Hamilton Kent Blog

2015 State of the Industry Water Report: Key Takeaways

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Does this list seem familiar:

1. Renewal and replacement (R&R) of aging water and wastewater infrastructure
2. Financing for capital improvements
3. Long-term water supply availability
4. Public understanding of the value of water systems and services
5. Public understanding of the value of water resources

Those, according to the American Water Works Association’s (AWWA) recently released 2015 State of the Industry Report, are the top five most important issues facing the water industry.

Rates and fees not enough to cover expansion

When it comes to R&R of aging infrastructure, the report’s authors noted “a gap between the financial needs of water and wastewater systems and the means to pay for these services through rates and fees.”  Moreover, 9 percent of respondents felt that water and wastewater utilities are not at all able to cover the full cost of providing service, including infrastructure R&R and expansion needs, through customer rates and fees.

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Looking ahead, 16% of all respondents said they were concerned that utilities will not be able to cover the full cost of providing service in the future.

Breaking it down further, 30% of utility employees reported that their utilities are currently struggling to implement full-cost pricing — a two percent increase from 2014’s survey.  “In addition, 38 percent of respondents think they will struggle to cover the full cost of service in the future, up from 35 percent in 2014,” the report noted.

A good financial policy

The most important issue regarding infrastructure R&R? Establishing and adhering to a financial policy for capital reinvestment, according to survey results. Prioritizing R&R needs and justifying R&R programs to ratepayers and oversight bodies were also cited as critical to infrastructure revitalization.

‘You don’t know me.’

More still needs to be done in educating the public on water systems and services. Seventy-two percent of respondents said they feel the general public has a poor or very poor understanding of water systems and services, while 61 percent said the public has a poor or very poor understanding of water resources.

Regulation frustration

In terms of regulatory concerns, chemical spills came in at number one, followed by point source pollution and combined sewer overflows.

There’s a lot of insight in the report, which you can download here. It’s worth a deeper dive.