An article from NLC Serivce Line Warranty Program by HomeServe USA

Water utilities’ budgets have been squeezed by a combination of a reduction in water usage from business closures and an increase in residential customers unable to pay bills when water is crucial to their ability to practice good hygiene and fight the global pandemic. 

What’s next? A lot of work – and even less money with which to do it.

Despite having a smaller customer base, rural utilities must meet the same standards as larger utilities, while having fewer financial and people resources and higher operational cost per capita. All these concerns are added to an aging infrastructure, some of which dates back to the Civil War. The oft-cited American Society of Civil Engineer’s report card gives our overall infrastructure a dismal D+, our water systems a D and our wastewater systems a D+. Clearly, there is work to be done.

Our aging infrastructure has not gone unnoticed by the average American. Your residents are aware of the dangers of deferring maintenance, especially after two dams failed and flooded nearby communities in Michigan. 

Not only are your residents aware of the problem, but they support seeking a solution. A Value of Water Campaign poll shows 84 percent of voters want state and federal leaders to support an overhaul of our water and wastewater infrastructure specifically, with 80 percent noting that rebuilding our infrastructure is extremely or very important. Among those polled, 73 percent supported investment in water infrastructure, despite the estimated $1.27 trillion price tag.

The future of rural water must be innovative, creative, collaborative and cost saving. Sharing information between rural water utilities and public-private partnerships (P3s) is one of the tools you’ll need to continue to provide safe drinking water and sanitation to your residents.

One of the largest costs water utilities of all sizes face is the energy bill – in order to provide clean water and treat wastewater, immense amounts of electricity go toward powering water and wastewater treatment plants. While energy efficiency processes and other power-saving methods will help you nibble at the edges of that bill, it still is likely a large part of your operational costs. 

So why not generate your own power? As solar arrays and battery storage become more affordable, having decreased 82 percent in price over the past decade, more water utilities are looking at incorporating solar energy and defraying their own costs. Solar gardens can start out small and be scaled to need and budget. They can also be incorporated in new and innovative ways, including using floating solar facilities on water reservoirs or providing bee and butterfly habitats. They can reduce costs and earn a water utility energy credits when a sunny day produces excess energy.

In addition, subsidizing your energy usage not only reduces your energy bill, but it makes your plant more resilient – during a power outage, fail-safe measures will have an additional redundancy. 

Beyond traditional renewables, wastewater itself can generate power, and some see a future where a wastewater plant won’t only generate its own power and heat, but provide excess power to the energy grid. Sludge produces methane, and, if treated then broken down in an anaerobic digester, sludge can produce biogas that can replace natural gas as an energy source – even fueling your fleet. Sludge-to-energy also reduces your need to dispose of the solid sludge.

The EPA requires that sanitation sewers and stormwater sewers be separated to reduce combined sewer overflows. Anyone operating a utility well knows the problems that can occur when a heavy storm causes these combined sewers to begin backing up into their residents’ homes. 

Green infrastructure is more cost effective, requires less maintenance and is installed quicker than grey infrastructure – it’s much easier to create detention ponds and rain gardens than to put large-bore pipes in the ground – and it is also much more visible to your residents. Planting trees not only improves natural drainage, but it can improve the property values of nearby residents’ homes, something they will surely appreciate. Most green infrastructure is dual purpose, and many communities have utilized their parklands as green infrastructure. 

Green infrastructure also makes utilities more resilient and mitigates flooding and air pollution. Studies have explored green infrastructure’s ability to filter water and improve the quality of groundwater. Green infrastructure can naturally remove nutrients, sediment, metal and trace contaminants and recharge groundwater. 

However, even the most inexpensive improvements must be financed. One funding source is the federal government’s Water Infrastructure Finance and Innovation Act (WIFIA) long-term, low-cost loans for improving energy efficiency at water treatment and wastewater plants; desalination, aquifer recharge, alternative water supplies and recycling water; and drought prevention, reduction and mitigation.

The U.S. Department of Agriculture’s Rural Utilities Service provides financial assistance for water and wastewater utilities that serve communities of 10,000 or less through the Water and Environmental Programs (WEP). The programs provide planning, development, construction and other funding through a variety of programs, including revolving funds, grants and loans. Some programs have lower population and/or median household income requirements. 

At the state level, states match federal funding through the Clean Water and Drinking Water State Revolving Funds. However, these funds are limited, often requiring large matches communities don’t have, and leaders are getting creative by looking at all available sources of funds, from the traditional to the alternative.

At the local level, there are the always-reliable general obligation or revenue bonds, which can be paid off through collected taxes or fees added to ratepayers’ bills. Infrastructure debt can also be remediated through taxation with a local option sales tax, a special-purpose tax that isn’t limited to residents, but those who work or vacation in your community. However, this may be accompanied by a cut in state aid or competition from nearby communities to lower their taxes to lure shoppers.

In addition, public-private partnerships are available – in return for taking a portion of the risk by providing upfront funding, a private entity would be given a later consideration, such as tolls or collecting fees from ratepayers. P3s allow communities to stretch their budgets with private dollars while considering the entire cost of a project, including maintenance. They can also help projects cut through red tape and increase the likelihood it is on budget and on time. Some entities are considering “P4s,” or public-public-private partnerships, in which multiple agencies work with a private partner, leveraging existing partnerships.

As our infrastructure continues to erode, changes must be made to allow for innovative solutions. Community leaders need more flexibility and fewer obstacles in order to address this mounting problem.

The NLC Service Line Warranty Program provides educational materials and optional service line warranties to residents in more than 450 partner communities. For more information, contact Bill Coffey at bill.coffey@homeserveusa.com or visit servicelinepartners.com.