Sridhar Vedachalam, Environmental Policy Innovation Center
Water Bill Assistance Programs Leave Out Deserving Customers
Analysis of customer assistance programs at the nation’s largest water utility companies finds that many in-need customers are excluded.
May 24, 2021, Washington, DC–A report released today by the Environmental Policy Innovation Center (EPIC) finds that customer assistance programs offered by large water utilities to help low-income customers pay their water bills are poorly designed and leave out deserving customers.
The report, H2Affordability: How Water Bill Assistance Programs Miss the Mark, evaluated assistance programs offered by 20 of the largest water utilities and found that a fifth did not offer any type of assistance program and those that did offer assistance, failed to meet the needs of their community.
“Where these programs exist, they often cater to a small section of the population, typically homeowners, and are beset with problems leading to low enrollment rates – under 25 percent of the eligible customers participate in them,” said Sridhar Vedachalam, EPIC’s Director of Water and lead author of the report.
Drinking water and wastewater costs have more than doubled since 2000 across the United States. This far exceeds price increases for electricity, rent, and gasoline. Higher water rates are a crippling burden for low-income households.
“Running water is quite possibly the most cost-effective public health tool for preventing illness,” said Laura Feinstein, the Sustainability and Resilience Policy Director at California-based SPUR. “Yet when people can’t pay their bills, they lose access to running water at great cost to themselves, their families, and their communities. The United States needs to address water affordability problems for low-income households so everyone can maintain access to water.”
“Confronted with the problem of unaffordable rates, the water sector’s response has been to point to these customer assistance programs,” Vedachalam added. “But if we look under the hood, these programs have too many loopholes and do not reach their intended audience. Collectively, we are failing at the task of ensuring everyone is able to afford water for their most basic needs.”
The report, funded by the Robert Wood Johnson Foundation and Spring Point Partners, found that the income thresholds set for assistance are often too low, and the assistance is provided on a “first-come-first-served” basis. Documentation requirements are too high and a lack of coordination with other assistance programs means customers have to apply separately to each program.
The report makes the following policy recommendations in order to improve customer assistance programs and increase participation:
- Homeownership requirements must be eliminated and non-account holders must be provided vouchers or cash assistance to offset the burden of high water utility bills.
- States must provide authorization that allows water utilities to use rate revenues for customer assistance and provides a guaranteed source to run the program.
- Water utility assistance programs must be linked with other utility assistance programs or federal programs to streamline access and improve participation.
- Water utilities must be allowed to access and share data on their customers with other utilities such as gas and electric.
- The application process must be streamlined by limiting the number of documents requested upfront, allowing electronic signing and submission, and providing as much information about the program.
- Income eligibility thresholds must be consistent with the region’s cost of living.
- Utilities must prioritize keeping the cost of water low for basic consumption and make discretionary uses expensive.
- Utilities must prioritize customers’ public health and welfare concerns by eliminating shutoffs as a tool for rate payment and limiting or eliminating delinquent payment fees.
Tiffani Bell, Founding Executive Director of The Human Utility, a non-profit organization that crowdsources donations to pay unpaid water bills, added, “The work done by the Environmental Policy Innovation Center to understand the landscape of water utility assistance programs is timely. Assistance is an important step on the path to affordability and this work furthers that cause.”
While the report found most assistance programs lacking, there were a few bright spots. Customer Assistance Program offered by Seattle Public Utilities and the Portland Water Bureau have easy-to-navigate websites, require little upfront documentation, accept online applications, and combine water bill assistance with other utilities like gas and electric.
“Private water systems, which operate across local jurisdictions and in theory should be better situated to set up these programs at the state-level, are also beset with their own problems, as our analysis of one such utility, Missouri American Water, found,” Vedachalam said.
“EPIC’s careful review of large utility assistance programs underscores the hard reality that implementing customer assistance programs is difficult,” said Manny Teodoro of the University of Wisconsin’s La Follette School of Public Affairs. “The study’s recommendations for improving assistance are sensible, but perhaps its most important finding is that customer assistance is, at best, a ‘band-aid solution’ to the nation’s water affordability challenge.”
The economic and public health crises brought on by COVID-19 have forced many utilities, including small and mid-sized ones, to confront the issues of unpaid bills and customer assistance.
“In the last set of COVID-19 relief bills approved by Congress in December 2020 and March 2021, the federal government allocated more than $1 billion toward debt relief and low-income assistance,” said Stacey Isaac Berahzer, CEO of IB Environmental, a consulting firm whose clients include several water utilities. “While certainly welcome, this assistance is short of the need, but does create an important opportunity for water assistance programs to become more common, efficient, effective, and hopefully ongoing.”
“Water utilities need a viable strategy to ensure that their most disadvantaged customers aren’t shut off from water services,” concluded Vedachalam “As the COVID-19 crisis demonstrated, water utilities are one economic shock away from a financial crisis. Utilities have a transactional relationship with their customers, but they tend to survive and even thrive when their customers are doing well.”
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About Environmental Policy Innovation Center (EPIC): The Environmental Policy Innovation Center is a nonprofit organization based in Washington, DC whose mission is to build policies that deliver spectacular improvements in the speed and scale of conservation and environmental progress. In our water work, we focus on innovative policies that improve health, access, and affordability; eliminate disparities across water systems; and build public trust in water supplies. www.policyinnovation.org