Will Utilities Pay Price For Fracking?

Source: Sara Jerome, Water Online, May 20, 2014

Water utilities can expect a major financial hit as the fracking industry grows if the controversial process contaminates the water supply, according to one ratings agency. Fitch Ratings said in a recent report that if water is contaminated by fracking chemicals, the agency “would expect a serious blow to a utility’s revenues, with losses concurrent with other growing direct and indirect costs. This would lead to debt service coverage reductions, liquidity strains and possibly the need for additional leverage.” That’s because the burden for cleansing water of fracking chemicals would fall on water utilities, rather than oil and gas companies.