Failing Water Infrastructure Threatens American Manufacturing

Robert Powelson, President and Chief Executive Officer, National Association of Water Companies

Robyn Boerstling, Vice President, Infrastructure, Innovation and Human Resources Policy, National Association of Manufacturers

The dismal state of water infrastructure in the United States is well documented. The American Society of Civil Engineers awarded our drinking water infrastructure a “D” grade on its 2017 report card, noting how water systems across the country are still using pipes and pumps with lifespans that expired decades ago. As a result of aging infrastructure, our water systems experience an estimated 240,000 water main breaks each year, wasting over two trillion gallons of treated drinking water.

But while much of the water infrastructure conversation has rightly focused on residential uses, American businesses – and especially manufacturers – also depend on reliable water service. Not only is our failing water infrastructure a public health issue, but it is also a vital economic issue and one that needs to be front and center this Infrastructure Week.

The manufacturing sector, which accounts for 11.6 percent of the nation’s GDP is particularly threatened by unreliable water infrastructure. Most manufacturers rely on water during their production processes, which means that an interruption in water service can have devastating effects. Every day that the average U.S. business is without water, it loses $230 in sales per employee. In water-intensive manufacturing industries, that cost can skyrocket to $5,800 per employee, according to the Value of Water Coalition.

Millions of jobs are at stake when our water infrastructure is unable to keep pace with population and economic growth. In fact, without immediate action to address all of our country’s infrastructure needs, the United States will lose more than 2.5 million jobs by 2025 and more than 5.8 million jobs by 2040. It is important that the private and public sectors work together to solve these enormous challenges.

Among the most fundamental challenges facing the water industry today is the need to attract huge amounts of capital to fund the replacement of aging infrastructure. Over $1 trillion is needed over the next 20 years to repair and rebuild our nation’s water and wastewater infrastructure systems. It’s a daunting challenge but thankfully NAWC member companies are ideally positioned to meet the compliance challenges that lie ahead.

Notably, the ten largest private water companies in the U.S. alone invest more than $3 billion annually to improve community water systems. This is a larger sum than the current total federal appropriation for the Clean Water and Drinking Water State Revolving Fund (SRF) programs. This investment is a reflection of water companies’ commitment to maintaining strong water infrastructure and understanding that strategic, proactive investment is crucial to ensure the safe delivery of water to the communities they serve.

The National Association of Manufacturers’ infrastructure blueprint “Building to Win,” suggests immediate steps policymakers can take to boost private sector investment in vital water infrastructure. Expanding public-private partnerships for drinking water and wastewater projects, through programs like the Water Infrastructure Finance and Innovation Act, will bring added resources beyond the limited federal resources provided by current EPA State Revolving Funds and other programs. Additionally, eliminating the state volume caps on private activity bonds for drinking water and wastewater projects will leverage private capital to multiply the impact of federal efforts. In fact, an analysis by Pricewaterhouse Coopers found that eliminating these caps, along with other regulatory changes, could lead to as much as a combined $68 billion in incremental private water and wastewater infrastructure investment.

Furthermore, policymakers should address the highly fragmented nature of our water utility sector. There are currently more than 53,000 water systems in the United States, and more than half of these systems are small, stand-alone operations serving fewer than 500 people. These systems struggle with shrinking budgets, a lack of technical and managerial expertise, and aging infrastructure. Supporting and incentivizing partnerships or regional consolidations can expand small utilities’ operational efficiencies, provide access to capital for infrastructure upgrades, bring much needed technical expertise to the system, raise rates of compliance with complex state and federal regulation, and improve customer satisfaction.

Sustainable drinking water infrastructure helps stimulate economic development through resilient and sustainable water and wastewater infrastructure. Smart investment and policy decisions made today will serve America’s economy and manufacturers well for generations to come.

Infrastructure Week is about building for tomorrow, and Americans believe that strengthening our water infrastructure should be a national priority. We need to push forward proactive, proven solutions to address our water infrastructure challenges head on. The consequences of inaction are far too serious.

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