Avoiding Rate Shock: Making the Case for Water Rates

Communicating the true value of water can act as a shock absorber when utilities must raise rates, according to this study sponsored by the AWWA Water Utility Council. This comprehensive study found that consumers get upset over rate increases because of a misunderstanding about the true value of a safe, adequate supply of water. The report, funded by the AWWA Water Industry Technical Action Fund, resulted from the need in many cities to replace aging infrastructure and the necessity of sharing the cost burden with water utility customers.

Drawing on extensive research, case studies, and in-depth interviews, the report lists four key findings:

• People undervalue water, making it more difficult for them to accept rate increases
• A consistent, structured communications strategy builds the credibility necessary to support the customer-utility relationship and rate increases
• It's never too late to start doing the right thing; think long-term and plan beyond the current crisis
• Billing practices and rate structure options can affect customer reactions and acceptance of rate increases

Each finding is followed by several recommendations to help utilities know their customers and deliver clear messages relating the benefits of water service, increased costs. It also includes tips on how, when, and where to communicate rate increases, plus a comprehensive plan to explain and implement rate increases, and outreach programs regarding billing and payment options.