Methods and Motivations of Water Pricing in Pennsylvania and the United States

This study presents a geospatial analysis of water pricing rates and structures in Pennsylvania (PA) and the United States (US), to provide insight into (1) the value of water and (2) the mobility and variability in water pricing. The study also begins to interrogate reasons for variability in water rates amongst companies characterized as public offering “uniform” rates. Variables tested include population, population density and fixed charge, as these factors may indicate how aptly a company can capitalize on economies of scale or how much it will cost the company to pump water a given distance. A trade off between fixed and volumetric charge amongst public uniform companies is also tested for statistical significance. Rate information procured from the 2015 American Water Works Association, water company tariffs filed with Public Utility Commission, company websites, and direct communication with water company officials over the phone. The data were compiled into spreadsheets and a relational database in a Geographic Information System (ArcGIS). Different water pricing structures were identified and characterized and maps showing the variability across the country and state were generated to disparities in price structures and rates between private versus public companies in PA and between PA companies versus US companies. Increasing block pricing structures were common across the US, yet relatively rarely across Pennsylvania. Decreasing block structures were primarily found in “rust belt” areas across the US. Water prices were consistently higher in arid regions, due to limited water resources, infrastructure, and transmission costs. Both fixed and volumetric charges show variability amongst PA water companies implementing a “uniform” rate structure. Some level of variability can be explained by the aforementioned fixed charge, population, and population density variables. However, further research can be conducted to see capital costs and elevation may also play into water pricing variability. Also, it is important to note the study’s ability to spatially represent pricing variability as an indicator of companies facing different costs in the allocation of water