PFAS Treatment Upgrade Cost Recovery Calculator

Per- and polyfluoroalkyl substances (PFAS) are reshaping how drinking water utilities plan capital projects, structure debt, and communicate rate changes. New federal and state standards are pushing allowable PFAS levels down to just a few parts per trillion (ppt), often near or below 4 ppt. Meeting these limits typically requires advanced treatment such as granular activated carbon (GAC), ion exchange resins, or high-pressure membranes.

Those technologies come with substantial capital and ongoing operations and maintenance (O&M) costs. Boards, regulators, and customers want to know: What will this do to our rates and typical household bills? The PFAS Treatment Upgrade Cost Recovery Calculator provides a quick, transparent way to translate PFAS treatment projects into approximate revenue requirements and rate impacts, before you commission a full engineering or rate study.

What this calculator estimates

Using a small set of utility-level inputs, the calculator produces an approximate annual cost recovery target and related rate metrics. Based on your entries, it estimates:

• Net capital to finance after subtracting grants or subsidies from total project cost.
• Annual debt service using a level-payment loan (annuity) structure.
• Total annual PFAS-related cost (debt service plus O&M).
• Required revenue per thousand gallons of water sold to cover those costs.
• Approximate monthly impact per household, based on a typical usage assumption.
• Simple compliance outlook, based on your baseline and target PFAS concentrations.

The tool is intended as a fast screening and communication aid. It helps finance directors, utility managers, and consultants explore “what if” scenarios and prepare for workshops, grant applications, and preliminary discussions with decision-makers.

Key formulas used in the model

The calculator applies standard finance and water-demand relationships to your inputs. In simplified form:

1. Net capital to finance
   Net Capital = Capital Cost − Grants/Subsidies
2. Debt service (annualized loan payment)
   The model treats the financing as a level-payment loan (annuity). With an annual nominal interest rate and a fixed term in years, the annual payment is:

   Where:

   • A = annual debt service (payment)
   • P = net capital to finance
   • r = annual interest rate (decimal, e.g., 0.0325 for 3.25%)
   • n = term in years
3. Total annual PFAS-related cost
   Total Annual Cost = Annual Debt Service + Annual O&M Cost
4. Annual water demand
   The tool multiplies your population by average daily demand per person and by 365 days per year: Annual Volume (gallons) = Population × Daily Demand × 365
5. Required revenue per thousand gallons
   Required $/1,000 gal = (Total Annual Cost ÷ Annual Volume) × 1,000
6. Approximate monthly impact per household
   The calculator assumes an average household uses a representative number of gallons per month (documented in the interface or script). It then applies:
   Monthly Impact ≈ (Household Use ÷ 1,000) × Required $/1,000 gal

These relationships are intentionally simple. They are designed to mirror high-level planning discussions and remain understandable to non-specialists.

How to interpret the results

Once you enter your inputs and run the calculation, you will see a set of outputs summarizing the financial implications of your PFAS treatment upgrade. Here is how to read them:

• Net capital to finance shows how far grants and subsidies offset your project cost. A smaller net capital amount reduces long-term debt service.
• Annual debt service reflects the yearly payment needed to retire the PFAS-related debt under your chosen interest rate and term. Longer terms generally lower annual payments but increase total interest paid over the life of the loan.
• Total annual PFAS cost adds O&M to debt service. This is the incremental annual revenue your system must recover if all PFAS-related costs are funded from rates.
• Required revenue per thousand gallons translates those annual costs into a volumetric rate component. It is not a full proposed rate; instead, it is the PFAS-related portion that would need to be layered onto existing revenue requirements.
• Estimated monthly bill impact gives a quick sense of what a typical household might see as an incremental charge if the PFAS cost recovery is collected through volumetric rates.

Use these outputs as conversation starters. For example, you might compare multiple treatment options, grant packages, or financing terms to see how they change the required $/1,000 gallons and monthly household impact. You can then bring representative ranges (not single point estimates) into meetings with boards or councils.

Worked example

Imagine a mid-sized utility with the following characteristics:

• Population served: 85,000
• Average daily demand per person: 115 gallons
• Baseline PFAS concentration: 16 ppt
• Target PFAS concentration: 4 ppt
• Capital cost of treatment upgrade: $32,000,000
• Available grants or subsidies: $5,000,000
• Financing interest rate: 3.25% APR
• Financing term: 20 years
• Annual O&M cost: $1,800,000

The calculator would:

1. Compute net capital to finance: $32M − $5M = $27M.
2. Apply the annuity formula with 3.25% and 20 years to estimate annual debt service on $27M.
3. Add $1.8M of O&M to obtain total annual PFAS-related cost.
4. Calculate annual water demand: 85,000 × 115 × 365 gallons.
5. Divide total annual cost by annual demand, then multiply by 1,000, to find the PFAS-related $/1,000 gallons.
6. Estimate a monthly household bill impact based on a typical monthly use assumption.

By adjusting just a few inputs—for example, testing a 30-year bond term instead of 20 years, or exploring a scenario with additional grant funding—you can see how sensitive rate impacts are to different policy and funding decisions.

Comparing scenarios

The table below illustrates how different funding and design choices affect key outputs conceptually. Values are illustrative only.

In practice, you would create these comparisons by running the calculator multiple times, saving or exporting the results, and discussing trade-offs with stakeholders.

Assumptions and limitations

To stay fast and easy to understand, the calculator makes several simplifying assumptions. Keep these in mind when interpreting outputs:

• Constant demand: Daily demand per person is treated as constant throughout the year; seasonal peaks, drought restrictions, or long-term conservation trends are not modeled.
• Single blended rate impact: The tool focuses on an average PFAS-related cost per thousand gallons. It does not design full rate structures (e.g., inclining blocks, fixed service charges, or separate wholesale/retail rates).
• Level-debt structure: Financing assumes equal annual payments at a fixed interest rate over the entire term. Real-world bonds may have different amortization patterns, issuance costs, or refinancing events.
• No inflation or escalation: The calculator applies today’s dollars. It does not account for future inflation, changes in power costs, media pricing, or regulatory updates.
• Simplified PFAS dynamics: The tool uses baseline and target PFAS concentrations primarily for context and compliance framing; it does not model breakthrough curves, blending strategies, or source diversification.
• Planning-level results only: Outputs are approximate and intended for screening, education, and communication. They are not a substitute for a formal cost-of-service study, engineering design, or legal/financial advice.

You should always confirm results with your finance, engineering, and legal teams before proposing or adopting actual rate changes.

Choosing realistic inputs

Better inputs produce more meaningful outputs. Consider the following guidance:

• Population served: Use your service population, not just active customer accounts. Include non-residential demand where appropriate through the daily demand figure.
• Average daily demand per person: Base this on recent billing or production data, averaged over at least one year to smooth seasonal peaks.
• Capital cost: Include construction, design, permitting, contingencies, and owner’s costs when possible, so the estimate reflects total project investment.
• Grants and subsidies: Enter only funding that you are reasonably confident will be awarded; use alternative scenarios to test higher or lower support.
• Interest rate and term: Coordinate with your finance or treasury staff to align assumptions with current bond market conditions or state revolving fund programs.
• O&M cost: Include power, chemicals, media replacement and disposal, additional staffing, and regulatory sampling related to PFAS treatment.

Related tools for water managers

This PFAS-focused calculator is part of a broader set of water and infrastructure planning tools. For example, the Graywater Recycling Payback Calculator helps evaluate conservation investments, while the Canal Lock Water Budget Planner supports surface water operations planning. Using them together can give your team a more complete view of both water quality and quantity decisions.

By combining transparent formulas, clear assumptions, and browser-only execution, the PFAS Treatment Upgrade Cost Recovery Calculator is designed to fit comfortably within public-sector IT policies while supporting better, faster conversations about PFAS compliance and cost recovery.