New Black & Veatch Water and Wastewater Report Provides Insight into Water Rates in Top 50 U.S. Cities

Report offers benchmarking data to help cities, utilities plan for
financial resilience

OVERLAND PARK, Kan.–(BUSINESS WIRE)–Across the U.S., water and wastewater management is gaining greater
attention as cities and utilities grapple with rising rates for water
and sewer services, the direct result of aging infrastructure, rising
operational costs, evolving capital funding mechanisms and regulatory
requirements.

Today, Black & Veatch Management Consulting releases its 2018-19
50 Largest Cities Water & Wastewater Rate Survey
to help the
market better understand how utilities are charging for water and
wastewater services in a way that ensures revenue stability while
balancing concerns over affordability.

The ninth edition of the report provides utility managers and community
leaders with valuable benchmarking data for the top 50 U.S. cities based
on population. The detail of the survey goes beyond rates and takes a
deeper look at the rate-making tools that utilities use to build and
maintain financial resilience in the face of growing infrastructure
demands, regulatory requirements and climate change.

Since 2001, residential water and sewer bills have increased at a rate
that far surpasses the most recent rate of inflation per the Bureau of
Labor & Statistics’ Consumer Price Index-U (CPI-U), and these higher
bills reflect several dynamics impacting the industry:

  • Aging infrastructure remains the industry’s greatest challenge.
    Funding infrastructure is a top priority and many utilities have
    developed charges specifically for capital projects or ongoing
    replacement and rehabilitation needs.
  • Operational costs associated with labor, pension obligations, contract
    services, materials and supplies have increased at a faster pace than
    the CPI-U, which has driven the need to increase rates.
  • Capital funding for water and sewer projects is increasingly scarce.
    As requirements tighten for long-term debt, many utilities have had to
    finance projects through cash reserves and rate increases.
  • Regulatory requirements are driving the need for significant capital
    to develop new water supply sources or to comply with clean water
    requirements. These programs come with significant costs that have
    triggered rate increases.

“The changing approach to rate structures will play a critical role as
cities and utilities plan for the long-term sustainability and
resilience of their municipal water systems. This, in turn, will help
position our clients to deliver affordable, reliable service to their
customers,” said David Mayers, Water Industry Executive with Black &
Veatch Management Consulting.

Among the report’s other notable findings:

  • Residential Water: While the number of survey participants with a
    uniform rate remains essentially the same at just over one-third of
    participants, use of the declining rate structure has dropped 15
    percent since 2001 as the inclining tier design grew from 46 percent
    to 60 percent in 2018.
  • Residential Wastewater: On the wastewater side, most respondents (65
    percent) rely on a uniform rate, with almost equal distribution
    between the inclining tier design (18 percent) and the flat rate
    structure (17 percent). Of interest is the disappearance of the
    declining block rate structure among survey participants in this most
    recent survey.
  • Non-Residential Water and Wastewater Services: Like the trends
    observed for residential customers, survey participants are moving
    away from the declining block structure for non-residential customers,
    as the inclining block structure gains in popularity.

The report offers a snapshot of the market forces putting upward
pressure on rates; compares year-over-year residential water and sewer
billing trends since 2001; provides survey-driven insight into rate
structures; and compares the average costs for water services for the 50
largest U.S. cities.

“As the dynamics impacting today’s water landscape continue to evolve,
our surveys enable us to keep our finger on the pulse of the industry,”
said Ann Bui, Managing Director for water services within Black & Veatch
Management Consulting, who oversees all rate and financial planning work
for water and wastewater clients. “This year’s water and wastewater
report continues that tradition, enabling readers to learn best
practices from today’s utility leaders.”

The report is available for download at bv.com/consulting
or you can request a printed report at managementconsulting@bv.com.

About Black & Veatch

Black & Veatch is an employee-owned, global leader in building critical
human infrastructure in Energy, Water, Telecommunications and Government
Services. Since 1915, we have helped our clients improve the lives of
people in over 100 countries through consulting, engineering,
construction, operations and program management. Our revenues in 2017
were US$3.4 billion. Follow us on www.bv.com
and in social media.

Black & Veatch Management Consulting provides integrated strategy,
transaction advisory, business operations, regulatory and technology
solutions for the power, water and oil & gas industries. Our highly
experienced team of professional consultants brings together combined
expertise in advanced analytics and practical business sense with
extensive technology and engineering capabilities. We deliver solutions
that work best for your program needs, organization, assets and
customers.

Contacts

Black & Veatch
MELINA VISSAT | +1 303-256-4065 P | +1
617-595-8009 M | VissatM@BV.com
24-HOUR
MEDIA HOTLINE | +1 866-496-9149

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