Water Affordability in Philadelphia

Robert W. BallengerFollow CLS:

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Questions to Consider

• What is the need?• What is “affordable?”• What have we done (and possibly learned

from)?• What are we doing?• What are we going to do?

Immense Need for Assistance

• Philadelphia demographics• Low-income program participation for electric

and gas utilities, compared to water• Water bills rising• Nationwide recognition

Impacts of Inadequate Assistance

• Health/safety• Shut offs• High rate of default• Collection issues• Bad debt

Defining Affordability• Comparing bills as a percentage of income

– An average bill represents 2.19% of the median Philadelphia household’s monthly income,

– For the approximately 14.8% of Philadelphia households having income below $10,000 per year, such an average bill represents at least 8.1% of monthly income,

– For the approximately 8.3% of Philadelphia households having income between $10,000 and $14,999 per year, such an average bill represents at least 5.4% of monthly income,

– For the approximately 13.4% of Philadelphia households having income between $15,000 and $24,999 per year, such an average bill represents at least 3.24% of monthly income

Defining Affordability (Cont.)

• What measure do we use? – FPL– AMI

• How do we define whose income is low enough and whose income is not low enough?

• How do we calculate affordable bills?• What do we do about arrears?

Other Utilities/Studies

• PUC context: CAP policy statement– Fixed percentage of income targets for

affordability• PGW model• PECO model – past and present• Current WRAP model

Benefits of Affordability

• Improved payments• Reduced debt• Increased “netback”• Utility financial benefits• Community benefits

New Program for Philadelphia Water

• Program design– Systematic approach– “Monthly bills shall be affordable for low-income

households”– “Monthly bill calculations based on income”– Conservation treatment– Arrearage management– Ongoing monitoring

New Program (cont.)

• Program timeline– Upcoming rate case– Implementation– Enrollment