Are Water Costs Sending Profits Down The Drain? Guest Series Part 4Source: Ecova
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.