U.S. water systems crumbling despite higher debt, rates -study

Reuters

NEW YORK, Oct 15 (Reuters) - The systems that supply mostAmericans with drinking water continue to deteriorate, despitehiking rates for users and taking on more taxpayer debt over adecade, according to a new study.

The average debt of municipal water systems in the UnitedStates increased by 33 percent from 2000 through 2010, andconsumers paid 23 percent more in rates on average over the sameperiod, according to researchers at Columbia University's WaterCenter in New York.

The nation's biggest water utilities are driving the hikes,accounting for debt and rate increases both over 100 percent,the study found. Meanwhile, federal funding for waterinfrastructure has begun to dry up.

"It will be difficult for many utilities to raise rates highenough to pay down existing levels of debt," said Upmanu Lall,the center's director, in a statement.

The American Water Works Association estimated in 2011 thatdrinking water systems need $1 trillion to replace more than onemillion miles of aging pipes underneath the nation's streetsover the next 25 years.

Columbia's study analyzed factors that are drivingvariability in water rates around the country - including watersource, utility size, population and climate - and their impacton debt and operating expenses. It used public data from theU.S. Census Bureau, the National Atmospheric and OceanicAdministration and other sources.

The researchers found that small water systems had thehighest operating expenses, and that large utilities are themost likely to cover their costs through rates despite havingmore debt.

They also noted that utilities are coming under stressbecause of demographic changes - particularly as Americansmigrate to the West and South, where water is scarcer, demand isgrowing, or both.

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