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.

Full Cost Pricing By 2050: The Way Forward

Recommendations for achieving better pricing outcomes and affordable access.

The Challenge:

For many communities, the cost of water service is not only underestimated, but often misunderstood in both its full financial and economic terms. This is underscored by 3 main friction points:

Identifying Full Costs
Addressing Affordability
Building Public Acceptance

“This report does not claim to envision what water utilities will look like in 2050. It is a description of the practices that need to be in place when utilities arrive there.”

The Team’s Response:

The vision of this report is to equip utilities to dismantle these 3 main barriers by offering 21 strategic recommendations mapped across four organizational dimensions:

People & Culture
Technology & Data Systems
Process, Policy & Governance
Communication & Stakeholder Engagement

Utility Performance Standards

Financially Sustainable Water Utility Readiness Program

The Challenge:

Financing for capital improvements and financial sustainability are cited as two of the top five issues facing the water sector. Moreover, 27% of utilities cannot cover cost of service and 33% are only moderately able.

“Recognize and support water utilities that implement best financial management practices to ensure their long-term financial health and stability.”

The Team’s Response:

A 2050 Ready Certificate Program that evaluates a utility’s:

Comprehensive financial plan
Justification for utility rate change decisions, and
Stakeholder communications related to the financial planning and rate-setting 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.

Finance & Affordability

Resources

Water 2050: Rethinking Reserves

Learn about resources and strategies to apply risk-aware and risk-savvy thinking to financial reserves in your own utility.

Access Recording

Water 2050: The Future of Water Utility Financial Sustainability

This webinar provides a glimpse into our water future through the lens of financial sustainability. There will be an engaging discussion about innovative policies and practices that will help shape the future of utility finance. Attendees will learn which actions must be taken now to support financial sustainability in the future.

Access Recording

Water 2050: Rethinking Reserves

Learn about resources and strategies to apply risk-aware and risk-savvy thinking to financial reserves in your own utility.

Access Recording

Water 2050: The Future of Water Utility Financial Sustainability

Access Recording

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.