AWWA Document Aims to Better Address Affordability in Safe Drinking Water Act Rulemaking

The American Water Works Association (AWWA) has announced the availability of a new document, “Improving the Evaluation of Household-Level Affordability in SDWA Rulemaking: New Approaches,” to help facilitate discussion of the U.S. Environmental Protection Agency (EPA) analysis of household-level affordability when making regulatory decisions.

A panel of experts was convened by AWWA, led by cochairs John Graham and Cary Coglianese. Graham, a professor at the University of Indiana, was administrator of the Office of Information and Regulatory Affairs at the Office of Management and Budget under President George W. Bush. Coglianese is a law and political science professor at the University of Pennsylvania, where he also serves as the director of the Penn Program on Regulation.

The expert panel concluded that regulatory actions should simultaneously account for vulnerable people’s access to affordable water service and the need to protect their health. This conclusion is important because when cost-benefit analyses are conducted under the Safe Drinking Water Act (SDWA), it may be assumed all households are willing and able to afford safer drinking water, even though households vary in their ability to pay.

The expert panel recommended that EPA expand its analysis of household-level affordability when performing economic analyses supporting future primary regulatory development under SDWA. Among the suggested changes is to move away from using median household income as the sole metric in assessing the impacts of the regulatory structure on affordability and focus more on impacts to households in the lowest 20 percent of income (lowest quintile). Moreover, EPA should seek to use analysis of affordability impacts to inform SDWA policy development (including but certainly not limited to regulatory standard setting) so that it can enhance public health protections, while also ensuring affordability.

“This report offers a roadmap toward improved analysis of a growing water affordability crisis in the United States,” Coglianese said. “Meaningful universal access to safe, life-sustaining water is increasingly put at risk by infrastructure demands and other factors driving up the costs of basic water services. With better analysis of the scope and causes of these trends, policy decision makers at the local, state, and federal levels will be better able to take the actions needed to ensure that everyone has access to a safe and affordable supply of water, no matter their level of income.”

“Most people will think we don’t need an affordability analysis because EPA does cost-benefit analysis,” said Graham. “I want to emphasize that cost-benefit analysis, as currently practiced under SDWA, does not address affordability for low-income households. This report will help ensure lowincome customers are considered in future rulemaking.”

David LaFrance, AWWA chief executive officer, noted that, “In bringing these experts together, our goal was to spotlight the growing importance of addressing affordability as a component of sound water policy decisions, including regulatory rulemaking. Ultimately, customers pay to maintain their water systems and services, including drinking water, wastewater, and stormwater. Decision makers need to consider all customers—particularly lower-income customers—in their regulatory policy discussions.”

The document is available as a free download on AWWA’s affordability resource page at www.awwa.org. S