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Framework to Enhance and Ensure the Sustainability of Water Infrastructure

U.S. municipalities are finding it increasingly challenging to fund their drinking water and wastewater infrastructure capital and operational costs. A national analysis performed in 2002 estimates that the gap between the costs of operating these systems and the funds available could exceed $500 billion by 2020. If the funding insufficiency is not addressed, operations will be scaled back, repairs will be deferred, and critical capital projects will not be undertaken due to financing constraints. This will result in noncompliance and water quality degradation. If the funding gap can be proactively addressed, these adverse environmental outcomes can be prevented. This document summarizes the framework for activities and initiatives to be carried out by Region 5 and State partners to help decrease infrastructure funding gaps. This framework focuses on the most significant problems and promising opportunities for reducing costs and increasing revenues, and identifies approaches through which the Region can contribute to substantive results. These initiatives will be blended into core program operations to the extent feasible. Annual strategies will be developed to describe activities, milestones, roles, and schedules. Region 5 will track implementation of planned activities and initiatives, and over a multi-year period will evaluate and report on the impacts of these activities and initiatives.

Decreasing Costs for Providing Clean Water and Safe Drinking Water

Energy Efficiency

EPA estimates that if drinking water and wastewater systems can reduce energy use by 10% through cost-effective investments and better operations, these utilities could save approximately $400 million annually. The energy efficiencies achieved would also address climate change concerns by saving 5 billion kWh of energy annually. It is anticipated there will be significant interest and participation from utilities in implementing energy saving measures due to the significant cost savings that will result. To promote energy efficiency Region 5 will:

Asset Management for Water Utilities

Successful asset management systems can help communities optimize infrastructure expenditures and lower costs while still delivering good service. To foster widespread understanding and adoption of asset management systems, Region 5 will:

Water Efficiency

Water and wastewater utilities can substantially reduce operational costs by encouraging water efficiency. This includes repairing and maintaining water mains to reduce leaks and working with customers to reduce water use. Water efficiency also results in energy efficiency and produces climate change-related benefits. Retrofitting one out of every 100 American homes with water-efficient fixtures would result in a savings of about 100 million kWh of electricity per year and eliminate 80,000 tons of greenhouse gas emissions. To advance water efficiency Region 5 will:

Green Infrastructure

Green infrastructure can effectively be used in combination with conventional storage, conveyance, and treatment systems to meet infrastructure needs, often with lower capital and/or operational costs. Green infrastructure can simultaneously bring additional benefits such as helping filter air pollutants, reducing energy demands, mitigating urban heat island effects, and sequestering carbon. To proliferate the use of green infrastructure approaches, Region 5 will:

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Increasing Water and Wastewater System Revenues

Full Cost Pricing, or the Real Cost of Water

Utilities need to implement pricing structures to cover the costs of drinking water and wastewater systems. U.S. households pay less (as a percentage of income) for water and wastewater services than households in other developed countries. People do not know the true costs to build, operate and maintain these systems. To foster more realistic pricing/rate structures, Region 5 will:

Financing Incentives

The State Revolving Loan Fund (SRF) programs provide low-interest loans to wastewater and drinking water systems for infrastructure improvement projects. States have the flexibility to provide financing incentives to projects that incorporate Sustainable Infrastructure elements into their design and operation. Region 5 has initiated discussions with all of the State agencies on how to incorporate Sustainable Infrastructure elements into their programs. Two States are now working toward creating incentives for projects that include Sustainable Infrastructure elements (for example by assigning additional priority ranking points to such projects) and/or to offer interest rate reductions on SRF loans as an incentive for water systems to incorporate Sustainable Infrastructure strategies into the planning, design, and construction of proposed projects. Region 5 will continue to work with all States, and will place particular focus on States where there are near-term opportunities to make significant progress, including:

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