Residential drinking water bills increased 62% on average between 2015 and 2025, outpacing inflation, grocery prices and median household income, according to a new analysis from Food & Water Watch.

The report analyzed rates for the 500 largest U.S. community water systems, which collectively serve about 155 million people, or 45% of the U.S. population. The analysis calculated annual bills based on 60,000 gallons of household water use and excluded wastewater and stormwater charges.

The average annual drinking water bill was $531 in 2025, although costs varied widely among utilities. Hempstead, New York, had the lowest typical bill at $133, while San Jose Water Company in California had the highest at $1,416.

Food & Water Watch found that water bills increased 1.6 times faster than overall inflation from 2015 to 2025. Bills also increased 19% faster than median household income over the period.

The report attributed rising costs to factors including aging infrastructure, water quality requirements, climate-related challenges and reduced federal support for water infrastructure. It cited EPA estimates that drinking water systems will need $625 billion in upgrades over the next two decades to comply with existing water quality standards.

Affordability was a particular concern for lower-income households. The analysis found that water bills exceeded its affordability threshold for low-income households in 93% of the systems studied.

The National Association of Water Companies (NAWC) is challenging recent analyses comparing water utility rates, arguing that comparisons based on published rate schedules can overlook differences in water consumption, infrastructure needs, operating costs and customer assistance programs.

The association said rate schedules do not necessarily represent what customers ultimately pay because household bills vary with water use, conservation and assistance programs. NAWC also said comparisons can overlook differences in water supply and treatment challenges, taxes and other costs between regulated private and municipal utilities.

Robert F. Powelson, NAWC president and CEO, said comparing rates among the largest U.S. water systems without additional context can provide an incomplete picture of water affordability and utility costs.

NAWC also emphasized the role of state public utility commissions in regulating private water companies. According to the association, rates and allowable returns for regulated utilities are reviewed through public proceedings, with commissions determining whether proposed costs and investments are appropriate.

The association pointed to infrastructure modernization, lead service line replacement, PFAS treatment, cybersecurity and resilience to extreme weather as cost pressures affecting water utilities across the sector.

NAWC said regulated private water companies have invested more than $43.5 billion over the past decade, including nearly $6.8 billion in 2025, to support drinking water infrastructure and service reliability.

The organization also called for a permanent federal water assistance program for low-income households. NAWC said it supports the bipartisan Low Income Household Water Assistance Program (LIHWAP) Establishment Act, following the expiration of the temporary LIHWAP program.

NAWC’s comments come as water affordability and differences in utility rates receive increased attention, with the association arguing that rate comparisons should account for the broader costs of providing safe and reliable drinking water service.