October 15, 2013 / 7:03 PM / 5 years ago

U.S. water systems crumbling despite higher debt, rates -study

NEW YORK, Oct 15 (Reuters) - The systems that supply most Americans with drinking water continue to deteriorate, despite hiking rates for users and taking on more taxpayer debt over a decade, according to a new study.

The average debt of municipal water systems in the United States increased by 33 percent from 2000 through 2010, and consumers paid 23 percent more in rates on average over the same period, according to researchers at Columbia University’s Water Center in New York.

The nation’s biggest water utilities are driving the hikes, accounting for debt and rate increases both over 100 percent, the study found. Meanwhile, federal funding for water infrastructure has begun to dry up.

“It will be difficult for many utilities to raise rates high enough to pay down existing levels of debt,” said Upmanu Lall, the center’s director, in a statement.

The American Water Works Association estimated in 2011 that drinking water systems need $1 trillion to replace more than one million miles of aging pipes underneath the nation’s streets over the next 25 years.

Columbia’s study analyzed factors that are driving variability in water rates around the country - including water source, utility size, population and climate - and their impact on debt and operating expenses. It used public data from the U.S. Census Bureau, the National Atmospheric and Oceanic Administration and other sources.

The researchers found that small water systems had the highest operating expenses, and that large utilities are the most likely to cover their costs through rates despite having more debt.

They also noted that utilities are coming under stress because of demographic changes - particularly as Americans migrate to the West and South, where water is scarcer, demand is growing, or both.

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