AWWA, WEF praise passage of WIFIA legislation

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May 22, 2014 -- On Thursday, May 15, a House-Senate committee released legislation to create a pilot Water Infrastructure Finance and Innovation Authority (WIFIA) that would lower the cost of renewing America's aging water infrastructure -- an important victory for U.S. water utilities and their customers.

The American Water Works Association (AWWA) and the Water Environment Federation (WEF) praised WIFIA as an important new finance tool to help communities address essential water and wastewater infrastructure projects at a lower cost, saving consumers money on their water bills.

"The imminent creation of the Water Infrastructure Finance and Innovation Authority is a significant breakthrough in confronting the U.S. water infrastructure challenge," said David LaFrance, CEO of AWWA. "WIFIA will reduce the financing costs of critical infrastructure projects, allowing communities to fix and expand water systems at a lower cost to their customers. Our elected representatives and senators deserve our gratitude."

The creation of a WIFIA is part of the larger Water Resources Reform and Development Act (WRRDA), which now advances for formal approval in the U.S. House and Senate. It is expected to be swiftly passed by both chambers and signed into law by President Barack Obama. WIFIA will provide low-interest federal loans to communities to reduce the cost of financing large water and wastewater infrastructure projects.

"We at WEF know that continued progress on clean water will require innovative technological practices and also innovative financing," said Dr. Eileen O'Neill, executive director of the WEF. "The WIFIA pilot program included in this bill offers municipal water leaders an additional way to finance their infrastructure needs."

While AWWA and WEF praised WIFIA as an important step forward, the associations also called for future adjustments to allow the program to achieve its full potential. The pilot program limits WIFIA funding to 49 percent of projects and prohibits tax-exempt financing for the remaining portions.

"WIFIA will be most effective when communities can fund 100 percent of project costs, and any non-WIFIA share should be allowed to be financed with tax-exempt debt," LaFrance said. "We are committed to working with our leaders in Congress and our colleagues in the water community to build off today's success."

If a utility saves just two percentage points on the interest rate for a 30‐year loan, it means 25 percent savings in the financing of a project. On large projects, the savings can amount to hundreds of millions of dollars that would otherwise be absorbed through customer bills over many years.

AWWA, WEF, the Association of Metropolitan Water Agencies, the Water and Sewer Distributors of America and other water and civic organizations have written letters, placed calls, and met hundreds of times with senators and representatives to promote the benefits of WIFIA and gradually build support.

In 2012, AWWA published a comprehensive report titled Buried No Longer: Confronting America’s Water Infrastructure Challenge, which demonstrated that Americans will have to invest more than $1 trillion over the next 25 years to repair and expand U.S. drinking water infrastructure. The report observed that wastewater costs are likely similar. The report also showed that deferring needed investments dramatically raises the future costs.

See also:

"Water leaders push for passage of WIFIA on Capitol Hill"

"Water Resources Reform and Development Act conference report released"

"AWWA's 2014 State of the Industry report tags water supply, infrastructure as top concerns"


About AWWA

Established in 1881, the American Water Works Association is the largest nonprofit, scientific and educational association dedicated to managing and treating water, the world’s most important resource. With approximately 50,000 members, AWWA provides solutions to improve public health, protect the environment, strengthen the economy and enhance our quality of life. For more information, visit www.awwa.org.

About WEF 

Founded in 1928, the Water Environment Federation (WEF) is a not-for-profit technical and educational organization of 36,000 individual members and 75 affiliated Member Associations representing water quality professionals around the world. WEF members, Member Associations and staff proudly work to achieve our mission to provide bold leadership, champion innovation, connect water professionals, and leverage knowledge to support clean and safe water worldwide. For more information, visit www.wef.org.

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