Toledo, Ohio’s summer battle with toxic algae is just the latest in a string of weather-related catastrophes to beset our nation’s water and sewer systems. Hurricane Sandy’s unprecedented storm surge caused more than $500 million in damage to coastal water systems. Last year’s Arizona wildfires that killed 19 firefighters also devastated forested watersheds in a region already defined by water stress. And, of course, Hurricane Katrina swamped New Orleans’ water system, causing one of the few weather-related credit downgrades in the sector’s history.
Across the country, extreme weather is exposing the vulnerability of 20th century water infrastructure. This liability was brought into stark relief by a lawsuit brought by Farmers Insurance Co. against municipal sewage systems in the Chicago region for failing to invest in upgrades that could have prevented a monster rainstorm from spewing raw sewage into basements and streets in April of last year. The lawsuit, which was later dropped, put water systems on notice that these extremes are the new normal their systems must be redesigned to manage.
Insurance companies are not alone in recognizing the costs of water infrastructure failure under extreme conditions. Recently, both Standard & Poor’s and Moody’s Investors Service—two of the largest credit rating agencies in the market—published their concerns about our infrastructure’s exposure to extreme events and climate change. Moody’s has gone so far as to propose comprehensive changes to its bond rating methodologies to account for “exposure to weather volatility” and other extremes, including over-dependence on water sales, which may be vulnerable to drought.
How these rating agencies factor in weather risks will have a major impact on the bottom-line of water systems that depend on the markets to finance their infrastructure. The riskier a water system looks, the higher the interest rate it will likely pay when it offers its bonds on the market.
Recognizing that both the markets and water service providers are planning against an ever more uncertain future, the U.S. Environmental Protection Agency recently released a synopsis of discussions it convened between the decision makers in the markets and water systems who have been leaders in defining what climate adaptation looks like for the water industry.
Whether climate extremes are causing sewage geysers or algal blooms, the end result will be more spending driving our water rates even higher.
But what if instead, we use climate extremes as a reason to fundamentally reevaluate the services our water utilities provide and how they provide it? What if we look at this as a design challenge to create more value for water utilities and their customers instead of less?
That’s what some U.S. utilities are already doing, and it’s driving a burst of innovation that should inspire us to believe that solutions are at hand.
Here are a few examples:
- Beset by recurring drought and declining groundwater, Southern California’s West Basin Municipal Water District built the only water treatment facility in the United States to produce five different “designer” recycled water products. The Edward C. Little Water Recycling Facility produces 46 million gallons of water a day, conserving enough water for 80,000 households a year. The plant produces five types of “designer water,” including irrigation water (tertiary disinfected), cooling tower water (nitrified) and indirect drinking water (microfiltration, reverse osmosis and ultraviolet light with hydrogen peroxide).
- Operating on a postage stamp-sized parcel of land in dense northern Virginia, the Alexandria Sanitation Authority found it hard to imagine how it would comply with increasingly stringent nutrient standards in the impaired Potomac River without dramatically increasing customer rates. That was, until its board decided to embrace transformation and become a full-service energy, water and nutrient resource recovery provider. Now Alexandria Renew Enterprises, “the community’s water resource recovery center,” saves nearly $3 million by reusing its treated wastewater effluent to run its operations, and has negotiated a deal with a large commercial developer who is buying the effluent to run building boilers, irrigate landscaping and replenish a biowall to filter stormwater runoff. “We must embrace innovation [and] question conventional wisdom,” says Renew Enterprises CEO Karen Pallansch.
- A growing number of wastewater systems are using waste gas as an energy resource, showing that water systems can be part of the low-carbon energy revolution. In 2012, Oakland’s East Bay Municipal Utility District (EBMUD) became North America’s first net energy positive wastewater treatment plant, producing more renewable energy than it needs to run its operations. To achieve this goal, EBMUD invested in a high-efficiency gas turbine and began accepting regional organic wastes to boost its energy production. Today, the California utility sells its excess energy onto the electric grid, creating an estimated $3 million a year in savings for ratepayers.
- In Texas, the San Antonio Water System is partnering with national energy company Ameresco to process more than 1.5 million standard cubic feet of biogas (a byproduct of sewage processing) a day. Amaresco collects and processes SAWS’ biogas onsite, selling more than 900,000 cubic feet of natural gas each day via commercial pipeline to the open market.
- Smaller distributed infrastructure can reduce the scale of disruption when extreme weather strikes, by dividing the services of the traditional large-scale facility into multiple, smaller units. Distributed systems can also lessen the costs of expanding service as a community grows. One such example is Vancouver’s Southeast False Creek Neighbourhood Energy Utility, which harvests heat from the neighborhood’s sewage stream to deliver heat and hot water to nearby buildings. The pocket treatment plant offsets 70 percent of the area’s energy demand. Boston’s Charles River Watershed Association is piloting a Smart Sewering project that will test the technical and economic feasibility of using urban wastewater flows, augmented by commercial food waste, to generate energy and restore stream flows in the long-degraded urban watershed.
- San Francisco’s Public Utility Commission (SFPUC) has taken distributed infrastructure to a whole new level. Its Alternative Water Supply program is now paying up to $500,000 to building developers who will produce water onsite for use by other entities in the city’s downtown. Building owners can qualify for the cost-sharing program by tapping into any type of water they can produce, including greywater, blackwater, rainwater, stormwater or foundation drainage water. SFPUC’s own headquarters demonstrate the potential for onsite water systems to dramatically reduce demand on the centralized water system—the building uses 65 percent less water than a typical building of its size, with an additional construction cost of less than 1 percent.
These powerful examples demonstrate that public water systems can be champions of innovation, unleashing value creation and climate-friendly solutions that benefit consumers and society alike. Hopefully we’ll see more of this in the years ahead.
About the Author
Sharlene Leurig is director of the Sustainable Water Infrastructure Program at Ceres and recently chaired the Austin Water Resource Planning Task Force in Texas. Follow her on Twitter @sleurig. Ceres is an advocate for sustainability leadership. Ceres mobilizes a powerful coalition of investors, companies and public interest groups to accelerate and expand the adoption of sustainable business practices and solutions to build a healthy global economy.