Atlanta is investing $300 million to create a 2.4-billion-gallon reservoir that would give the city a 30-day supply of water instead of its current three days.Going from drought to flood in California, lead in Flint, Mich., shortages in Georgia — the headlines make it clear that clean water can’t be taken for granted. Water supply in many parts of the United States is facing challenges, whether the problem arises from lack of rainfall or aging infrastructure. As the increasing price of water reflects that reality, water efficiency is becoming a higher priority for facility managers. But the cost of water remains a relatively small part of operating expenses for most facilities. Indeed, experts say that water is an underpriced resource. That’s why facility managers aiming for high performance buildings need to see that the importance of water efficiency strategies goes beyond cost savings. Understanding the broader context can lend urgency to water efficiency efforts while helping to justify measures to reduce water consumption.
Water-cost conundrum
The rationale for water efficiency in areas of drought is easy to see. Since new supplies are hard to find, the easiest way to guarantee a steady supply of water is through efficiency. But infrastructure is also an urgent issue in many areas, and better infrastructure costs a lot.
Whether the issue is shortage or infrastructure, the easiest way to guarantee a steady supply of water is through efficiency. One way to encourage efficiency is by raising water rates. In past decades, water rates have risen as per-capita use has fallen. Greater efficiency leads to lower per-capita water consumption, which forces utilities to raise their rates to cover fixed costs, which in turn gives users more incentive to reduce their consumption. Both trends are expected to continue, and facility managers will need to plan accordingly.
Over the past 15 years, says Ed Osann, a senior policy analyst at the Natural Resources Defense Council (NRDC), average water rates have risen at twice the rate of the Consumer Price Index. Osann says that the trend began about 20 years ago and probably has almost that long left to run. “The utilities have been slow to recognize what’s going on, to see that consumption won’t snap back,” he says.
But rising charges for water still don't reflect the true cost of delivering clean water. “Across the United States, users aren’t paying the true cost just for everything to be cleaned and pumped,” says Matt Howard, vice president of the Alliance for Water Stewardship. “There’s a perverse incentive to use water that’s artificially cheap.”
Deterioriating infrastructure
Water infrastructure problems range from leaks to lead in pipes. Nationally, says Greg DiLoreto, former president of the American Society of Civil Engineers, who manages a water utility near Portland, Ore., the infrastructure cost over the next 20 years to get the system up to a grade of B would be $105 billion, but spending is falling far short of that. “Across the whole country, some cities are in better shape,” he says. “But we need to start gradually increasing revenue.”
The problem with raising rates, however, is finding the political will to do so — and convincing users that the increases are fair and necessary, although system failures would force users to shut their businesses and lose even more money.
Solving the problem “takes political will and capital,” Howard says. “We’re talking about pipes that are underground and really old, and there’s no easy answers because of the cost of digging up all that infrastructure.” But using best-available technology for new construction is a first step.
At DiLoreto’s previous water utility job, they ran a 50-year forecast of use, maintenance, and revenue (which was unusual), and instituted small annual rate increases to cover projected costs. Customers were willing to pay when the situation was clearly explained, and they appreciated the predictability. “A lot of costs for water systems are fixed,” he says. “The pipes exist whether any water comes out of them or not. Just the fact that you have water to your property has value.”
The general problem with water rates, Osann says, is that about 85 percent of water is produced by publicly owned utilities, which answer to an elected city council or to an appointed water authority. In either case, “local governing bodies are not professional utility regulators” — they usually lack the background or the data to make long-term decisions on necessary investments. Electricity and gas, by contrast, are largely produced by investor-owned companies that are closely regulated by state agencies. But the nation’s 60,000 local water utilities “have a built-in disincentive to provide for cost recovery for things that can be deferred,” he says.
In terms of regulation for infrastructure and water quality, “there’s a pretty substantial gap in our framework right now,” Osann says. “States have a lot of authority that they’re not exercising.” He says that states can and should set standards and require local governments to report on whether their utilities can meet them.
Finding a leak and replacing that section of pipe might not pay for itself, says Neil Grigg, a professor of civil and environmental engineering at Colorado State University — unless the price of water continues to rise. Most utilities, says Neil Grigg, a professor of civil and environmental engineering at Colorado State University, have been putting off maintenance and improvements, particularly in older cities in the East and Midwest. “If utilities decide they need a big increase to get caught up, they’re going to have a lot of public accountability issues.”
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