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05 April 2018 / Reese Tisdale
Is U.S. water infrastructure going to the dogs?


Over the next decade, U.S. municipal utilities have set the stage for over US$683 billion in capital improvements to address deteriorating piping networks, combined sewer overflows, and rising population demands on treatment plants and distribution networks. The scope of these utility infrastructure improvements are wide ranging and vary significantly by region, state, and municipality.

Municipal utility infrastructure in the U.S. is recognized for its much needed investment across more than 49,000 and 28,000 community water and wastewater systems, let alone expansive stormwater networks. While these discrete segments, or markets, if you will, continue to evolve, the overall pace of change is that of a well-established, mature sector. Within this broader landscape, however, select segments are accelerating at a more rapid clip and drawing in a breadth of new vendors, service providers, and investors.

One critical driver for this dichotomy is the necessity to address sections of an aging 1.6 million mile underground pipe network that have exceeded their expected, useful lives; secondly, the proliferation of more advanced solutions– new business models, information technologies, and alternative financial tools– are impacting procurement decisions and making their way into utility operator and service provider toolkits.

The public’s growing concerns about U.S. water infrastructure are real and increasingly reflected in utility planning documents.

Bluefield Research has embarked upon an in-depth analysis and forecasting exercise of capital expenditures (CAPEX) for water, wastewater, and stormwater utilities across the U.S. Central to the 50-state forecast methodology is Bluefield’s bottom-up analysis of capital improvement plans and spending allocations for utilities in 100 major U.S. cities.

Brief takeaways include:

Utilities allocate more spend toward infrastructure CAPEX; dollars per capita on the rise. Each utility faces unique challenges that impact per capital spend dramatically. Per capita spend by utility for the ten-year forecast period ranges from a low of US$157 in Riverside County, California to a high of US$11,117 in Miami-Dade County. Of the 52 utilities Bluefield analyzed in both its 2016 and 2018 reports, 32 show increases in capital improvement planning budgets, with an average growth of 47 percent.

Pipe investment dominates water infrastructure spend. The underground pipe networks for water, wastewater, and stormwater are long enough for almost three roundtrips to the moon. As expected, pipes represent 75%, or almost $300 million, of total spend on distribution and collection networks over the forecast period.

Utilities are prioritizing resiliency in light of concerns over stormwater impacts. Concerns about the impact of large storm events on the environment, is driving an increase in combined CAPEX from US$31.8 billion in 2018 to US$35.3 billion in 2027, including funding for new approaches, such as green infrastructure.

CAPEX for information technology inspired segments like smart water will contribute more than US$16 billion by 2027. Utilities are now investing in “Big Data” solutions, as the water sector looks for more efficient ways to map, analyze, rehabilitate, and operate aging water and wastewater systems.

These and other findings are found in Bluefield’s new report, U.S. Municipal Water Infrastructure: Utility Strategies & CAPEX Forecasts, 2018-2027, released in April 2018. These forecasts draw heavily from detailed, bottom-up analysis of capital improvement plans at utilities across in 100 U.S. cities in all 50 U.S. states

Reese Tisdale
President

Reese Tisdale has an extensive background in industry research, strategic advisory, and environmental consulting in the power and energy industries. Prior to co-founding Bluefield, Mr. Tisdale was Research Director for IHS Emerging Energy Research, a leading research and advisory firm focused on renewable energy. He also has demonstrated experience in groundwater remediation for oil & gas companies and as an international market analyst for ThermoFisher Scientific.

Mr. Tisdale’s interest in critical infrastructure needs and developing markets is influenced by his three years in El Salvador, where he led water supply and agriculture projects immediately following the country’s civil war. He has a BS in Natural Resources from The University of the South, Sewanee and a Master in Business Administration from Thunderbird: The American Graduate School of International Management.





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