Are Water Costs Sending Profits Down The Drain? Guest Series Part 4

By Paige Kindell, vice president, resource managment solutions, Ecova

Of all the utilities that retailers pay for to run their business — electricity, natural gas, telecom and water — energy is one of the greatest expenses. However, while water costs at a typical freestanding retail location may account for a relatively small portion of utility expenses, water rates across the U.S. are rising faster than any other resource.

According to a recent analysis conducted by USA Today, overall utility costs since 2000 have risen an average of 33%, but water costs have increased an average of 75%. One in four municipalities have doubled water rates, and in some cities, rates have increased by more than 100% (San Francisco and Atlanta topped the list at 211% and 233% respectively).

Unfortunately, there is no relief on the horizon because the main reason for these increasing costs is the scarcity of the product. When water becomes scarcer — either due to geographical location and growing populations or short-term drought-related shortages — municipalities increase rates to reduce consumption. However, water costs are also rising in almost every city due to much-needed infrastructure maintenance, including replacing centuriesold piping and implementing security measures at reservoirs and treatment plants. These costs are shared by all rate payers, regardless of per gallon use.

You can still catch up with Part 1, Part 2, and Part 3 of this series.