Latest Post, Water

America’s hidden water affordability crisis


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By Ciara O’Rourke on Mar 5, 2017 6:00 am

When Elizabeth Mack wondered about a future in which Americans wouldn’t be able to pay for water, a couple of colleagues waved her off. “Don’t be ridiculous,” they said. But the idea niggled at Mack, an assistant professor at the Department of Geography, Environment, and Spatial Sciences at Michigan State University. And in January, in an article published in the science journal PLOS ONE, she asked a new question: Is there a burgeoning water affordability crisis in the United States?

Mack, along with research assistant Sarah Wrase, determined that if water rates increase at projected amounts over the next five years, the percentage of households that can’t pay their water bills could triple from 11.9 percent to more than a third. Nearly 14 million households nationwide already struggle to afford water services. An additional 27.18 million — or 8.5 percent of the country’s population — could soon face the same challenges.

“I don’t think we think about this, about what it would mean to not have running water,” Mack told Fusion. Of course, some Americans have experienced it. Water affordability is becoming an increasingly critical issue in cities across the country, including Philadelphia, Atlanta, Seattle, and Detroit. In Philadelphia, an estimated four out of 10 water accounts are past due. Atlanta and Seattle have some of the highest water rates in the country. And in Detroit, a campaign to cut off delinquent residents has stopped water and sewage service for 50,000 households since 2014. It’s a reality Mack thinks Americans in other parts of the country could face.

“Any place with shrinking city characteristics, any city where we have a hollowing out of a downtown core that used to be quite vibrant” could be in trouble, she said. That’s the case in Detroit, where a declining population has left fewer households to shoulder the costs of water services.

The cost of replacing water systems built around World War II are projected at more than $1 trillion over the next 25 years across the country. Prices will be even higher if cities tap private companies to provide water services because they tend to charge higher rates than public providers. A majority of Americans get their water from public providers, but in Atlanta, where the privatization of water services in part drove up water expenses, the service costs $325.52 per month. Households must make at least about $87,000 for that to be affordable.

Because public utilities can only charge customers as much money as it takes to recoup their costs, Mack said, it can be harder for them to finance new infrastructure — but their rates also tend to be lower than private providers that don’t have the same constraints. Still, a 2014 report by Corporate Accountability International and Public Services International Research Unit questioned whether it’s appropriate to tap private companies to shore up infrastructure projects. “No matter how the private sector frames its intentions, its priority is market development over community development, profit maximization over the public interest,” the report states.

Other drivers behind rising water prices include increasingly rigorous water quality standards, said Laura Feinstein, a senior research associate at the Pacific Institute, a global water think tank based in Oakland. As federal laws are updated to reflect new contaminants, water utilities have to spend more money to treat the water to keep it safe for consumers. Extreme weather events associated with climate change, such as droughts and floods, are also expensive for the systems to manage.

But there are ways for both providers and people to curb costs, she said. As utilities look for new water sources to accommodate population growth, they can turn to storm water capture or gray water reuse instead of costlier dams, reservoirs, and desalination plants. And utilities should be mindful that per capita water use doesn’t necessarily increase as populations do thanks to more efficient appliances and cultural shifts among residents who might water their lawns less.

“In reality, per person water use just keeps going down over time, at least in California,” Feinstein said.

Some utilities have worked to develop effective bill discount programs to focus their efficiency programs on lower-income customers. Offering a rebate for a low-flush toilet, for example, is only an option for people who can already pay for a big investment like that, Feinstein said. But giving customers a discount upfront makes it more affordable.

Water affordability is already a serious challenge for low-income people in the United States, Feinstein said. In one study that looked at a sample of communities in California, the institute found that about 5 percent of households had incomes under $10,000 and were spending around 5 percent of their income on water.

In California, at least, laws restraining public utilities from hiking rates higher than the cost of recovery can also hamper efforts to offer discounts to low-income customers, Feinstein said, “because they can’t charge more affluent customers a little more in order to fund low-income discounts.”

For people already living in poverty — 40 percent of the population in Detroit — any increase in a water cost will strain a family’s finances, said Randy Block, director of the Michigan Unitarian Universalist Social Justice Network. He and others in the faith community are trying to raise money to help needy residents pay for water. He thinks water should be recognized as a human right in Michigan just as the United Nations General Assembly defined it in 2010. He likened the city shutting off water for delinquent customers to a war on poverty, and he believes similar skirmishes will play out across the country as income inequality grows.

“Detroit is the canary in a coal mine,” Block said.

Mark Fancher, an attorney for the American Civil Liberties Union (ACLU) of Michigan, said unaffordable water has been a “pretty massive problem” in Detroit for 10–15 years. The practical result of shut-offs, he said, is residents relocating. While there are hardship extensions for residents who have fallen behind on their bills but are also suffering from a serious medical condition, according to Fancher, the system could be a lot better: Residents often don’t know about it, or their applications are denied. Other times, they might receive bills for water they didn’t use or not get the bills at all, he said.

“The argument has been made that an affordability plan for the city of Detroit would be a really helpful thing for the struggling utility,” Fancher said. “Because even though people who take advantage of it may not be paying full market rate for water, they’ll be paying more than nothing, which will at least bring in some significant amount of money that right now they’re not getting at all.”

He questioned how seriously the city is interested in water affordability. The Detroit Water and Sewerage Department did not respond to questions about water affordability and shut-offs in the city, but The Detroit News reported last month that officials expect a new rate structure that rewards low water use will reduce the burden on low-income residents. In turn, said Marcus Hudson, the department’s chief financial officer, their probability of paying will increase.

Mack thinks that governments, utilities, and consumers will need to work together to solve the growing problem of water affordability.

“How can we fix this infrastructure and how can we finance it together?” she said. She cautions against alarmist responses to her study, which, she said, “is not meant to be an activist piece.” Rather, she said her research highlights a quiet water crisis that many Americans are aware of in developing countries but don’t consider in the United States. She doesn’t think anyone appreciates the scope of infrastructure problems here and, she said, Americans should be watching Detroit warily.

“I would hazard a guess that most people don’t know how much water they use,” she said. “I’d encourage them to do some self-education.”

Feinstein is agnostic on whether it’s an increasing problem. The article, leaning on the Environmental Protection Agency’s average consumption estimates, assumes the average household uses 12,000 gallons per month. “That might be more than people really need to meet their basic needs,” she said.

But she agrees that water affordability is a problem. Other countries, such as France, Australia, and South Africa have better programs in place to make sure low-income residents can pay for water, Feinstein said. She thinks California is leading the way with legislation that calls for the State Water Resources Control Board to study how to develop low-income assistance rates statewide. As far as she knows, it would be the first such program of its kind if it’s implemented but, she said, it should be nationwide.

“When people don’t have access to the water that they need, it compromises their health. It means they end up having to make choices between paying for things like medical care and paying for food and paying for water,” Feinstein said. “Water is essential for life. People should be able to get the water they need a price they can afford it.”

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Kentucky Regulators, Industry Reps Privately Rewrote Coal Ash Rules


By Erica Peterson

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Kentucky’s Energy and Environment Cabinet has finalized a controversial plan to let the state’s utilities virtually self-regulate the storing of hazardous coal ash near power plants.

As details about the plan emerged over the past few weeks, Cabinet Secretary Charles Snavely defended the rules and the process, saying it included “full public participation.”

But documents obtained by WFPL News show the process was far from public and instead included more than a year of backroom meetings — under both former Gov. Steve Beshear and Gov. Matt Bevin — with representatives of the utility industry. During that time, documents show the regulations were significantly revised and weakened.

When regulators began meeting with representatives of the utility industry in September 2015, the regulations they had drafted (left) were extensive. By the time they submitted the drafts to the Legislative Research Commission in October 2016 (right), the regulations were weakened.

Environmental attorney Tom FitzGerald of the Kentucky Resources Council, who has spent more than 44 years working in the state, and oftentimes on workgroups with members of industry and regulators to craft regulations, said to his knowledge, such one-sided input from industry is unprecedented in recent years.

“I think it’s unconscionable, and I think it does not reflect well on how little value [the regulators] place on public involvement in the development of regulations that are intended to protect the public,” FitzGerald said.

Representatives from the Energy and Environment Cabinet declined an interview request. In response to emailed questions, spokesman John Mura defended the cabinet’s regulatory process.

“As a part of the pre-KRS 13A deliberative process of regulation development, it is common for the state to informally discuss regulatory matters with the regulated sector that are directly impacted by those regulations,” Mura wrote.

He also pointed to a public comment period and a public hearing held in November 2016. After public comments were received, the agency made minor changes to the rule.

Dangers of Coal Ash

Coal ash — also called “coal combustion residuals,” or CCR — is the byproduct of burning coal for electricity. It’s often stored in dry landfills or wet ponds, or recycled into products like concrete or wall boards.

But it also contains contaminants like mercury, cadmium and arsenic. And environmental advocates say that’s why it’s so important there’s adequate state and federal oversight over coal ash disposal.

“Coal ash is a toxic substance that if handled incorrectly can take human lives, can make people sick, can ruin the environment, lakes, rivers, streams, permanently,” said Earthjustice attorney Lisa Evans.

In the past decade, there have been two high-profile instances — in Kingston, Tennesee and Eden, North Carolina — where large-scale coal ash spills have contaminated miles of rivers and land. But there have also been numerous other cases where there have been smaller amounts of pollution, where coal ash has caused air problems or has leached chemicals into groundwater.

Kentucky Division of Waste Management geologist Todd Hendricks mentioned a few of those instances in public comments he made about the cabinet’s proposed coal ash rule:

“Analysis of groundwater and leachate from CCR units in Kentucky has shown elevated levels of heavy metals, sulfate, boron, and other contaminants. One facility is conducting groundwater corrective action for contamination of karst springs with arsenic leaching from an inactive surface impoundment. Hundreds of thousands of gallons of arsenic-contaminated groundwater per day are captured and pumped to the active surface impoundment for dilution and discharge through a permitted outfall. At another facility, state laboratory analysis of one recent sample of fluid (presumably leachate) flowing from the toe of a closed CCR landfill showed 9.81 mg/L of arsenic, which is 981 times the maximum contaminant level (MCL).”

Coal ash wasn’t regulated by the federal Environmental Protection Agency until 2015. But with the publication of the first-ever federal coal ash rules in the Federal Register, the EPA set out new standards designed to be incorporated into states’ existing regulatory framework.

And that’s when the Kentucky Energy and Environment Cabinet began working on the state’s version of the regulations.

Emails Show Industry-State Meetings

By its own admission, the Kentucky Division of Waste Management spent more than 1,600 hours working on the regulation in 2015, under former governor Steve Beshear.

On Sept. 3, 2015, regulators sat down with representatives from Kentucky’s utility industry. They screened a PowerPoint presentation on the current draft version of the rules. And on the 12th slide, regulators told the utility representatives that their facilities would no longer be able to qualify for a program called a “permit-by-rule” for coal ash sites. Instead, they would have to stop accepting coal ash into their landfills and ponds by Oct. 19, 2015, or get a permit for disposal.

That wasn’t the last meeting between regulators and industry representatives to discuss the coal ash rules. Emails obtained through an open records request show they met in person at least three more times — in October 2015, and April and June 2016.

State regulators shared drafts of the regulations with Tom Shaw, the environmental director of Big Rivers Electric Corporation, and Jack Bender, the attorney representing the Utility Information Exchange of Kentucky, an industry group. And both men sent regulators UIEK’s comments on the proposals multiple times, months before the agency took comments from the public.

Bender declined a request for additional comment, and Shaw didn’t respond to a voicemail message.

When regulators went into that meeting on Sept. 3, 2015, the draft CCR rules were extensive. They covered groundwater monitoring, inspections, technical specifications for recycling coal ash and plans for closing facilities.

But by the time the draft regulations were released to the public in October 2016, they didn’t contain any of those specifics. And the regulations proposed regulating the electric utilities with a “permit-by-rule” — the very mechanism that the state declared it would not use during that September meeting.

Oversight Steps for Coal Ash Removed

In the proposal released to the public in October, electric utilities wouldn’t have to apply with the state for a permit to build a landfill or pond for coal ash. Instead, the state determined the utilities would have a “permit-by-rule” and could begin constructing coal ash units without prior permitting or review by state regulators.

Right now, utilities building coal ash units need a permit from the Kentucky Division of Waste Management. The process sometimes takes years and involves professional engineers, geologists and environmental technicians. Often permits are also needed from the Kentucky Division of Water.

Under the new proposal, those wouldn’t be necessary.

The state’s approach has been modified somewhat in the final version to a “registered permit-by-rule.” This means utilities will have to register before they begin construction of landfills or ponds, but there will still not be a rigorous permitting process.

“It’s the Wild West, basically,” FitzGerald said. “You get to characterize [the project] on your own, if you do at all, you get to manage it at the location you decide, you get to control the design, the construction, the operation, the closure, the post-closure. And the only time the state is going to become involved is after you screw up. If they find out about it.”

FitzGerald said skipping a rigorous permit review process — where the utility and regulators work together to design the project — could pose myriad problems.

If groundwater monitors aren’t put in the correct locations, they might not detect water pollution. Sensitive ecological or historical sites — like Wentworth Cave on Louisville Gas and Electric’s Trimble County property — could be buried under coal ash forever.

Or, in the most extreme cases, an engineering error could lead to structural flaws in a project and result in a catastrophic coal ash spill.

Cabinet spokesman Mura wrote in an email that the state’s end product is an attempt to comply with the federal rules.

“It was the Obama EPA, after a lengthy regulation development process, that promulgated an industry self-implementing program with no permitting program and with the public/state involvement process done via posting of information on industry website(s),” Mura said.

The EPA’s rules were self-implementing but intended to be incorporated into a state’s existing framework. More recently, Congress approved the Water Infrastructure Improvements for the Nation (WIIN) Act, which directs states to work the new federal standards into existing permitting programs.

Legal Challenges Possible

It’s not illegal for regulators to consult with industry representatives before a draft regulation is released for public comment.

Instead, the Kentucky Energy and Environment Cabinet routinely seeks input from so-called stakeholders early in the process. But usually that input includes people on different sides of the issue — not just industry representatives but also people from environmental groups, landowners and others with a stake in how the regulations play out,

FitzGerald said that kind of approach — where all sides are engaged early on in the process — ensures that when the regulations are released for public comment, multiple perspectives have been taken into account.

“It is far preferable and I think much more productive and you get a much more responsible work product when you have input from all of the stakeholders,” he said. “And yet in this case, the input came solely from the regulated industry. And the result was a serial weakening of a responsible approach into one that I think is the most irresponsible approach I have seen in my 44 years of working on these issues on behalf of the public.”

Before the rule is finalized, it will need approval from two legislative committees. FitzGerald said if it wins approval, he might consider seeking judicial review.

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