Trends & Forecasts

AWWA: 2019 State of the Water Industry

Water industry professionals reported increased optimism about the current health of their industry in a recent report from the American Water Works Association (AWWA). Respondents rated the state of the industry at 4.85 on a scale of 1 to 7, up from 4.47 in the 2018 report and 4.34 in 2017. The trend had been downward for the previous 14 years and has now turned clearly up.

Since 2004, the AWWA has conducted annual surveys to discover the challenges and concerns of water professionals, how these are being addressed and what the trends are in the water/wastewater industry. The recent survey closed in October 2018, after collecting the responses of 2,048 water industry professionals. The State of the Water Industry Report presents the findings.

MOST IMPORTANT ISSUES AND CHALLENGES

Table 1 shows the overall ranking of the top 20 issues affecting the water/wastewater industry, based on survey responses. “Renewal and replacement of aging water and wastewater infrastructure” has been number one for the past five years, with “Financing for capital improvements” number two, overall. The ratings on other issues have changed over time. In particular the following challenges moved up in the ranking and gained higher “critical” ratings:

Groundwater management and overuse (2018: 15th/26% critical; 2019: 7th/34% critical)
Compliance with future regulations (2018: 16th/21% critical; 2019: 13th/29% critical)
Water conservation/efficiency (2018: 21st/25% critical; 2019: 16th/30% critical)

table 1

The importance of issues is different for small utilities. Medium, large and extra-large utilities shared the same top 5 concerns (though in differing order). Small utilities’ top five concerns were different:

Watershed/source water protection
Water rights
Water conservation/efficiency
Public understanding of the value of water systems and services
Improving customer, constituent and community relationships

SYSTEM RENEWAL AND REPLACEMENT

Respondents agreed the water/wastewater infrastructure needed renewal and replacement. The survey inquired further about the challenges involved. Infrastructure reliability, access to funding, justifying cost to ratepayers and oversight bodies, and maintaining levels of service showed up at the top of the list. Each system has its needs, of course, but the U.S. Environmental Protection Agency’s drinking water infrastructure needs survey showed $472.5 billion will be necessary to maintain and improve the drinking water infrastructure over the next 20 years.

MEETING FUTURE WATER SUPPLY NEEDS

Utilities always need to look ahead to figure out how to supply water needs in the future. When asked how prepared their utility is to meet long-term needs, 55% of respondents said they were fully or very prepared, while 4% indicated their utility was not at all prepared. Utilities use a variety of approaches to help maintain their water supply.

Mandatory or voluntary restrictions: A gauge of short-term water availability is how often a utility imposed water-use restrictions in the past decade. Among participants at utilities, 53% indicated they had zero or one year of voluntary restriction during that time and 65% reported zero or one year of mandatory. On the high end, 13% reported five or more years of voluntary restrictions and 10% reported five or more years of mandatory restrictions.

Desalinating brackish groundwater: Where salt or brackish water is available, some utilities perform desalination to augment their water supply. Three percent of utility respondents said their utility has fully implemented desalination of brackish groundwater. Another 2% reported desalination projects in development and 3% were considering desalination. Most of the utilities that desalinate brackish groundwater are in California, Florida and Virginia, the report stated.

Desalinating sea water: Three percent of utility respondents work for utilities that are currently desalinating sea water. One percent reported desalination projects in development and 2% say their utility is considering it. Most utilities using seawater desalination are in California, Texas, and Virginia.

Wastewater reuse: Indirect potable reuse is used to add to the water supply in 5% of utilities surveyed, while 6% have a project in development and 10% are considering it. Direct potable reuse has been implemented in 2% of the surveyed utilities. An additional 4% have a process under development and 7% are considering it.

Stormwater capture and reuse: Of the utility responses in this area, 2% are already reusing stormwater and 6% are considering this process.

EMERGENCY PREPAREDNESS

With possible threats such as extreme weather events, wildfires and economic instability, utilities that provide critical services such as water are preparing for emergencies. A community risk and resilience assessment helps show where a utility is at risk. Survey respondents reported the status of their assessments.

table 2

America’s Water Infrastructure Act of 2018 (AWIA) was signed into law in 2018. The law acknowledges the effects of extreme weather, such as hurricane Harvey, and requires water utilities to complete an emergency response plan and update it every five years.

CYBERSECURITY IN THE WATER SECTOR

AWWA added cybersecurity to the survey to assess its prevalence in this industry. Not surprisingly, very large utilities experienced more cybersecurity events than smaller ones (Table 3).

table 3

“The threat is clear […] that data breaches are prevalent across all sectors,” said Kevin Morley, AWWA’s manager of federal relations, quoted in the report. “It is essential that water systems make cybersecurity a top priority to protect against harm to public health and safety, damage from service interruptions, lost data, compromised systems, litigation, recovery costs and reputational harm.”

The report covers many other areas, including affordability for customers, specifics about water quality, public-private partnerships, and financing for infrastructure renewal and replacement. Altogether, though the industry faces major challenges, those surveyed who work in the industry have a positive outlook.

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2019 State of the Water Industry survey participants

Of the 2,048 respondents:

55% work for water utilities
15% work for consulting firms or are consultants, providing technical and engineering services to the water industry
30% have industry association as service providers, academics, scientists, members of regulatory bodies or industry retirees.

The 943 utility respondents represented all sizes of water utilities