The water and wastewater infrastructure in the United States have been a growing concern in recent years. Despite the significant federal funding allocated in the 2021 Infrastructure Investment and Jobs Act, a large portion of it remains undistributed. With approximately 94% of the $55 billion earmarked for water and wastewater needs yet to be disbursed, issuers may not require significant municipal bond issuance for water infrastructure projects. This is due in part to the availability of federal grants and low-interest loans provided by the government, which have become more attractive options for cities and counties.
The slow disbursement of funds is attributed to various factors, including the Build America, Buy America provision, which requires the use of U.S.-produced materials. Additionally, the increased costs of materials, projects, and labor, as well as earmarks placed on the use of funds, have also caused delays in the distribution of funds. Despite the allocation of funds through federal fiscal year 2026, the benefits for water systems are expected to materialize in the future.
The federal government’s estimated $271 billion needed for clean water infrastructure spending in 2012 and the $625 billion estimated for drinking water infrastructure spending in 2021 indicate the substantial investment required in the sector. However, experts believe that these estimates are on the lower side, with expectations of an increase in the near future. Howard Neukrug, the Executive Director of the Penn Water Center, believes that a staggering $2 trillion will be needed to meet the goals of existing Clean Water and Safe Drinking Water acts.
The water sector faces several challenges, with climate change being the most significant. Climate change has resulted in sea level rise, droughts, floods, heat waves, and other extreme weather events, necessitating utilities to mitigate their impact and strengthen their infrastructure. Other challenges include the removal of per- and polyfluoroalkyl substances (PFAS), lead line replacement, aging infrastructure, and high interest rates.
To address these challenges, the water sector is exploring various strategies. Former U.S. Senator Bill Bradley emphasizes the need for collaboration among local, state, and federal agencies to tackle the water crisis. Pricing water at a free market level is also suggested to benefit both residential and industrial users. Additionally, the development of technologies such as desalination and water reuse shows promise in aiding the sector.
An example of successful public-private development in the water sector is the Vista Ridge Supply Project in San Antonio, Texas. Through this project, the San Antonio Water System has increased its water supply to meet the needs of the rapidly growing area. By July 2021, the water system was receiving 50,000 acre-feet of water per year from the project, showcasing the potential of innovative solutions in addressing water supply challenges.
The future of water infrastructure in the United States presents both challenges and opportunities. Adequate funding, technological innovations, and collaborative efforts among stakeholders are crucial in ensuring the sustainability and resilience of the water sector in the years to come.