Wednesday, May 22, 2013

Money & Business

A National Water Crisis Is on the Verge of Gushing

By Marianne Lavelle
Posted 5/27/07
Page 2 of 3

Maxwell is among those who believe it will take a catastrophic infrastructure failure causing widespread illness or death to spur action. Fortunately, that did not occur in West New York this winter, but the break was a warning sign. Although United Water New Jersey, the system operator, blamed the breach on water expansion in the February cold, it is well understood in the industry that the pipes most vulnerable to frigid temperatures are those that are rusting and deteriorating because they are nearing the end of their useful lives.

The American Water Works Association, the trade group for the nation's drinking water utilities, estimates that there are 250,000 to 300,000 main breaks per year, and the numbers are increasing as the infrastructure ages. United Water–one of a handful of private companies running U.S. water systems–is a good example; although it is now a subsidiary of the French utility company Suez, serving 7 million people in 20 states, it still operates the same pipe network that it laid when the company was founded in North Jersey in 1869.

A major problem, at least in the view of the Bush administration, is that utilities haven't been charging their citizens the true cost of providing water, but instead subsidize the service with other revenues. The Environmental Protection Agency has been promoting the idea of what it calls "full-cost pricing" as one of its "four pillars" of sustainable water systems, along with better management, cooperation among communities that share the same watershed, and water conservation.

"We think that water efficiency and full-cost pricing are the wave of the future," says Benjamin Grumbles, epa assistant administrator for water. "The more people understand the true value of water as the lifeblood of the community, and the value of infrastructure as the organs and bones that help support the system, the more they'll realize prices need to reflect that."

Ken Kirk, executive director of the National Association of Clean Water Agencies, representing sewer systems, wryly refers to the administration's idea as "the four pillows," because "they're kind of soft," he says. Although all are good ideas, he says, they wouldn't close the funding gap. In fact, in the topsy-turvy world of water, efficiency makes the fiscal picture worse. The more water consumers save, the less revenue for utilities, which charge by the gallon.

Kirk's group is one of several pushing the concept of a federal trust fund for water, much like the one that finances the highway system through the federal gas tax. Advocates have put forth funding ideas like a surcharge on bottled water, fees on toilet paper and other "flushables," or some other broad revenue source, but it all sounds like a tax on Capitol Hill and is a hard sell. The idea hasn't gotten further than hearings.

Federal funding for clean drinking water and waste-water treatment, in fact, has declined 24 percent since 2001.

Since federal largess cannot be counted on, the problem is squarely in the lap of local water systems. Some have had success. Atlanta over the past five years tackled a water system in crisis with a $3.9 billion improvement program. To pay for it, the city doubled water rates, and voters approved a referendum for a 1 percent sales tax to help turn around a system in which raw sewage spilled into waterways during storms and dangerous street sinkholes and boil-water advisories were a regular occurrence because of water-main breaks.

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