In some coastal regions in California, fresh water sources are in short supply. In order to supply these areas with water, a variety of solutions have been implemented. One such solution involves desalination—removing the salt content from the water to create fresh water. Another solution is to supply arid communities with water sources from neighboring communities through the construction of underground piping. Engineers are continually looking for ways to make water available to communities across the county in the most efficient and reliable manner as possible.
Public-sector water utilities generally set their own rates and do not have to go through a state public utility commission approval process. Private-sector companies, on the other hand, need to apply with the Public Utilities Commission of the state in which they operate when seeking to raise rates. In exchange for providing water services, private-sector companies are entitled to earn a reasonable return on prudently invested capital. A company is not guaranteed a specific return; whether it earns the allowed return depends on how efficiently the company is run. When determining whether to allow a rate increase, the regulator looks at whether the capital invested to build and maintain the system is reasonable and whether the company is operating in a prudent fashion.
Due to drier and warmer-than-average weather conditions and long-term issues with water sources, many municipalities and states experience shortages. When water conservation is mandated, local governments provide specific guidance on regulations. Visit our Wise Water Use section for ways to use water wisely.
The water infrastructure system is relatively straightforward. Water travels through three main channels: the pumping station and the distribution system. It then leaves the treatment plant and makes its way, through the network of pipes, to homes and businesses.
The pumping facility extracts raw (untreated) water from the a source, such as an aquifer or river, using large pumps, pipes, and a power source to drive the pumps.
After raw water is pumped from its source, it is sent to a treatment facility, also usually situated above ground. This is where water is treated to meet the levels of purity and quality set forth by the United States Environmental Protection Agency (USEPA).
Once the water has been treated it is then ready to enter the distribution system. The distribution system is a network of pipes that span fields, mountains, and highways so that it can reach homes, businesses, fire hydrants, and a multitude of other destinations. The U.S. water pipe network stretches across 700,000 miles and is more than three times the length of the National Highway System. American Water maintains 48,000 miles of pipe in our systems.
After water is drawn from the source (underground, aquifers, rivers, reservoirs, lakes, oceans) it is sent to a treatment facility where modern treatment systems use a combination of chemicals and filtration to assure water quality before it enters the distribution pipes. Treatment facilities are designed by engineers to meet the specific consumption and quality needs of the communities they serve. As those needs increase, additional resources and investments must be provided so that the facilities can remain in compliance with established standards. Water quality standards are set by the USEPA and many states.
The Safe Drinking Act passed by Congress in 1974 authorized the USEPA to set standards for the water delivered by every community water system in the United States serving more than 25 people. The USEPA establishes national health-based standards for drinking water to protect against both naturally-occurring and man-made contaminants that may be found in water supply sources. Our water utilities perform many tests each day to ensure that our customers receive high-quality drinking water.
As of March 2016, American Water has 6,700 employees.
A normal application to a field might only be once every five years. But the final determination is usually made by a detailed soil analysis before and after application. Detailed records are maintained of what specific combination was used on a specific field, and soil samples are also taken over several years to determine if an additional application is appropriate or even needed.
With 85% of the nation’s water serviced by the public sector, the burden to finance the upgrades rests mainly on municipalities, local communities, and ultimately, state and local governments. To assist, the federal government has set up funds to help finance the upgrades, such as the Clean Water State Revolving Fund, which was established in 1987. The fund enables state and local governments to get low interest loans in order to fix aging wastewater treatment facilities and sewer pipes. States are required to match funds they use by at least 20%. Additional measures have been proposed, such as The Water Quality Financing Act of 2007 (H.R. 720), which would commit $14 billion to communities for fixing their antiquated infrastructure. Finally, cities also have the option to apply for municipal bonds in order to finance their work. Other solutions point to the private-sector funding, by which private-sector companies, such as American Water, invest the money needed for water and/or wastewater infrastructure improvements. Public-Private Partnerships (PPP) have also been used in many communities and through them private sector companies assist in the design, rebuilding, and operation of publicly-owned water and wastewater systems. PPP offers one of the most viable ways for communities to access the capital and industry expertise of the private-sector. It is believed that such partnerships will play an increasingly role in helping the U.S. overcome its water infrastructure challenges
There is no evidences to show that bottled water is better that tap water. All tap water is required to meet strict standards set by the USEPA under the Safe Drinking Water Act. The water provided by community water systems is regularly tested for compliance with state and federal regulations, whereas bottled water suppliers do not have such stringent regulatory requirements.
Biosolids are a residual product of the wastewater treatment process. Biosolids can be used in regulated applications ranging from soil conditioning to fertilizer for food or non-food agriculture, to distribution for unlimited use, and are a good source of plant nutrients. Biosolids also contain valuable organic matter that improves the health, quality and structure of the soil.
Biosolids application on farmland has been a regular part of many agricultural communities for over 30 years in North America. In the past few years, more programs have sprung up to take advantage of the cost savings to both communities and farmers.
The cost of water itself is minimal, but there are many expenses associated with the planning, design, construction, operations and maintenance of a water system, as well as the actual treatment process. These include the facilities used to extract, treat and supply the water; investments made to upgrade and maintain these facilities; the materials used in treating the water; updating water testing and treating methods in order to meet regularly with compliance laws; and the labor required to manage the water system. Among the main costs: the electricity used to pump the water from its source and across terrain, and the purchase and operation of pipes.
There are many ways to conserve water. Fixing leaking faucets and toilets is an excellent way to start. If your faucet is dripping at the rate of one drop per second, you can expect to waste 2,700 gallons per year, which will add to the cost of your water bill. You can also take care to run your dishwasher and washing machine only when they are full. For a list of water saving tips for around the home, please visit our Wise Water Use section.
The primary goal of every water service supplier is to provide high-quality drinking water in a reliable manner. Aging pipes can impede such a service. The vast majority of the nation’s pipes were installed in three periods; in the late 1800s, the 1920s, and just after World War II. Depending on the pipe's material of construction, age is not necessarily an indicator of condition or ability to satisfy service needs. For example, cast iron pipe installed in the late 1800s and early 1900s has been found to be in good condition more than 100 years after being installed. However, there are circumstances in which the aged pipes are leading to leaks and creates two subsequent issues. First, it allows contaminants to enter the pipe, thereby jeopardizing the water quality. Second, it allows treated water to seep (and sometimes steadily flow) out of the system and be wasted. In extreme cases, eroding pipes cause the ground above them to collapse, creating sinkholes. Pipes that leak must ultimately be attended to, requiring them to be unearthed and repaired accordingly. Infrastructure in the water industry refers to the pumping stations that draw the water from the source, treatment facilities that treat the water so that is meets the standards of the EPA, and distribution systems that include the vast network of pipes that deliver the water to our taps. While all three of these elements must be well maintained in order to supply clean and high-quality water, the distribution system is generally thought to need the most attention and investment.
There are approximately 53,000 community water systems that service as many as 8 million people and as few as a dozen. Many of these systems are within 5 miles from each other and serve populations less than 10,000. In rural areas, millions of residents depend on private wells dug in their own properties for fresh water, and use septic systems to dispose of wastewater. Municipally owned systems are responsible for the water services for about 85% of the population, with private companies serving most of the remainder. Privately owned companies range from small business enterprises to large corporations with publicly traded stock. In some areas, Public-Private partnerships have been formed between private-sector companies and municipalities to handle water treatment, delivery and wastewater service.
Founded in 1886, American Water Works Company, Inc., which we refer to, together with its subsidiaries, as American Water or the Company, is the largest investor-owned United States water and wastewater utility company, as measured both by operating revenue and population served. Our 6,700 employees provide approximately 15 million people with drinking water, wastewater and other water-related services in 47 states, as well as Ontario, Canada.
Our primary business involves the ownership of regulated water and wastewater utilities that provide water and wastewater services to residential, commercial and industrial customers, treating and delivering over one billion gallons of water per day. Our subsidiaries that provide these services are generally subject to economic regulation by state Public Utility Commissions, which we refer to as state PUCs, in the states in which they operate.
We also provide services that are not subject to economic regulation by state PUCs. Our Non-Regulated Businesses include our Contract Operations Group, our Applied Water Management Group and our Homeowner Services Group. In 2007, our Non-Regulated Businesses generated $242.7 million in operating revenue, prior to inter-segment eliminations.
Over the years, a “Due Process” system has been developed that gives the utility the right to present its water rate case. This process also gives the customer and regulator the right to challenge those requests. A schedule of public hearings is created that allows the public to participate in the process. The utility is required to support its request by rigorously applied standards of evidence. During the hearing process, the utility is subject to cross examination and evidence presented in the proceeding can be challenged on a number of grounds.
The water rate case process involves the following players:
• The utility
• Representatives of the public, including local government representatives, public interest groups and
other non-government organizations and individuals.
• The state public utility commission
Requests for rate increases generally undergo an extremely thorough examination involving all of these entities.
As with other regulated industries, the public utilities commission or similar agency in each state reviews the water rate structure, services, investments, and corporate governance before allowing rate increases. Water utilities provide detailed information to the commission so there is a clear understanding of the actual cost of the service provided and of the investments needed to provide water services. The commission allows for rate increases only if the company can demonstrate that the capital invested was necessary and that the company is operating in an efficient manner.
Public Water utilities are responsible for supplying water services for about 85% of the population, with private companies serving most of the remainder. Privately owned companies range from small business enterprises to large corporations with publicly traded stock. In some areas, Public-Private partnerships have been formed between private-sector companies and municipalities to handle water treatment, delivery and wastewater services.
The general services segment includes the building and operating of water and wastewater utility systems, system repair services, lab services, sale of water infrastructure and distribution products.
American Water participates in both the water utility and general services segments of the business.
Municipal systems are owned and operated by the cities or towns they service and are under the management of the mayor or other elected officials. Privately-owned systems range from small corporate associations that provide service to a dozen families to large corporations that own several water service companies. Whether pubic or private, all water utilities must abide by the strict water quality standards established by the EPA as well as state and local regulations. Private company rates are generally established by state PUCs.
American Water was founded in 1886 as the American Water Works & Guarantee Company and reorganized in 1947 as American Water Works Company, Inc.
American Water is located at:
1025 Laurel Oak Road
Voorhees, NJ 08043
The right to use water from lakes, rivers or ground water sources is granted by the Federal government and State agencies. Water utilities do not own the water. Their role is to collect, treat and distribute clean and safe water in a reliable manner. In most states the actual water is held in public trust and local water utilities are allowed to remove the water from a source (river, ground, lake) with permission from a governing body. For providing this service, water utilities generally charge less than 1 penny per gallon for the water.
Water is treated to meet the levels of purity and quality set by the USEPA. Increasingly stringent USEPA regulations require treatment processes to be continually updated and tested, advancing the levels of technology, skill and chemical solutions. Nearly all public water supplies in the United States meet USEPA standards for safe drinking water. Standards limit the concentrations, or amounts, of contaminants. In some cases where a contaminant cannot be measured, water supplies must provide specific treatment, such as disinfection and filtration.
The cost of delivering safe, reliable water depends on a number of factors such as: the expense of operating and maintaining the water system; the cost of the electricity used to pump the water from its source to homes and businesses; and the salaries of technicians, meter-readers, administrative personnel and others who help run the water utility. Depending on where one lives, these costs can vary from region to region. For example, communities often have water sources of differing qualities. Those who depend on water with more saline properties often have to spend more to have their water treated than those with access to purer water. Likewise, communities in locations far removed from water sources may pay additional costs to have pipes extended out to their area.
When water is charged to your home it reflects the services provided in order to transport, treat, and distribute water from a source to your tap. In order to provide you with water of the highest purity, the infrastructure and facilities used to supply the water must be maintained so that the water is kept safe and clean. As such, the pipes and facilities need to be regularly upgraded so as to ensure safety and meet compliance, and this is reflected in the water bill.
When you pay for water, you are mainly paying for a service. This means labor, infrastructure, capital investments, compliance laws, and other operating costs. Rate increases are based on how much it costs a water service provider to supply water in any given area. One main driver of increasing rates is capital investment, or the money water providers need to invest to repair and upgrade the water supply infrastructure. Analysis estimates that repairs to the infrastructure range from $276 billion to $1 trillion over the next 20 years. It is therefore likely that rates will rise for all communities across the country in the next few years. In some areas, water scarcity raises rates as well. When clean water sources have been exhausted, communities must find alternative ocean water or drilling to deep ground water, all of which require additional capital investments to be made.