H2O For Amazon HQ2: Could You Handle It?

Not every city expects a dramatic growth spurt of 50,000 jobs, and only one metropolitan area will emerge victorious from the much-heralded Amazon HQ2 competition. Still, the prospects of water or wastewater system growth, or even escalating maintenance on aging infrastructure, raise important questions about your utility’s 10-year plan. Do you have one? If you do, how up-to-date is it? And if you don’t, isn’t it time to start thinking about developing one?

Touch All The Bases

If you are a water treatment or wastewater utility without an up-to-date 10-year plan, consider some of the starter ideas and links listed below. One way to whittle down the seemingly overwhelming task of developing one is to divide and conquer. Consider all options — cost-cutting efficiency, technology upgrades, and yes, potential rate increases. Depending on the size of your utility, you might assign various department heads to track and report on specific aspects of operations that are most familiar to them:

• Infrastructure. The hidden nature of water and wastewater’s aging infrastructure makes it particularly difficult to quantify its status or risk of failure, and hard to get the consuming public to appreciate its age and the expense of maintaining it.  Use AWWA’s “Buried No Longer” tool to calculate life expectancy and replacement costs for your share of the 1 million miles of the water industry’s aging infrastructure buried across the U.S.
• Energy. Don’t let the fact of 100-year-old pipes springing multiple leaks each day distract you from thinking about energy consumption, which can represent up to 50 percent of your municipal or utility budget. Every dollar saved by fine-tuning aeration requirements, or by generating your own electricity using solar panels or biogas recaptured from waste treatment, is another dollar available to upgrade the aging infrastructure in your water distribution or wastewater collection system.
• Chemistry. Even though there are multiple water purification options — e.g., chlorination, chloramination, UV, etc. — some of them can impact other costs within your system, such as rates of pipeline corrosion. Explore options based on their total long-term impact to your operation, not only on today’s immediate out-of-pocket costs.
• Financing. While financial structures and rates are not a physical aspect of water treatment operations, they are an underlying factor to everything you do — or fail to do — in your utility’s operations. How the three physical aspects mentioned above affect each other — positively or negatively — have direct financial implications on your operating budget. As long as your rate structure is fixed, it’s a zero sum game. Any aspect of the operation you want to change will have to be funded from savings in energy, labor, or consumables from other facets of your operation. Unless you can make the case for raising rates or take advantage of funding alternatives to fix aging infrastructure or fund new capital investments, it will be hard to improve efficiency and save costs over the long haul.

Attack The Problem Step By Step

Don’t let the daunting prospect of developing an in-depth 10-year plan overwhelm or intimidate you from at least outlining the process with readily available resources. Every bit of work experience, every documented repair cost, every news item that raises your professional curiosity provides an opportunity to build the case for a more strategic approach to process improvement, preventive maintenance, priority setting, and ultimately rate-setting.

• Recognize The Elephant In The Room. AWWA members recognize the declining confidence in the soundness of the U.S. water industry (Figure 1). Most consumers, however, simply do not know or appreciate the value of water and the cost of producing quality water. It’s up to you to communicate that reality to the public and to decision-makers who can establish realistic water rates in line with reasonable utility goals and the service expectations of ratepayers.

Figure 1. Feedback from AWWA water professionals shows declining trends in opinions for year-by-year overall state of the water industry and five-year projections for the industry.
Reprinted from AWWA 2017 State of the Water Industry Report. Copyright © 2017 AWWA.

• Document In-House Experience. Good recordkeeping on the frequency of pipe leaks, equipment breakdowns, costs of repair, or compliance shortcomings can provide a frame of reference when setting priorities for aging infrastructure projects or maintenance efforts. It can also provide the realistic backup you will need to convince rate-setting decision-makers that maintaining the status quo is no longer viable.
• Archive Information For Future Reference. Never let a snippet of supporting information go to waste. Create folders in your Web browser for each key category of interest — statistics on industry experiences and best practices, more efficient technologies and equipment options, water treatment costs, rate-setting, case studies — and any other industry insights you can use to educate end users and decision-makers on the value of water. Then, as you come across interesting Web pages,
• Manage Expectations. Continuously communicating information about industry developments and experiences — through customer communication, media news releases, and timely emails to municipal management and utility boards — can pave the way to more rational discussions on conservation and cost control. Sending links to industry reports about aging infrastructure concerns, compliance failures, and environmental consent decrees can condition decision-makers to the reality of the situation. By doing that, eventual requests for rate increases can be discussed in the context of water quality choices — as former DC Water CEO George Hawkins explains — instead of being dismissed out of hand.

Tie It All Together

As you collect and review information as part of various staff meetings, a profile of your utility’s greatest needs and options will start to emerge. At that point, you can start to flesh out the outline of a 10-year plan and start devoting some meetings specifically to developing a finished plan.

Draw confidence from the fact that your utility is not alone. There are plenty of water professionals who have experienced similar situations and are willing to share the value of their experience. A good place to start is with your local, regional, or national industry organizations. Whether you meet with counterparts from other utilities face-to-face at industry gatherings, or learn from resources made available through association websites, you will be able to compare experiences and learn new strategies for problem-solving. For example, AWWA’s website provides valuable reports across a wide range of business practices, including asset management, emergency preparedness, and regional collaboration.