/ Corporate / New Black & Veatch Report Recounts Challenges Faced by U.S. Water Service Providers

New Black & Veatch Report Recounts Challenges Faced by U.S. Water Service Providers

Matt Ball on June 20, 2016 - in Corporate, Design/Engineering, Water

OVERLAND PARK, Kansas, June 20, 2015—Aging water infrastructure, inadequate capital and the public’s perception of the cost of water for delivery, collection and treatment are creating a crisis for many providers across the United States, according to Black & Veatch’s 2016 Strategic Directions: Water Industry Report

The fifth annual report, based on survey responses from more than 350 industry participants, offers insights and analysis of the key issues facing water service providers across the United States and international markets. It finds persistent anxieties among many water utilities whose aging systems are strained by changing demographics and fiscal challenges. These forces are driven in part by the public value placed on water services and challenges meeting regulatory standards for safe, reliable water supplies and effluent.

“Water industry leaders across the globe are being compelled toward a new era of collaboration and innovation. They understand they can no longer plan for and maintain water supplies that depend on rainfall,” said Cindy Wallis-Lage, President of Black & Veatch’s water business. “Many water industry leaders face another year with much of their infrastructure operating well beyond its design lifespan, a problem made worse by extreme weather and revenue streams that can’t keep pace with necessary maintenance.

“For many service providers, short term funding challenges mean long-term capital investments are sacrificed,” Wallis-Lage added.

The Strategic Directions report comes as world water leaders grapple with safety and supply cases ranging from lead issues in Flint, Michigan, algal blooms, ongoing drought and nutrient reduction requirements to protect receiving waters. The report examines how nearly all issues of importance to the industry are hardwired to revenue and cost, and how water leaders must raise their engagement with customers who have become more vocal about rate pressure even as the cost of delivering safe water rises. Nearly 70 percent of water service providers said educating consumers about the “price of water” is a top priority when it comes to addressing ratepayer conflicts, the report found.

Maintenance of asset life is by far the industry’s top concern in the U.S., with more than half of survey respondents citing it as their biggest issue. Customer rates, financial viability, maintaining service with limited resources and water conservation/demand management round out the top five.

This year’s report also features analysis and insights from Radhika Fox, CEO of the U.S. Water Alliance, a national nonprofit organization advancing policies and programs that build a sustainable water future. Fox also serves as Director of the Value of Water Coalition, a national campaign dedicated to communicating how water is essential, invaluable and needs investment.

New for the report in 2016 is interview-based analysis from key international markets using insights gained from industry leaders in the Asia Pacific region, India and the United Kingdom. Projects involving alternative water supply, the intersection of smart cities and smart water supplies, and data analytics reflect strong steps toward sustainability and resilience.

Other key findings include:

  • More than half of water utilities have seen increased customer interactions or complaints after recent high-profile water supply issues.
  • Only 28 percent said their existing funding streams would cover maintenance, debt service, capital investment and reserves – a drop from more than 36 percent the year previous.
  • About 30 percent of providers say they are considering different financial management models, such as public-private partnerships, that would help them raise capital for maintenance or improvements.
  • A full 60 percent of respondents listed cost and financial issues as the biggest challenge holding back alternative water supply projects, though nearly 50 percent say they either have or plan to develop a master plan for water reuse.

Black & Veatch has conducted its annual Water Utility survey from 15 March 2015 through 1 April 2015. 358 participants completed the survey. Statistical significance testing reflects precision of at least ±5 percent at the 95 percent confidence level.

The full Black & Veatch report is available for download at no charge via www.bv.com/reports.

About Black & Veatch

Black & Veatch is an employee-owned, global leader in building critical human infrastructure in Energy, Water, Telecommunications and Government Services. Since 1915, we have helped our clients improve the lives of people in over 100 countries through consulting, engineering, construction, operations and program management. Our revenues in 2015 were US$3 billion. Follow us on www.bv.com and in social media.

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