Water Utilities Raise Rates As Demand Falls

By Kevin Westerling

Water customers in many parts of the U.S. are facing rate hikes due to the sagging economy and decreased demand, according to an Associated Press story published by the Water Environment Federation. Manufacturing closures and cut-backs, a poor real estate market, and a downturn in tourism were cited as causes for the drop in water usage, exemplified in southern Maine by an 11 percent drop in sales last year for the Kennebunk, Kennebunkport & Wells Water District.

"This is happening most everywhere. It's a regional thing, it's a national thing," said Norm Labbe, the utility's superintendent, to the Associated Press. "Many, many (water utilities) around the country are seeing decreases in revenues. Because if industry goes down, revenues go down."

A recent Water Research Foundation study also recognizes home foreclosures and business contractions as contributing factors in the reduction of water use, which has been seen in cities with high unemployment as the people relocate in search of jobs.

"You've got to charge more when revenues go down," explained Gardner Ross, a water utility manager in Baileyville, ME, to the AP. "But people don't have incomes coming in, so it's a double-whammy."