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If you want to see how water scarcity could impact the future for water and wastewater utilities, look no further than California. This November, Golden State voters will decide on a massive $7.5 billion water bond measure aimed at funding a statewide comprehensive water management plan — and addressing one of the worst droughts in the state’s history during a time of significant population growth. A major chunk of that bond measure (about $2 billion) will go toward water and wastewater utility upgrades aimed at water reliability, safe drinking water, and water recycling.
While a lot of attention has been focused on the California drought, the truth is that much of the West is suffering under similar drought conditions. Actually, many of our municipal clients are being hit with two droughts: one of water scarcity caused by Mother Nature, the other of dried up funding caused by tax-weary voters.
But as the California ballot measure demonstrates, water scarcity provides a great opportunity for municipalities to galvanize public support for new investments in water and wastewater. You could call it a silver lining of sorts. Experts say that’s exactly why California residents are so in favor — by two to one, according to the most recent polls — of passing the massive water bond measure.
Of course, voters in other drought-plagued states may not be so eager to fund water and wastewater improvements.
What can municipalities do?
That’s a key question, because water and wastewater utility upgrades yield more energy — and water — savings than any other single investment a municipality can make. In fact, well-maintained water and wastewater infrastructure is critical to a utility’s ability to properly and efficiently manage water use, water quality, and water resources. But the active maintenance of infrastructure requires significant capital investment, and today’s municipalities face a sizable structural deficit where capital needs outpace available funding.
At the same time, energy costs continue to rise, while regulatory and sustainability pressures mount. Without action, declining infrastructure will impact a state’s water and wastewater systems serving millions of U.S. citizens across the nation — especially those in drought stricken areas.
Short of bond measures, utilities do have options. A performance-contracting program integrated into a comprehensive strategy may very well be the best option for many municipalities. With performance contracting, cities and counties can achieve operational savings of up to 60 percent, which offers a tremendous opportunity for them to monetize savings, implement infrastructure upgrades expeditiously, and transfer equitable project cost, performance, and delivery risk to a financially sound and proven energy services company (ESCO).
A comprehensive, integrated strategy implemented through performance contracting offers an attractive option to the utility owner to leverage savings, implement infrastructure improvements, address non-revenue water, and drive maximum benefits from an existing capital investment that may or may not be performing to its highest potential.
Here are a few of the performance contracting improvements that can save millions in energy costs and untold gallons of precious water:
- Pump efficiency
- Cogeneration
- Dynamic pump station optimization
- Technology process improvements
- Advanced metering infrastructure
As the drought lingers with no relief in sight, the future of precious water resources may depend on how well municipalities can find ways to fund these important energy- and water-saving upgrades. With California leading the way, you don’t have to be a psychic to see that water scarcity and demand issues will likely drive water and wastewater utility upgrades for years to come. Short of publicly funded improvements, turning to performance contracting solutions will likely be an integral strategy for water and wastewater utility management.
To learn more about how water and wastewater upgrades can help with water scarcity and demand issues, and how to fund those upgrades, please register for our upcoming webinar.
Free Webinar: Oct 29, 2014 at 2pm ET
Hear first-hand from city leaders and Schneider Electric experts how Clute, TX used performance contracting to meet its growing water demand, tackle much-needed wastewater improvements, and reduce its energy costs by 57%.
In addition, to help you take the next steps in developing a strategy for your water/wastewater facility, all registrants will receive a free eBook on infrastructure trends and funding options following the webinar. Please join us for this informative industry briefing.
