09252016Sun
Last updateFri, 23 Sep 2016 2pm

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An Alternative Basics Education: Valve Ed Comes to You!

An Alternative Basics Education: Valve Ed Comes to You!

For the first time in the seven-year his...

Give Your Flow Meter a Happy Home

Give Your Flow Meter a Happy Home

Increased emphasis on the need to improv...

What’s in Store for the Construction Market?

What’s in Store for the Construction Market?

As was the case with many of the present...

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Industry Headlines

Pentair Valves & Controls Hosts Customer Appreciation Training Event

2 DAYS AGO
Pentair Valves & Controls Hosts Customer Appreciation Training Event

More than 200 representatives from Houston’s refinery, chemical and petrochemical industries joined Pentair Valves & Controls on Sept. 15 at its Pasadena, TX facility for a customer appreciation BBQ and training event . The presented seminars are a part of Valves & Controls’ Pentai...

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Mueller Water Products Recognized for Best Smart Water Solution

3 DAYS AGO

Mueller Water Products, Inc. received the 2016 Best Smart Water Solution award at the third annual Smart Water Summit in Palm Beach Gardens, FL. Mueller Water Products, who won this award for the second time, was recognized for smart technology solutions offered through its Mueller Co., Mueller System...

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Senate Overwhelmingly Passes Water Resources Development Act

2 DAYS AGO

The U.S. Senate recently passed the Water Resources Development Act (WRDA) of 2016 with a broad bipartisan vote of 95 to 3. This legislation not only authorizes critical U.S. Army Corps of Engineers projects that drive investment in navigation, flood management, and ecosystem restoration, it provides ...

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Alaska Railroad Prepares First U.S. Shipments of LNG

2 DAYS AGO

The Alaska Railroad (ARRC) will demonstrate its ability to safely transport liquefied natural gas (LNG) in intermodal LNG ISO containers from southcentral to interior Alaska during a month-long operational performance project in early fall 2016.

ARRC is the first railroad in the country to obtain permi...

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Manufacturing Growth Eases Again in September

1 DAY AGO

At 51.4 in September, the seasonally adjusted Markit Flash U.S. Manufacturing Purchasing Managers’ Index (PMI) was down from 52.0 in August and pointed to the weakest improvement in overall business conditions since June. The latest PMI reading marked seven years of continuous growth across the ...

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Leading Economic Indicators Down Slightly in August

2 DAYS AGO

The Conference Board Leading Economic Index (LEI) for the U.S. declined 0.2% in August to 124.1, following a 0.5% increase in July, and a 0.2% increase in June.

“While the U.S. LEI declined in August, its trend still points to moderate economic growth in the months ahead,” said Ataman Ozy...

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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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