Thursday, January 7, 2010

NO SUCH THING AS FREE WATER

In the frontier days of the United States, perhaps drinking water really was "free". One can picture from movie westerns a mountain man fur trader or cowboy dipping a tin cup in a mountain stream without apparent ill effects. Today, however, the notion that fresh water is "free" and that there should be no charge for it is a total misconception. The fact is that none of the water we drink or use in commercial activities or use to fight fires is free.

Public utility water and wastewater systems, whether municipal, investor-owned or non-profit, all provide a service to their users. In the case of drinking water, they withdraw raw water from the ground or a surface water source (lake or river), treat the water to remove contaminants, and deliver safe water in volumes and pressures to satisfy demands of homes and businesses. In the case of wastewater, they collect, treat and discharge sewage.

All aspects of water service and wastewater service impose costs which must be recovered in the prices of these services. If these costs are not recovered in the price of service, the service provider will not be long in business or is subsidizing service from a source other than the service users.

Accordingly, as a general principle of law, water utilities are entitled to recover their reasonable costs of service. And they should do so in their rates charged users. However, not all utilities necessarily do this, for political or other reasons. That can lead to infrastructure and other deficiencies or cross-subsidization by other customers. (More on that another time).

Therefore, the common misconception that water is free because it in the ground or a water body should be corrected by the understanding that a user should and must pay for the costs of service. Even someone who drills a water well or buys a bottle of water pays a price for the costs incurred. THere is no such thing as free water.

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