Water, wastewater utility survey focuses on customer rates

Aug. 2, 2010
OVERLAND PARK, KS, Aug. 2, 2010 -- Black & Veatch released the results of its sixth 50 Largest Cities Water and Wastewater Rate Survey, which highlights customer charges for water and sewer service for residential, industrial and commercial customers...

OVERLAND PARK, KS, Aug. 2, 2010 -- Black & Veatch today released the results of its sixth 50 Largest Cities Water and Wastewater Rate Survey, a valuable knowledge resource for water and wastewater utilities. The survey highlights customer charges for water and sewer service for residential, industrial and commercial customers.

"This survey is a tool for managers of water infrastructure to see how their rates compare with national trends," said John Kersten, Associate Vice President and Water Industry Lead in Black & Veatch's management consulting division. "The primary source of income for these utilities to pay for operating, maintaining, expanding and updating their infrastructure is through water and sewer rate collections, which must be continuously adjusted to address rising costs."

A key finding of the survey is that water and wastewater bills for residential use across the country have increased at a steady rate since 2001 -- when Black & Veatch began producing the survey.

This trend correlates with findings from The 2009 Report Card for America's Infrastructure, published by the American Society of Civil Engineers (ASCE), showing approximately $2.2 trillion of investment is needed to improve vital infrastructure over the next five years. Overall, America's grade is a cumulative "D" as noted by the ASCE.

The full survey results are available at www.bv.com/top50ratesurvey.

Black & Veatch's analysis cites five key issues that influence rates and sheds more detail around the value of water and wastewater services and the solutions needed to address these two areas of vital infrastructure:

• Commodity price increases. Primarily in electricity, chemicals and natural gas costs. A leading contributor to operating and maintenance costs of water and wastewater facilities - highlighting the important inter-relationship or nexus of water and energy.
• Lower consumption and high fixed cost. In general, demand or a consumer's usage is declining while many utility costs, such as debt service, are fixed. Since most pricing structures include volume-based charges, revenues are declining while costs are not.
• Benefits. Pension obligations and health care benefits are prompting an increase in labor costs.
• Influence of wastewater legal action. Significant capital programs are being implemented in most major cities to comply with legal; action related to wastewater system performance.
• Aging infrastructure. Updating and replacing aging infrastructure are significant costs for most water and sewer utilities, as noted in the ASCE report available at: www.asce.org.
• Analysis of the 2010 survey results indicates the average annual increase in typical residential water bills is approximately 5.3 percent from 2001 through 2009, while the increase in typical residential sewer bills is approximately 5.5 percent.

About Black & Veatch
Black & Veatch is a leading global engineering, consulting and construction company specializing in infrastructure development in energy, water, telecommunications, management consulting, federal and environmental markets. Founded in 1915, Black & Veatch develops tailored infrastructure solutions that meet clients' needs and provide sustainable benefits. Solutions are provided from the broad line of service expertise available within Black & Veatch, including conceptual and preliminary engineering services, engineering design, procurement, construction, financial management, asset management, program management, construction management, environmental, security design and consulting, management consulting and infrastructure planning. With $2.7 billion in revenue, the employee-owned company has more than 100 offices worldwide and has completed projects in more than 100 countries on six continents. For additional information, visit our Web site: www.bv.com

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