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Infrastructure

$1 Trillion investment in US water infrastructure needed, says AWWA report

April 03, 2012
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The massive investment needed for buried drinking water infrastructure in the U.S. totals more than $1 trillion between now and 2035, concludes a just-released report from the American Water Works Association. The need will double from roughly $13 billion a year today to almost $30 billion — in 2010 dollars — annually by the 2040s, and the cost will be met primarily through higher water bills and local fees, according to the report.

The authors say "Buried No Longer: Confronting America''s Water Infrastructure Challenge" is a call to action for utilities, consumers and policy makers and recognizes that the need to replace pipe in the ground "puts a growing stress on communities that will continue to increase for decades to come."

Key findings in "Buried No Longer" include the following:

• The needs are large. The cost of replacing pipes at the end of their useful lives will total more than $1 trillion nationwide between 2011 and 2035 and exceed $1.7 trillion by 2050.

• Household water bills will go up. Although water bills will vary by community size and geographic region, for some communities the infrastructure costs alone could triple.

• There are important regional differences. The growing national needs affect different regions in different ways, with growth concerns greater in the South and West and replacement concerns greater in the Northeast and Midwest.

• There are important differences based on system size. As with many other costs, small communities with fewer people to share in the costs face the biggest challenge.

• The costs keep coming. Infrastructure renewal investments are likely to be incurred each year over several decades. For that reason, many utilities may choose to finance infrastructure replacement on a "pay-as-you-go" basis rather than through debt financing.

The report concludes that postponing infrastructure investment in the near-term raises overall cost and increases the likelihood of water main breaks and other infrastructure failures. However, the $1 trillion investment necessary through 2035 does not have to be made all at once. There is time to implement asset management plans and set rates that more closely reflect the cost of water service.


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