Feb 20, 2007

CEO Believes Investor-Owned Water Utilities Could Resolve Infrastructure Issues

Washington -- In a presentation to the National Association of Regulatory Utility Commissioners, Aqua America, Inc. Chairman and CEO Nicholas DeBenedictis suggested that investor-owned water utilities could play a key role in resolving the infrastructure needs of the nation’s water industry. The remarks were made during the organization’s annual conference, which is being held this week in Washington, D.C.
Citing the $500 billion the U.S. Environmental Protection Agency (EPA) says is needed to upgrade the nation’s water and wastewater infrastructure and the fact that 84% of the nation’s 50,000 water systems serve fewer than 3,300 people, DeBenedictis said that given the right regulatory climate, large investor-owned utilities can get the job done.
DeBenedictis said that among the challenges faced by investor-owned water utilities today are the currently permitted low depreciation rates, which are not sufficient to adequately recover the major capital investments that are needed in the nation’s infrastructure. He also noted that the cost of pipe upgrades has increased significantly in recent years.
DeBenedictis explained that utility regulators have the ability to help the water industry address these challenges by providing incentives that will attract investors who, in turn, provide the capital necessary to address the infrastructure needs cited by the EPA. He cited single-tariff pricing, infrastructure surcharges and commodity cost adjustments as specific incentives, noting that many states have already adopted some of these measures.
Aqua America, Inc. is a U.S.-based publicly-traded water and wastewater utility holding company, serving approximately 2.8 million residents in 13 states.