Special Report

10 Cities With the Most Expensive Water

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Last year, the water supply in Flint, Michigan was found to contain high amounts of lead. As many as 8,000 children have likely been exposed to the poisonous substance for months. Meanwhile, more evidence emergences that Gov. Mitch Snyder’s office ignored numerous warning signs that the city water had a problem. Further, some have suggested these warnings were ignored because the affected population was primarily poor and African American.

The crisis in Flint dates back to April 2014, when the city’s emergency manager — seeking to save money due to its massive budget crisis — switched its water supply from the Detroit system to the nearby Flint River. Shortly after, several red flags were raised, including General Motors ceasing use of the water in its Flint plant because it was too corrosive. As early as February, lead levels were found to be unacceptably high, and soon residents were complaining about rashes, hair loss, and other health symptoms. By the end of the year, it became clear that the water from Flint’s polluted river was corroding the city’s lead pipes and poisoning its population.

While cost-cutting was at the root of the catastrophe, a typical Flint home paid $864 per year in water bills after the city switched from Detroit’s network. This is nearly triple what the average public water system household pays, and more than in any major system in the United States. Flint is not the only city in the country with contamination problems, nor is it the only system where Americans are paying several times the standard water bill each year.

Click here to see the 10 cities with the most expensive drinking water.

In an interview with 24/7 Wall St., Mary Grant, Public Water for All campaign director at Food and Water Watch, explained, “Flint was a case of a loss of democratic control of a water system. This emergency manager came in and started treating the water system like a business, instead of a public service.”

While Flint’s water supply is managed by a government entity, private water systems tend to be far more expensive on the whole. For this reason, and also because it is easier to ensure water safety in a government-run system, most municipal water utilities are public. According to Grant, most of the governments that choose to privatize their water or sewer system do so to pay off short-term liabilities.

Although just 12% of the nation’s population is served by a private company, seven of the 10 most expensive water systems are owned by private companies. The typical household water bill in a privately-owned municipal system is $316.20, while private systems cost more than $500 on average.

Grant explained that private companies are more expensive because of “how they’re regulated, the costs they’re allowed to recover, and the rate of return they’re allowed to make on their investments.” She added that one factor in particular that is driving up costs also tends to make private systems less safe. “Small private systems rely on groundwater that may be contaminated, and so a large public system can come in and take over the system and connect it to its existing water treatment plant to provide more cost-effective service, and also higher quality service.”

Regional governments can set caps on how much private companies charge users, but state laws allow some private companies more leeway on what they are allowed to charge for, and how much. Pennsylvania, where five of the 10 most expensive water systems are located, has particularly friendly regulatory systems for private companies. In particular, Pennsylvania allows entities to obtain significantly higher rates of return.

Regional water scarcity can also drive up prices. In California, which is in the midst of one of the worst droughts on record, several cities have raised prices in an attempt to curb water usage, and also to maintain profits during this period of conservation. Goleta, California, where water costs a typical family $737 per year, uses this tactic. The city was sued due to the price increase.

Consumer rights group Food & Water Watch reviewed the U.S. Environmental Protection Agency’s Safe Drinking Water Federal Information System, and identified the 500 largest community water networks. Using utility websites, government ordinances, and calls to utility customer service lines, the group calculated the amount a household using 60,000 gallons of water — a typical usage rate — would pay annually in each system. The 10 municipalities on this list are the largest cities in the service areas these systems cover. 24/7 Wall St. also reviewed income and poverty data from the U.S. Census Bureau for the principal counties and cities in these areas.

10. Charleston, West Virginia
> System name:
WVAWC – Kanawha Valley District
> Annual bill: $710.63
> Sector: Private
> Service population: 217,959

By far the largest water supply system in West Virginia, the West Virginia American Water Company – Kanawha Valley District services 217,959 residents of Kanawha County and surrounding areas. It is one of a handful of districts that operate as a subsidiary of American Water, the largest investor-owned water and wastewater utility company in the United States. The typical household in the system spends $710.63 annually on water, one of the highest water bills anywhere in the country. In the rest of the South, the average annual bill if served by a private water system is $462. Water from a public system in the South is even cheaper, averaging just $289 a year.

9. Huntington, West Virginia
> System name:
WVAWC – Huntington District
> Annual bill: $710.63
> Sector: Private
> Service population: 86,827

The typical customer in the WVAWC – Huntington district pays $710.63 annually for water, one of the highest rates in the country. The district is controlled by the West Virginia subsidiary of American Water, which serves an estimated 40% of the state’s population. Like most large private water agencies, West Virginia American Water hedges against the high cost of building a water system by expanding its customer base into rural communities outside of Huntington. A chemical spill near the company’s distribution center in January 2014 put its infrastructure to the test. During the crisis, West Virginia American Water was unable to keep their system operational. American Water also failed to notify the public or maintain affordable rates as it attempted to fix the problem. In a follow-up study of the spill, the advocacy organization Boston Action Research suggested the municipality of Huntington take public control of the water system.

8. Monterey, California
> System name:
Cal American Water Company – Monterey
> Annual bill: $716.18
> Sector: Private
> Service population: 94,700

Monterey is a coastal city in Central California, where a severe drought, now in its fifth year, has put a strain on water agencies and customers alike. California and many municipalities have called on residents to save water. To deal with decreased water consumption, many water suppliers must raise rates to meet their budgetary needs. Last year, Cal Am, the private corporation supplying Monterey’s water, claimed it had under-collected approximately $40 million since 2010 because of the drought. To make up for the loss and fund an important desalination project, Cal Am recently imposed a significant rate hike. Many Monterey residents have protested the hike, claiming they were punished for surpassing their reduction goals. Currently, a movement in the area calls to establish public control of the water supply.

7. Goleta, California
> System name:
Goleta Water District
> Annual bill: $736.62
> Sector: Public
> Service population: 87,000

California is currently in its fifth year of severe drought, with 2013 being the driest year on record. To deal with the water shortage, municipalities must raise water rates to both encourage conservation and maintain government budgets. In Goleta, such price increases have resulted in a lawsuit against the district. Farmers in Goleta Valley recently sued the Goleta Water District, claiming insufficient justification for the district’s changes to the rate structure. The precedent set by the case may have significant impact on how municipalities can handle the drought in the future. Ultimately, the case may help lower Goleta’s typical water bill.

6. Norristown, Pennsylvania
> System name:
PA American Norristown
> Annual bill: $792.84
> Sector: Private
> Service population: 94,724

Pennsylvania passed a law in 2012 that allows private water companies to charge their customers for wastewater services. The law permits such companies to subsidize wastewater costs with funds that public water companies could otherwise raise through taxes, allowing them to compete in larger markets. Perhaps as a result, the 94,724 customers serviced by the PA American Norristown water system are subject to some of the most expensive water rates in the country. The system is maintained by the Pennsylvania subsidiary of American Water, the largest investor-owned water and wastewater utility company in the United States.

5. Scranton, Pennsylvania
> System name:
PAWC Lake Scranton
> Annual bill: $792.84
> Sector: Private
> Service population: 134,570

A typical customer served by the PAWC Lake Scranton water supply system pays $792.84 annually for their water, one of the highest rates in the country. For many small municipalities with a limited tax base, yielding control of a utility to a large, national company makes fiscal sense. Scranton’s water system is controlled by the Pennsylvania subsidiary of American Water, to which it is considering also selling the rights to its sewer system for nearly twice the market value.

4. Pittsburgh, Pennsylvania
> System name:
PA American Water Co-Pittsburgh
> Annual bill: $792.84
> Sector: Private
> Service population: 516,411

By far one of the largest private water systems in the country, the American Water Company services more than 510,000 Pittsburgh area residents. According to Grant, Pennsylvania’s regulatory structure allows for private companies to bake more costs into their bills. Likely largely for this reason, the state’s average private water network bill of $705 is higher than that of any state except for West Virginia. The bill is even higher for Pittsburgh residents, with the typical household paying nearly $800.

3. Silver Spring, Pennsylvania
> System name:
PA American Water Co West
> Annual bill: $792.84
> Sector: Private
> Service population: 93,368

Silver Spring, a township in southeast Pennsylvania, is one of a number of water districts in the state controlled by the Pennsylvania subsidiary of American Water. Residents in the district are subject to a typical annual bill of $792.84 per household. For many small municipalities with a limited tax base, the capital investment required for a state-of-the-art water distribution system is financially unrealistic. As a result, many municipalities yield control of their water system to large, private companies that have greater ability to raise capital.

2. San Diego, California
> System name:
Padre Dam Municipal Water District
> Annual bill: $826.94
> Sector: Public
> Service population: 96,589

The Padre Dam municipal water district provides water to 96,589 residents in the suburbs of San Diego. The district was formed in 1976 and sources its water from a dam originally used by the Mission San Diego de Alcala — California’s first Spanish mission — more than two centuries prior. While a high water bill is no guarantee of quality, residents in the Padre Dam service area have access to clean water and renowned service. The district has won numerous awards in the past few years, receiving recognition for customer transparency and sound capital budgeting.

1. Flint, Michigan
> System name:
City of Flint
> Annual bill: $864.32
> Sector: Public
> Service population: 124,943

According to Food & Water Watch, no residents paid more for their water supply than Flint residents — while it was still drawing water from the polluted Flint River. This high cost is deeply ironic, given the extremely poor quality of the water and because the switch to the Flint River was made as a cost-cutting measure. Some have suggested that Flint inflated water rates as a means of paying other bills as the city fought off insolvency. A city household with typical water usage pays $864.32 a year — close to triple the average water bill in a public system. The high bill is particularly egregious given that Flint is one of the poorest cities in the country. More than 40% of the city’s residents live in poverty.

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