The terms that shape rates, affordability, and customer protections
Water is an essential service and consistently among the lowest cost utilities for households. Studies show customers are willing to pay reasonable increases in their utility bills to ensure water service is safe and clean. Behind the scenes, affordability is managed by careful planning, balancing investments, careful cost management, financing tools, and regulatory review. The terms below unpack the many factors that influence water rates—and explain how disciplined, transparent processes help keep service both affordable and sustainable over time.
Key Terms
- Affordability / Rate Stability: Balancing necessary investment with a customer’s water and wastewater rates—also influenced by innovative financing strategies, customer assistance, multi‑year investment planning, and federal grants and loans
- Arrearage / Arrearage Forgiveness: Past‑due customer balances; some customer assistance programs include partial or full forgiveness paired with on‑time payment plans.
- Clean Water State Revolving Fund (CWSRF): State Revolving Fund program focused on wastewater, stormwater, water reuse, and water‑quality projects.
- Customer Assistance Program (CAP): Utility program that offers discounts, payment plans, leak repair help, or arrearage forgiveness to keep bills affordable for low‑income households.
- Drinking Water State Revolving Fund (DWSRF): A federal‑state program providing low‑interest financing for water infrastructure through state‑run revolving loan programs.
- Economies of Scale: Cost and expertise advantages achieved when larger systems spread costs and best practices across many customers, improving reliability and affordability.
- Infrastructure Surcharge: A regulator‑approved line item allowing a utility to recover certain ongoing infrastructure‑replacement costs between rate cases, reducing rate shock.
- LIHWAP (Low‑Income Household Water Assistance Program): A federal program (now sunset) that temporarily helped low‑income customers pay overdue water/sewer bills and avoid shutoffs.
- Rate Case: A formal proceeding where a private utility requests a rate adjustment and must justify costs, participate in hearings, and undergo utility commission review.