State of the Water Industry revealed
May 25, 2015

The American Water Works Association’s 2015 State of the Water Industry Report comes at a time when utilities are faced with a daunting conundrum: How to pay for more than a trillion dollars in infrastructure renewal, replacement and expansion over the next 25 years during a time of declining water sales and revenues.

Girl drinking waterNow in its second decade, AWWA’s annual survey tracks water industry trends and reflects the concerns of the water community as it grapples with ongoing challenges. This year, the report collated survey results from 1,747 AWWA members and other water professionals. The report is available free for download to those who log in at awwa.org.

While water quality in North America remains consistently high, the report sounds an all-too-familiar warning: “We must address our water infrastructure and resource management challenges or else the reliability and resiliency of our water systems, the health of our environment, the prosperity of our economy, and the safety of our communities will be increasingly at risk.”

So, with nearly three out of every four water utilities in North America reporting flat or declining sales and revenues – largely the result of more efficient appliances and fixtures, rate structures that encourage conservation, and conservation education programs -- how will utilities finance impending infrastructure repairs as well as day-to-day operating costs?

According to the survey, the top choice among water professionals was shifting from consumption-based fees to fixed fees within rate structures, followed by changes in growth-related fees, shifting rate designs to increasing block-rate structures and increasing financial reserves. Sixteen percent of utility respondents are concerned that they will someday be unable to cover the costs of services and repairs through rates and fees.

“Many communities face important decisions as they may need to adjust their resources to address specific needs,” said Ken Mercer, AWWA’s senior manager of technical and research programs and author of the report.

The survey pinpoints the five most important water industry issues, with the top two spots focused on the future – renewal and replacement of aging water and wastewater infrastructure and financing for capital improvements. With a severe drought scorching much of the Southwestern United States and Southern Great Plains, long-term water supply availability ranked third.

Looking past current droughts and near-term water shortages, when asked “How prepared do you think your utility will be to meet its long-term water supply needs?” 11 percent said their utilities will be challenged to meet long-term water supply needs, up slightly from last year. Taken together, these results make sense against the backdrop of public understanding, or perhaps more accurately, misunderstanding. For the most part, water and wastewater services run reliably and efficiently, and customers do not realize the massive amounts of buried pipe were paid for by previous generations.

The fourth and fifth most important issues in the 2015 survey relate to public perceptions of the value of water service and resources. More than seven out of 10 respondents said the general public has a poor or very poor understanding of water services and six out of 10 said the public has a poor or very poor understanding of water resources.
 
“We’re confronted with hundreds of competing issues on a daily basis, so it doesn’t surprise me that water services and resources, which in North America are generally excellent, are not at the top of the list of problems the general public is concerned with,” Mercer said. “However, water services and resources are the foundation for the modern life we enjoy, so the public really needs to understand the importance of protecting and improving them for current and future generations.”




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