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What Would You Pay for Clean Water?

Clean water is a top health issue for any community, and that includes public and economic health.  Keeping water clean requires substantial public infrastructure, which costs money, and cleaning up existing pollution costs even more. But it’s essential if we want to be able to pour ourselves—or our customers—a glass of water, take a shower, or flush a toilet.

A modern society simply cannot function without a safe, dependable water supply.

But many major metropolitan areas, including Washington, D.C., are served by antiquated waste water systems that cannot meet modern demands.

Parts of Washington, D.C. are served by a combined system carrying both storm water and sewage. Some of the pipes in this system date back to the Civil War. A large rainstorm can overwhelm the system, allowing sewage to flow into area waterways leading into the Chesapeake Bay.

To correct this situation, D.C. Water has embarked on the Clean Rivers Project, a federally-mandated $2.6 billion, 20-year project to build huge underground tunnels to store overflow storm water and sewage during rainstorms until it can be treated. A new Brookings paper examines the  project and concludes that despite D.C. Water’s smart management, we need a better financing system to ensure its success and spread the cost fairly and efficiently among all the beneficiaries.

D.C. Water is financing the project by issuing long-term bonds backed by revenue from customer fees and charges. The federal government has supported the project, but that support is not predictable. The present approach puts the burden on District property owners based on the “polluter pays” principle, which could be risky, judging by the project’s cost projections. Water and sewer payments will increase sharply, with disproportionate impacts on the lowest-income residents.  Rate payers’ will or ability to pay may falter, and the costs of the project may crowd out D.C. Water’s other capital and maintenance investments.

Some would say, this is the District's problem; let them pay to solve it.  That approach ignores the fact that water doesn’t recognize political boundaries.  Cleaner water flowing from the District means downstream jurisdictions have fewer pollution problems, and it helps improve the health of the Chesapeake Bay, a national priority. The District is home to about 11 percent of the region's population, but the benefits of cleaner water for drinking and recreation from here all the way to the Bay are enjoyed by millions.  Meanwhile, surrounding states and local jurisdictions face their own regulatory and budgetary pressures, many also tied to federal mandates, to improve water quality.

Current fragmented efforts do not match the scale of the problem.  Water may not be constrained by boundaries, but communities and utilities are. They have no authority beyond their own borders or narrow rate bases, yet they must address water issues that span multiple states and stem from multiple causes, including agricultural runoff, sewage, and storm water runoff and erosion.

Jurisdictions and regions across the country face the dilemma of developing sustainable financing for sustainable environmental goals. In the D.C. region, there is a better way to pay for clean water.  We recommend that D.C. Water and the Metropolitan Washington Council of Governments convene federal, state and local jurisdictions to sort out a more rational approach to pay for the Clean Rivers Project, which could serve as a national demonstration.  Wouldn’t it be nice to see the federal government create a framework supporting regions working together on water quality, resource management, system upgrading, and, of course, financing?