The national average for a single family home’s electric bill is $140-$150/month. In some locale’s the bill can be over $600/month. Contrast that to a national average water utility bill of $40-$50/month (some locations can exceed $110/month). These are averages for a normal sized home with modest lawn. Larger homes, larger lawns, are more. Why the disparity?
The difference can be traced to three factors: 1) Nearly all water suppliers are governmental which seeks to provide water to its citizenry at the lowest price without profit; 2) water utilities are inherently local with each provider having a different mix of supply and quality contrasted against power generation that has more uniformity in costs; and 3) electrical generation is more influenced by the national and international costs of natural resources used to generate electricity (i.e., market set coal, gas prices).
In short, we have always had cheap water. That’s changing. The reason, of course, comes down to supply and demand.
First, demand. As the nation moves away from fossil fuels, the nation becomes more electrically dependent (heating, cooking, cars transitioning to electric). Add to that the surging demands from data centers and an increasing digital/AI society, and you have the demand side. The reason? With the exception of renewable energy (hydro, solar, wind), all power generation consumes significant quantities of freshwater in order to cool nuclear reactors or generate steam by burning natural gas and coal. While some regions face population increases, just as many confront decreases. The US population is growing at a slow pace, only about 0.5%/year.
The supply side is the gamechanger. The twentieth century was the age of federal water projects. The west was transformed by massive dam, pipeline, irrigation, and hydropower development funded by Congressional appropriations. In the first quarter of the twenty-first century, funding has been constrained limited largely to maintaining and replacing aging infrastructure. The result is that local water providers have had to internalize more costs in their rate structure.
Add to that the fact that pretty much all the “easy,” “cheap” water supplies have been developed. The supplies that exist going forward are costly requiring greater expenses for transfers, treatment, all of which are compounded by inflation. Let’s take a few examples:
· In Southwestern Utah, the Pine Valley Water Supply Project is currently in planning and review for the construction of a seventy-mile pipeline. Estimated cost: Nearly $300 million to develop and transport 15,000 acre feet of water per year ($20,000/af);
· Queen Creek, Arizona and Buckeye, Arizona recently acquired groundwater from the distant Harquahala basin. The supply is anticipated to last a hundred years. Estimated cost: $13,441/af.
· Corps Christi, Texas just put on hold the Inner Harbor Seawater Desalination Plant with an estimated cost of $980 million to $1.2 billion. The project would, if pursued, supply 30 million gallons/day (92.07 acre feet/day or $33,600 af/year). Net cost: $29,762/af)
· Denver’s Gross Dam expansion is estimated to come in at as much as $819 million to add 77,000 acre feet of storage, less 5,000 acre feet for environmental mitigation. Net cost: $11,375/af
Federal projects constructed in the mid-to-late twentieth century resulted in a water cost between $150/af to $1,200/af. Some projects sold water at costs of as little as $7.20/af. That’s a far cry from $20,000/af.
In most locations in the U.S. there is no “commodity cost” of water taken from a stream. The cost to the utility is collecting, transporting, treating and distributing water. However, in the arid western U.S., where the prior appropriation doctrine prioritizes water by the date the water was first spoken for, water rights (the right to take water from a stream or aquifer, has a commodity cost.
We can expect to see water bills rise. Not to the level of electrical bills, but narrowing the disparity. Some decry water is a public good and should not be monetized. While that argument has a tinge of merit, it ignores reality. The simple fact is that even for non-profit governmental utilities, rates are a function of the costs of developing, transporting, treating, storing, and distributing this increasingly scarce resource.
Wise water planning can buffer costs to existing consumers by saddling the costs of new raw water sources and expanded infrastructure largely on new demands (making growth pay its own way), but that has its limits as new expansions are more often than not also undertaken to replace ageing infrastructure and meeting new water quality standards that benefit existing customers. The effect can be buffered, but not eliminated.
We all are going to have to acknowledge that the age of cheap freshwater is over.