Lack of influence of climate on present cost of water supply in the USA

Abstract

Previous studies have sought to develop econometric models of water supply systems, which can be used to predict future water supply costs; none, however, have investigated the influence of climatic factors. In this paper, climatic and other regional influences on the costs of water supply in the USA are explored using multivariate analysis of water supply costs from water supply utilities located throughout the USA. Results showed that over 90% of the variation in present water supply capital and operating costs for surface and ground water systems can be explained by variations in quantity of water delivered, with other variables, particularly regional climate, playing a negligible role. An analysis of the historic development of water supply in the USA showed that capital expenses for water supply systems are a relatively small component of the present total annual costs because: (1) the original capital expenditures were reduced for utilities due to large public subsidization; (2) repayment of capital expenditures is now complete owing to the long time period since the original investments; and (3) new policies encourage demand management instead of supply expansion. Therefore, the present costs of water supply are not related to climate and thus are not a useful guide to future costs in studies that evaluate climate change impacts.