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The affordability of water and sewer service continues to be an increasingly critical challenge for utilities across the country.
The water sector can become leaders in addressing this issue for our local communities by focusing on monitoring affordability and continuously improving customer assistance programs.
Cities like Louisville and Raleigh have evaluated the affordability of their services and developed roadmaps for promoting service affordability.
Widespread poverty causes many issues for households in the U.S., and helping households afford basic services is a key focus area across the country. Here, we showcase ways the water sector can become a leader in addressing this crisis in our local communities.
Raftelis collaborated with Louisville Water, Louisville MSD, and Raleigh Water to evaluate the affordability of their services and develop a roadmap for promoting service affordability through policies, strategies, and customer assistance programs. The studies examined household income levels and customer bill patterns, the effectiveness of existing customer assistance programs, and objectives that each utility prioritized relative to customer affordability.
The projects included interviews with key stakeholders for each organization, including executive leadership, billing and customer service staff, and community partners. The information gathered from these discussions was instrumental in developing action items that form the basis of the affordability frameworks. The affordability frameworks present strategies and tactics based on their priority to each organization, the time required to examine and implement them, and the level of impact they may have on the community.
Raftelis helped both Louisville and Raleigh explore affordability through commonly used metrics, such as the costs of water and sewer service as a percentage of household income, delinquency rates and statistics, payment plan success rates, and others. The data used is based on information from the utility’s customer information system and other publicly available socio-economic data from the US Census Bureau.
Louisville Water and Louisville MSD entrusted Raftelis to evaluate the affordability of their water services and explore options to support their customers who are facing financial difficulties. Recognizing the essential nature of these services, Raftelis conducted a comprehensive study to understand customer needs and develop informed recommendations. The review included an in-depth analysis of households in the service area to understand the demographics and economic conditions of water and wastewater service customers.
“MSD provides three critical services to our community – wastewater collection and treatment, stormwater management and drainage, and Ohio River Flood Protection. These services keep our region safe and are the cornerstones of a healthy community, environment, and economy. MSD is an anchor institution in this region. One of the major challenges that all water and wastewater utilities are facing right now in the country is affordability. While utilities must continue to focus on how to address aging infrastructure, meet all regulatory requirements, and develop their capabilities to meet future regulatory requirements, utilities also need to balance those important items with how to keep cost to their customers and to their communities affordable.”
Tony Parrott, Executive Director, Louisville MSD
Louisville Water and MSD customers currently have access to a range of customer assistance programs (CAPs) that can help residents manage their bills, including:
When developing a framework to address affordability challenges within a system, it is essential to understand the key objectives of the organizations. Discussions with key stakeholders from Louisville Water and MSD resulted in the following prioritization of objectives to promote affordable and accessible water and wastewater services for all customers. The prioritized list of goals and program objectives includes:
“We are part of our community – we provide a product that’s essential for public health and quality of life. And for the people who depend on our service, an unpaid bill or the worry of finding the money to pay the water bill should not be something that consumes you with worry. So often water providers are viewed as utilitarian institutions. That’s wrong. We’re an anchor for everything that makes a town work. Listening to our customers and community partners and then developing an affordability roadmap is the right approach to strengthen the public’s trust.”
Spencer Bruce, President and CEO, Louisville Water
Louisville is focused on reducing low-income customer impacts, providing tiered assistance based on need, and minimizing shut-offs with the overall objective of delivering a gold-standard effective and efficient service. In response to that Raftelis recommended action items in the areas of system-wide affordability, EWRAP, the senior discount program, rate structures, late fee policies, community partnerships, funding, and communication.
Raleigh Water’s service is affordable when measured by commonly used industry metrics. However, some customers may have trouble paying their monthly bills. Raleigh Water is focused on minimizing shut-offs in its service area and expanding enrollment in its customer assistance programs, which is why it engaged Raftelis to measure its affordability and create a roadmap for the future.
State regulations limit some of the options that Raleigh Water can offer its customers, however, customers can access several existing CAPs to help manage their bills. Current programs include:
Gregory Jenkins II, Assistant Director of Public Utilities and Interim Solid Waste Services Director said “We wanted a rate model that doesn’t just serve our community, but grows alongside it, using real data to understand and respond to their needs.”
Discussions with key stakeholders from Raleigh Water resulted in the following prioritization of objectives to promote affordable and accessible water and sewer services for all customers. The prioritized list of goals and program objectives includes:
To achieve these goals, Raleigh Water’s roadmap includes short-term, mid-term, and long-term initiatives ranging from three months to 10 years. These initiatives apply to various focus areas within the utility, including communications, utility customer assistance programs, payment plans, leak adjustments, administration, and the creation of new programs.
Louisville and Raleigh are examples of cities actively working to ensure water affordability. These cities are positively impacting their residents’ lives by implementing a comprehensive approach that includes customer assistance, rate structure adjustments, and infrastructure improvements. As the costs for providing essential water and wastewater services increase and affordability challenges become more prevalent, other municipalities need to learn from the experiences of Louisville and Raleigh and adopt similar strategies.
Some of the additional considerations include:
By addressing these additional considerations, Louisville and Raleigh can further strengthen their efforts to promote water affordability and ensure a sustainable water future for their communities.
To learn more about affordability and the way your water utility can make an impact, contact Joe Crea at jcrea@raftelis.com or Melissa Levin at mlevin@raftelis.com.
