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Sustainable Water Infrastructure through Innovative Financing

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The History of Water Infrastructure Financing

In 1970’s, The U.S. Congress passed legislation making

EPA an important fiscal partner in wastewater funding

In 1987, in order to better serve state and local

communities specific water needs, the U.S. Congress

established the Clean Water State Revolving Fund

During this time, EPA developed a new permit

processes to control discharges to the nation’s

waterways

Very large investments were made in the treatment of

industrial waste and in the upgrading of the public

wastewater systems

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Features of the State Revolving Fund (SRF) Program

Federally and state provided “seed money”

State programs are allowed great flexibility

State implemented and operated

Public participation is encouraged

Federal involvement is limited

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An SRF Functions As An Infrastructure Bank

Each state operates its own SRF that makes loans for

wastewater treatment and nonpoint source projects;

including agricultural and urban runoff, leaking storage tanks,

septic systems, and protecting drinking water sources

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The Gap Report

Purpose -- To quantitatively understand the future needs for water investment to: – Address U.S. population

growth/economic needs, and

– Renew existing aging infrastructure.

Estimates were made for water

and wastewater, investment,

cost and payments (2000-

2019).

Needs – Spending = GAP.

http://www.epa.gov/owm/gapreport.pdf

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GAP Findings For 20 Years - -(2000-2019)

$45$31Total

$0$10O&M

$45$21Capital

Drinking

Water

Clean

Water

Total Gap (20 Years)

(Average in Billions of $)

No Revenue Growth

GAP Scenario

Revenue Growth

GAP Scenario (3%)*

(Annual Rate of Increase - 3% above inflation)

$263$271Total

$161$148O&M

$102$122Capital

Drinking

Water

Clean

Water

Total Gap (20 Years)

(Average in Billions of $)

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Great Success, Yet An Emerging Challenge

Source: USEPA,

Progress in Water

Quality: An

Evaluation of the

National

Investment in

Municipal

Wastewater

Treatment,

June 2000.

A projection of increasing BOD U

(Metric Tons Per Day)

0

5,000

10,000

15,000

20,000

25,000

1968 1978 2016

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EPA Has Identified Four Pillars for Sustainable Infrastructure

Full cost pricing

Water efficiency

Better management

Watershed

approach

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Full Cost Pricing

ensures that there are sufficient revenues in place to support the costs of doing business

can also have the added benefit of encouraging efficient water use

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Water Efficiency

reduces the need for costly infrastructure

options include: metering,

water reuse,

water saving appliances,

landscaping and

public education

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Better Management

Asset management (Better acquisition, Operations and maintenance, and, Renewal and replacement), environmental management systems (EMS’s)

Focuses on better

– utility performance,

– environmental performance, and

– customer service

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Watershed Approach

looks more broadly at water resources in a coordinated way

targets resources towards highest priorities

examples of watershed approaches include: permitting on a watershed basis

water quality trading

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Thank you