Top 5 Utility Concerns

Data collected as part of the 2012 Annual North Central Utility Rate Survey was not limited to just utility billing rates, but included a range of topics, based on suggestions from previous rate survey participants, AE2S staff members, and clients. The results of our regional survey show that the top Water and Wastewater Utility concerns of the respondents align with the concerns reported by other water industry professionals nationwide.

Survey participants ranked 18 issues, based on the level of concern for their Water and Wastewater Utilities, with a rank of “1” being a top concern and a rank of “18” being of least concern. The table below identifies the top five concerns expressed by survey respondents, as well as the percentage of survey respondents that ranked each of the identified issues as a top five concern for both the large (communities over 5,000 population) and small (communities under 5,000 population) Rate Surveys.


In both the large and small community surveys, Aging Infrastructure/Asset Management was the top concern for the majority of survey respondents. Other nationwide surveys have also ranked Aging Water and Sewer Infrastructure as the most important issue facing the industry. In 2009, the American Society of Civil Engineers gave America’s Water and Wastewater Infrastructure a grade of D-, and the recent AWWA report “Buried No Longer: Confronting America’s Water Infrastructure Challenge” estimates the investment needed to restore existing water systems will be at least $1 trillion over the next 25 years. The water industry continues to stress the importance of asset management and to provide tools for assisting utilities in developing practices to help prioritize and manage maintenance and replacement of aging infrastructure.

Increasing Operating Costs came in as the second highest rated concern by survey respondents. Rising energy costs, which on average can account for as much as 30 percent of operating costs, are of specific concern.

It is no surprise that Funding and Financing ranks number three in our survey. In a nationwide survey, only about 27 percent of respondents believe that funding in the next five to ten years will be sufficient to fund their capital infrastructure projects. National respondents also indicated that the revenue bond market will be their primary financing source. It is unlikely that the market will support the large quantity of bonds necessary to fund all of the needed projects.

Regulatory Compliance is also adding to the financial pressure of utility management, with over 50 percent of survey respondents ranking this issue within their top five concerns. Nationally, Regulatory Compliance is identified as the major driver for ongoing infrastructure investments.

Rounding out the top five, greater than 50 percent of survey respondents ranked Utility Rate Affordability within their top five concerns. Reviewing your rate structure for potential modifications, such as “lifeline” rates; offering payment flexibility; or implementing a customer assistance program can help mitigate affordability concerns. However, it is important and sometimes difficult to distinguish between a customer’s ability to pay higher water rates and the willingness to pay. In a national survey, approximately 68.5 percent of respondents believed their customers have little understanding of the gap between the cost of producing water and their current water rates. Both AWWA and WEF have resources available for customer outreach and education. National respondents agreed that more needs to be done to market the true value and importance of utility services to consumers before they will recognize the need for increased rates.

AWWA and WEF will sponsor a joint Utility Management Conference in Glendale, Arizona on March 10-13, 2013. The conference will address many of the concerns identified in this article.  For more information about the conference, click here.