The case for state-level drinking water affordability programs: Conceptual and empirical evidence from California

Informed by the design of a program in California, we make a three-part argument for why state-level governments might consider implementing direct bill-assistance programs for drinking water service to address growing affordability concerns for low-income households. State-level operation of bill-assistance programs represents a departure from the global trend of allowing water utilities to operate bill-assistance programs at their own discretion. We first explain the motivation for enhanced public sector support to help households pay for drinking water service. In state-level contexts such as California, we find that the basic household affordability equation has worsened due to an increase in the numerator of residential retail bills and a stagnation in the denominator of household incomes. We next demonstrate why direct bill assistance to households is necessary even with the presence of other system-level financial support or retail rate structure policies. Finally, we make the case that direct bill-assistance programs are best situated at the state level, due to substantial variation in systems’ capacity and demonstrated willingness to run their own robust affordability programs for vulnerable customers.