Utility Sustainability

Sustainable Water and Wastewater Utilities and Municipalities

Water and wastewater utilities can take significant steps toward better serving their customers and decreasing their particular financing challenges by accessing the many organizational, managerial and financial tools at their disposal. NAWC supports and encourages these principles in federal funding programs link to letter and testimony.

Public-Private Partnerships:

A public-private partnership is a contractual agreement between a public agency (federal, state or local) and a private sector entity. Through this agreement, the skills and assets of each sector (public and private) are shared in delivering a service or facility for the use of the general public. In addition to the sharing of resources, each party shares in the risks and rewards potential in the delivery of the service and/or facility.

More than 2,000 water and wastewater utilities have partnered with the private sector to address their infrastructure challenges. Such partnerships have been shown to save money for municipalities, enjoy broad support and possess a 98 percent renewal rate.

Leveraging Private Capital:

A recent Standard & Poor’s (S&P) report notes that about $100 billion in new money for infrastructure investment funding was raised globally in 2006, and more investment funds are planned. Managers of these funds are actively looking for sound infrastructure projects in which they can put all that new money to work for their investors.

Investors in these funds are often pension funds, insurance companies or foundations that have large amounts of capital to invest and are looking for stable, long-term investment returns that basic infrastructure assets can provide. Moreover, in this time of economic distress, average Americans can benefit from a variety of investment options such as those provided by utilities.

Full Cost of Service Pricing:

Charging water and wastewater users the full cost of the services they receive is sound environment policy and efficient economic practice. Large government subsidies discourage conservation and mislead the public on the value of our precious water resources by making water and wastewater bills deceptively low. Of course, some disadvantaged customers need assistance paying their bills. Such targeted assistance is necessary and appropriate.

Consolidation:

There are 53,000 water utilities in the U.S. It is clear that utility consolidation can produce significant economies of scale, reduce costs all around and go a long way in assisting localities in addressing their funding challenges.

Sound Asset Management:

The General Accounting Office (GAO) estimates that as many as 25 percent of all utilities do not have asset management plans at all, and more than half of utilities’ existing asset management plans are inadequate. Since good management of assets is an essential element of successfully addressing the infrastructure replacement challenge, utilities should be encouraged to adopt such practices.