Charting the Path: Sustainability and Resilience in 2050

Abstract

From David B, LaFrance, CEO, AWWA: In this Last Drop column, guest author Christine Spitzley, who is a principal at OHM Advisors and a vice president on the AWWA board of directors, discusses one of the most important aspects of meeting the Water 2050 goal. She ties the importance of a utility's sustainability and resilience to the importance of full-cost water rates. For those wondering where to start on this financial sustainability journey, she provided a three-step plan. Read on.

Water 2050 is a collaborative initiative launched by AWWA to envision the future of water and chart a course for future success. Two words are often used to describe and define this future success: sustainability and resilience. Though often used interchangeably, sustainability and resilience are not the same. Adam Carnow, in his July 8, 2022, ESRI blog post (“Resilience and Sustainability, the Definitions, Difference, and Applicability of GIS”), defined their differences clearly: sustainability focuses on how current generations meet their needs without compromising future generations, while resilience refers to a system's ability to prepare for threats, absorb impacts, and recover after disruptive events. Both are vital to the future of water utilities, and achieving them requires an acute understanding and a comprehensive strategy.

The Water 2050 collaborative recognized the need for a unified process to guide diverse utilities toward success. How do utilities build resilience and sustainability into water systems in a world that's rapidly changing? How do utilities pay for it?

The Finance and Affordability team is one of the five strategic implementation teams dedicated to executing the critical recommendations made in the Water 2050 Report. The team's key concern: How do we get all water utilities to a place of resilience and sustainability in just 25 years?

One of the most powerful tools for building sustainable and resilient water utilities is full-cost pricing. This model directs utilities to charge customers for the actual and full cost of providing water services, allowing them to recover these costs.

While implementing full-cost pricing can be difficult—especially for smaller or financially struggling utilities—the long-term benefits are clear. This approach stabilizes utility finances, promotes equitable pricing, and helps avoid budget shortfalls that can undermine infrastructure maintenance and development. Obstacles on the road to full-cost pricing for all (particularly for utilities in disadvantaged or underfunded regions) include rising costs, aging infrastructure, and difficulty passing rate increases in communities with limited financial flexibility.

AWWA's Finance and Affordability team is assembling a collection of best practices to guide and support all utilities, no matter where they are on the path to full-cost pricing. The goal is to provide actionable approaches and support to meet utilities at all stages of the journey.

If we create a clearly supported path to full-cost pricing and equitable funding models, by 2050 water utilities across North America can be resilient to future challenges and capable of sustainably providing reliable, high-quality service to their communities.