Drinking Water Infrastructure: Who Pays and How (And For What)

Drinking Water Infrastructure | © American Rivers

The water systems that serve our communities are facing the challenge of updating and building infrastructure that will meet the needs of a substantially different future.  As advocates for healthy rivers, creeks, lakes and oceans, we contribute to the planning of our future communities, our future water.

In the effort, we try to ensure that our legal and regulatory structures provide the environmental protections that our waters and communities need.  Our work on EPA’s post-construction stormwater rulemaking is one example, as is our emphasis on more efficient, resilient drinking water supplies

Of course, improving regulations is just the first step.  On their own, regulations and laws are simply words on paper – their real effectiveness comes when cities, water agencies, private companies, indeed, all of us, take steps to live up to their requirements.  As advocates, our work is just beginning. We have an obligation to provide continuing assistance, providing information and examples that inform efforts to meet new regulatory requirements and build water infrastructure that meets future needs.

Sometimes this work takes the form of informing the evolving conversation about better stormwater infrastructure through reports on the economic benefits of green infrastructure or ways to overcome concerns about operating and maintaining green infrastructure solutions.  Our communities’ drinking water systems are also facing new pressures, from a changing climate and growing population to shrinking public budgets and stretched water supplies.  We’ve highlighted ways in which efficiency and conservation can provide “new” water more economically.

Ultimately, it comes down to economics, and our work as advocates must also focus on the ways that water systems pay for the infrastructure that treats and delivers clean water.  We need to engage in planning about water rates, bond sales to finance new infrastructure, and the multi-generation risk that can be created by the cost of building multi-million, or multi-billion, dollar infrastructure projects.

However, many water and community advocates lack expertise in economics and financing and aren’t fully prepared to have these conversations with utility managers, local leaders or the public. Over the past few years, we’ve worked to highlight the need for sustainable infrastructure financing [PDF].

Today we are directly addressing the needs of our community by releasing an introductory guide to the methods drinking water utilities use to finance the systems they build and operate.  Primarily, this “primer” focuses on bond sales, the most significant source of funds for the large water utilities that provide drinking water services to the vast majority of United States’ households. 

As drinking water utilities plan new or expanded supplies to meet future demand or respond to emerging constraints, their choices have economic impacts on tax payers and water customers. Residents in some places are paying dramatically increased water rates for unneeded reservoirs and pipelines. Our new guide is intended to highlight the financial implications of infrastructure planning, and the role that paying for water conservation and efficiency measures can have in reducing the risk posed by funding large storage projects.