Category Archives: Utilities

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.

Private Sector Financing: A Review of Service Delivery Models in Eight Communities

Source: Jeff Hughes, Lexi Kay Herndon, Journal – American Water Works Association, Volume / Number: 110, Number 1, January 2018
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From the abstract:
A study of private financing models in the water industry examines variations in implementation and design and whether outcomes differ from initial expectations.

Organizing in Red America

Source: Dissent Magazine, Summer 2017

Articles include:
Left in the Middle
Michael Kazin

….The good news is that a left does exist in Red America—and, amid the failures of the Trump administration, appears to be growing. Its adherents may share, in whole or in part, the cultural proclivities of the more numerous conservatives who live there. But they are arguing and organizing for many of the same demands as are their counterparts in places like New York City and Los Angeles; they are also busy defending the same people at risk from Trump and his allies in Congress and their own states. In this special section of Dissent, you will learn about some of those activists and a few of the politicians who share their goals…..

Working Too Hard for Too Little: An Interview with Senator Sherrod Brown
Michael Kazin

….This spring, the senator issued a lengthy document, “Working Too Hard for Too Little: A Plan for Restoring the Value of Work in America,” which lays out a set of innovative ideas about how to raise wages, make jobs more secure, and compel employers to adhere to decent standards on the job. In late April, Michael Kazin interviewed the senator in his office on Capitol Hill…..

Mississippi Autoworkers Mobilize
Michelle Chen

The workers at the Nissan plant in Canton, Mississippi, had high hopes when the state-of-the-art factory complex moved in fourteen years ago to a small, majority black town where more than a quarter of residents live in poverty and decent jobs are scarce. …. After fourteen years at the plant, he says, “People are hurting inside of my factory.” His fellow coworkers have been concerned by what they see as increasingly unstable working conditions and general deterioration in benefits and safety protections. A few years ago they campaigned to organize with the United Auto Workers (UAW). Since then, he says, the workers have faced growing hostility from management for seeking to unionize, which only confirms its disrespect for a community that’s invested decades of public funding and faith in Nissan’s promise of stable manufacturing careers. ….

Birmingham’s Fight For a Living Wage
Scott Douglas

The election of Donald Trump has turned our attention to the politics of white working-class people, particularly in the states that voted for him last fall. But progressives should not ignore the activism of the black working class in many of those same red states. ….

The Next Operation Dixie
Sarah Jaffe

The election of Donald Trump has led to a lot of soul-searching on the left. In particular, the narrative since the election has focused on Trump’s appeal to working people, and whether this reflects an inherent racism among the so-called “white working class” or a failure of liberals and the left to speak to their economic concerns.

While the divide between “red” and “blue” states is often overstated (just ask the Republican governors of Massachusetts and Illinois), the Deep South has always lagged behind in union organizing. The failure of the CIO’s “Operation Dixie” in the late 1940s and concerted campaigns to divide black workers from white workers in law and on the shop floor left southern workers with fewer rights, lower wages, and, without unions to press their case, with less political representation. Yet there have always been exceptions, unions and organizations that have fought against great odds to build power for workers in the South, and with the accession of Trump, they can offer us advice for how to move forward when workers’ rights are under attack and racism being fomented from the highest levels of government. Dissent’s Sarah Jaffe spoke with three labor organizers from the South about their experiences and what can be learned from their successes….

Standing With Immigrants in Nebraska
Julie Greene

…. Many states have been transformed by immigration in recent decades, but some are better prepared than others to cope with the crisis. Take my home state of Nebraska. A solidly red state that has not voted for a Democratic presidential nominee in more than half a century, Nebraska has nonetheless seen the flowering of a pro-immigrant political culture. Over the past six years, activists across the state built a coalition that has made it possible to confront the harsh words and actions of the Trump administration head on. Examining what they did and how they did it can offer lessons for activists beyond the Great Plains. ….

Bringing Power to the People: The Unlikely Case for Utility Populism
Kate Aronoff

One glaring omission in the postmortem handwringing about the 2016 election is the fact that most poor people in America—of all races and genders—simply didn’t vote. They were prevented from doing so by a number of structural barriers—voting restrictions, second and third jobs, far-flung polling locations—as well as a lack of excitement about two parties they saw as having abandoned them.

Enter: twenty-first-century electric cooperatives, a perhaps unlikely player in the contest for power between progressives and conservatives in the heart of so-called Trump country in rural America.

If there’s one thing poor, rural communities tend to have in common, it’s where they get their power—not political power, but actual electricity. Over 900 rural electric cooperatives (RECs)—owned and operated by their members—stretch through forty-seven states, serving 42 million ratepayers and 11 percent of the country’s demand for electricity. They also serve 93 percent of the country’s “persistent poverty counties,” 85 percent of which lie in non-metropolitan areas. REC service areas encompass everything from isolated farm homes to mountain hollers to small cities, with the highest concentrations in the South, the Midwest, and the Great Plains. And they might just offer an opportunity to curb the right and the climate crisis alike…..

A Burgeoning Crisis? A Nationwide Assessment of the Geography of Water Affordability in the United States

Source: Elizabeth A. Mack, Sarah Wrase, PLOS, Published: January 11, 2017

While basic access to clean water is critical, another important issue is the affordability of water access for people around the globe. Prior international work has highlighted that a large proportion of consumers could not afford water if priced at full cost recovery levels. Given growing concern about affordability issues due to rising water rates, and a comparative lack of work on affordability in the developed world, as compared to the developing world, more work is needed in developed countries to understand the extent of this issue in terms of the number of households and persons impacted. To address this need, this paper assesses potential affordability issues for households in the United States using the U.S. EPA’s 4.5% affordability criteria for combined water and wastewater services. Analytical results from this paper highlight high-risk and at-risk households for water poverty or unaffordable water services. Many of these households are clustered in pockets of water poverty within counties, which is a concern for individual utility providers servicing a large proportion of customers with a financial inability to pay for water services. Results also highlight that while water rates remain comparatively affordable for many U.S. households, this trend will not continue in the future. If water rates rise at projected amounts over the next five years, conservative projections estimate that the percentage of U.S. households who will find water bills unaffordable could triple from 11.9% to 35.6%. This is a concern due to the cascading economic impacts associated with widespread affordability issues; these issues mean that utility providers could have fewer customers over which to spread the large fixed costs of water service. Unaffordable water bills also impact customers for whom water services are affordable via higher water rates to recover the costs of services that go unpaid by lower income households.

Related:
Press release

The climbing cost of water
Source: LaShell Stratton-Childers, Water Environment & Technology (WE&T) Magazine, Volume 29 Number 5, May 2017
(subscription required)

Michigan State researchers predict that water will no longer be affordable for as many as a third of American households.

75 Years of Too Cheap Water

Source: John H. Murdoch, Jr., Journal – American Water Works Association, Volume 109 Number 5, May 2017

From the abstract:
Murdoch admonished water providers for keeping the price of water artificially low. At one time, this was done to encourage customers to connect to water systems – before they realized the benefits of treated and regulated water systems. But by 1956, the benefits were established, and Murdoch challenged water providers to reflect the value of water in charges that passed the real costs of providing that safe and adequate supply of water to their customers. To some degree, this situation continues to exist today.