A New Benchmark

This year’s update involves a notable methodological change. My published price and affordability analyses to date have used residential service prices at 6,200 gallons per month as the benchmark volume. I chose that volume because it approximated 31 days of essential water consumption for a family of four at 50 gallons per capita per day (gpcd) (31 x 4 x 50). Back in 2017, 50 gpcd was a reasonable approximation of essential indoor use based on Texas Water Development Board policy and Water Research Foundation’s 2016 Residential End Uses of Water (REU) study findings.

The newly released 2026 REU prompted a substantial revision to my methodology, as American homes are getting dramatically more water efficient over time. The 2026 REU study finds that average indoor water consumption fell to just 38.5 gpcd, which works out to about 4,800 gal. per month for a family of four. That change demands a change in measurement. In this post we’ll look at both the old 6,200 and the new 4,800 gal. level, but the latter will be my default benchmark volume going forward (at least for the next ten years, or whenever the next REU study comes out).

Steadily rising prices

At both 4,800 or 6,200 gal., monthly residential water service prices continue to rise steadily. Here are average combined monthly water and sewer bills at both volumes, from 2017 through 2025:

In 2025, the average U.S. utilities charged $86.41 for a month of water and sewer service at 4,800 gallons, or $101.14 at 6,200 gallons. Those prices are, respectively, up from $66.76 and $77.51 in 2017. Overall, prices have increased an annualized average of about 3.4% since 2017.

Water and sewer prices have increased at roughly similar rates over this period of time, with sewer bills consistently averaging about 15% higher than water.

Regressive trend accelerates

The dismal drift toward ever more regressive prices continues to accelerate, as utilities collect more and more of their money through fixed and low-volume charges. It's the lazy way to generate more stable revenue.** Average first gallon price (fixed charges plus the first volumetric unit charge) rose more than $5.00 from 2023-2025; first gallon prices have increased by an annualized average of 4.4% since 2017—significantly faster than 4,800 gal. prices, which have increased by an average of 3.3% annually. Increases in first gallon prices have consistently outpaced 4,800 gal. prices since I began collecting national data:

It’s an understandable choice for managers and policymakers facing rising costs, falling demand, and fluctuating supplies. But the ever-greater reliance on fixed charges gives customers less control over their bills, reduces incentives to use water efficiently, and forces low-volume customers to carry a disproportionate share of the utility’s revenue risk. It’s also terrible for affordability in many contexts insofar as water consumption correlates with income.

You know who likes this trend? High-volume water customers. Here’s the trend in progressivity / regressivity measured with my favorite metric, the Amy Poehler Index:

The Poehler Index captures the unit prices that utilities charge to very high-volume residential customers relative to unit prices charged to moderate-volume customers. Values greater than 1.0 reflect progressive rates, which charge high-volume customers more for the extra water they consume; values lower than 1.0 indicate regressive rates, which charge those profligate water users less money for that additional water. In 2025, the national average Poehler Index fell to 0.66—the lowest value to date, and another powerful indication that utilities are managing their revenue risks by lightening the load on the water hogs and sticking it to their low-volume customers.^†  

The big picture

Together, the 2025 rates data tell a story about a new normal for water and sewer prices in the United States: lower average residential demand, steadily rising prices, and ever-more regressive rate structures. These new normals carry mixed implications for affordability; I’ll take those up in Part 2.

*Perhaps more accurately, my research assistants have collected those rates. Thanks Kris Barnett, Robin Saywitz, Ryan Thiele, and Xavier Hopp.

** What's the not-lazy, more equitable way? Decoupling. Even better: Tailored Rates.