Rising infrastructure costs threaten water affordability, AWWA report finds

U.S. drinking water systems will require between $2.1 trillion and $2.4 trillion in infrastructure investment over the next 25 years, as utilities face compounding cost pressures beyond traditional asset replacement, according to a new report from the American Water Works Association (AWWA). 

The report highlights a widening gap between current spending and future needs, with utilities investing about $33.6 billion annually compared to an estimated $90.2 billion required—leaving a funding shortfall of roughly $56.6 billion per year.

AWWA said rising costs are being driven by factors including regulatory compliance, treatment of emerging contaminants such as PFAS, climate resilience requirements, cybersecurity investments and lead service line replacement.

If the funding gap is addressed primarily through rate increases, average household water bills could more than double by 2050, raising affordability concerns for millions of customers. The report estimates more than 30 million households could exceed commonly used affordability thresholds without additional financial support.

The report also underscores the importance of federal financing programs such as the State Revolving Fund (SRF) and the Water Infrastructure Finance and Innovation Act (WIFIA), noting that long-term, low-cost financing will be critical to managing costs and sustaining investment in drinking water systems.

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