Black & Veatch Report: Aging Infrastructure, Capital Costs & Funding Top Concerns for U.S. Water Leaders
July 12, 2012Black & Veatch’s first Strategic Directions in the U.S. Water Utility Industry Report identifies top challenges in the water and wastewater industry. The report is based on a comprehensive survey of U.S. utility leaders and includes analysis and recommendations from Black & Veatch water industry experts.
“Utility leaders are continuously challenged to make the most of limited budgets — a situation truer today than just five years ago,” said Cindy Wallis-Lage, president of Black & Veatch’s global water business. “As a result, the vast majority of survey respondents doubt the sufficiency of their future funding to manage and maintain their systems.”
The water report is the water industry’s version of Black & Veatch’s widely referenced Strategic Directions in the U.S. Electric Utility Industry Report, which has been published for six years. Key findings from the water report are:
- Issues that drive investment or cost are the top concerns among water utility leaders. Aging infrastructure is the most pressing concern within the industry.
- More than 75 percent of respondents have taken measures to reduce energy consumption within their utility operations. Electricity used to produce water can account for as much as 30 percent of water utility budgets.
- More than half of survey respondents stated they are implementing asset management improvement programs.
- 85 percent of respondents said average water consumers have little-to-no understanding of the gap between rates paid and the cost of providing water and wastewater services.
- Nearly half of utility leaders believe that customers will probably be willing to pay higher rates needed to pay for capital improvements.
- Despite funding concerns, the majority of utilities are not considering other forms of financing such as public-private partnerships.
“Overcoming today’s challenges requires a significant change in how utilities develop and implement strategic and capital plans,” said John Chevrette, president of Black & Veatch’s management consulting division. “At the same time, consumers must better understand that water and wastewater services are not free or low cost. Rather, these are services that must be paid for in an equitable and responsible manner, helping consumers better realize the value of both the service and the resource.”
Black & Veatch’s inaugural report is based on an industry survey and expert analysis. The industry survey was conducted between Feb. 22 and March 13, 2012. Statistical significance testing was completed and represented results have a 95 percent confidence level. The full Black & Veatch report is available at www.bv.com/survey.