Category Archives: Utilities

Costly Returns: How Corporations Could Profit From Inflating the Already High Cost of Repairing the Nation’s Crumbling Water and Sewer Infrastructure

Source: Food & Water Watch, June 2008

From the press release:
A future favorable to investor owned water utilities will result in higher rates, fewer consumer protections, a limited or non-existent federal safety net for low income communities and large infrastructure investments built to maximize profit, not the interest of the public, according to a Food & Water Watch analysis of investor briefs.

“Corporations have a financial incentive to oppose conservation, protection of drinking water sources and other policies and programs that would save money and help offset the economic burden on communities across the nation,” said Food & Water Watch Executive Director Wenonah Hauter. “Wasted water drives up a company’s revenue, which flows from people’s water bills.”

In fact, the investor research firm believes that if “faulty underground infrastructure were to interrupt a major city’s water supply for an extended period,” the public would be less resistant to rate hikes that benefit corporations. The analysis also reveals U.S. states where regulators are especially friendly to private ownership or management of water: Pennsylvania, Delaware, and Connecticut, with a nod to California’s recent about face on strong consumer protections and shift toward encouraging privatization of water service.

Although public utilities provide water to about 86 percent of people on community water systems, a private sector push is on to change this. The report, Costly Returns: How Corporations Could Profit From Inflating the Already High Cost of Repairing the Nation’s Crumbling Water and Sewer Infrastructure, analyzed investor briefs by Boenning & Scattergood and reveals that, thanks to some fancy finance and accounting, private utilities tie higher earnings to increased costs.
Executive Summary

New Report: Millions of U.S. Workers Stand to Gain from Green Industries

Source: Political Economy Research Institute, University of Massachusetts (via Sierra Club)

From the press release:
Workers at every skill level will be in high demand and enjoy greater job security in key industries essential to building a clean-energy economy in America and fighting global warming, according to a new report released today by a coalition of conservation and labor groups.

This groundbreaking report, Job Opportunities for the Green Economy, takes a state-by-state look at existing jobs skills across a wide range of occupations and income levels that would benefit from America’s transition towards a clean energy economy. The report quantifies the number of workers who can apply their skills to six categories of green industries building retrofitting, mass transit, fuel-efficient automobiles, wind power, solar power, and cellulosic biomass fuels.

Hundreds of thousands of workers in the U.S. already possess the vast majority of skills and occupations necessary to reduce global warming and make the shift to a clean energy economy. For instance, constructing wind farms creates jobs for sheet metal workers, machinists and truck drivers, among many others. Increasing the energy efficiency of buildings through retrofitting relies on roofers, insulators and electricians, to name a few.

Water Infrastructure Needs and Investment: Review and Analysis of Key Issues

Source: Claudia Copeland, Congressional Research Service, January 23, 2008

Policymakers are giving increased attention to issues associated with financing and investing in the nation’s drinking water and wastewater treatment systems, which take in water, treat it, and distribute it to households and other customers, and later collect, treat, and discharge water after use. The renewed attention is due to a combination of factors. These include financial impacts on communities of meeting existing and anticipated regulatory requirements, the need to repair and replace existing infrastructure, and concerns about paying for security-related projects.

This report identifies a number of issues that have received attention in connection with water infrastructure investment. It begins with a review of federal involvement, describes the debate about needs, and then examines key issues, including what is the nature of the problems to be solved; who will pay, and what is the federal role; and questions about mechanisms for delivering federal support, including state-by-state allotment of federal funds. Congressional and Administration activity on these issues from the 107th to the 109th Congresses also is reviewed.

The Low-Income Home Energy Assistance Program (LIHEAP): Program and Funding

Source: Congressional Research Service (via National Council for Science and the Environment)

The Low-Income Home Energy Assistance program (LIHEAP), established in 1981 (P.L. 97-35), is a block grant program under which the federal government gives states, territories, and tribes annual grants to operate home energy assistance programs for low-income households. The LIHEAP statute authorizes two types of funds: regular funds, which are allocated to all states using a statutory formula, and contingency funds, which are allocated to one or more states at the discretion of the Administration.

Full Report (PDF; 144 KB)

Who Pays for the Water Pipes, Pumps and Treatment Works? – Local Government Expenditures on Sewer and Water – 1991 to 2005

Source: Rich Anderson, Mayors Water Conference, 2007

Local government spent $82 billion to provide sewer and water services and infrastructure in FY2005, up from $45 billion in FY1992. The local government share of spending on sewer is just over 95 percent, and the state share is just under 5 percent. The local government share of spending on water supply is over 99 percent. Total spending on sewer and water from 1991-1992 to 2004-2005 is $841 billion.

The trend is for greater spending levels. Factors contributing to the increased need for investment include: population growth and land use development; an aging water infrastructure that needs constant maintenance and rehabilitation; and climate change impacts that threaten water supplies from drought; reduced snow-pack; salt water intrusion on coastal aquifers from rising sea levels; increased storms, hurricanes and flooding that require infrastructure hardening.

Local government is the primary investor in public-purpose sewer and water. Costs and spending will increase dramatically over time, and the added costs from climate change impacts are not currently included in infrastructure financing discussions. The nation’s cities need more help from the federal government and greater access to private equity to address investment needs over the next 50 years.

The Politics of Electricity Restructuring across the American States: Power Failure and Policy Failure

Source: Phillip J. Ardoin and Dennis Grady, State and Local Government Review, Vol. 38 no. 3, 2006

Utility deregulation has been the focus of research examining the role of policy diffusion in state policy innovation. In this study, a model of policy innovation is employed to determine the factors that influence the probability of a state restructuring its electric utility policies. Examined are the effects of industrial: residential price ratio disparities, the relative cost of energy in each state, the selection process of public utility commissions, legislative professionalism, the partisanship of state legislatures, interest group influences, and regional diffusion on the likelihood of a state adopting energy deregulation policies. The findings indicate that economic factors determine the policy choices of state legislatures. The policy diffusion model generally is sustained even though, in retrospect, the policy of deregulation of the electric industry generally has been considered to be a failure.