'Strategic Directions' report outlines water utilities' biggest challenge

In early June, Black & Veatch released the third edition of its annual Strategic Directions: U.S. Water Industry report, which aims to provide important information for overcoming some of the major challenges facing water and wastewater utilities, including limited budgets, rising costs, aging infrastructure, and storm resiliency.

Sep 9th, 2014


In early June, Black & Veatch released the third edition of its annual Strategic Directions: U.S. Water Industry report, which aims to provide important information for overcoming some of the major challenges facing water and wastewater utilities, including limited budgets, rising costs, aging infrastructure, and storm resiliency.

At the recent AWWA event in Boston, I spoke with Cindy Wallis-Lage, president of Black & Veatch's Global Water Business, about the report's key findings. "What we see is that we continue to have gaps," she said. Funding is one area, in particular, where there is discrepancy. "Over 60% of utilities noted that they don't have adequate revenues to meet their costs," she said.

But a key piece, she said, continues to be customer education in understanding how we need to maintain our infrastructure to have consistency in supply and understanding what the customer's role is.

I asked Ms. Wallis-Lage if there were any surprises in the report this year. "This is our third year," she said, "and it was pretty consistent. We haven't made enough improvements, we haven't invested enough to actually shift where those gaps are so they continue."

One new topic raised in the report this year is the importance of communicating with customers about why a rate increase might be needed. "That immediately went to the top five," she said. So how do we impress upon customers the importance of water infrastructure -- especially since we've done such a good job of hiding it from view? "I think one of the best ways to communicate that for utilities," she said, "is having a really strong asset management program because it provides you the framework for that communication."

With a strong asset management program, it's clear what the assets are, their condition, and their expected performance. With that information, it's a lot easier to explain to the customer where investment is needed so that reliable service and safe water can continue to be delivered 24/7 as expected.

"That communication needs to start with the 'why,'" she suggested. "If you don't start with the 'why,' then the 'how' and the 'what' don't matter."

When it comes to asset management, though, Wallis-Lage said we still have a ways to go. "There are some utilities that have embraced this wholeheartedly and are saying, 'Yes, we are tracking all of our assets and have strong asset management programs,'" she said. "But you'll see in the report that there's a significant number that have very little invested in asset management."

It circles back around to funding, she said. Asset management programs are not created overnight; they are a long-term investment. "You need the funding," she said, "and you need the leadership to say, 'Yes, this is where we're going because this is going to provide us the framework to know where we need to make the right investments on the right assets at the right time."

With that vision and understanding of assets, a utility can make targeted investments. "And then you can educate the customer," she continued, "saying, 'Yes, we're being good stewards of your money.'"

To access Black & Veatch's Strategic Directions: U.S. Water Industry report, visit www.bv.com.

Angela Godwin
Chief Editor, WaterWorld

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