NAWC Warns Congress of 'Grave Consequences' of Proposed New Grant Program

Nov. 1, 2001
-- Encouraging Congress and the water industry to pursue truly innovative solutions to the water infrastructure replacement challenge, Peter Cook denounced calls for an old-fashioned federal grant program to subsidize water utilities. Representing private water utilities before a Senate Subcommittee, Cook instead encouraged Congress to work within the existing State Revolving Fund (SRF) programs to address the infrastructure financing challenge.

"One need only review the history of the wastewater construction grant program in the 1970's to see that grants breed dependence and subsidize everyone's water rates, including those that can afford to pay full cost of service rates," said Cook, Executive Director of the National Association of Water Companies. State Revolving Loan funds that do not have these negative characteristics, "make a lot more sense," said Cook. "In addition to revolving loans," Cook continued, "there are other financing techniques such as public-private partnerships that are available to utilities, all of which can help keep rates as low as possible."

Instead of funding a large grant program, Cook concluded by calling on Congress to remove the state volume caps on private activity bonds. Cook called this change, "the most important modification Congress can make to give municipalities the tools they need to meet the coming infrastructure challenge."

Peter Cook testified Wednesday, October 31, before the Senate Subcommittee on Fisheries, Wildlife, and Water at a hearing on innovative financing techniques for water infrastructure improvements.

The National Association of Water Companies is the nation's trade association representing private and investor-owned drinking water utilities. NAWC has 200 members in 42 states that provide drinking water service to over 22 million Americans everyday.

Source: NAWC