A question raised on the internet last week was whether our current delay in replacing infrastructure was simply delaying the costs for infrastructure to our children and grandchildren? The amount of money we spend on infrastructure today, as a component of GNP, has decreased. That should be troubling for a couple reasons. Just as the economists will tell you that the economy cannot expand at a greater rate than the population grows, the investment to maintain the infrastructure needed to expand that economy should have some relationship to the growth rate. If investments in what makes the economy go are half the rate they used to be, clearly our priorities are elsewhere which portends future expenses to catch up. While it makes a good political sound-bite to cut costs, reduce government, cut funding to infrastructure programs, etc, the reality is that this is akin to the short term profit outlook on Wall Street – it does not plan adequately for the future.
So how does this help utilities? Well, let’s think about your community’s priorities. How many of you have compared your customer’s rates to those of cable television? Or to typical telephone plans? Rarely are the average costs for our customers, typically in the 5000 to 6000 gallons per month range, exceed the typical costs for a family cable or telephone plan. And which one is needed to survive? While the phones are needed for business, and cable is great to have (Game of Thrones is excellent if you have missed it) neither is needed to survive. This is a missed opportunity for the utility industry. It is one where we have been out-marketed, with the potential for huge costs to impact out kids and grandkids, just to maintain the current systems. Many of our central city utility systems were started pre-WWII. WPA was a 1930s program that constructed piping across the US. Expansions occurred in the 1950s as people started migrating to the suburbs, and from the 1960s-today, but the reality is that many people reading this were not alive when the bulk of the piping in the US was constructed. Which makes it “old!”
It is important that the utility industry convey to local officials the need for reinvestment in a system that runs well now, so that it will continue to provide good service. We need to project the long-term program needs. Asset management can help, but we need to plan, inform and market our product. So who out there is doing any of this? What input have you received and are you getting your needed rate increases?