United Water commits to water-needs solution

HARRINGTON PARK, N.J. — United Water, one of the largest water services providers in the nation, made a Commitment to Action at the Clinton Global Initiative (CGI) Annual Meeting in New York that offers cities across the U.S. a new long-term solution to the challenge of meeting current and future water needs. As a Featured Commitment at the “Working Capital” plenary session of the CGI Annual Meeting, opened by President Barack Obama, United Water was highlighted for bringing a cross-sector solution — and new financing model — to the challenge that many municipalities face today.

Continued growth in demand for water along with competing needs for other municipal services — from roads and fire departments to police and schools — has stretched city finances beyond their limits. This, coupled with dwindling federal support for cities, has led to a decades-long decline in the nation’s water infrastructure. The American Society of Civil Engineers grades the country’s water system a “D” and the US Environmental Protection Agency says it will take more than $600 billion during the next two decades to bring pipes and treatment facilities nationwide back to standard.

United Water’s “solution” will upgrade and operate water systems more efficiently, help cities meet increasing environmental and water quality standards and attract new long-term capital from private equity partners. This new money will be used specifically to upgrade water systems and also to help ease pressure on municipal balance sheets, freeing cities to invest in other public services.

Under this contractual approach, municipalities maintain ownership and control of the water or wastewater system and of rates charged to users. Sustained and predictable investment in water will create new infrastructure-related jobs and spur growth in local economies.

“By making a Commitment to Action at CGI we aim to bring attention to a challenge facing America that has literally been buried for decades. What’s different about our solution is that — for the first time in the U.S. — our ability to improve water quality and operational efficiency is combined with the private equity investment needed to upgrade and maintain systems and stabilize water rates over the long term,” said Bertrand Camus, CEO of United Water.

United Water’s Commitment to Action comes on the eve of the 40th anniversary this October of the Clean Water Act (CWA) — landmark legislation that brought the first regulatory standards for water into being. Since the passage of the CWA, federal funding once available to help cities invest in water infrastructure and meet environmental standards has slowed to a trickle. United Water along with private equity partners will help cities now struggling to maintain and upgrade their water systems and help them meet Environmental Protection Agency standards.

Specifically, in its Commitment to Action, United Water and private equity partners will invest in two municipal water systems. United Water’s intention is to bring this model to many other municipalities in the years to come.

• In the City of Bayonne, N.J., United Water and its joint venture partner Kohlberg Kravis Roberts, will, over the 40-year duration of the contract, make a $107 million capital investment in the water system and also retire $130 million of overhanging Bayonne Municipal Utility Authority debt. Initial capital investment in highly accurate wireless water metering and other monitoring systems, such as GIS, SCADA, and CMMS, will help reduce water loss from leakage, prioritize pipe replacement and improve operational efficiency. KKR has a long history of making infrastructure investments and a proven commitment to improving the operational and environmental performance of the companies in their portfolio, making them an ideal partner for this investment.

• United Water has also been selected to work with Nassau County, N.Y., to improve the county’s wastewater system.

“Maintaining clean, sustainable water supplies is the single most important contributor to public health and it is essential to creating vibrant local economies. With ever increasing pressure on scarce water resources and dwindling public funds, the private sector has a more important role than ever to provide a lasting solution to America’s water challenge.” said. Camus.