Water Infrastructure Bill to Top $1 Trillion

Feb. 27, 2012

AWWA report shows impact on U.S. households

The cost of repairing and expanding U.S. drinking water infrastructure will top $1 trillion in the next 25 years, an expense that likely will be met primarily through higher water bills and local fees, a groundbreaking study by the American Water Works Association (AWWA) shows.

The report, titled “Buried No Longer: Confronting America’s Water Infrastructure Challenge,” analyzes many factors, including timing of water main installation and life expectancy, materials used, replacement costs and shifting demographics. Nationally, the infrastructure needs are almost evenly divided between replacement and expansion requirements.

Cities will be impacted in different ways depending on their sizes and geography. Many small communities will face the greatest challenges because they have smaller populations across whom to spread the expenses.

“Because pipe assets last a long time, water systems that were built in the latter part of the 19th century and throughout much of the 20th century have, for the most part, never experienced the need for pipe replacement on a large scale,” the report states. “The dawn of an era in which the assets will need to be replaced puts a growing stress on communities that will continue to increase for decades to come.”

Key findings from “Buried No Longer” are:

  • The needs are large: Investment needs for buried drinking water infrastructure total more than $1 trillion nationwide over the next 25 years if pipes are replaced at the end of their useful lives. Through 2050, these needs exceed $1.7 trillionReplacement needs account for about 54% of the national total, with the balance attributable to population changes over that period.
    • Pipe replacement expenses account for more than 84% of the $278 billion need in the Northeast and Midwest through 2035. Meanwhile, in the rapidly growing South and West, expansion to meet a growing population amounts to about 62% of the projected need of $277 billion in that same time period.  Replacement-related needs are a less important factor in these regions.
    • The required national-level investment will double from roughly $13 billion a year today to almost $30 billion annually by the 2040s (in 2010 dollars). This level of investment must then be sustained for many years, if current levels of water system performance and service are to be maintained.
  • Household water bills will rise: The amount water bills will rise varies depending on past investment, community size and geographic region, but in some communities, the infrastructure costs alone could triple the size of a typical family’s bill.
    • Small, rural communities may face the biggest challenge. Places with fewer people living far apart have more pipe “miles per customer” than large, urban systems. The study suggests that the most impacted households could see their drinking water bills increase between $300 and $550 per year above current levels to address infrastructure needs.

There is still time to act: Postponing infrastructure investment in the near-term raises the overall cost and increases the likelihood of water main breaks and other infrastructure failures. However, the $1 trillion investment necessary through 2035 does not have to be made all at once. There is time to implement asset management plans and set rates that more closely reflect the cost of water service.

“The needs uncovered in ‘Buried No Longer’ are large, but they are not insurmountable,” said AWWA Executive Director David LaFrance. “When you consider everything that tap water delivers -- public health protection, fire protection, support for the economy, the quality of life we enjoy – we owe it to future generations to confront the infrastructure challenge today.”

“Water is a basic necessity of life,” said AWWA President Jerry Stevens, who is also general manager of West Des Moines Water Works in Iowa. “Water utilities are committed to finding fair and equitable rate designs that address affordability issues as they face the increased cost of infrastructure replacement. The good news is that there is still time to act. ‘Buried No Longer’ helps us recognize the challenge ahead. Together, we can take the necessary steps to meet that challenge.”

Source: AWWA

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