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WaterWorld . January 2003 . www.waterworld.com
Survey Finds World Water Rates Rising
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A recent survey by the NUS Consulting Group studying water
rates across the world found that rates increased in 12 of
14 countries surveyed. Water rates in the United States were
among the lowest in the countries surveyed, and were one half
to one third the rates charged in most European countries.
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The majority of countries included within the survey reported
water prices increasing above their respective rates of inflation.
South African had the largest percentage increase in pricing
with a jump of 20.4 percent from last year. Only the Netherlands
reported a slight decrease of 0.5 percent compared to 2001,
while Germany, the most expensive county surveyed, reported
no change in pricing. The US saw a 4 percent increase
in prices.
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The survey was based on prices as of July 1, 2002, for an
organization with an annual usage of 10,000 cubic meters.
Where there was more than a single supplier, an unweighted
avenge of available prices was used. The percentage
change for each country was calculated using the local currency
in order to eliminate currency movement distortion.
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As demonstrated in this year’s survey, the rise in water
prices is mainly due to two factors -- the first being the
need to ensure the quality of supply and the second being
the need to increase conservation measures. As reported in
last year’s survey, this water industry “sleeping giant” is
beginning to awaken and consumers, both residential and business
alike, must prepare themselves for higher prices and less
secure supply.
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Europe has the highest water costs in the world and this
trend is likely to continue. Germany and Denmark pay
the highest prices for water on the Continent, at $1.78 and
$1.72 per cubic meter (264 gallons), respectively. Rates in
the United Kingdom, France, Belgium and The Netherlands were
all above $1 per cubic meter of water.
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Italy, whose water prices are relatively low in comparison
to their European neighbors, at 72.2 cents per cubic meter,
has forecasted significant increases as it conforms to EU
regulations and expands it current infrastructure.
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Having enjoyed success in deregulating their electricity
and gas industries, some countries are grappling with this
issue in the area of water. The United Kingdom is undertaking
a pilot program and Germany is active in exploring ways of
deregulating its market. However, water is one of the
most politically sensitive subjects and quality supply, not
price, remains the paramount concern.
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In North America, the issues of water quality, scarcity of
supply and aging infrastructure continue to take center stage.
Once a cheap resource with a seemingly unending supply, water
quality and quantity are becoming dominant issues. Aging
infrastructures coupled with new Federal regulations are forcing
local municipalities to increase prices. The survey found
the average rate for water in the US was 54.3 cents per cubic
meter, ahead of only South Africa and Canada in the survey.
Canada, once a haven for cheap supply, is facing increases
as water quality and methods of ensuring safe supply are beginning
to take root.
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Of the 51 US cities sampled in this year’s international water
survey, the overall increase in the average price of water rose
by 4.0 percent, reflecting an increase nearly double last year’s
rise of 2.2 percent. More significantly, the 2001 survey had
only four municipalities reflecting double-digit increases whereas
this year’s study showed eight cities had service increases
over 10 percent. |
Cities having such significant increases included Fort Smith,
Arkansas (37.5%) Boston, Massachusetts (24.4%), Dover,
Delaware (23.9%), Binghamton, New York (20.2%), Roanoke, Virginia
(17.3%) and Los Angeles, California (12.3%). While most increases
reflected costs for new construction and upgrading of maintenance
systems, the increases in Roanoke and Los Angeles also reflected
measures to increase water conservation.
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According to NUSA, many water systems throughout the United
States do not meet new Federal Clean Water guidelines and
are faced with massive costs in order to meet such regulations.
Along with tougher measures to ensure clean water drinking
water, many areas of the county are faced with severe drought
conditions. Many water systems are finding themselves in unique
situations wherein local governments are introducing curbs
on water consumption and the water company is attempting to
increase revenue. Reduced water sales equate to lower
operating profits and thus costs are bound to increase for
supply.
In the coming years, the United States will continue to experience
even greater increases in prices as water quality is subject
to stricter federal regulations , city systems deal with aging
infrastructure and government authorities introduce additional
measures to promote water conservation.
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Author's notes
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The NUS Consulting Group is an independent energy and telecommunications
cost control and consulting organization, based in Park
Ridge, New Jersey, USA. Web: www.nusconsulting.com
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Water & Wastewater International December, 2002
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