Analysts: Flint Is Changing How We Talk About Water Funding

Funding and cost concerns are the biggest stress on utilities, according to engineering firm Black & Veatch’s latest analysis of trends in the water industry.

“Changing customer behaviors, drought and the continued slow pace of residential construction all remain drags on utility revenue,” according to the report, which the firm releases annually.

This may all sound a little familiar. The firm’s 2015 report, compiled from survey data from water utilities, pointed out that many utilities “lack the capital to do anything more than get by with what they have.”

And in 2014, the firm noted “a cesspool of financial worries” plaguing water utilities, according to a write-up in The Kansas City Star.

“It’s all about cost pressures,” one Black & Veatch analyst said at the time.

Funding and cost pressures are perennial problems for utilities. What else is new?

“What is remarkable is that in 2016, new headlines about safe drinking water supplies and lingering concerns over past droughts, and those to come, are energizing a necessary national conversation around how much stakeholders up and down the water chain are willing to spend to ensure a safe, reliable supply,” the new report said.

“There is little doubt that the problems in Flint, Michigan, are fueling new debates over America’s water infrastructure. Utilities are hearing from customers in the wake of Flint, and utilities are also moving quickly to engage customers about the state of their local systems,” it continued.

The Flint crisis has put a spotlight on an industry often forgotten by the public, according to the report.

“Public engagement with water utility service providers can ebb and flow with local events such as water main breaks and treatment issues serving as catalysts for community interest. However, the water crisis in Flint, Michigan, appears to represent an inflection point in what has historically been the limited geographic reach of service performance issues,” the report said.

For some utilities, financial pressures are getting worse over time.

“Only 28 percent [of respondents] said their existing streams would cover maintenance, debt service, capital investment and reserves — a drop from the 36 percent that was reported the year previous,” the report said.

To read more about utility engagement with the public visit Water Online’s Consumer Outreach Solutions Center.