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    1. Maintenance & Safety
    2. Standards & Regulations

    The water industry takes a look in the mirror

    April 15, 2014

    Only 18% of those surveyed see utilities covering service costs with rates and fees.

    Kevin Parker

    Authors of the 2014 AWWA state of the water industry report express mild surprise that the perception of the water industries by the professionals who work in it has changed little in recent years, even given “global phenomena and local crisis.”

    The American Water Works Association has done this industry survey report for a decade now. This year more than 1,700 respondents completed most of it. About 53% of those respondents worked for a utility. On a scale of 1 to 7, they rated current water-industry health at 4.6, up a bit from last year.

    “By this measure,” says the report, “the water sector has been resilient in the face of many large-scale political, financial, environmental and technology changes over the last ten years.”

    Of those surveyed:

    ·         Close to half (46%) of utility employees reported that their utilities’ access to capital was good or better than any time in the last five years.

    ·         Only 69% of utility employees say that the utility is at least moderately prepared financially to respond to their infrastructure needs.

    ·         About 60% of respondents indicate their utilities are very prepared to meet long-term water supply needs. About 10% see challenges here.

    ·         About 40% of respondents think the water industry is moderately prepared to address climate change.

    ·         While 70% of respondents say their utilities are not considering direct potable reuse to augment existing drinking water supplies, 12% say theirs are.

    Current concerns

    Despite the seeming conviction that U.S. water systems have the financial and operational resiliency to address the issues discussed above, there is no question but that the respondents consider three issues among the most critically important and chief concerns the country, and continent, face: 1) state of water and sewer infrastructure; 2) long-term water supply availability; and 3) financing for capital improvements.

    The respondents’ top three current regulatory concerns, in order, are 1) pollutant discharges, 2) disinfection by-products and 3) combined sewer overflows. The top three future regulatory concerns in order are 1) pharmaceuticals and hormones, 2) security and preparedness (cyber, physical and emergency response) and 3) disinfection products.

    Comparing the responses of those working for a utility and those not doing so reveals a close alignment in terms of the top ten issues faced. But across the top 15, utility employees included “compliance with existing regulations” and “compliance with future regulations,” while non-utility employees left those two out and included  “water conservation/efficiency” and “expanding water reuse/reclamation.”

    Some facts relevant to these expert opinions include the following. From the period of 2009 to 2012, the annual estimated population growth rate for the United States decreased from 0.9% to 0.7%. Each day, 1,146 gallons per inhabitant per day is withdrawn from the total water supply. There are more than 156,500 U.S. drinking water systems. There were nearly 45,000 U.S. wastewater systems reported in 2008, according to the EPA.

    Canada actually uses a bit more water per capita than does the United States, but everything else is on a smaller scale, obviously. No figures are available for Mexico.

    Comes at a cost

    Looking at other AWWA source materials, based on capital improvement project (CIP) projections provided directly by water and wastewater utilities the average expected CIP spending in 2013 was about $84/person for water systems and $104 for wastewater systems. Extrapolating these results to the entire U.S. population served by publicly supplied water, the estimated annual CIP costs for water systems was approximately $23 billion, while for wastewater systems it was $28 billion.

    Further calculations bring AWWA to the conclusion that the total amount spent on capital improvement projects for water and wastewater systems in the United States over the next 25 years could easily top $2 trillion. Yet only 18% of those surveyed feel that their utility is fully able to cover the cost of providing service through rates and fees, a percentage expected to decrease by 4% in the future.

    And therein, my friends, lays the conundrum.

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