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Tale of the Tap: Water Needs to Top $1T

Tuesday, February 28, 2012

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One trillion-with-a-T dollars. That’s the throat-parching cost of meeting the needs of buried U.S. drinking water infrastructure in the next 25 years, new research estimates.

Don’t look for government to pick up the tab, either, says the study by the American Water Works Association. The bill will largely gush out in higher water bills and local fees.

 AWWA

 AWWA

Older regions like the Northeast and Midwest will have to replace failing, aged water systems, while the booming South and West will demand whole new networks.

“Restoring existing water systems as they reach the end of their useful lives and expanding them to serve a growing population will cost at least $1 trillion over the next 25 years, if we are to maintain current levels of water service,” according to Buried No Longer: Confronting America's Water Infrastructure Challenge, by AWWA, an international nonprofit educational association dedicated to safe water.

‘Day of Reckoning’

Deferring the needed investment will only further degrade water service, resulting in more service disruptions and more costly emergency repairs, the group says.

“Ultimately, we will have to face the need to ‘catch up’ with past deferred investments—and the more we delay, the harder the job will be when the day of reckoning comes,” according to the report.

Some communities could be forced to triple water bills, while others will resort to “significant ‘impact’ or development fees,” the report says. Numerous communities, it adds, will be facing replacement and expansion demands at the same time.

Of course, any new drinking-water standards that arise will only ratchet up the bill.

‘Growing Stress on Communities’

The report analyzes the timing of water main installation and life expectancy, materials used, replacement costs, shifting demographics and other factors.

Nationally, it reports, infrastructure needs are almost evenly divided between replacement and expansion. Expansion to keep pace with population growth will be the greater issue in the South and West, for example, while replacement—on the backs of a shrinking population—will be the main concern in the Northeast and Midwest.

“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,” AWWA reports.

“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.”

Other Findings

Among the report’s other conclusions:

• Size matters. 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.

• Delays will cost more. Postponing investment will raise the overall cost of addressing the problem and increase the likelihood of water main breaks and other infrastructure failures.

‘Not Insurmountable’

The good news: The trillion-dollar bill is not all due at once. That means there is time to implement asset management plans and set rates that more closely reflect the cost of water service, the group reports. (Currently, it says, most Americans pay less than $3.75 for every 1,000 gallons of tap water.)

AWWA has urged Congress to create a Water Infrastructure Finance and Innovation Authority (WIFIA), modeled after the Transportation Infrastructure Finance and Innovation Act (TIFIA).

The TIFIA program provides federal credit assistance in the form of direct loans, loan guarantees, and standby lines of credit to finance surface transportation projects of national and regional significance.

“Creating such a WIFIA offers a modern, effective way to help increase this nation’s level of investment in water and wastewater infrastructure, at the lowest possible cost to the federal government,” says AWWA.

“The needs uncovered in ‘Buried No Longer’ are large, but they are not insurmountable,” said AWWA Executive Director David LaFrance. “When you consider everything that tap water delivers—public health protection, fire protection, support for the economy, the quality of life we enjoy—we owe it to future generations to confront the infrastructure challenge today.”

AWWA water main chart

   

Tagged categories: AWWA; Construction; Infrastructure

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