Water-as-a-Service® brings professional treatment to municipalities with no upfront cost
For the past few years, the water sector in the United States has received lackluster annual infrastructure report cards from the American Society of Civil Engineers (ASCE), and 2021 was no exception. Bringing the grade up will be challenging, but there is cause for optimism.
In 2021, ASCE gave American drinking water infrastructure a grade of C+, warning that the 2.2-million-mile system is old and underfunded. Water mains break every two minutes, wasting 2 billion gallons of water every day. The nation’s 16,000 wastewater treatment plants now operate at an average of 81% of design capacity, with 15% operating at or beyond capacity, and demands on them are growing. Many plants and their collection networks are nearing the end of their service lives.
In 2001, the American Water Works Association (AWWA) talked about “the dawn of the replacement era,” describing how pipes installed from the late 1800s through the post-World War II era were set to reach the end of their service life relatively soon.
While a C+ may not sound impressive, it was a big improvement over 2020’s D grade. Federal financing programs are expanding, and utilities are investing in their networks. In 2020, more than 12,000 miles of water pipe was slated for replacement by U.S. utilities, and innovative technologies are helping.
Utilities often have been reactive when it comes to improvements, even though the cost of not working toward fixing water risks is five times higher than the cost of preparation. Yet asset management plans recently have spurred many utilities to shift to a proactive maintenance footing.
Paying for New Water Infrastructure
One large note of optimism is current federal involvement in encouraging infrastructure renewal. In 2021, the Water Infrastructure Finance and Innovation Act (WIFIA) closed on 46 infrastructure loans totaling $9 billion, and the new Bipartisan Infrastructure Law has allocated $43 billion for the largest federal investment in water ever, with special attention to underserved communities.
Even considering assistance from the government, so much infrastructure needs to be replaced that the cost seems staggering. The EPA estimates a total national infrastructure requirement of $384.2 billion between 2011 and 2030.
The AWWA ranked renewal and replacement of water infrastructure, along with securing the financing to accomplish it, at the top of its list of concerns facing the water industry. Concerns over compliance with regulations also figured highly, along with concern over the impending retirement of a large part of the water workforce. How will utilities secure financing for infrastructure renewal projects and attract and retain new talent?
Public-Private Partnerships Pave a Way Forward
Public-private partnerships (P3s) between public agencies and specialized companies are changing the way water infrastructure is delivered in the U.S., and several states now have laws to encourage them.
Although specifics vary, in a P3 arrangement the private partner assumes the financial risk and provides infrastructure and O&M for a long-term contract period, with the public partner paying only for the water services it uses. Seven Seas Water Group’s Water-as-a-Service® approach demonstrates how these arrangements can provide a win-win for municipalities or businesses, and the communities in which they operate.
With Water-as-a-Service®, municipalities no longer need upfront capital and pay only for the water produced. Seven Seas Water Group pays all operating costs, is responsible for all safety and regulatory compliance, and manages the entire operation and associated risks, while clients experience newfound freedom from infrastructure debt.