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The overwhelming majority of drinking water systems are small and in small rural communities, serving primarily residential customers with few, if any, commercial or industrial customers. Because they are unable to achieve economies of scale available to larger systems serving urban populations, small water systems face high investment, operational, maintenance, and compliance costs, and charge relatively high water rates. Meanwhile, most of their customers have relatively low per capita income. This creates a dilemma for small water systems—how to provide water at an affordable rate while charging a price that will cover all costs.


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