AWWA applauds WIFIA milestone: 100th water infrastructure loan

A U.S. water infrastructure financing program crafted and championed by the American Water Works Association (AWWA) has achieved a major milestone.

The Water Infrastructure Finance and Innovation Act (WIFIA) program administered by the U.S. Environmental Protection Agency (EPA) recently closed on its 100th long-term, low-cost loan. The recipient is the Santa Clara Valley Water District (Valley Water) in California. The district actually will benefit from two WIFIA loans totaling $115 million to help finance critical water supply and flood control projects. Together, Valley Water is projected to save $256 million over the life of the loans. 

“We know making smart investments in water infrastructure and technology today remains the most cost-efficient way to ensure Santa Clara County has enough safe, clean water now and into the future,” said John L. Varela, Valley Water Board Chair. “Thanks to WIFIA, we can do this in a cost-effective manner to benefit our rate and taxpayers.” (Pictured left, a WIFIA loan is helping fund Valley Water’s seismic retrofit project at Anderson Dam.)

AWWA, EPA and other water partners celebrated the milestone earlier this week during the March 22 Water Matters! Fly-In.

Federal tool for financing water infrastructure

More than 10 years ago, as concerns mounted about the deteriorating condition of the country’s water infrastructure, AWWA publicly advocated for water infrastructure financing at its 2011 Water Matters! Fly-In in Washington, D.C. AWWA continued to champion the concept until 2014, when Congress enacted the legislation that created WIFIA and was subsequently signed into law by President Barack Obama. Since then, AWWA has advocated to fully fund the program and promote it to potential borrowers.

WIFIA is meant to accelerate water infrastructure investment by providing supplemental credit assistance with fixed interest rates and an extended repayment term to qualifying public water systems. The federal credit program lowers the overall cost of borrowing for regionally and nationally significant projects.

Other organizations supporting the legislation’s passage included the Association of Metropolitan Water Agencies, the National Association of Water Companies, the Water Environment Federation, the National Ground Water Association, WateReuse, and the Water and Sewer Distributors of America.

Since the WIFIA program was launched, it has closed 100 loans totaling $17 billion to help finance $36 billion in water infrastructure projects. EPA estimates that borrowers have saved more than $5 billion and created 123,000 jobs, and the projects have benefited more than 50 million people. 

“Utilities often pay for distribution line renewals from their operating revenue on a pay-as-you-go basis rather than using debt financing with the cost spread over multiple years,” said Tracy Mehan, AWWA executive director of government affairs. “WIFIA offers a means of getting ahead of the curve and reducing risk for current and future generations.”

From concept to creation

David Weihrauch with H2O Compliance Strategies in Ohio was a member of AWWA’s Water Utility Council (WUC) in the days when AWWA was trying to garner support for WIFIA. He befriended Rep. Bob Gibbs, R-Ohio, who chaired the U.S. House Transportation and Infrastructure Committee. Gibbs shepherded WIFIA through passage by the House, which voted 412-4 in favor of the bill. Another WUC member, Todd Heidgerken of Oregon, worked with Sen. Jeff Merkley, D-Oregon, to gain Senate passage of the bill, 91-7.  

Weihrauch, who was later named AWWA Volunteer of the Year for his work on WIFIA, said the key to WIFIA passage was educating decision-makers about “the profound need for water infrastructure replacement while providing an attention-grabbing cost impact forecast related to deferring those replacements.”

He said the impact of AWWA’s 2012 report, Buried No Longer: Confronting America’s Water Infrastructure Challenge, helped lawmakers understand the need for a solution. 

“The professionals at the AWWA Government Affairs office sought to build on this moment by heating up a long-simmering notion of an innovative water project funding mechanism,” he said. “The Water Infrastructure Finance Innovation Act was born, a public policy firm was engaged, and position papers were written. The search for a legislative conveyance for the program was undertaken.”

He credited many other AWWA members for working on solutions to the “infrastructure gap” that led to WIFIA, including WUC members Dave Rager, Mike Hooker and Aurel Arndt. 

“The program has had a positive impact without detriment to pre-existing funding programs,” he said. “I encourage utilities considering applying for a WIFIA loan to communicate with those who have completed the WIFIA application process and develop an understanding of what is involved.”