State of the Water Industry Report highlights top industry issues

September 9, 2014

By David Marcum, P.E.

The American Water Works Association has released its State of the Water Industry Report for 2014, which identified the top industry issues – infrastructure, long-term supply, financing for capital improvements and public understanding of the value of water resources, systems and services.

The report, based on a survey of more than 1,700 AWWA members and related professionals, addresses the concerns and issues currently facing the water industry. As the report states in its conclusion: “Despite the major challenges facing the industry, our overall successes continue to be a source of price and inspiration.”

The survey polled utility employees in the wastewater, water and stormwater industry, and non-utility employees, including consultants, manufacturers, distributors, financial representatives and educational professionals.

The survey’s top three identified issues are:

1. The overall state of the country’s water and sewer infrastructure: Stewardship of water systems was ranked as the most important issue facing the industry and the country, as identified by water professionals. According to the report, expenditure for water and wastewater improvements in the United States over the next 25 years could be greater than two trillion dollars.

The majority of respondents believed that water and wastewater utilities as a whole are only moderately able to “cover the full cost of providing service, including infrastructure renewal/replacement and expansion needs.” However, 83 percent responded that their own utilities are prepared to address current and future infrastructure renewal/replacement needs.

2. Water supply and long-term availability: The survey indicated that nearly 100 percent thought the importance of long-term water supply ranges from important to critically important, and that 59 percent of utilities are very or fully prepared to meet their long-term water supply demands. Responses also indicated the majority of utilities were aware of possible impacts of droughts or other climate changes. These can result in:

  • Treatment challenges
  • Reduced groundwater recharge
  • Stormwater management challenges
  • Coastal flooding and saltwater intrusion
  • Increased frequency and duration of floods, droughts and wildfires
  • Loss of wetlands
  • Increased risk to infrastructure

The survey showed a very low percentage of respondents at 12 percent are “considering direct potable reuse to augment existing drinking water supplies.” Additionally, the survey noted concerns regarding groundwater contamination.

3. Capital improvements: Nearly everyone surveyed agreed that financing for capital improvements is a critically important issue facing utilities. Over half of the respondents felt that their utility’s access to capital was “as good as” or “better than any time” in the past five years.

Related to the necessity for capital improvements, the report states that “because of the long-term nature of the necessary investments that will be made in the coming years, forward-looking and holistic approaches to system stewardship is needed.”

In the future, utilities will be forced to raise rates in order to finance infrastructure projects. At the same time, water use is declining dramatically in some areas because of conservation practices and public education. The report indicates “utilities are faced with the challenge of explaining why rates may go up even as their community conserves water.”

The poll’s fourth and fifth top issues are in the public awareness categories of understanding the importance of water resources, and realizing the importance of water systems and services. Respondents indicated these two areas were critical, and they believe the general public, as well as residential and non-residential customers, had a poor understanding of the value of water resources and water systems and services.

Overall, the current health of the water industry was polled to be 4.6 on a scale of one to seven. This result is up from 4.5 in 2013, and is interpreted in the report to indicate that “the water sector has been resilient in the face of many large-scale political, financial, environmental, and technological changes over the last ten years.”

This is a short summary of the report, which provides a breakdown in greater depth of various issues on a question-by-question basis as related to the 2014 state of the water industry. The survey, which describes itself as a gauge to determine the “perceptions of the industry and to identify and track significant trends,” is a valuable tool. This report is highly recommended for both utilities and water professionals to assess and plan for the future and to obtain a snapshot of current opinions.