Category Archives: Utilities

Organizational Dissolutions in the Public Sector: An Empirical Analysis of Municipal Utility Water Districts

Source: Tima T Moldogaziev, Tyler A Scott, Robert A Greer, Journal of Public Administration Research and Theory, Advance Articles, February 17, 2019
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From the abstract:
The proliferation of special-purpose districts and the increasing complexity of local governance systems has been well documented. However, even as new special districts are created, others are being dissolved. This article investigates the extent to which both internal and external factors are at play in municipal utility district dissolutions. Decades of existing empirical studies on private, nonprofit, and interest organizations show that factors internal to organizations, such as institutional structure and resources are significant covariates of organizational mortality. Equally important are external factors, where density dependence and resource partitioning pressures influence organizational survival. Public sector organizations, such as special-purpose water districts, operate in relatively well monitored and statutorily constrained environments, however. Drawing upon the organizational mortality literature, we examine when and why municipal utility water districts that operate in fragmented service delivery systems dissolve. The results show that the relationship between internal and external organizational variables and special-purpose organizational dissolutions is more nuanced than existing research suggests.

U.S. Public Power and Electric Cooperative Utilities 2019 Sector Outlook: Ratings Stability Persists In A Difficult Era

Source: S&P Global Ratings, January 22, 2019
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S&P Global Ratings believes the U.S. local government sector remains stable and resilient for now. Local governments benefited from positive economic trends in 2018 (such as higher GDP growth and low unemployment), but 2019 already show some signs of slowing…

U.S. Municipal Water And Sewer Utilities 2019 Sector Outlook: Stable, Although Potential Disruptions Are Not Making Planning Easy

Source: S&P Global Ratings, January 15, 2019
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As the calendar flipped to 2019, many market participants did not use the word “happy” to precede “new year.” January unfolded with a federal government shutdown, the uncertainty related to a new Congress, and a potential debt ceiling due date by August….

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.