Water 2050

Finance & Affordability

Water 2050

Overview

The Finance and Affordability Strategic Implementation Team (SIT) is developing strategies to ensure sustainable funding and affordable access to water for all communities. We’re identifying and sharing proven funding models, financing mechanisms, and pricing strategies that promote affordability while ensuring the long-term financial viability of water utilities.

Financing and Funding

We’re exploring new funding sources and approaches to revenues, including non-traditional financing mechanisms. We’re also conducting a pilot study on Segmented Pricing in Portland, Oregon.

Full-Cost Pricing

We’re working to standardize key definitions, such as “Affordability” and “Full-Cost Pricing,” to improve clarity and consistency in the water sector. We’re also identifying barriers to full-cost pricing and providing recommendations to help utilities implement this model while considering affordability.

Utility Performance Standards

We’re developing a certification program to assist utilities in securing funding and budget approvals from their governing bodies. This program will provide a structured framework and clear guidelines to validate rate studies and facilitate the rate adoption process.

Water 2050: Finance & Affordability

The envisioned world of 2050 will include:

Financial and reinvestment strategies that ensures the water industry’s ability to provide continued and reliable service.
Water being valued in more than financial terms, going beyond pricing, recognizing water as a merit good and its power politically and socially, for a sustainable future.
Funding for water that is based on the full cost of the service, where ‘full cost pricing’ coupled with non-price methods (to ease the economic burden on low-income and disadvantaged communities, as with the SNAP or Affordable Connectivity Program) will be commonplace.

Recommended Actions

The short-term recommended actions for the Finance & Affordability Strategic Priority include:

Rapidly identify and share financing and funding resources for resilient systems of the future.
Establish a pricing model and set rates that covers all the costs of water service while advancing affordable access and recognition of the human need for water.
Promote the integration of utility performance standards that support better technical, managerial, and financial practices and align utility sustainability plans and economic growth plans.

2050 Video

Economics of the Future of Water

In 2050, how will we keep water affordable — without compromising reliable, equitable access to clean, safe drinking water and sanitation? Economics is a central consideration for the future of water.

See All Water 2050 Videos

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Water 2050 Think Tank Reports

Economics Think Tank:
A diverse group of influential thinkers from within and outside the water community put forth nine recommendations for an economically sustainable water future in the third think tank report of the Water 2050 initiative.

The 26 participants in the Water 2050 Economics Think Tank, which took place Jan. 23-25, 2023, at the Penn Club in New York City, included highly respected voices from the water and wastewater utility, manufacturing and consulting community, as well as regulators and academics, CEOs and climate advocates and infrastructure and financial services experts.