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When to invest in water

When to invest in water

An engineer’s perspective on prioritizing water infrastructure needs

By Jim Barbato, P.E.

When it comes to our nation’s infrastructure, Americans expect reliable highways, bridges, and water systems. To keep up with that expectation, we are at a point where major infrastructure investments are required. According to the 2017 American Society of Civil Engineers (ASCE) Infrastructure Report Card, it will cost roughly $4.6 trillion — more than the federal government spends in an entire year — to address critical infrastructure needs across the country.

An important part of that investment revolves around fragmented and inefficient water and wastewater infrastructure systems. More than 150,000 water systems in the United States serve nearly 320 million Americans, and most households receive drinking water from one of roughly 51,000 community water systems managed by local municipalities.

Jim Barbato, P.E., vice president of corporate engineering, Aqua America

For these local governments, investing in their water systems is just one priority in their long list of budgetary considerations, which include critical decisions regarding roadways, bridges, schools, and first responders. It’s difficult to prioritize those needs, and it can be easy to overlook the state of the buried infrastructure.

Unfortunately, this has resulted in water infrastructure that has been overlooked for far too long in many communities across the country. Many of the 1 million miles of water main in America were laid in the early 20th century and have a lifespan of roughly 100 years. With utilities averaging a pipe replacement rate of 0.5 percent per year, according to the ASCE, it will take an estimated 200 years to replace the systems — essentially double the useful life of the pipe.

In specifically evaluating the water and wastewater infrastructure in the 2017 Infrastructure Report Card, the ASCE gave U.S. water infrastructure a “D” and wastewater infrastructure a “D+”. The issue is serious, and the price tag is large: The American Water Works Association estimates $1 trillion is needed to maintain and expand drinking water service to meet demands over the next 15 years.

In addition to the significant capital investment necessary, municipalities must also meet increasing regulatory compliance from federal and state regulatory agencies, which require enhanced engineering and technical expertise.

A viable solution: Publicly regulated water utilities

The situation is a dire one, which is causing increased interest from municipalities in partnering with publicly regulated utilities to help improve local water and wastewater systems. By leveraging compliance expertise, purchasing power, and operational efficiencies, publicly regulated water utilities can often provide the resources required to rehabilitate systems struggling with aging infrastructure and accompanying operations issues.

A partnership between a municipality and a publicly regulated water company can take several forms to help the system’s water quality and distribution system. In many cases, a company such as Aqua acquiring the system from a municipality proves to be the best option for all involved, as proceeds netted from the sale of a water system can offer the local government additional budgetary resources while providing a guarantee that the system’s water infrastructure will receive necessary capital investment and maintenance, without draining resources from other vital municipal services.

There are many important considerations that go into an agreement to sell a water system, on both the part of the seller and the publicly regulated purchaser. For both parties, the current state of the water system’s infrastructure is one of the most important factors in determining the value of the system, infrastructure investments the purchaser will need to make, as well as any possible rate impact for customers.

As a part of this process, the publicly regulated company will typically conduct a thorough analysis of the system and its history. This analysis typically includes:

  • evaluating the system’s monthly operating reports;
  • reviewing water quality test results;
  • understanding any investments made by the municipality in the past five years; and
  • assessing the municipality’s compliance track record for both primary and secondary Environmental Protection Agency standards.

The fact-finding process also requires a general understanding of the municipality, including the number of customers and households served; miles of water main; the number of wells, tanks, and pumps in the service area; and other infrastructure considerations.

Reconstructing and rehabilitating water systems

Upon successful completion of an acquisition, a team of engineers uses this initial review to inform plans to invest in infrastructure to improve the system, both in the short and long term. These plans are developed by taking into careful consideration the quality of the water that is being delivered to customers, the prudency of any infrastructure investments for the long-term viability of the system, and any costs that might be passed onto customers.

Of course, the one priority for a publicly regulated utility such as Aqua is to ensure that the water it delivers meets all federal and local drinking water standards. In some cases, massive rehabilitation and reconstruction is required to ensure that customers receive safe and reliable water. Reconstructions often include:

  • reviewing the water source supply and constructing or drilling new wells;
  • building new well stations with updated water treatment such as improved chlorination and pH controls to monitor the water quality resulting from the treatment process and provide auto-alerts to employees; and
  • improving the security around water treatment facilities.

Distressed systems also often require construction of new storage facilities, distribution system upgrades, and replacement of legacy metering systems with newer remote-read meters. In cases where water quality issues are impacting taste or causing odor, improvements might be required to the system’s water treatment and storage facilities. Even systems that do not require major reconstruction may require other upgrades or maintenance, such as cleaning and painting storage tanks or well station modifications.

Various issues can complicate the process of rehabilitating an acquired water system. For example, Aqua has acquired systems that had such poor water quality that the EPA had issued “boil water advisories” notifying customers to boil their water to ensure its safety before consuming. In these cases, the first priority is installing new filtration and treatment systems before addressing other issues. The challenge in reconstructing municipal systems with severe water quality issues is the need to operate the system while executing improvement plans on parallel paths — addressing the immediate need for providing clean drinking water while also initiating long-term infrastructure improvements.

The timelines for capital improvements for acquired systems vary greatly based on need. Aside from addressing immediate water quality issues, the primary focus when acquiring a system is to ensure that safe and reliable water is provided to all customers.

Rehabilitation efforts for newly acquired systems and Aqua’s long-standing commitment to investing in our existing systems continues to drive our capital investment program. Aqua spends roughly $1.5 billion every three years to improve water and wastewater infrastructure in communities across the country. This investment, coupled with investments of other publicly regulated water companies, provides a viable solution for municipalities across the country struggling to maintain their own water systems, and in a larger sense, plays a critical role in addressing our nation’s dire infrastructure needs.

Jim Barbato, P.E., is vice president of corporate engineering at Aqua America (www.aquaamerica.com), a publicly traded water and wastewater utility serving nearly 3 million people in Pennsylvania, Ohio, North Carolina, Illinois, Texas, New Jersey, Indiana, and Virginia.