How We Subsidize Spread-Out Places Via Utilities

By Richard Bose, Electrical Engineer and Vice President of St. Louis Strong

This column was originally published on NextSTL.com.

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Take a look at your utility bills. Is there any charge related to the amount of infrastructure it takes to serve you? Does it take many or relatively few feet of wire to deliver electricity to you? What about water pipe? Sewer pipe? Does it take a pumping station to get your sewage out of a valley?

There is no frontage charge on our utility bills in St. Louis County. So for the same amount of electricity and water usage, households located closer together subsidize households located farther apart.

Let’s take a look at Missouri American Water, the company that supplies water to St. Louis County, with the exception of Kirkwood. Missouri American Water has 4,200 miles of water mains and 31,000 fire hydrants in St. Louis County. Bills are calculated with the sum of a minimum customer charge based on water meter diameter and usage (Missouri American Water rates).



Water Infrastructure Age (From the  Our Aging Water Infrastructure  report by the Metro Water Infrastructure Partnership)

Water Infrastructure Age (From the Our Aging Water Infrastructure report by the Metro Water Infrastructure Partnership)

Our water infrastructure is aging. Much of it was created to serve the spread-out places built after World War II and is now reaching end-of-life. Previous generations kicked the can down the road when they opted not to establish an infrastructure fund to finance its inevitable need for replacement. The development choices of the past are now coming home to roost.

Recognizing the need to replace old pipes, the Missouri Legislature authorized Missouri American Water to charge customers for infrastructure replacement in 2003. Missouri American Water added a fee to bills called the Infrastructure System Replacement Surcharge (ISRS). Since its inception, Missouri American Water has spent $445 million on improvements to water distribution and hydrant upgrades in St. Louis County. The rate is $0.7642 per 1,000 gallons of water.

Here, again, there is no attempt to charge based on the amount of infrastructure needed to serve a customer—even in the fee that’s paying to replace that infrastructure. ISRS is currently suspended due to the drop in St. Louis County population in the 2010 Census.

According to the Our Aging Water Infrastructure report by the Metro Water Infrastructure Partnership, the average St. Louis County household uses 84,000 gallons of water per year (“enough to fill over seven medium-sized swimming pools”). Most of this water—about 70 percent—is used indoors in showers, toilets, faucets, washers, cooking, and food preparation. The rest is used outdoors.

If most of a household’s water is being used indoors, then water usage is shaped more by household size than it is by a home’s lot size. The takeaway: an infrastructure fee based on water usage is a poor proxy for the cost of that infrastructure.

Our Aging Water Infrastructure says it costs $1 million per mile to replace water mains. Let’s do the math and see who the winners and losers are with the ISRS rate structure:

  • $1 million per mile / 5,280 feet per mile = $189 per foot

  • Divide that by 2, since there are usually homes on both sides of the street: $189 / 2 = $95 per foot

Based on this estimate, replacing water mains costs $95 per foot. Assume the pipes last 100 years. Missouri American Water says the typical customer is charged $3.09 per month for ISRS.

  • $3.09 per month * 12 months per year * 100 years = $3,708

  • $3,708 / $95 per foot = 39 feet

The typical user is paying for 39 feet of water main, which is near the low end of house frontage in St. Louis County. This means the rate is too low for average use.

If we also factor in homes that don’t have a neighbor across the street, pipes with no customers on either side, and the fact that a 100-year lifetime is on the high end for water pipes, the rate is likely much too low.

As our places have become increasingly auto-oriented, properties have continued to spread out. The following frontage examples from around the county reflect that pattern:

  • 140 foot spacing in Chesterfield on Countryside Manor Court

  • 100 foot spacing in Ballwin on Bentshire Court

  • 89 foot spacing in Ellisville on La Dina Place

  • 60 foot spacing in Crestwood on Greenview Drive

  • 50 foot spacing in Rock Hill on Blossom Lane

  • 40 foot spacing in Richmond Heights on Goff Avenue

  • 30 foot spacing in University City on Plymouth Avenue

What might an ISRS rate based on frontage space (that doesn’t kick the infrastructure expense can to future generations) look like?

  • $95 per foot / 100 years / 12 months = 7.9 cents per month, per foot

This rate of 7.9 cents per month, per foot should be indexed with inflation of water main replacement costs. At this rate, the household in Chesterfield would be paying $11.06 per month, and the household on Plymouth would be paying $2.37 per month.

With our current system, makers have little say in decisions to create more takers. When a city in our too-fragmented region zones for sparse land uses, they are forcing others in other municipalities with no say in the decision to subsidize their choices. This is yet another example of why what happens on the other side of our municipal borders does indeed affect us.

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Richard Bose is an Electrical Engineer by profession. He earned a BA in Physics and Economics and an MSEE from Washington University in St. Louis. Richard is a transplant from Central Illinois and has called St. Louis home since 1998. He is Vice President of St. Louis Strong, a board member of the Skinker DeBaliviere Community Housing Corporation, and contributor to NextSTL.com and The Times of Skinker DeBaliviere. He can be found on Twitter at @stlunite and contacted at richard@nextstl.com.

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Articles in “From the Field” represent the opinions of the author only and do not represent the views of the Community Builders Network of Metro St. Louis or the University of Missouri-St. Louis.