[For more posts from this author, please see these blogs and LinkedIn articles.]
As attention to our nation’s safe drinking water needs continues to grow, so too does attention to the nation’s water affordability challenges, particularly for low-income households. To succeed in providing universal access to safe water, we must ensure both that no one loses access because they can’t afford their water bill and that utilities have the funds they need to provide safe water to everyone.
The last year was a busy one in the world of water affordability. This blog provides a brief survey of some of the most important policy developments, focusing especially on the federal level, where the issue gained attention as never before.
This blog also spotlights a couple of leading-edge developments at the state and local levels, from Michigan and Philadelphia.
NRDC, alongside many frontline and national partners, played a role in nearly all of these initiatives. We look forward to building on them in the years ahead.
Federal policy developments
The Low Income Household Water Assistance Program (LIHWAP) helped millions keep access to water, but shut down when funding expired.
From 2021-2024, the U.S. Department of Health and Human Services (HHS) implemented LIHWAP, a first-ever national low-income water assistance program. As the temporary program spent down the last of the $1.1 billion appropriated by Congress (with then-president Trump’s signature), HHS published reports on the program’s implementation, continued to update a detailed dashboard with state-level data, and released state-specific fact sheets based on those data. LIHWAP supported over 1.5 million households, preventing nearly 1 million disconnections of water service, restoring water services over 100,000 times, and reducing over 1.1 million water bills—all across the country, in communities both large and small. In this recent blog, you can read stories of some of those millions of people who received support, and find information on the 17,000 utilities that participated in the program.
Despite these achievements, LIHWAP’s funding expired in March 2024. Congress provided no additional funds in FY24 or FY25, despite efforts from more than 150 water associations, environmental, low-income, and other public interest advocates, and labor unions—alongside scores of U.S Senators and Representatives.
EPA released its Water Affordability Needs Assessment—Report to Congress.
When the Bipartisan Infrastructure Law (BIL) was negotiated in 2021, the version that originally passed the House would have created a permanent low-income assistance program. That was dropped from the final version that passed. But the BIL did direct EPA to develop a “water affordability needs assessment,” including recommendations on how to address low-income water affordability challenges.
In December 2024, EPA released its report, which estimates that 12 to 18 million low-income households (9.2% to 14.6% of all U.S. households) face unaffordable water bills. The report estimates that it would take $5.1 billion to $8.8 billion per year to close the affordability gap. It provides recommendations concerning the design of a permanent federal program, as well as other steps that Congress, EPA, and local utilities can take to address water affordability. Many of these ideas drew on feedback from NRDC and frontline allies in the Water Equity and Climate Resilience Caucus. (The report was light on state-level recommendations, however. One of the updates later in this blog, from Michigan, points to a gold-standard for how states could address water affordability.)
Members of Congress introduced legislation to create a permanent low-income water assistance program.
HHS’s final LIHWAP report and EPA’s Water Affordability Needs Assessment show unequivocally why we need a permanent low-income water assistance program. And national polls consistently show large majorities of voters in support.
In February 2024, Sen. Padilla introduced the first-ever Senate bill to create such a program, and a bipartisan companion bill was filed in the House. Later in the year, Rep. Tlaib introduced a comprehensive bill to create a program, incorporating many best practices in program design, such as auto-enrollment of household already participating in other programs like SNAP or LIHEAP. And Rep. Tonko’s AQUA Act, which would strengthen many aspects of the Safe Drinking Water Act, includes a robust provision to create a permanent low-income assistance program, which includes many of the same best practices.
HHS released its Water Utility Affordability Survey Report.
In March 2024, HHS released a report that it described as “an analysis of the largest survey documenting [water and sewer] rates, arrears, disconnections and fees in one dataset in the country.” In this 2022 snapshot of almost 1,900 water and wastewater utilities that responded to a voluntary survey, the average utility reported sending shutoff notices to 16% of its residential customers, and actually disconnecting 5% of its residential customers, due to overdue bills. Almost all of the utilities added a “disconnection fee” and a “late fee” to these customers’ overdue balances, further raising the cost of getting water turned back on. (Raw data from the utilities’ responses, with utility names redacted, is available near the bottom of this webpage.) The survey’s findings illustrate the need not only for programs that help people afford their water bills, but also for consumer protections that ensure people don’t get their water shutoff or fall deeper into debt when they can’t afford to pay.
EPA’s Environmental Financial Advisory Board (EFAB) completed its own water affordability study and recommendations.
As the year wound down, EFAB put the finishing touches on a year-long effort, formally releasing its report, Advancing Water Affordability Nationwide: A Framework for Action, in January 2025. The report provides valuable recommendations on equitable rate structures, the design of low-income assistance programs, and strategies to reduce the cost of capital improvements without sacrificing health and environmental results. It suggests a range of actions that EPA could take, using existing authority, to promote affordability best practices among water utilities, and it favorably cites two key NRDC resources (the Water Affordability Advocacy Toolkit and Water Affordability Business Case Tool). EPA, in its Water Affordability Needs Assessment, welcomed EFAB’s recommendations.
In discouraging news…Utility associations used affordability as a weapon against public health protections.
Water and wastewater utilities continued their efforts to secure a permanent federal water assistance program, in parallel (and sometimes together) with the efforts of environmental and water justice advocates. Unfortunately, though, they also used water affordability challenges as a cudgel in their efforts to undermine new safe drinking water rules.
The two major water utility associations, the American Water Works Association (AWWA) and Association of Metropolitan Water Authorities (AMWA) filed suit in 2024 to challenge EPA’s new limits on six of the ubiquitous, toxic “forever chemicals” known as PFAS. The AWWA also challenged EPA’s new rules to protect people from toxic lead in drinking water, which require replacement, within a decade, of the vast majority of lead service lines that deliver water to tens of millions of people’s homes. The utilities argued that the cost of protecting people from PFAS and lead would make water bills unaffordable. In both cases, they’re simply wrong, as I’ve explained at length in blogs here, here, and here. EPA also debunked the utilities’ exaggerated cost estimates, as my colleague Erik Olson explains, and identified many strategies utilities can use to reduce burdens on low-income customers (see p. 21-61 here). NRDC and partners have intervened in the lead and PFAS cases to defend EPA’s new drinking water rules. Water utilities can, and must, provide water that is both safe and affordable.
EPA proposed a “Water System Restructuring Assessment Rule” under the Safe Drinking Water Act, with implications for affordability.
Also in 2024, EPA proposed a rule defining the terms on which a state can require a struggling water system to assess “restructuring” options, including consolidation with another system or even privatization, to help resolve non-compliance with the Safe Drinking Water Act. The proposal acknowledged that restructuring can have profound effects on the community served by a water system—of which some may be desirable and some undesirable—beyond the effects on drinking water quality compliance. These can include significant impacts on water rates and affordability. More than 60 groups submitted joint comments on the proposal (which NRDC helped organize with key partners), urging EPA to ensure that restructuring always serves community members’ interests in safe, reliable, and affordable water. EPA did not issue a final rule before the end of the Biden Administration, leaving it in limbo going forward.
Meanwhile, the US Water Alliance released a white paper, based on public polling, which found that people care both about whether a water system restructuring would improve their access to safe water and how it would affect their water bills. They also found that people overwhelmingly believe community members need a voice in decisions about water system restructuring and in the governance of any restructured system, as we urged in our comments to EPA.
State and local developments
Best-in-nation water affordability legislation neared the finish line in Michigan.
Landmark water affordability legislation—developed through collaboration among community groups, water utilities, social service providers, environmental groups, and others—nearly passed the Michigan Legislature in 2024. It stems from an intensive multi-year campaign, led by the People’s Water Board Coalition with NRDC and many allies working closely alongside. The package of bills would establish and fund a first-in-the-nation, statewide water affordability program, which would effectively cap water bills for low-income customers at a certain percentage of income; create what may be the strongest statewide water shutoff protections for low-income residents and customers who rely on water to treat medical conditions; protect tenants from shutoff when their landlord fails to pay the water bill; and establish a human right to water.
The bills didn’t make it across the finish line in 2024, as the legislative session ended in disarray. But the campaign succeeded in catapulting water affordability into the state policy spotlight, and it secured $70 million during the legislative session to help low-income households pay their water bills. The coalition is bringing the legislation back in 2025, with every intention of getting them passed with bipartisan support. Their success could provide a model for states around the country.
Philadelphia super-charged enrollment in its income-based water rate program, using “data sharing” to seamlessly enroll eligible customers without the need for an application.
Among local utility-based water assistance programs, Philadelphia’s income-based rate has been rightfully hailed as a gold standard. For low-income households (primarily those below 150% of the federal poverty level), this “Tiered Assistance Program” (TAP) keeps water affordable by capping the combined water, sewer, and stormwater bill at a small percentage of income. Moreover, TAP works on a sliding scale; participants in the lowest income tiers pay the smallest percentage of income under the program. Participants also see their past water debt forgiven, over time, when they make complete payments on their future, discounted bills.
As 2024 began, TAP was reaching more than 20,000 enrolled customers. But, like nearly all utility assistance programs around the country, the participation rate among all eligible customers had room for improvement. During 2024, TAP enrollment skyrocketed, thanks largely to the city’s efforts to “pre-qualify” customers and enroll them without need for application, based on their participation in various other income-qualified social service programs. This approach, which relied on data-sharing across city agencies to identify eligible water customers, more than doubled the number of accounts enrolled in TAP from February 2024 to September 2024, adding nearly 37,500 customers to the program. (See p. 7 here.) And the total number of participating accounts, including customers enrolled through all methods, nearly tripled between December 2023 (21,500 accounts) and September 2024 (59,456 accounts). Philadelphia’s success with data-sharing holds lessons for other water utilities and for the design of future state- and federal-level programs. (Stay tuned in 2025 for an NRDC issue brief on that theme….)
