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The Water Infrastructure Debate. 2005 Urban Water Summit Albuquerque, New Mexico September 30 - October 1, 2005. NAWC – Who Are WE?. NAWC represents private and investor owned DW & WW utilities in US We serve 15-20 % of public, 20 million people

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the water infrastructure debate

The Water Infrastructure Debate

2005 Urban Water Summit

Albuquerque, New Mexico

September 30 - October 1, 2005

nawc who are we
NAWC – Who Are WE?
  • NAWC represents private and investor owned DW & WW utilities in US
  • We serve 15-20 % of public, 20 million people
  • NAWC currently has 161 DW utility members in 39 states
  • Generally, the largest make up the NAWC’s current membership.
  • I will talk about the infrastructure debate
    • What is society’s obligation to provide safe water?
    • Who should pay, government or customers?
    • What other issues are being debated?
    • How has existing and proposed legislation addressed these issues?
    • Do we need to change our culture in the water sector?
society s responsibility
Society’s Responsibility
  • Most would agree that society has a responsibility to assure its citizens have access to the essential prerequisites of life:
    • Safe water
    • Sanitation
    • Food
    • Shelter
    • Clothing
nothing is free
Nothing is Free
  • Providing prerequisites requires considerable investment of resources
  • No one argues that food, shelter, and clothing should be free or heavily subsidized to all members of society
  • Some argue that safe water and sanitation should be
how should we pay
How should we Pay?
  • What is best way to assure all get the essential prerequisites?
    • Those who can afford it should pay the market price
    • Those who cannot afford the market price should get subsidies
the debate about who pays
The Debate about Who Pays
  • Should government rather than customers pay?
  • What do other utility models tell us?
    • Other utilities are economically independent
    • Most customers pay full cost of service rates
    • Only targeted subsidies are used
the debate about who pays1
The Debate about Who Pays
  • What kind of federal/state assistance is appropriate?
    • For the typical utility with reasonable economies of scale - low interest state revolving loans
    • For the economically disadvantaged - bill subsidies
    • For small remote communities that are very costly to serve - grants
what else are we debating
What Else are We Debating?
  • Need to stimulate comprehensive infrastructure planning and continuous investment
  • Privately owned WW utilities should be made eligible for wastewater SRF loans
  • Need to stimulate consideration of
    • Consolidation
    • Public-private partnerships
consolidation often resisted
Consolidation often Resisted
  • Physical or managerial consolidation often fiercely resisted by local interests
  • Where public health is jeopardized, states must step in and force an appropriate solution
federal impediments to ppp have been eliminated
Federal Impediments to PPP have been Eliminated
  • Executive Order 12803
  • Executive Order 12893 (59 FR 4233)
  • IRS Rule 97-13
  • EPA Guidance on Privatization of Federally Funded Wastewater Utilities
water legislation currently in force
Water Legislation – Currently in Force
  • SDWA Amendments (1996)
  • Clean Water Act (1987)
water legislation historical bills
Water Legislation – Historical Bills
  • S. 1961 (2002)
  • HR 3930/HR 1560 (2002/2003)
  • S. 2550 (2004)
water legislation pending bills
Water Legislation – Pending Bills
  • S. 1400 (2005)
  • HR 1708 – Water PABs (2005)
do we need to change our culture
Do we need to Change our Culture?
  • Some believe DW & WW services should be heavily subsidized through grants
    • They argue that rates cannot be raised any more
    • Grants subsidize all customers, even those who can afford higher rates
    • Such subsidies send the wrong price signals and discourage conservation
do we need to change our culture1
Do we need to Change our Culture?
  • Some are waiting on the government to bail them out
  • Deferring critical rate and infrastructure investment decisions
  • Budget realities preclude significant federal assistance except for emergencies
do we need to change our culture2
Do we need to Change our Culture?
  • The longer we defer the more the ultimate cost will escalate
  • We also risk jeopardizing public health & customer service
do we need to change our culture3
Do we need to Change our Culture?
  • Those responsible for water service must not use a federal bailout as an excuse for inaction
  • Privately owned utilities must go to their PUCs for rate increases to cover the needed investments
  • Publicly owned utilities must go to their city councils, mayors, county executives or oversight boards
do we need to change our culture4
Do we need to Change our Culture?
  • Inaction will implicate all parties in the inevitable service failures
  • As recent shortcomings in hurricane relief have shown, responsible officials will pay the price for failure
how to make the case
How to Make the Case
  • AWWA and the WEF developing resources to help utility managers make the case for rate increases to fund the investments
  • Recently these organizations have been reaching out directly to mayors and other decision makers
avoiding a crisis is in our hands
Avoiding a Crisis is in our Hands
  • If utilities continue to defer, a crisis is inevitable
  • It will be seen as a failure of leadership at the local level
  • We know what needs to be done and if we don’t do it, we will not be able to avoid the fallout