The east and west water divide

The structure of the United State's water industry is clearly very different to that of the United Kingdom's. David Sayers gives a personal comparison of the water systems in both countries

This article compares aspects of the UK and US water industries, so what better way to start than with one striking and defining contrast: There are only 22 water supply companies in England and Wales compared to some 54,000 systems (regularly serving at least 25 people) in the US. To some extent, a much greater area and lower population density necessitates more fragmented water supply systems, but by no means can these two factors alone account for such a disparity. For a more fitting comparison, consider the Delaware River Basin, situated on the mid-Atlantic coast with a relatively high population density, covering parts of New York, New Jersey, Pennsylvania and Delaware.

It is one quarter the size of England and Wales, with several hundred separate water supply systems, the largest of which, the City of Philadelphia Water Department, serves a population of around 1.5M, small by UK standards.

Clearly the structure of the water industry is very different. The key regulatory roles are played by both federal and state agencies, which collectively provide similar functions to the Environment Agency (EA) and the Drinking Water Inspectorate.

Some regions, such as the Delaware River Basin, have an additional layer of regulatory oversight, designed to aid water resources decision-making on a river basin basis.

In contrast to the UK, water resources management and supply systems typically conform to political, not hydrologic, boundaries. Another notable contrast is the lack of a single economic regulatory agency similar to Ofwat.

Price setting and economic regulation of privately owned systems (which account for only around 15% of public water supply) is carried out by each state's Utility Commission. Municipal systems set their own rates, with downward pressure applied by customers, who are also voters.

If the results of several recent and well-publicised studies are anything to go by, that downward pressure may have been too effective.

These studies warn of a future funding crisis for the industry, which needs to find money for an ageing and severely neglected infrastructure. Added to this are the rising costs of meeting more stringent water quality requirements and anti-terrorism measures. Not surprisingly, consideration is being given to new ways of financing and operating public water supplies in the US.

While some still advocate federal subsidies and public ownership, there is a growing trend towards privatisation and outsourcing.

Public versus Private

The private versus public ownership debate is often contentious because of its inescapable political overtones, with opinion often distorting the facts.

In theory, there are advantages to public ownership, which offers access to preferential rates of financing. In an industry so heavily financed by debt, this should translate into an advantage over the private investment alternative. However, a culture in public infrastructure management of build and operate with minimal maintenance until it wears out, leaves many public systems facing huge and often overwhelming investment costs. The concepts and benefits of asset management are still waiting to be embraced. Operators of rundown public systems face the choice between raising rates (and upsetting local voters) or selling or contracting to private companies. In the case of the latter, much criticism is often levied against the rate increases that typically follow.

Of course rates must be kept in check, but if chronic under-investment really has been the cause of the problem, then higher water bills are most likely a necessary first step on the road to recovery, rather than something to be vilified. Perhaps more important than the issue of ownership is the need to consolidate some of these 54,000 systems.

In addition to clear operational efficiencies, there are benefits from a regulatory perspective as companies become better able (with increased resources) and generally more willing (due to greater stakeholder pressure) to respond to regulation. It will come as no surprise to most that the US uses a lot of water, more per-capita than almost anywhere else in the world.

A study of the dry western states revealed average per-capita use of approximately 600 l/d. For a more appropriate comparison, again consider water use in the Delaware River Basin, an area that has some geographic and demographic similarities to the UK. On a per-capita basis, average use is approximately 285 l/d, around double that in the UK.

Determining what happens to all that water is not straightforward. With hundreds of purveyors, some barely large enough to have full-time engineers, the collection and analysis of data is a daunting undertaking, as is co-ordination between the various agencies sharing the data.


Federal rules, passed in 1992, governing the majority of plumbing fixtures and fittings within the home, are mostly comparable to UK standards. The notable exception is for washing machines, which all tend to be low-efficiency top-loaders, although this may change if other states follow the example of California in passing legislation requiring all new machines to be front-loader-efficient by 2007. Where water consumption is high, use outside the home is typically the cause.

Very green lawns, Jacuzzis, hot tubs, swimming pools and pressure washers all contribute to the higher per-capita consumption figures. This suggests the potential for conservation is vast, although this may involve implementing tariffs that recognise discretionary use. An indication that homeowners are not ready to give up their green lawns voluntarily is given by billboards that advertise home sprinkler systems with slogans such as brown is out this summer, contrasting a withered looking lawn to a lush green and presumably well-irrigated one.

These may be the same sprinkler systems that are automated for ease-of-use and as a consequence no-one, except soaked passers-by, are aware they are irrigating pavements, roads and driveways, sometimes just shortly after it has rained.

It is not daring to suggest an explanation of such wastefulness is given by examining the relative costs of water. Perhaps the best method of comparison is not to make US$/£ conversions but to express costs as a percentage of median household income.

The average water and sewerage bill in the US amounts to approximately 0.5% of median household income, against 1% in the UK. US customers are getting more and paying less for it - it is hardly surprising that use is high.


In the US, the use of percentages as a leakage performance indicator and the term 'unaccounted for water' are still commonplace, revealing leakage management has not received the attention it deserves. Terminology such as the 'economic level of leakage' would also be alien to many regulators and industry professionals.

However, it is worth noting the American WaterWorks Association (AWWA) has recently adopted a new position on leakage, much more closer to UK practice, which essentially represents the recommended future approach for north American water suppliers. UK leakage specialists take note.


Before we can look to the UK water industry as a role model, let us not forget the issue of metering. In 1987 the Delaware River Basin Commission passed a ruling requiring universal customer metering - the reality today is that all but the smallest systems are metered. I have never been given the impression universal customer metering is a particularly contentious issue in the US (but let us acknowledge that water is cheap).

My long-standing opinion is that the UK is a Luddite when it comes to metering. However, a UK/US comparison of water use indicates that although metering may be a prerequisite for efficient use, in the absence of a realistic tariff, it is no guarantee.

WATER Re-use

The states of Florida and California stand out as having embraced re-use and recycling technology with conviction and enthusiasm. For good reason, these are coastal areas with high population densities where freshwater discharged to coastal waters is lost to the system. Some still see re-use as a panacea for water resources ills, figuring that where successes have been achieved, they can be directly translated to other areas.

In the mid-Atlantic region there are some large-scale re-use systems in operation, on golf courses and at industrial facilities, but these examples are not common. Given that indirect re-use (discharge to a watercourse for withdrawal some point downstream) is widely practised and accepted, the benefits of direct re-use, where the discharge would otherwise augment stream flow and support downstream withdrawals, are marginal from a water quantity perspective. This changes the economics of such systems and suggests the applicability of re-use is best evaluated on a site-by-site basis and is not easily mandated. The domestic greywater systems that have been trialed extensively in the UK have not appeared in the US. Given the track record of domestic greywater recycling, the US public would be even less likely than their UK counterparts to tolerate systems that require significant maintenance. Some may wonder why, in a country noted for its scepticism to bloated government and apparent fondness for market forces, there has not been a more fervent embrace of the private sector for solving water supply problems. There must be another, even more powerful, force at work. The US Civil War serves as a reminder that, in a country so large, finding the appropriate level and degree of government has always been contentious. In many respects, the devolution of power has survived and significant political strength still lies at local levels - the concept of home rule, a foundation on which the country was born, which contrasts (as its founders purposefully intended) to that in the UK.

Translating this to water resources, it frequently means local communities look cautiously on the activities of regional agencies or large (usually privatised and foreign-owned) public water suppliers, who take a wider view. When local groups raise concern for the viability of future housing developments and adequacy of water supplies, it is often not as altruistic as first appears. Instead, it is usually concerned that with expanded public supplies will come growth, sprawl and, worst of all, other people.

Consequently, attempts to consolidate or rehabilitate small, struggling systems are sometimes obstructed by those who view this as removing one of their key defences against growth. So, will privatisation come to the rescue by making everything more efficient? It will likely play a significant role but if communities voluntarily undertake the necessary changes, privatisation is not inevitable.

Public systems can, and occasionally do, run well - the threat of privatisation may be enough to encourage some to reform. Those that do not will have to accept their fate.

East meets West

As a final thought, I offer my opinion on the widely-credited assumption that the biggest water supply problems occur in the western states.

An alternative view is that actually the west, mainly due to massive infrastructure projects, has a lot of water - the problem is much of it is used to grow water-intensive, low-value, subsidised crops, such as alfalfa, cotton and rice.

In California, these crops consume 54% of agricultural water demand and account for 17% of the state's agricultural revenue. Water may naturally flow downhill, without distorting subsidies it will also flow from lower to higher value uses. Despite much resistance, there is great potential to redistribute water for other uses, including instream flow protection for fish and wildlife, which are increasingly recognised as being as economically important as off-stream withdrawals.

In the east, agriculture is not so dominant and large federal water projects are much less likely. Without significant re-allocation options, a growing water demand could either lead to greater squabbles between urban, agricultural and environmental needs or perhaps even encourage serious efficiency and conservation to extend the usefulness of existing resources

References: Summary of water infrastructure forum; AWWA Residential End Uses of Water, 1999; California Water 2020: A Sustainable Vision, 1996. David Sayers can be contacted by email at



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