Decision Analytics For Water Utilities: Driving Capital Efficiency in an Evolving Industry

Drive Capital Efficiency in an Evolving Industry
White Paper Mon 26 Feb 2018

Over the past century, the water industry has steadily increased its technical and business proficiency, while improving public health and protecting the environment. However, water utilities today are facing unprecedented challenges related to the stewardship of this robust yet aging infrastructure. Renewal and replacement of water and wastewater assets is a key concern, yet budgetary constraints and limited public support for rate increases are making it increasingly challenging for utilities to continue to meet service level targets and minimize disruptions.

According to Jim Gebhart, Director for EPA’s Water Infrastructure and Resiliency Finance Center: “The implications of deteriorating infrastructure can be felt nationwide—each year our country experiences about 240,000 water main breaks, $2.6 billion is lost as our water mains leak trillions of gallons of treated drinking water, and billions of gallons of raw sewage are discharged into local surface waters from aging sewer overflows.”

To add to this, climate change and resource availability are stressing traditional business models to the breaking point. Within the last decade, drought conditions have impacted many regions of the world, causing water shortages and groundwater issues, and placing an increased risk on infrastructure.

Utilities must support environmental initiatives to minimize consumption, and explore ways to better utilize the available supply. Unfortunately, the downside of conservation efforts is declining revenues. Yet the public and regulators remain highly averse to rate increases, resulting in ever-increasing financial constraints for the organizations managing this infrastructure.

To be successful in this environment, it is increasingly important for water utilities to focus their limited capital and labor on the continued quality and reliability of these essential services, while simultaneously investing in technologies and initiatives to manage resource availability and meet future demands. This makes it crucial for utilities to deliver capital efficiency: they must ensure every dollar is being spent in the most effective way possible—to maximize the value each project delivers to the utility, its customers, and society.

Water is our most critical resource, and the reliability and resiliency of our water infrastructure impacts our health, our environment, and the economy. Now more than ever, water utilities need to align their investment strategies with the initiatives that will best address these key challenges, today and in the future.