Nicholas Institute for Environmental Policy Solutions
A team of researchers from Duke University's Pratt School of Engineering; Nicholas Institute for Energy, Environment & Sustainability; and the Nicholas School of the Environment assessed the finances of 301 North Carolina water utilities and identified a significant and growing group of communities facing a conflicting dilemma of water affordability and utility cost recovery. The researchers found more than half of utilities analyzed (prepandemic) did not generate sufficient revenue to cover their costs. For each utility, affordability burden and operating ratio—the ratio of a utility's operating revenue to its operating expenses—were both affected by population size, population growth or loss, and median household income. All utilities in the analysis would require annual supplemental funding to ensure operating ratios greater than 1.