Why is Utah's water so cheap?

Monday , April 17, 2017 - 5:30 AM

LEIA LARSEN, Standard-Examiner Staff

Editor’s note: This is a reposted version of a story originally published in the Standard-Examiner March 29, 2015.

Utah is the second-driest state in the nation, yet its residents pay some of the lowest rates for water.

The Utah Division of Water Resources has taken a close look at water rates in the state. A 2010 study found that water rates in Utah are about 43 percent below the national average, and 45 percent below averages in the West.

According to the division, the paradox mostly boils down to geography.

“Our water supplies are good, and we don’t have to go far for our water,” said Eric Millis, director of the division.

Most of Utah’s population is along the Wasatch Front, nestled along mountains that receive abundant precipitation compared to the rest of the arid state. That precipitation naturally flows downhill and collects in our reservoirs. 

“We can build our plants and tanks on hillsides, which saves pumping costs,” Millis said.

As cities in other states like Arizona and California have grown, they’ve built pipeline projects and diverted water hundreds of miles to their population centers. Those transportation costs add up, but, so far, this hasn’t been the case in Utah.

Most of Utah’s large water projects were also built decades ago with the help of federal funding. Much of that funding has been repaid, and the water systems remain operational.

“The projects are very key parts of water supply, and of course, there was a  subsidy to help encourage those types of projects to be built,” Millis said. It just hasn't cost us a lot to supply water compared to some other places.“

The true cost of our water is also somewhat hidden by property taxes. Many water providers in the state, including Weber Basin Water Conservancy District, collect property taxes to repay the federal government for water projects and to cover other projects benefitting the public good, like flood control, recreation and fish and wildlife protection.

Rolling these costs into taxes means lower water bills, but it also misrepresents the true cost of water.

“Some people ask, should we bump rates up to encourage conservation? Should we get rid of the property tax?” Millis said. “I think those are decisions elected officials really ought to make.”

The property taxes do make water districts more attractive to bond buyers, because it means they have a stable, long-term source of revenue. It’s a similar concept to a homebuyer’s credit rating, which banks look at before issuing loans.

“There are reasons on both sides of the table, and we don’t have a side we’ve chosen on that,” Millis said. “Conservation is good. We’re not trying to hamper it.”

Tage Flint, general manager of Weber Basin Water Conservancy District, said the rates on water bills will likely go up in coming decades to fund water projects for a growing population.

“We’re going to have to increase water rates; that’s how we recover costs,” he said. “We’re not going to increase taxes.”

When it comes to raising water rates just to encourage water consumers to conserve, however, Flint said the solution isn’t straightforward.

“There’s a philosophical discussion, is water a complete consumable commodity? Economists will tell you to price it until people won’t use so much of it,” he said. “But the flip side is, water is also a life-sustaining service. The widow down the street on fixed income still has to have water, there’s kind of an inherent right.”

Contact Reporter Leia Larsen at 801-625-4289 or llarsen@standard.net. Follow her on Facebook.com/leiaoutside or on Twitter @LeiaLarsen

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