It’s time to face the nation’s water infrastructure needs

May 17, 2012

Communities across the country are being confronted with a daunting challenge: replacing the aging, underground pipes that carry drinking water while also expanding service to meet the needs of a growing population.

Making the task even more formidable is the price tag, which is predicted to be at least $1 trillion over the next 25 years.

During a February hearing by the House Subcommittee on Water Resources and Environment, LCA’s general manager and chief financial officer, Aurel Arndt, drove the point home: “I want to emphasize that this is $1 trillion for buried drinking water assets only. Above-ground drinking water facilities, wastewater, stormwater, and other water-related investment needs are also very large, and must be added to reflect the true magnitude of the water investment needs before us.”

To put that number — a one followed by 12 zeroes — into some perspective, imagine this: According to CNBC.com, $1 trillion, if counted out in $100 bills, “would be enough to fill 4.5 Olympic-sized swimming pools.” That’s a lot of bills.

Meanwhile, investment is lagging far behind, and finding funding for the work is becoming progressively difficult. At the same February hearing — held to discuss financing options — committee chairman U.S. Rep. Bob Gibbs, R-OH, said, “Local governments are being forced to pay for more and more of the costs … with the result that local communities and ratepayers are increasingly getting economically tapped out.”

Flooded with problems

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An ancient aqueduct.

It might be hard to believe that the nation’s water lines are in such dire straits. After all, water is a basic human need. But the facts don’t lie: Water infrastructure systems in major cities across the country have been experiencing phenomenal failures. For instance, as of 2003, Atlanta was losing 20 percent of its water because of leaks in old mains. Monitoring of leaks by New York’s DEP, started in the 1980s, found that a section of New York City’s 85-mile long Delaware Aqueduct was losing up to 36 million gallons of water a day. And in Pittsburgh, a 2008 report to the state DEP showed leaks accounted for a loss of about 42 million gallons of water a day. According to the Environmental Protection Agency’s Aging Water Infrastructure Research Program, there are 240,000 water main breaks each year in the United States. The problem is so bad that in a 2009 assessment, the American Society of Civil Engineers gave the nation’s water systems a “D- ” in its “Report Card for America’s Infrastructure.”

At the heart of the problem is the age of the infrastructure: Many cities are using water mains put in place more than 50 years ago; in fact, some older communities have pipes that have been buried more than a century. Because the pipes were largely made of steel or iron, they’ve stood up well over the years; many lasting longer than anyone thought they would. But that just means they exist on borrowed time. And unlike our bridges and roads, which seem to get most of the attention, it’s much harder to see deteriorating water lines.

“A large part of the water infrastructure is out of sight and out of mind,” Arndt says. “It’s buried underground. Whenever something is invisible to the public, it’s either taken for granted or, in many cases, just forgotten until a problem arises. With assets having such a long life, you can go through several generations without having any kind of significant expenditure associated with those facilities … that almost creates the impression that the assets are immortal, when in fact they do have a limited life. [So] for the first time in four or five generations, the communities are being faced with making significant investments in that capital.”

LCA customers are among the lucky ones. “In many ways we are fortunate because LCA was first created in the 1960s, so everything that was built since then is, by waterworks comparison, relatively new,” Arndt says. “In LCA’s case, if you look at the oldest mains that we have constructed, we are probably facing that replacement time probably somewhere beyond 2050.”

Conversely, the Philadelphia Water Department says the average age of its 3,200 miles of water lines is about 78 years; with some pipes dating back to 1824. The average age of their wastewater lines is about 100 years.

Similarly, infrastructure needs and age vary across the country. Arndt says that in the South and West, investment demand has revolved more around new construction in growing areas, rather than on replacement. “A large part of their existing infrastructure was built around World War II and thereafter, so they aren’t really approaching the same replacement urgency that, for example, the Northeast and Midwest are experiencing.”

Wastewater woes

But there’s also wastewater to consider. While most wastewater systems are newer than the drinking water systems (“A lot of investment occurred in the 1970s when the Clean Water Act was enacted,” Arndt says), there’s still a tremendous amount of work that needs to be done to bring the lines and treatment systems up to date.

One of the biggest problems is with stormwater. “The issues we find that are driving wastewater infrastructure investment,” Arndt says, “is what is called combined sewer overflows, in which the very old systems, the ones built in the first half of the last century, actually combine the stormwater and sanitary sewer systems.” When there’s enough rain (or snowmelt) to trigger what’s called “peak flow,” the polluted flow washes into rivers, lakes, streams and bays; backs up into homes, and even bursts out of manhole covers.

A 2011 story from the Huffington Post says that each year, “more than 27 billion gallons of untreated sewage and polluted wastewater spill into New York Harbor.” The trigger for these overflows can be “as little as one-tenth of an inch of rain.”

The 3 Rivers Wet Weather Demonstration Program reports that in the Pittsburgh area, “As little as one-tenth of an inch of rain — an average Pittsburgh rainfall is one-quarter inch — can cause raw sewage to overflow into our rivers and streams. Melting snow can cause the same effect.” The group says that since 1995, river advisories issued by the Allegheny County Health Department because of these overflows have been in effect for nearly half of each recreational boating season, which runs from May 15 to September 30.

Arndt says that efforts are under way nationwide to separate those combined wastewater lines, as well as upgrade sewage treatment systems to remove so called “nutrients” such as nitrogen and phosphorous, which cause a host of problems for waterways.

All these needed improvements, however, bring us back to the $1 trillion-plus figure (and remember, that figure doesn’t factor in wastewater work), because the biggest hurdle for most communities is the cost.

Usually, local governments provide the majority of the financing for water and sewer projects. This capital could come in the form of customer fees, loans or bonds. States provide aid through loans and debt refinancing; money from the federal government helps to fund those programs.

But the expected cost of infrastructure replacement is so high, experts fear the traditional approach won’t be enough to make ends meet. “Increased investment needs to take place, which leads to the question: Where is the money going to come from?” said Rep. Gibbs at that February meeting.

The WIFIA connection

That’s where WIFIA — the Water Infrastructure Finance and Innovation Act — would come in. The proposed legislation would create a Water Infrastructure Finance and Innovation Authority, which, Arndt testified, would “provide direct loans, loan guarantees, and lines of credit for large water infrastructure projects.” The proposed authority would provide municipalities with “a wider range of funding options, including lower interest rates and more flexible terms.”

“The scale of water infrastructure investment needs … often push utilities beyond the limits of … traditional financing sources and beyond the ability to set affordable rates for its customer base,” Arndt testified. “That calls for an expanded toolbox of funding options to help meet the nation’s critical water infrastructure needs.”

“Buried No Longer: Confronting America’s Water Infrastructure Challenge,” a report by the American Water Works Association, says that one of those funding options needs to be higher water bills for customers. Arndt is chairman of the advisory work group that helped prepare the report.

“The level of investment required to replace worn-out pipes and maintain current levels of water service in the most affected communities could in some cases triple household water bills.” That projection, the report goes on to say, “assumes the costs are spread evenly across the population in a ‘pay-as-you-go’ approach.”

Because of the relatively young age of LCA’s infrastructure, the Authority has the ability to set money aside rather than adopt a “pay-as-you-go” model. That means rate increases should continue to be minimal. “We don’t see a significant impact to our rates from replacement costs,” says Arndt. “One of the things we’re doing since we have the luxury of time is to bank funds and put them in reserve, so we have at least some of the money necessary when that time comes.”

That doesn’t mean water bills won’t go up. “We have been raising rates the last few years, but by a very modest degree — they’ve been like 3 to 4 percent a year — to cover the increasing operating expenses,” Arndt says. “I think that pattern is what we would like to see: relatively modest, but more regular increases in rates, rather than having very large, double-digit increases on a less frequent basis.”

As with any infrastructure, occasional repairs and improvement must be made, says Liesel Adam, LCA’s customer care and communications manager. “For the time being, our capital improvement plan has been successful in keeping our water system in relatively good repair on a proactive basis, and we have the capacity from a supply perspective to meet the needs of new growth for the foreseeable future.”

However, she says sewer system improvements and expansion are high on the Authority’s list of priorities. Development projects in the ever-growing Lehigh Valley area mean LCA’s sewer system will be “stretched beyond its current capacity without new infrastructure,” she says. “And the existing sewer system is experiencing deterioration that allows rainwater to infiltrate into the pipes, which can increase chances of sewer system overflows during wet weather events.”

At the time of this story’s publication, the fate of the Water Infrastructure Financing and Innovation Act was still in limbo. Greg Kail, Director of Communications for the American Water Works Association, says AWWA expects a bill to be introduced sometime in May. “There will then be a ‘markup’ hearing in which they [the House Subcommittee on Water Resources and Environment] consider amendments,” he says. “Members will then vote on whether to pass the bill on to the full Transportation and Infrastructure Committee. There is always a chance the full committee will initiate markup, but that is rare.”

In the meantime, the nation’s water infrastructure needs are growing faster than the funding needed to meet them. And if action isn’t taken soon, cash-strapped municipalities all over the country could find themselves high and dry.

 

 

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