Water Utilities Eye More Permanent Aid After Temporary Relief

Water and sewer utilities are eligible to access a pot of $350 billion in the coronavirus relief package signed into law earlier this month, buoying an underfunded and overlooked sector whose services have become indispensable during the pandemic.

The ability to tap into aid from the state and local coronavirus recovery funds included in the new law could be transformational for a sector shouldering more than $8 billion in debt from customers’ unpaid bills over the past year, advocates said. Even more important than the infusion of federal dollars, however, is Washington’s renewed interest in water affordability and accessibility because of the Covid-19 crisis, they said.

Utilities are hoping to capitalize on that momentum and push for funds for upgrading aging infrastructure as Congress begins work on the next economic package. They also want lawmakers to focus on more affordability programs and resources for low-income ratepayers.

The recovery money “shows me the moment has arrived for water, sewer, and stormwater infrastructure,” said Kyle Dreyfuss-Wells, chief executive officer of the Northeast Ohio Regional Sewer District, which serves 62 communities including Cleveland. “And now we have to continue that conversation.”

Photographer: Tim Boyle/Bloomberg

The American Rescue Plan Act (Public Law 117-2), which President Joe Biden signed into law in mid-March, provided $500 million to help low-income households access clean water, as well as support wastewater investments. That direct assistance was in addition to $638 million included in the fiscal 2021 omnibus spending package (Public Law 116-260) for the Health and Human Services Department to create a Low-Income Household Drinking Water and Wastewater Emergency Assistance Program to provide relief to ratepayers in need during the pandemic through state grants.

The relief package “made clear that water is a serious priority for this Congress and the administration,” said Adam Krantz, chief executive officer at the National Association of Clean Water Agencies. Krantz added that over the last three months, water assistance programs for low-income ratepayers have received more than $1 billion in funding and public clean water utilities are noweligible to access “historic levels” of federal dollars.

Dreyfuss-Wells said the pandemic has exacerbated the existing gap between funding—most of which comes from local ratepayers rather than the federal government—affordability, and accessibility. “At the end of the day, we have a huge need to basically rebuild the nation’s wastewater, stormwater, and drinking water infrastructure, and we have to be real about that,” she said.

Lawmakers’ Next Efforts

NACWA and the Association of Metropolitan Water Agencies in February launched a media and advocacy campaign that consisted of digital ads, congressional and grassroots lobbying, and a focus on telling local utilities’ stories. AMWA includes the largest publicly-owned drinking water systems in the country.

The effort comes as Congress is debating legislation related to drinking and wastewater access and affordability and how water issues fit into a larger, forthcoming infrastructure effort.

The Senate Environment and Public Works Committee on Wednesday will consider drinking water and wastewater infrastructure legislation that would include re-upping state revolving funds for those projects.

The House Energy and Commerce panel on Monday held a hearing looking at a $300 billion infrastructure package, called the Leading Infrastructure For Tomorrow’s America (LIFT) Act (H.R. 1848), that would invest in climate, broadband, and public health. Part of that legislation would authorize $22.5 billion over the next few years for replacing lead service line in drinking water through the Drinking Water State Revolving Fund.

Last week, House Transportation and Infrastructure Chair Peter DeFazio (D-Ore.) unveiled bipartisan legislation (H.R. 1915) to address the country’s ailing water sector, including authorizing $40 billion over the next five years for the Clean Water State Revolving Fund.

‘Not Child’s Play’

“Infrastructure is not child’s play,” said Dreyfuss-Wells, adding that her organization’s capital budget is about $200 million annually. “This stuff is expensive.” The Northeast Ohio Regional Sewer District has about $1.7 billion in debt, she said, because “we financed this huge capital program to deal with combined sewer overflows.”

“We are going to enact a bold infrastructure package that will have direct investments in upgrading our water infrastructure,” said Rep. Debbie Dingell (D-Mich.) during AMWA’s annual conference last week.

“I think this is water’s moment,” said Radhika Fox, acting assistant administrator for water at the Environmental Protection Agency, at the same event. “I believe that water is really going to a play a key role in this administration.”

AMWA’s conference featured several Republicans and Democrats emphasizing the need for Congress to focus on upgrading water infrastructure. “Bipartisan water infrastructure is a priority for us on EPW,” said Sen. Shelley Moore Capito (W.Va.), the top Republican on the Senate Environment and Public Works Committee, in recorded remarks.

Even though the $350 billion in the American Rescue Plan Act is “phenomenal,” said Dreyfuss-Wells, the competition for that money will be fierce. Several entities, not just water utilities, are eligible for the money within those funds.

Dreyfuss-Wells said she doesn’t know how much of the money coming to Ohio would go to water, drinking water, wastewater, or stormwater. But utilities are ready to deploy those dollars where needed in communities, she said.

To contact the reporter on this story: Kellie Lunney in Washington at klunney@bloombergindustry.com

To contact the editors responsible for this story: Zachary Sherwood at zsherwood@bgov.com; Michaela Ross at mross@bgov.com