Only 10% of Water Utilities See Climate Change as an Issue

A new water industry report by Black & Veatch highlights the chasm of concern over water availability between communities and their local water utilities

On the other end of the spectrum, 40 percent of non-utility stakeholders surveyed said that climate change was a significant issue for water utilities. About half of the surveyed water utilities said they had assessed the vulnerability of most of their assets, but only 15 percent included climate change factors in that analysis. For most utilities, addressing climate change means investing in water conservation and energy management and assessing protection for vulnerable facilities.

“There are still a number of agencies that have not assessed the vulnerability and resilience of all key assets, which represents a major blind spot related to risk,” Ralph Eberts, managing director for integrated solutions at Black & Veatch, wrote in the report.

It’s not just California water agencies that are feeling the strain of drought. Seventy-five percent of Gulf Coast water utilities and more than a quarter of those in the Southeast and Midwest said that water conservation efforts enacted due to drought had reduced demand and adversely affected revenues.

California’s governor has mandated that urban water utilities update their rate design, including the implementation of conservation pricing. New pricing schemes are not being considered widely, however. Only a small fraction of water utilities across the U.S. are looking at time-of-use rates, according to the report. Instead, 60 percent of utilities said they were planning or considering increasing base or fixed charges to stabilize revenue.

Additional base charges may not be enough, however. “To successfully combat the long-term supply challenges currently facing California and other regions under pressure, we believe utilities must strengthen their management of water demand, develop more stable water sources, and devise rate structures to generate stable revenues,” Geoffrey Buswick of Standard & Poor’s wrote in the report. He pointed to California’s nearly $15 billion Bay Delta Conservation Plan that will likely raise Metropolitan Water District of Southern California customer bills by about $5 per month.

Despite the critical need for investment, there is a chicken-and-egg problem that Black & Veatch identified between U.S. water utility leaders and engineers. Executives said they want technology to be proven before they invest in it, and yet engineers are saying that the C-suite’s proof-of-concept concerns are sidelining upgrades.  

Source: GreenTech Media

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