The shareholder-owned private utilities represented by the National Association of Water Companies have been investing in and providing service to their communities for as long as 200 years. Our five largest member companies alone have invested more than $2 billion in water infrastructure across the country in 2011, compared to the approximately $2.5 billion the federal government provided to its principal program for local water infrastructure, the state revolving funds.
Unlike roads, access to a safe and dependable water source is a necessity for life. Yet communities nationwide have been neglecting to provide their local water utilities with the resources necessary to make much-needed upgrades, leaving much of the nation’s water infrastructure in a state of disrepair.
But we can change this by increasing private investment in America’s water infrastructure through a more robust use of public-private partnerships. While more than 2,000 publicly-owned drinking water and wastewater facilities in the U.S. benefit from the operational efficiencies and technological expertise of private water service companies through management contracts, it has been much more difficult to leverage financial private sector participation.
The good news is there are effective tools available to solve this problem. To increase opportunities for communities to bring in private financing for public infrastructure, a bipartisan, bicameral group of national leaders are working together in Congress to remove limitations on tax-exempt private activity bonds. Senators Robert Menendez(D-NJ) and Mike Crapo(R-ID) with Representatives Bill Pascrell(D-NJ) and Geoff Davis(R-NJ) are proposing to make this existing financing tool work better for water projects. If enacted, as much as $5 billion per year in new private capital will flow into local water infrastructure and create or sustain approximately 142,500 jobs.
It’s no wonder that the President’s Jobs Council’s recent report recommends that the U.S. “Leverage and Expand Existing Public-Private Financing Mechanisms to Increase Private Capital for Infrastructure Investment.”
While it’s true that public funds for infrastructure are scarce, innovative ideas are not. State and local governments are creating effective partnerships using private capital and private management for all types of infrastructure. While the federal government may have fewer dollars, it can and should provide more enlightened support through tools such as enhanced use of private activity bonds – and potentially an infrastructure bank – designed specifically to facilitate greater private capital to meet the nation’s critical infrastructure needs.
The status quo is not an option. As infrastructure discussions continue on Capitol Hill, our elected officials should recognize that steps must be taken now for infrastructure to be open for business, or we risk being closed for growth, and that water infrastructure is an essential component to any future proposals. Public service and private enterprise are a powerful combination for moving water forward.
Michael Deane is the executive director of the National Association of Water Companies and is former Associate Assistant Administrator for Water in the U.S. Environmental Protection Agency.