Black & Veatch has released its 2023 Water Report, providing expert analysis of survey responses from about 450 U.S. water industry stakeholders.
The report finds that the U.S. water sector’s complexities continue to evolve amid pushes for greater sustainability and resilience. The sector grapples with challenges, ranging from chronically aging infrastructure to regulatory pressures and climate change, as well as opportunities, such as greater data availability and an infusion of federal funds.
The report also finds that the sector is still grappling with an aging workforce and efforts to hire qualified staff.
Money issues – from justifying capital improvement programs to rate requirements and managing capital and operational costs – remain other top concerns, along with regulatory mandates.
Resilience and sustainability remain a prevailing theme, with two-thirds of respondents citing sustainability as a critical strategic focus. Along the way, the survey shows evidence that the industry continues to wage a digital transformation — a key driver to resilience and sustainability, promoting better decision-making and optimal use of aging assets in a rate-restricted sector.
Headwinds add to the complexities of today’s water industry, from the impacts of climate change to the shifting regulatory landscape that includes the U.S. EPA’s March announcement of its long-expected National Proposed Drinking Water Rule (NPDWR) to regulate a new category of toxins in drinking water. Worries about cyberattacks also continue.
But opportunity knocks, certainly on the funding front. The Infrastructure Investment and Jobs Act (IIJA), enacted in late 2021 as the largest federal investment in water in U.S. history, commits tens of billions of dollars to the sector. But just slightly more than one-quarter of respondents say their enterprise has applied for or will go after that funding, while more than four in 10 haven’t explored it nor have plans to pursue it.
“Throughout the ecosystem of U.S. water utilities, stakeholders continue to demonstrate agility and forward thinking as part of a “One Water” mindset that all forms of water — from drinking water to wastewater, stormwater, reclaimed water, indirect and direct potable reuse, and groundwater — are a singular resource to be managed sustainably,” said Mike Orth, president of Black & Veatch’s governments and environment business.
The new report highlights a U.S. water sector, with more than 50,000 water utilities and 16,000 wastewater utilities, discovering new ways of doing business by holistically leveraging integrated approaches to both planning and delivering strategic, financial and operational resilience.
Some other key findings of the report include:
- Roughly half of respondents report that their utility has sustainability goals and the means to measure them.
- Two-thirds cited affordability as their biggest hurdle in achieving sustainability strategies.
- Roughly four in 10 rated themselves as “very confident” about the resilience of their water supplies. An additional 44% of respondents cited “somewhat confident.”
- Two-thirds of respondents reported positive results when asked to what extent their enterprise’s data or digital solutions strategy is achieving objectives.
- More than half of respondents stated they are not leveraging data they collect effectively, a slight increase from 49% last year.
- U.S. water utilities are prioritizing investments in water reliability and resilience (61%), asset rehabilitation and renewal (56%), cybersecurity (50%) and regulatory compliance for PFAS (49%) as their top investments for their utility or municipality over the next decade.
- Eight in 10 respondents say cybersecurity is the most important investment in the security of their assets. But only 57% believe physical security — a prerequisite for cybersecurity — is the most critical investment.
- 45% consider new federal funding programs as too restrictive, up from 27% last year. 46% label them administratively too burdensome, an increase of 9% points from 2022.
- Identical to 2022’s results, half of the respondents reported that consumers had little understanding between the cost of producing safe water and the current rates they pay.
- More than half of respondents envision investing in additional treatment processes or significant new treatment technologies, though their time horizons vary.