- Industry: Energy & Utilities
By: Tommy McClung and Greg Weeks
To build a sustainable water future the White House has released a series of commitments to the industry, and in support of that release, held an interactive Summit on March 22, World Water Day. The Summit covered a number of topics through a series of panel discussions with actions detailed in a commitment memo where institutions and organizations delineated current and projected efforts. These efforts include cross-cutting solutions in the areas of drought resilience, solution pilots, expansion of monitoring and forecasting capabilities, improving information and tools, and raising public awareness and engagement.
For realization of these solutions, the call to arms requires water industry stakeholders from all walks to challenge norms in every aspect of the water business. Utilities, institutions, and manufacturers must challenge everything from sophistication of leadership and management to designing and building technical and operational solution. In doing so, the water industry can take a quantum leap forward by focusing on a long term approach to managing resources, investing in solutions, leveraging innovative technologies, driving conservation, protecting watersheds, raising public awareness, and helping communities in need.
A key question to addressing effective management of water is deciding if it is a national, state, or local resource. Watersheds don’t follow political boundaries. Some, like the Mississippi / Missouri River basin, span a huge geography that impacts numerous states. Managing the flow of this great river has been argued for years between upstream and downstream states. It is operated through a series of dams by the US Army Corps of Engineers, yet the public water supplies and wastewater systems along its course are primarily locally owned. Who should control development of the resource? Fund its development / protection? Where should the controlling law reside? These questions are often debated long before any solutions can even be contemplated. The Great Lakes and Rio Grande River add a multinational component to this complexity. Smaller watersheds and localized aquifers can impact only local geography. Should these be managed the same way?
While the geography and demographics vary widely across the country, the issues often are very similar. Growing populations demand more water. Sources are often limited in quantity or quality, and infrastructure is aging and deteriorating. Extended droughts in much of the country put great pressure on supplies, while flooding in other areas threaten facilities. Buried infrastructure failing at a rapidly expanding rate is causing outages, and damage is driving the need for capital that exceeds financial capacity. These needs are putting pressure on utilities to raise rates, yet innovation and market entries that might drive affordable alternatives lags behind.
A key area where innovation was stressed was financing the tremendous demand for capital to replace aging infrastructure. Developing partnerships between public agencies and private entities, leveraging the capital markets, long term concessions, , regionalization, and making investor capital available to municipal systems all need to be explored and expanded. How is capital being funneled into the water industry to move it forward? Several examples from various sources were delineated in the commitment memo. Examples of public funding include the NSF providing $20 million for research on impacts of extreme water related events and the USDA providing $8.5M to support research into critical water problems. Research funding examples reside at UCLA, UC Berkeley, University of Colorado, University of Notre Dame, University of Illinois, Oklahoma State University, Texas A&M, Kansas State, Emory University, MIT, University of Hawaii, Arizona State University, USC, UC Riverside, George State University, University of Akron and many more. Additionally, private capital examples include $5.5 billion being invested by American Water Company in the next 5 years to improve service reliability and water quality.
These examples of financed efforts are pushing the industry toward solutions that must unite into a common pursuit, where the inertia of innovation will drive perspectives that set the tone for issues of Regional, State, and Community approaches to water sustainability to be addressed. The elements of finance, research, innovation, and philosophy represent a continuum of development that must be bound by water industry stakeholders. Stakeholders must be committed to principles of the greater cause and tie this continuum together to fully realize the vision being set by the White House Water Summit and the commitments set forth.
Commitments across the country such as Alabama Center for Rural enterprise addressing waste water technologies, The Everglades Foundation targeting fresh water innovation, agencies driving innovation for startups such as H2OTech, Imagine H2O, and XPV Water Partners, and regionalized organizations driving change across jurisdictions such as the City of Chicago with a common data platform and American Water investing across their 17 operating companies are setting the continuum in motion. Water industry stakeholders now must step in to propagate the inertia and make possible a unified address of the issues surrounding water sustainability. In stepping forward, stakeholders must challenge industry norms by embracing change and put on their roadmaps actions that propagate this inertia.
In thjs example, imagine the inertia that could be generated by roadmaps where products are being created that allow for affordable entry into intelligent networks and technical platforms that empowered utilities with data. In turn, imagine utilities advancing their capabilities and capacities such that the concepts behind smart utilities could come alive. The White House commitments are a start, but the water industry stakeholders must embrace new entries into the market and expand leadership and financing capacity to drive the continuum of development. The continuum of development in full motion will empower the water industry to take that quantum leap necessary to fully realize the vision set forth by the White House on World Water Day.
To exemplify this point, if stakeholders within each of the elements of the continuum expect cross collaboration and results that are pushing the vision, inertia propagation will take hold and development will begin moving faster and faster as innovation becomes the new norm. The challenge in this thought is that all stakeholders within the elements of the continuum must be actively driving that philosophy. Consider if policy makers do not drive innovation by enabling capital investment decisions, then manufacturers will not be incentivized to break current business models. The same concept applies to funding sources who must expect recipients to deliver results that push the envelope and drive the industry toward the desired state.
So, what is the desired state? Where should authority lie? Where should responsibility lie? How does such a complex set of variables be controlled or pushed toward a common goal? Follow on thought and work streams should seek to answer these questions while each of us as stakeholders in this wonderful industry challenge each other to sustain the inertia of innovation in the water industry.
We here at WMP believe it is critical that water utilities take a leadership role in driving innovation into every aspect of their operations. Ultimately the responsibility falls on the municipalities, districts, and companies that provide safe, quality water reliably every day, to lead innovation in technology and financing in their operations and, more than ever, to lead protection of the watersheds and aquifers that provide this precious resource.
By working closely with legislators and regulators at all levels they can shape an environment that enables them to move forward. It is the utility that understands most fully that watersheds do not conform to political boundaries and need to be managed holistically. Working with federal, state, and local government to collaborate on allocations, watershed monitoring, financing needed improvements, and building public support is critical for the utilities.
Forward looking utilities are starting to use creative financing via public / private partnerships and using investor owned access to the capital markets, working more closely with research both within industry groups and with university outreach, and becoming more politically active to influence regulation. Using these tools to take advantage to improved technology, process improvement, and workforce optimization will keep the water industry where they need to be: providing quality water every minute of every day and protecting the resource for the long term.