Confronting Crisis
Thursday, March 29, 2012
By Elizabeth Cutright
What could you do with a chunk of $1.8 billion in grant funding for infrastructure upgrades? If the backers of HR1189 finally succeed, the Clean Water Affordability Act will open up the congressional checkbook and funnel some much-needed funds to financially stressed communities burdened with leaky pipes, inefficient pumps, and all manner of conveyance system meltdowns.
HR1189 is an ongoing attempt to amend the Federal Water Pollution Control Act so that “municipalities that would experience a significant hardship raising the revenue necessary to finance projects and activities for the construction of wastewater works” finally get the financial backing they need (www.govtrack.us/congress/bill.xpd?bill=h112-1189). Although the Federal Water Pollution Act itself has been modified many times—either to “authorize additional water quality programs, standards, and procedures” or to create funding for necessary projects and improvements—for many communities the changes are too costly to implement, and the fines for noncompliance are financially devastating. The Clean Water Affordability Act is aimed at reducing or mitigating this financial hardship. Unfortunately, HR1189 has been stalled in the House Committee on Transportation and Infrastructure and referred to the Subcommittee on Water Resources and Environment since March 18, 2011, and, as GovTrack.us warns, most bills never make it out of committee.
But stalled funding is nothing new. Neither are the dire—but scarily routine—warnings about the state of our infrastructure. In February, a report by Standard and Poor (S&P), once again raised the clarion call. The S&P report warned—again—that US public water systems are in dire need of repair and rehabilitation. And as we all already know, those repairs won’t come cheap. The S&P report cautions, “water systems will need to spend about $335 billion over the next two decades to comply with regulations”.
The S&P analysts seem to place the responsibility of financing and funding squarely on the shoulders of the municipalities that own a majority of public water utilities (85% according to Bloomberg). In a statement, New York-based S&P analysts Aneesh Prabhu and Manish Consul are quoted as saying, “Many municipalities have not initiated financing for the upkeep of their facilities because of deteriorating balance sheets and burgeoning deficits. Given the currently low interest rates, we think deferring such spending is a lost opportunity.” The S&P analysts go on to conclude that a failure to capitalize on current credit opportunities positions municipalities at a risk of higher costs in the future as infrastructure begins to systematically fail amidst increasing demand and decreasing resources.
But—pardon the pun—the S&P report is really only the tip of the infrastructure iceberg. In February, the American Waterworks Association (AWWA) released a groundbreaking study that puts the cost of repairing and expanding US drinking water infrastructure to over $1 trillion in the next 25 years. And where will the money come to fund these expenses? Higher water bills and local fees.
The report, entitled “Buried No Longer: Confronting America’s Infrastructure Challenge”, analyzed a variety of elements—from water main installation timing and life expectancy, to materials, to replacement costs and shifting demographics—to determine national infrastructure needs. Available at www.awwa.org/infrastructure, it reveals that our current conveyance systems are torn evenly between the need for replacement and the pressure to expand to meet demand. And as HR1189 already anticipates, the AWWA report concludes that it’s the small communities that “will face the greatest challenges.”
“Because pipe assets last a long time, water systems that were built in the latter part of the 19th century and throughout much of the 20th century have, for the most part, never experienced the need for pipe replacement on a large scale,” the report says. “The dawn of an era in which the assets will need to be replaced puts a growing stress on communities that will continue to increase for decades to come.”
We’ve known for some time that our water infrastructure is in crisis, but it seems as the evidence piles up, everyone’s willing to point out the dangers but unwilling (or unable) to come up with feasible—or at least economical—solutions. Adding complexity to the issue is the fact that water scarcity and increased demand forces many utilities themselves to pay a premium on the water they deliver, including tapping desalination and wastewater reuse. And paying more per gallon directly impacts the amount utilities can set aside to invest in infrastructure.
No one is more aware of the looming infrastructure funding crisis than municipalities staring down the barrel of the gun. But all hope is not lost. As AWWA Executive Director David LaFrance points out, “The needs uncovered in ‘Buried No Longer’ are large, but they are not insurmountable.”
And AWWA President Jerry Stevens agrees, “Water utilities are committed to finding fair and equitable rate designs that address affordability issues as they face the increased cost of infrastructure replacement. The good news is that there is still time to act. ‘Buried No Longer’ helps us recognize the challenge ahead. Together, we can take the necessary steps to meet that challenge.”
Author's Bio: Elizabeth Cutright is the Editor of Water Efficiency magazine and Distributed Energy magazine |
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