03012017Wed
Last updateWed, 01 Mar 2017 7pm

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VMA Sees Limited Valve Shipment Growth for 2017

VMA Sees Limited Valve Shipment Growth for 2017

After a year of little growth in 2016, U...

How to Improve Reliability and Safety of Solenoid Valves

How to Improve Reliability and Safety of Solenoid Valves

In an industrial setting such as a chemi...

Human Factors Can Cause a Disaster—or Prevent One

Human Factors Can Cause a Disaster—or Prevent One

Process industry plants are complex and ...

Improving Valve Sealing Performance and Reliability

Improving Valve Sealing Performance and Reliability

From time to time, we are re-posting wel...

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Industry Headlines

ISM: Manufacturing Jumps to Two-Year High

Wednesday, 01 March 2017  |  Chris Guy

According to the Institute for Supply Management (ISM), manufacturing expanded in February as the Purchasing Managers Index (PMI) registered 57.7%, an...

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Industry Headlines

Flowserve Appoints Jay Roueche Interim CFO

-1 DAYS AGO

John E. (Jay) Roueche III, Flowserve’s vice president, investor relations and treasurer, will assume the role of interim chief financial officer (CFO), effective immediately. Mr. Roueche’s appointment follows Karyn Ovelmen’s departure from the company as executive vice president and ...

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GE Oil & Gas Selected for Louisiana LNG Export Facilities

1 DAY AGO

Venture Global LNG, Inc. has selected GE Oil & Gas as a strategic partner to provide a plant-wide technology solution for its liquefied natural gas (LNG) export facilities under development in Louisiana. Under the agreement, GE Oil & Gas will leverage advanced technologies to deliver a compr...

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Chemical Processing Industry Expects Growth in 2017

22 HOURS AGO

According to a recent Chem Show survey sent to more than 10,000 chemical and other processing manufacturers, equipment suppliers, and design/engineering firms, 2017 is expected to foster significantly elevated business prospects and sales throughout the chemical processing industry. Based on survey r...

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LNG Exports Expected to Drive Growth in U.S. Natural Gas Trade

1 DAY AGO

The U.S. is expected to become a net exporter of natural gas on an average annual basis by 2018, according to the recently released Annual Energy Outlook 2017 (AEO2017). The transition to net exporter is driven by declining pipeline imports, growing pipeline exports, and increasing exports of liquefie...

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ISM: Manufacturing Jumps to Two-Year High

-1 DAYS AGO

According to the Institute for Supply Management (ISM), manufacturing expanded in February as the Purchasing Managers Index (PMI) registered 57.7%, an increase of 1.7% from the January reading of 56%, indicating growth in manufacturing for the sixth consecutive month, and is the highest reading since ...

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Growth in Texas Manufacturing Activity Continues

22 HOURS AGO

Texas factory activity increased for the eighth consecutive month in February, according to business executives responding to the Texas Manufacturing Outlook Survey . The production index, a key measure of state manufacturing conditions, rose five points to 16.7, suggesting output growth picked up pac...

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Making Progress On Improving Our Aging Water Infrastructure

spr11_watermain_break_photo.jpg

The nation’s utilities are employing rate increases, technology and other tools to maintain and, in some cases, upgrade or replace, our water infrastructure.

The frequency of water leaks and main breaks occurring across the U.S. is increasing at a steep rate as years of unchecked deterioration take their toll on a water infrastructure that, in places, dates back to the second half of the 19th century. Utilities and state and federal agencies are well aware of this growing dilemma. However, the unusually high number of devastating main breaks is significantly increasing public awareness of the dire condition of the country’s water system.

In February 2011, news outlets across the country reported that Kansas City, MO, experienced 467 main breaks this winter alone—a 73% increase in the number of breaks the city experienced during the winter of 2010. Montgomery and Prince George’s County, MD, which deliver water to 1.8 million people, also made news headlines for breaks in their water systems. According to one article, both counties set a record in December 2010 for having the largest number of water main breaks in a single month—647. The following month, Prince George’s County experienced a 54-inch water main break that damaged nearby businesses and leaked an estimated 50 million gallons of water.

While municipal spending on water systems is taking place, much of it is for emergency repair, and it is not nearly enough to cover the estimated spending gap for necessary repairs and replacement. As stated by the American Society of Civil Engineers (ASCE) in its 2009 report, “America’s drinking water systems face an annual shortfall of at least $11 billion to replace aging facilities that are near the end of their useful lives and to comply with existing and future federal water regulations. This does not account for any growth in the demand for drinking water over the next 20 years.”

To address the shortfalls, municipalities and water utilities are looking at a variety of funding sources, including municipal bond issuance, higher water rates and increasing operational efficiencies.

Municipal bond issuance is a common funding source for water systems. However, some investors have recently expressed concern about the risk of possible municipal defaults. Results of a Reuters poll published in February 2011, found that more than half of Wall Street professionals, including municipal bond traders and investors, anticipate that up to four multibillion-dollar municipal bond defaults will take place this year.

Fortunately, certain investment analysts and ratings agencies have a more optimistic view of municipal bonds that focus on water systems. A recent Fitch Ratings report explained the relatively stable credit quality of water bond issuers. The report cites numerous supporting factors, including the essentiality of water and its monopoly status, which has helped shield the water sector from certain economic factors.

Some analysts say that recovering more of the actual cost of water—if not moving toward full-cost pricing—could be an important avenue to increase the investment needed in our aging water infrastructure. They point out that water rates in the U.S. are typically less than in other developed countries. In fact, results of the International Water Report and Cost Survey, conducted by NUS Consulting Group in 2007, indicated that U.S. water rates were the least expensive at 66 cents per cubic meter average compared to the 13 other developed countries that were surveyed (Denmark’s rates were the highest at $2.25 per cubic meter).

A significant source of funding for water and wastewater comes from the revenues generated by user rates; therefore, pricing water to accurately reflect the costs of providing quality water services is one strategy that utilities are using to maintain infrastructure and encourage conservation.

However, as rates increase, utilities will need to proactively educate consumers on the true value of water to absorb the shock of higher rates and ease consumer acceptance of those rates, according to Avoiding Rate Shock: Making the Case for Water Rates, a study sponsored by the AWWA [American Water Works Association] Water Utility Council. The study found that consumers get upset over rate increases because of misunderstandings about the true value of a safe, adequate supply of water, and that a consistent, structured communications strategy can build support for rate increases.

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