I found the article, New Solutions to an Aging Problem (WaterWorld, Feb. 2001, pg. 47), by my colleague, Water and Wastewater Equipment Manufacturers Association (WWEMA) Executive Director Dawn Kristof, to be misleading at best.
The article uses the 1997 U.S. Environmental Protection Agency (EPA) estimate and an American Water Works (AWWA) estimate of limited scope to suggest an inflated estimate by the Water Infrastructure Network (WIN). What the article fails to note is that EPA's drinking water infrastructure estimate only covers needs related to compliance with the Safe Drinking Water Act. It does not include the cost of replacing aging treatment facilities and distribution systems. And AWWA's estimate only counts distribution system needs.
By comparison, WIN's estimate of $2 trillion includes replacement costs and operations and maintenance costs for both drinking water and wastewater treatment facilities and distribution/collection systems. And unlike the EPA needs report, which relied solely on surveys completed by state program offices, WIN based its sound findings on data not only from EPA and AWWA, but also the U.S. Department of Commerce and the Census Bureau.
The article also fails to note that WIN's estimate falls well within the ballpark of EPA's current drinking water and wastewater infrastructure gap analysis.
It should be made clear that WIN is not asking Congress for $2 trillion. Instead, the coalition's report, Water Infrastructure Now, suggests only $57 billion over five years. This is only a portion of the documented needs, leaving plenty of opportunity for the private market to fund the remaining need.
Value-Based Procurement
The article also speaks to the need for "value-based procurement" so that municipalities can "choose the technology most appropriate to that community's needs." I don't disagree with value-based procurement. It makes good sense for municipalities to purchase equipment that may be more appropriate and perhaps less costly in the long run. However, in the interest of full disclosure, my colleague fails to point out that value-based procurement is also good for companies that develop new technologies. Water and wastewater equipment manufacturers are in the market to sell new, perhaps innovative and more costly technologies. Manufacturers want a market for these new technologies, and if there are additional funds to be spent on infrastructure, they want their products to be eligible for purchasing.
Affordability
Affordability is another area where skewing the facts is easy. I often hear that drinking water rates, particularly for large systems, are affordable or not high enough. It's an easy calculation, but it simply cannot be considered in isolation of the other costs facing urban dwellers, particularly the urban poor. If I still lived in the small town in Wisconsin where I grew up, my water bill may be more, but the cost of living would not. Perhaps an investor-owned water company or manufacturer can evaluate affordability through a narrow lens, but municipalities cannot and should not.
Market Stability
My colleague also complains that WIN's proposal will cause water systems to postpone infrastructure replacements and upgrades until Congress enacts new programs. The opposite is true. As long as the drinking water and clean water state revolving funds continue to exist, WIN will support ever-higher appropriations for them. And if Congress authorizes new, streamlined state financing authorities such as PENNVEST to disburse loans and grants, as recommended by WIN, more communities than ever will receive the green-light to replace and upgrade their aging infrastructure.
Also, Water Infrastructure Now includes a recommendation that would allow states to purchase or refinance outstanding debt obligations of drinking water and wastewater systems. This provision is included in both the existing drinking water SRF and clean water SRF to allow communities to move ahead with construction and be reimbursed once the grant or loan is disbursed.
Self-Sustainability
Finally, the article fails to note that WIN has supported the concept of self-sustainability from the beginning. This is why WIN incorporated self-sustainability into Water Infrastructure Now, which recommends that grants and loans should be subject to reasonable terms and conditions, as determined by Congress. This recommendation was intended to provide a placeholder for future discussions with Congress and the Bush Administration. In addition, four charter members of WIN - the Association of Metropolitan Water Agencies, the Association of Metropolitan Sewerage Agencies, the American Water Works Association and the Water Environment Federation - offer special programs to member-utilities to help them plan for future infrastructure costs and become more competitive.
Anyone who evaluates the WIN proposal with objectivity will see that Water Infrastructure Now is a balanced approach with a mixed-bag of options designed to protect public health and promote long-term sustainability. That said, WIN has always been an adamantly inclusive coalition. Water Infrastructure Now recommends not only grants and loans, but also improvements in procurement, public-private partnerships, and other incentives for investment, whether federal or private. Indeed, Water Infrastructure Now is only a blueprint. The real work is on Capitol Hill, where the industry should work together.
About the author: Diane VanDe Hei is Executive Director of the Association of Metropolitan Water Agencies, a non-profit organization based in Washington, D.C., that has represented the nation's largest publicly owned drinking water suppliers for 20 years.
