Jun 18, 2014

Black & Veatch Report Shows Customer Engagement Critical for Water Utility Success

New Strategic Directions report highlights challenges & opportunities for sustainable water infrastructure

Black & Veatch strategic directions U.S. water utility

Black & Veatch's third annual Strategic Directions: U.S. Water report is now available. The report compiles data and insight from water utility leaders across the U.S. Among the key issues identified in the report are ongoing concerns with aging infrastructure, challenging financial conditions and the need for customer education.

"Justifying capital investment and increases in rates are key issues for the water industry," said Cindy Wallis-Lage, president of Black & Veatch's water business. "Utilities must educate their customers on the value of water and the cost of providing safe and reliable services. Without customer buy-in, many utilities will lack the necessary support to solve their current challenges and plan for their future."

Water smart grid programs, such as advanced metering infrastructure (AMI), can support customer education programs. More than 60 percent of water utility leaders stated their organization is considering or has implemented AMI to reduce costs. However, less than half are considering the use of web-based portals that use AMI data so that customers can better manage their water use and account.

Best practice asset management programs can help utilities justify their needs through the use of data collected from AMI programs and other assessments. Utility leaders can use this data to prioritize investment decisions. The information proves why specific investments are needed and quantifies the risks of non-investment.

"City leaders and/or utility regulators need to understand why investment is needed and be assured that the utility is making wise and efficient use of rate payer dollars," said John Chevrette, president of Black & Veatch's management consulting business. "Adoption of a best practice asset management framework and the use of risk-based planning meet this need. Through this approach, utilities will become more efficient and resilient to future challenges."

Other key findings from this year's report include:

  •  • Utilities of all sizes and from all geographic regions selected "Customer Rates" as one of their top three sustainability issues. Two-thirds of utilities in the United States do not have a revenue or rate structure that covers all of the components needed for a financially sound business operation.
  •  • Sustainable water supply and resources require a "Reduce, Reuse, Recover" mentality. Reducing water use saves precious water supplies and operational costs. Reusing water further supplements a region's water supply and reduces overall freshwater requirements, particularly from industry. Recovering resources from used water, such as nutrients and energy, can provide a utility with new revenue streams while benefiting the environment.
  •  • Aging infrastructure, managing capital costs and ability to fund capital programs remain among the top five industry issues for the third consecutive year. These issues represent why the adoption of best practice asset management is needed.