S&P report card released on U.S. water-sewer sector

Water supply determinants, including drought, supply source, and growth patterns are and will be a major pressure on many of the larger water systems in the U.S. in the coming years, according to a new report.

Jul 23rd, 2003

DALLAS, July 23, 2003 -- Water supply determinants, including drought, supply source, and growth patterns are and will be a major pressure on many of the larger water systems in the U.S. in the coming years, according to a report by Standard & Poor's Ratings Services.

Other significant pressures on U.S. water-sewer utilities include regulation and, possibly, homeland security.

Another new report notes that capital improvement plans has been the most oft-cited factor in rating upgrades and downgrades in the past two years, since how a utility manages its capital plan can determine the strength of its debt service coverage.

"Water supply, like all of these issues, can be a major factor affecting a particular utility's long-term capital plan," said credit analyst Theodore Chapman. "The capital plan for any utility is the single most significant factor affecting rates for service, which in turn affect a utility's financial position, including net revenues available for debt service," he added.

The full reports, "U.S. Water-Sewer Utilities Awash in Supply Issues" and "Public Finance Report Card: U.S. Water-Sewer Sector" are available on RatingsDirect, Standard & Poor's Web-based credit research and analysis system.

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