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:

Arrange for and conduct training for utility managers/operators, other technical staff, and local decision-makers on energy efficiency. Outreach and education strategies will be developed both for large and small utilities, as the needs and opportunities will vary for these different-sized operations.

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:

Work with EPA Headquarters and regional partner organizations to host asset management training sessions for large and medium-sized municipalities.
Work with external partners to provide hands-on training for smaller utilities, and provide training on Check Up Program for Small Systems (CUPSS), which is a free, easy-to-use, asset management tool for small drinking water and wastewater utilities.

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:

Partner with external organizations, particularly the Chicago-based Alliance for Water Efficiency, to compile, analyze, and widely share information on opportunities for and benefits from water efficiency practices, including promoting WaterSense.
Work collaboratively with professional organizations and trade groups, including the Appraisal Institute and the National Association of Home Inspectors, to develop informational materials and provide training for stakeholders in the building market on water efficiency practices.
Coordinate with the City of Chicago to identify and promote opportunities for water conservation and efficiency in the City's proposal for the 2016 summer Olympics.

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:

Collaborate with universities to develop and deliver course content on Green Infrastructure for engineering students and continuing education classes for practicing engineers.
Work with external partners to implement pilot projects and measure the performance of Green Infrastructure practices, including measurement of performance and environmental concerns for practices at Brownfield sites.
Share green infrastructure performance data widely, to reduce uncertainty about these practices.
Work with States and communities to pilot green infrastructure practices as control measures (in combination with grey infrastructure measures) in Combined Sewer Overflow long-term control plans.
Work with States to adopt stormwater permit language that encourages green infrastructure practices and work with MS4 communities to incorporate green infrastructure practices into stormwater management plans/programs.

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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:

Support municipalities efforts to develop appropriate pricing/rate systems by making useful models and tools readily available.
Work with water utilities and trade associations to develop and share pamphlets, websites and public service announcements to increase public awareness of the full cost of operating and maintaining drinking water and wastewater systems.

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:

Encourage and assist the SRF programs in Indiana and Ohio with implementation of SRF Sustainable Infrastructure incentives.
Support Illinois EPA efforts to offer SRF loan assistance for a green infrastructure pilot project in Aurora. The Aurora project will use green infrastructure approaches, planned as part of a riverfront redevelopment initiative, to help meet CSO and stormwater management needs.