Debt costs associated with financing projects over time also put pressure on rates. Another factor that can play a significant role in contemporary rate increases is historic underpricing. For some water systems, the loss of subsidies and the need to begin pricing water more accurately to reflect costs can account for substantial, but necessary, rate increases. Rising costs and prices for water may force a change in consumer expenditure patterns. The cost of compliance with drinking water standards is only one of several factors contributing to rising water prices.
Water prices send customers a crucial signal about the value of quality water service.
However, for some communities, higher prices may strain water system and household budgets. Thus, drinking water can be made more affordable by reducing the cost of service, increasing the ability of users to pay, or both. For systems which qualify, variances may offer a lower cost approach to SDWA compliance. There are many other possible approaches to lowering the cost of service. However, once systems reach a viable size, which varies by geographic location, there is a smaller benefit to an additional increase in system size.