I would tell lower-income households, contact your utility provider, see if you can’t negotiate payment," Mack said. "Do something so that you can keep your water on, so that you can make payments on your bill. Don’t assume that if you can’t pay, there’s nothing that can be done.”

Detroit has at times been a center of the water infrastructure crisis that is raising rates for Americans. The study’s introduction cites the city as an example of mass shutoffs, as 50,000 Detroit residents have seen their water shut off since 2014, the study said. In the study’s state-by-state analysis of water affordability, Michigan comes in 24th-highest in proportion of areas at some risk of crisis, and 12th-highest in proportion of areas at high risk of crisis.

Wrase said she and Mack are planning on further water affordability research, as they were surprised at how drastic their results were in this study. Wrase said the two are considering a study of individual cities, such as Detroit, to determine which areas are at highest risk.

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