WHAT WILL WATER RATES BE LIKE IN THE 1990S

The prices many municipal suppliers and private water utilities charge for water have increased dramatically over the past decade; in some cases they have doubled or tripled. For example, in 1980 a major water authority in the Northeast was charging $ 1.0 1/1,000 gal. The comparable rate today is $2.05. In a large southwestern community, rates during the six warmest months increased from $0.74 to $2.07 per 1,000 gal in the 1980s. Overall charges for water service increased at an average compound rate of about 7 percent per year during the last decade. Many factors led to these increases, including general inflation, higher capital costs, and more stringent environmental regulations. When amendments to the Safe Drinking Water Act are fully implemented and as pressure increases to preserve and protect the nation's water resources, it is reasonable to expect that price increases will follow this trend and may surpass it during the 1990s. These increases will strongly influence the use and management of this valuable resource. In addition to continued dramatic overall rate increases, the 1990s will be characterized by increasing block rates, other conservation-based charges, and more widespread adoption of impact fees. this article concludes with some insights into the effects of such changes on the water industry and its customers.