EPA to Release First National Study of Water Affordability Challenges

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As attention to our nation's safe drinking water needs continues to grow, so too does attention to the nation's water affordability challenges, particularly for low-income households. When people can't afford to pay their water bills, they face severe consequences, including disconnection of water service, loss of housing, and spiraling debt. Yet, we lack a national strategy to ensure access to safe and affordable water and sanitation for everyone-regardless of one's zip code or income.

As soon as this week, we expect the Environmental Protection Agency (EPA) to release its first-ever "Water Affordability Needs Assessment." This Report to Congress, mandated by the 2021 Bipartisan Infrastructure Law, will quantify how many millions of low-income households face unaffordable water bills and the depth of their financial challenges. Moreover, it will identify a range of policies that can help meet these challenges.

We expect EPA's report to emphasize the need for action at the federal, state, and local levels.

One set of solutions is focused on federal and state funding for water infrastructure, which reduces costs for local communities. This includes the $50 billion provided through the 2021 Bipartisan Infrastructure Law, which will help support implementation of new lead and PFAS standards and many other water and wastewater system upgrades. More such funding will be needed in the years ahead-both from Congress and from states.

Another set of solutions focuses directly on customers who struggle to pay their water bills. We expect EPA's report to explore the opportunity to create a federal low-income water assistance program, similar to the long-standing program (known as "LIHEAP") that provides low-income households with support for electric and gas bills.

For a short time, between 2022-2024, $1 billion in federal funds was available for low-income water assistance. The temporary Low-Income Water Assistance Program (LIHWAP), created by Congress during the COVID-19 pandemic, helped approximately about 1.5 million low-income households pay their water bills. The vast majority were below the federal poverty line. Across almost every state and territory and nearly 100 Native American Tribes, LIHWAP enabled nearly 4 million people to restore or avoid shutoff of service due to unpaid bills, or to reduce their monthly water bills going forward. (See LIHWAP data dashboard here.) But funding expired and Congress has not yet created a permanent program.

Hundreds of water utility associations, local governments, environmental, low-income, and other public interest advocates, and labor unions have declared their support for federal water assistance funding and legislation to create a permanent program. National polls consistently show large majorities of voters supporting a federal program. Just this year, several bills have been introduced in Congress to finally create one (HR 10150, S 3830, and HR 8032). Hopefully, EPA's report will give those efforts a boost.

We also expect EPA's report to highlight ways that water and sewer utilities can act locally by, for example, adopting adopt equitable water rate designs and low-income affordability and assistance programs. States, too, can collaborate with local utilities to fund and implement such programs. A water affordability toolkit published jointly by NRDC and National Consumer Law Center explores these approaches in-depth. We look forward to EPA elevating these solutions in the national dialogue around safe and affordable water. (Last month the agency specifically flagged these solutions-and the NRDC/NCLC toolkit-in response to utilities' concerns about the cost of replacing toxic lead pipes.*)

Finally, we are hopeful that the report will identify concrete steps EPA will take, using the agency's existing capacities, to encourage utilities and states to make wider use of water affordability best practices. NRDC and our partners stand ready to work with EPA to advance these initiatives.

With additional federal and state infrastructure funding, a new permanent low-income water assistance program, restructured rates, and additional state and local water affordability programs, we can ensure every family in the country has safe, affordable water from their kitchen taps.

Note:

*See EPA (2024), "Response to Public Comments on the Lead and Copper Rule Improvements," page 21-61:

"There are strategies that utilities may apply to help low-income rate payers, such as the following: variable rate structures, which allow free or low-cost essential-use amounts, then scale for extra use; capping bills for low-income residents as a percent of income; discounts to low-income customers; aiding low-income consumers with correcting plumbing leaks as well as other repairs; consumer assistance programs; and grants or subsidies from the State Revolving Funds (SRFs).

"The Financial Capability Assessment Guidance, originally designed for the CWA program, may also prove useful to PWSs, and organizations such as the NRDC and National Consumer Law Center have provided toolkits on affordability and assistance programs, water efficiency and plumbing repair assistance, and equitable water rates as part of water affordability advocacy toolkits."

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