MO American Water Proposes Bigger Subsidy For Spread-Out Places

In 2016 I told you about how the
Infrastructure System Replacement Surcharge (ISRS) program amounted to a subsidy stream from productive land uses to low-productivity land uses.

Take a look at your utility bills. Is there any charge related to the amount of infrastructure it takes to serve you? Does it take many or relatively fewer feet of wire to deliver electricity to you? Water pipe? Sewer pipe? Does it take a pumping station to get your sewage out of a valley? There is no frontage charge on our bills. So for the same amount of usage, households closer together subsidize households further apart.

Nextstl – How We Subsidize Spread-out Places Via Utilities

Now Missouri American Water is proposing a rate hike increasing its revenue by $73.5M or 21%. The utility says it needs the rate increase to help pay for $920M in water and $30M in sewer infrastructure improvements from 2018 to 2022. to continue to deliver safe drinking water.

Investments in the rate review include the replacement of approximately 275 miles of aging water and sewer pipelines and the upgrading of treatment plants, storage tanks, wells and pumping stations across the state.

MO American Water

Shame water rates didn’t include putting some money away for the inevitable and predictable costs of maintenance and replacement. As we’re experiencing with MSD rate increases where previous generations’ carelessness in building a too-big sewer system while
abdicating maintaining it leaving us holding the bag, so it is here. MoDOT has done the same thing with its system. If they’d put money aside along with each new road and bridge, we would be able to afford their predictable and inevitable replacement costs today, but then they couldn’t have built as much for the same amount of taxation.

The generational theft component aside, the rate increase is for infrastructure, yet doesn’t account for how much infrastructure it takes to deliver water to customers. The rate increase is based on water meter size and usage. So if two households use the same amount of water yet one is on a 30 foot wide lot while the other is on a 100 foot wide one and both water mains in front are replaced, the former subsidizes the latter. Despite having no say in the development pattern of the spread-out place due to municipal fragmentation, the household on the 30-foot wide lot is on the hook to help out the 100 foot household through their water bills.

To comment or take part in a question-and-answer session, individuals will need to register by 5 p.m. the day before each hearing, by providing their name, phone number, and email address. The information can be emailed to the PSC at [email protected], or provided over the phone by calling 1-800-392-4211.


Stltoday – Public hearings on Missouri American’s request to hike water rates begin this week

As the infrastructure that enabled the great spread-out of post-WWII America crumbles we will see subsidy streams broadened and new ones proposed to prop up low-productivity places.