Category Archives: Utilities

US Survey Reveals Gaps, Opportunities for Health, Safety, and Environment Programs

Source: Frank Milligan, Journal AWWA, Vol. 111 no. 1, January 2019

Overall findings related to health, safety, and environment programs and practices are encouraging, but there are opportunities for significant improvement.

In today’s litigious environment, where the consequences of employer safety decisions have never been greater, there is an ever‐increasing need for comprehensive, effective health and safety programs. These organizational initiatives have three primary goals: reducing potential risks and costs; improving workplace morale and performance; and minimizing work‐related injuries, illnesses, and stress. While the majority of US water utilities now have formal health, safety, and environment (HS&E) programs in place, these programs require continuous evaluation to ensure that their metrics and measures are consistent with current best practices….

Water And Sewer Utilities – US: 2019 Outlook Stable As Debt Service Coverage Strengthens But Capital Needs Rise

Source: Ryan Patton, Rachel Cortez, Naomi Richman, Alexandra S. Parker, Moody’s Investors Service, Outlook, December 5, 2018
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The stable outlook for the water and sewer utility sector incorporates revenue growth that will continue to strengthen debt service coverage and liquidity, and the ability to meet operating costs. ….

Public power electric utilities – US: 2019 outlook stable, aided by sound cost recovery, adaptability to clean energy shift

Source: Dan Aschenbach, A. J. Sabatelle, Doris Hernandez, Sarah Lee, Kevin G. Rose, Eriq Alexander, Thomas Brigandi, Michael Mulvaney, Moody’s Investors Service, Outlook, December 6, 2018
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The outlook for business conditions in the US public power electric utility sector over the next 12-18 months is stable, supported by self-regulated cost recovery, sound financial metrics and a competitive product. Challenges include the transition to clean energy, continuing efforts to reduce greenhouse gas emissions, cybersecurity risks and lower electricity demand, but we think the sector can adapt to them….

Water Infrastructure Financing: The Water Infrastructure Finance and Innovation Act (WIFIA) Program

Source: Congressional Research Service, CRS Report, June 11, 2018

The Water Infrastructure Finance and Innovation Act (WIFIA) program provides financial assistance for water infrastructure projects, including projects to build and upgrade wastewater and drinking water treatment systems. Congress established the WIFIA program in the Water Resources Reform and Development Act of 2014 (WRRDA 2014, P.L. 113-121).

The WIFIA concept is modeled after a similar program that finances transportation projects, the Transportation Infrastructure Finance and Innovation Act (TIFIA) program. Proponents of the WIFIA approach, including water utility organizations, cite several potential benefits
• WIFIA provides credit assistance to large water infrastructure projects that may otherwise have difficulty obtaining financing.
• WIFIA provides credit assistance, namely direct loans, at U.S. Treasury rates, potentially lowering the cost of capital for borrowers.
• WIFIA assistance has less of a federal budgetary effect than conventional project grants that are not repaid, because only the subsidy cost of a loan (representing the presumed default rate on loans) is required to be appropriated.
• WIFIA support limits the federal government’s exposure to default, because projects must be found creditworthy with a revenue stream for repayment to be eligible for assistance.

On the other hand, opponents of the WIFIA approach, including organizations that represent state environmental agency officials, have cited several concerns
• Federal funding for a WIFIA program could have a detrimental effect on federal support for established State Revolving Fund (SRF) programs that provide the largest source of water infrastructure assistance today.
• If WIFIA funding resulted in a decrease in SRF assistance, smaller projects may face financing challenges.
• The Congressional Budget Office has warned that the future costs of a WIFIA program to the federal budget may be underestimated.

Wind farms bring windfalls to local governments across US

Source: Francis A Mamo, Swami Venkataraman, Lesley Ritter, Mark McIntire, Rachel Cortez, Leonard Jones, Alexandra S. Parker, Moody’s, Sector In-Depth, May 8, 2018
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The proliferation of wind farms in the US has propelled tax base growth and generated new tax revenue for local governments, particularly in rural areas with abundant wind resources.

Medians – Solid financial metrics, ability to raise rates underpin stable sector

Source: Evan W Hess, Matt Jaffe, Lauren Von Bargen, Leonard Jones, Alexandra S. Parker, Moody’s, Sector Comment, Water and sewer utilities – US, April 5, 2018
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Municipal water and sewer utilities continue to demonstrate a stable to modestly positive financial performance, according our latest medians data. The steady performance is primarily driven by utility systems’ willingness and ability to raise rates to support operations and debt service. However, declining asset condition across the sector indicates an underinvestment in infrastructure. These credit factors, which are key to our stable outlook for the sector, are set to continue….

Water and Wastewater Workforce: Recruiting Approaches Helped Industry Hire Operators, but Additional EPA Guidance Could Help Identify Future Needs

Source: United States Government Accountability Office, GAO-18-102, Published: January 26, 2018

From the highlights:
Projections from the Department of Labor’s Bureau of Labor Statistics (BLS) suggest that workforce replacement needs for water operators are roughly similar to workforce needs nationwide across all occupations; however, little is known about the effects of any unmet needs on compliance with the Safe Drinking Water Act and the Clean Water Act. BLS has projected that 8.2 percent of existing water operators will need to be replaced annually between 2016 and 2026. Although BLS projections are intended to capture long-run trends, rather than to forecast precise outcomes in specific years, this predicted replacement rate is roughly similar to the predicted rate of 10.9 percent for all workers across the U.S. economy. Limited information is available to determine whether retirements, or other workforce needs, are affecting drinking water and wastewater utilities’ ability to comply with the Safe Drinking Water and Clean Water acts. At a national level, neither the water utilities’ industry associations nor the Environmental Protection Agency (EPA) has analyzed whether there is a relationship between unmet workforce needs and compliance problems. EPA relies on states to inspect utilities to ensure compliance with the acts. EPA’s inspection guidance documents, for both drinking water and wastewater, advise states to examine the quality and quantity of staff operating and maintaining water utilities. However, the guidance does not advise states to examine future workforce needs. GAO has found that future workforce needs can be identified through strategic workforce planning, which involves developing long-term strategies for acquiring, developing, and retaining staff to achieve program goals. By adding questions to EPA’s inspection guidance on strategic workforce planning, such as the number of positions needed in the future, EPA could help make this information available for states to assess future workforce needs. Information on future workforce needs could help states and utilities identity potential workforce issues and take action as needed.

Representatives from 11 selected water utilities reported that by using various approaches, they were generally able to meet their current workforce needs but faced some challenges in doing so. Representatives from the selected utilities said that they recruit operators using word of mouth, websites, newspapers, and partnering with local technical schools. However, representatives from small utilities said that even with these approaches, they had difficulty hiring certified operators and instead hired and trained entry-level employees. Additionally, representatives from large utilities said they face difficulties in recruiting skilled workers, such as electricians and mechanics, part of a larger national pattern.

Five federal agencies that GAO reviewed—EPA and the Departments of Agriculture (USDA), Labor (DOL), Education, and Veterans Affairs (VA)—have programs or activities that can assist utilities with their workforce needs in several ways, including through guidance, funding, and training. EPA has worked with DOL and industry groups to develop a water-sector competency model to support industry training and with VA to help place disabled veterans in water industry jobs. In addition, USDA funds personnel who travel to rural utilities to provide hands-on assistance through its Circuit Rider program. Four of five small utilities GAO interviewed said they used this program and other USDA technical assistance for training operators.