Technology and the Future of Water

“The Water Future - Smooth Selling or Turbulent Tides Ahead?” was the theme of WWEMA’s 98th Annual Meeting, held this past November in San Diego. Top executives from the water and wastewater equipment manufacturing community and manufacturer representatives held lively discussions about the business of water and the prospects for growth in this market sector. Topics ranged from the water-energy nexus and material costs escalations, to industry research needs and new product introductions.

Trends

Ed Means of Malcolm-Pirnie kicked off the conference by providing a riveting presentation on future trends in the water industry. Among his predictions:

A 28% percent increase in U.S. population over the next 30 years will force utilities to seek out marginal water sources;

The surge in NGO advocacy groups will play a greater role in public policy decisions;

Water rates double or triple in the next 20 years;

Federal subsidies will be static at best;

These predictions certainly suggest that there will be major challenges facing the water and wastewater industry in the years ahead. How the industry positions itself to meet these challenges was the topic addressed by the next set of presenters who spoke about the industry’s research agenda and the critical role that technology will play in providing needed solutions.EnergyBuilding on the technology theme was the next panel session addressing the water-energy nexus.Mike Hightower of Sandia Laboratories described the soon-to-be-released report to Congress providing a national water-energy R&D roadmap to identify the major issues and needs that must be addressed to reduce future fresh water use in energy production and facilitate nontraditional water use treatment and reuse. He noted that the U.S. withdraws as much water for thermoelectric as it does for irrigation. “With the U.S. needing 30 percent more electricity by 2025, the industry needs to develop more water-efficient energy technologies,” Hightower proclaimed.Marcus Jensen of Southern Nevada Water Authority concurred with this opinion and called for greater attention being given to improving the reliability of these systems to properly operate and maintain them. “The human cost of maintaining these systems must be taken into account when selecting which manufacturers should be allowed to bid their systems,” he opined.Larry Slominski of World Water and Power Corporation, a solar engineering and water management company, described a project undertaken with Idyllwild Water District, located east of Los Angeles, to make it the first water utility in the U.S. able to run its entire facility with solar power. He expressed optimism about its future potential and the possibility of many more water utilities switching to solar power. CostThe final guest speaker presentations were devoted to the topic of material cost escalations.Mike Luker of Eastern Municipal Water District described ways in which his district manages contract pricing and procurement practices in a changing market, including linking contract pricing to applicable industry indexes; requiring firm-fixed pricing throughout a contract; requiring contractors to produce document of price at time of bid vs. construction with the contractor being responsible for the first 10 percent increase and compensated thereafter; require performance trials prior to bid/award for large ticket items; and pre-negotiating items with contractor assuming the agreement between the owner and the supplier.Doug Lanning of Carollo Engineers discussed construction cost trends including material cost increases, short-term material price quotes, longer product lead times, short supply of skilled labor, and busy contractors resulting in less competition and higher costs. This has forced his company at times to add a bid market allowance of approximately 10 percent to accommodate for fewer contractors bidding on projects.Harry Cosmos of J.R. Filanc Construction Company offered useful advice on how to pay suppliers faster and minimize the time it takes to get projects started as a way of dealing with material cost escalations. Once an owner gives his intent to award, his company will draft purchasing orders and suppliers will begin putting together their submittals, he stated by way of example.Speaking on behalf of the supplier community was Cynthia Goerke of JCM Industries and Gene Darin of Fontaine USA. JCM Industries, a manufacturer of pipe fittings, is a Lean/Quick response time company with “service” as its niche, explained Goerke.“Suppliers must do everything they can to mitigate costs in this cost escalating period,” she stated.Fontaine USA, a manufacturer of stainless steel sluice gates and slide gates, experienced seven price increases for stainless steel in 2006, totaling 40 percent increase in cost, Darin reported. To control costs, his company uses purchasing leverage by forecasting demand, controlling inventory and managing long-term supplier contracts. About the author: Dawn Kristof Champney is president of the Water and Wastewater Equipment Manufacturers Association, a national, non-profit trade organization established in 1908 to represent the interests of companies that manufacture and supply products and processes used in the purification of water and treatment of wastewater for municipal and industrial applications, worldwide.