In September 2024, Philadelphians saw their monthly water bills jump by about 12%, the second-largest rate hike that year of any large water system in the country. This year, rates went up by nearly another 10%, now pushing a typical monthly bill close to $100, according to the Philadelphia Water Department.
But if these recent increases seem eye-popping to the city’s residents, they may not have seen anything yet, says Robert Ballenger, an attorney with Community Legal Services, who also serves as public advocate before the City’s independent Water, Sewer and Storm Water Rate Board. Perhaps nobody outside PWD’s own staff pays closer attention to the finances of the utility than Ballenger, and he uses two words to describe how he sees its financial future: “pretty terrifying.”
That’s because, Ballenger says, the city’s water system is coming to terms with historic disinvestment — having to replace pipes and treatment plants well past their lifespan — at the same time that new regulatory requirements for both drinking water and sewage pollution are bearing down. PWD’s own projections, he adds, predict that it may have to double its revenues between now and 2036 to keep up.
We’re talking going from a $1 billion-per-year utility to a $2 billion-per-year utility.”
— Robert Ballenger
“We’re talking going from a $1 billion-per-year utility to a $2 billion-per-year utility,” Ballenger says. “I attribute 50% of that concern to the absence of [outside] funding,” he adds, especially for capital projects needed to meet federal mandates.
The other half, he says, is a complex mixture of rising operational and maintenance costs — aging infrastructure, wages, inflation — and decision-making on how to pay for it.
Andrew Kricun, former executive director of the Camden County Municipal Utilities Authority and current managing director of the nonprofit clean-water consulting firm Moonshot Missions, says utilities like PWD could be more self-sufficient. In the 24 years he worked for that neighboring utility across the Delaware River, a tenure that ended in 2020, Kricun says he and colleagues dramatically improved water quality and implemented large capital projects while raising rates only once. (The utility’s rates later jumped 22% in 2023 and are scheduled to increase 3% annually through 2027, according to Tap into Camden, but still average less than $70 a month).
He credits that primarily to the historical consolidation of more than 50 water systems into a single regional entity — and the cost efficiencies that came with it — as well as heavy reliance on the New Jersey Infrastructure Bank, which doles out low-interest loans for water infrastructure. So, in Kricun’s view, while a historic decline in federal funding for water utilities has made a “substantive” difference in their finances, the challenge is “not insurmountable.”
PWD says a similar strategy is not in play here in Philadelphia. Over the next six years the department estimates it will need to spend $4.7 billion on capital costs alone, or about $800 million annually, spokesperson Brian Rademaekers wrote in an email to Grid. But state officials have told PWD they can only set a goal of providing up to $100 million a year in low-interest loans, if the state budget allows it, according to PWD. That amounts to only a fraction of the department’s capital costs, let alone operations and maintenance. The department will likely need to pay for much of the rest through financing or rate hikes.
“Capital investments and related infrastructure financing will remain a driver for rate increases in the future,” the department says.
The end of federal funding
Riding the wave of the 1960s environmental movement, Congress created the Clean Water Act in 1972 and the Safe Drinking Water Act in 1974, introducing a robust regulatory framework to clean up industrial pollution and sewage. Cities like Philadelphia were required to build modern, expensive wastewater treatment plants.
Congress also created the Construction Grants program, which provided tens of billions of dollars to help directly pay for the upgrades.
“It was one of the largest civilian federal expenditures in the 20th century,” says Rebecca Hammer, senior attorney and deputy director of federal water policy at the Natural Resources Defense Council. “It was really quite a large investment that had huge benefits for public health and the environment.”
But that changed in 1987, when President Ronald Reagan and a Democratic-controlled Congress agreed to scrap the grants program and replace it with a pair of revolving loan funds. These programs, administered by the U.S. Environmental Protection Agency, now award a few billion dollars a year to state governments, which then use it to provide mostly low-interest loans to utilities. When the money is repaid, it can be loaned out again.
Hammer says the changes go a long way in explaining the financial pressures faced by big-city utilities across the country. Congressional Budget Office data show a fourfold decrease in the amount of federal funding for water infrastructure since the sunsetting of the Construction Grants program. Hammer says that means Uncle Sam now effectively pays cents on the dollar of what it used to for major capital projects, even as federal regulations have continued to tighten.
And needs are growing: Hammer points to EPA calculations showing utilities nationwide will collectively have to spend $1.25 trillion by 2041 to modernize their infrastructure and guard against climate change. PWD goes further, pointing toward an American Society of Civil Engineers report stipulating nearly $3 trillion in need by 2033, more than a third of which represents a “funding gap that needs to be addressed,” the report concludes.
It’s been challenging for communities because at the same time federal investment has gone down, costs have gone up.”
— Rebecca Hammer, Natural Resources Defense Council
“It’s been challenging for communities because at the same time federal investment has gone down, costs have gone up,” Hammer says, noting that treatment plants and other infrastructure installed in the 1970s are reaching the end of their lifespan.
PWD says planning documents from the 1980s show federal grants covered as much as 75% of the costs of wastewater treatment plant upgrades in the city at the time. Now, the best the department can hope for is low-interest loans, such as the $100 million loan it received from the commonwealth in 2021 to pay for major upgrades at its aging Northeast Water Pollution Control Plant. Such loans often come with favorable terms compared with other financing options, but they will still cost Philadelphians tens of millions of dollars in repayment that they wouldn’t have faced a few decades ago.
There are grants available, but PWD does not qualify for them due to how the Pennsylvania Infrastructure Investment Authority (PENNVEST), which serves as a clearinghouse for federal loan funding, calculates need.
Robert Boos, PENNVEST’s executive director, says its formula assesses the ratepayer cost of each project application, with an eye on affordability. If a project will cause rates to increase by more than about 1% of median household income for a given utility, it may qualify for grant funding.
“You could have raw sewage running down the streets in a more affluent community, and they may only qualify for a low-interest loan because they have a financial capacity to address it,” Boos says.
But others say PENNVEST’s formula leaves PWD at a distinct disadvantage. The water department calculates that the sheer scale of its system means a project would have to exceed $300 million to qualify for a grant, a figure rarely reached and one that exceeds PENNVEST’s annual grant budget anyway.
Patrick Starr, executive vice president for programs at the nonprofit Pennsylvania Environmental Council, adds that residents of neighborhoods like Chestnut Hill and Rittenhouse buoy Philadelphia’s median household income — about $61,000 in 2023 — and paper over affordability issues in poorer areas. PWD makes a similar point, noting that less-populated Allegheny County has historically received more PENNVEST funding than Philadelphia, since it contains more than 100 municipalities in addition to Pittsburgh.
“Sadly, as impoverished and obsolete as our system is, because we have pockets of wealth … it sort of throws a wrench into the PENNVEST formula,” Starr says, adding that if Philadelphia was broken into 12 subsystems, he understands that “maybe six or seven” would qualify for grants.
Despite the hikes, PWD rates below average
Every year, the Massachusetts Water Resources Authority analyzes rates for the utilities of the country’s largest 33 cities. Its most recent report for 2024 ranked Philadelphia as the 19th most expensive, even after it hiked rates by the second largest percentage nationally that year, trailing only Los Angeles. And a January 2025 report from Bluefield Research, a market research firm, found Philadelphia’s rates also about average nationally — and by far the lowest rates of the four Northeast cities it analyzed. Bluefield calculated the average monthly bill in Philadelphia at just over $100 a month, compared with about $150 in New York City, Boston and Portland, Maine.
“One of the reasons they don’t qualify for PENNVEST grant funding is because their rates are so low,” Kricun says of PWD.
Kricun reiterates that he believes utilities can generally get by with smart and robust use of low-interest loans, along with programs like bill assistance for low-income ratepayers, enabling the raising of rates without harming the most vulnerable.
Ballenger, the consumer advocate, says he believes the City has already made some headway in this regard. In 2017, the City’s Department of Revenue and PWD launched a Tiered Assistance Program, which allows low-income ratepayers to obtain “significant savings by offering a consistent bill based on their income.” Along with implementing new shutoff protections and taking steps to ensure cash reserves aren’t inappropriately large, Ballenger feels PWD has “bought into” efforts to assist vulnerable ratepayers.
But he remains concerned about just how much rates will increase over the next decade, and says he favors PENNVEST redoing its formulas. Already, the state agency has adjusted its formulas for Biden-era funding dedicated to lead service line replacement, Boos says. The agency has since directed millions of dollars of grant money to low-income neighborhoods where the pipes often exist, regardless if they were part of a larger utility that wouldn’t typically qualify, including projects in Philadelphia.
“We did not want to be another Flint,” Boos says, but adds that the program remains PENNVEST’s “one exception.”
Councilmember Mark Squilla, chair of the Appropriations Committee and sometime inquisitor of PWD, perceives the department as an entity that at times is too quick to throw up its hands in seeking outside funding. He notes that PENNVEST bent its rules on lead service line funding and suggested that through being proactive — making applications for projects and advocating politically with anyone who will listen — there may be more funding victories to be had for PWD.
“My goal with the water department is … let’s have a plan in place so when money does become available, we can be shovel-ready,” Squilla says. “Not just say, ‘This will never happen, we’ll never have those resources.’”
Kricun adds that, similarly, some utilities across the country have succeeded in working with their congressional delegations to get one-off, earmarked federal grants for capital projects. That can be a dirty business that leads to funding inequities, but it is in the toolbox.
“It’s a zero-sum game, but if you can get it, good for you,” Kricun says.
Yet others say that PWD has sometimes failed to look even closer to home, such as seeking out philanthropic funding from entities like the William Penn Foundation, which maintains a focus on clean water issues in Philadelphia. Advocates note that PWD does appear to be taking steps to address such criticisms: This year the department applied for and received a $2.1 million William Penn Foundation grant to study a potential stormwater reduction tunnel in North Philadelphia. Ballenger notes the department has also formally agreed to meet with his office and other officials to discuss potential ways to get better funding from PENNVEST.
For its part, PWD says it welcomes collaboration with advocates and other stakeholders and already works alongside City agencies “to seek grant [and] cost-effective financing support,” adding that it has an internal team “continually focused on applying for funding from state and local entities.” But given the size of the gap between what’s needed and what’s available, the department says it believes paradigm-shifting funding can only come from one place, and it’s not from the relatively small pots of local and state grant funding.
“While every dollar of funding/financing counts, suggesting that those dollars will add up to significantly influence customer rates in the coming years is overly optimistic,” PWD says. “There is an acute need for these investments nationally and an associated funding gap that clearly needs to be addressed at that same level.”
This special section is a part of Every Voice, Every Vote, a collaborative project managed by The Lenfest Institute for Journalism. The William Penn Foundation provides lead support for Every Voice, Every Vote in 2024 and 2025 with additional funding from The Lenfest Institute for Journalism, Comcast NBC Universal, The John S. and James L. Knight Foundation, Henry L. Kimelman Family Foundation, Judy and Peter Leone, Arctos Foundation, Wyncote Foundation, 25th Century Foundation, Dolfinger-McMahon Foundation, and Philadelphia Health Partnership. To learn more about the project and view a full list of supporters, visit 
This is about privatization. PWD is a non-profit and makes no money for Wall Street so the idea is to create enough of an infrastructure and funding crisis that cities have to sell their utilities to private utilities that are legally ENTITLED by the PUC to earn a profit. Philly has too many privately owned homes so the banks want to raise the cost of water and home insurance so high that corporations can buy your house and then rent it to you. All the new environmental mandates and the climate crisis are about getting private control of the utilities and the homes away from the people and in the hands of the bankers.