Utility Revenue Challenges

The economic havoc created by covid-19 is likely to be with us for year.  State and local revenues will take years to rebound.  Normally the water industry would seem to be less impacted than state and local tax bases because the people are still here.  But let’s take a look at how utilities might be impacted by the covid19 pandemic.  Those utilities that are primarily residential may see lesser impacts that urban, economic communities, but the we should expect impacts.  AWWA estimates the loss could be $33 billion and put up to 90,000 private sector jobs that serve these utilities at risk.  The question is whether this will be spread-out across all utilities to impacting certain ones more than others.  Already central Florida is seeing a slowdown of construction activity with 30,000 jobs lost. 

But people do want their utilities protected and funded.  recent Value of Water Campaign noted that 84 percent of American want more investment in water.  The HEROS Act approved by the US House of Representatives would help provide funding to state and local communities who have suffered losses, although the US Senate has steadfastly refused to discuss the proposed $1 trillion in funding that is earmarked for states and local governments.  The House has also proposed $1.5 billion for helping people pay their water bills.  A potential infrastructure bill might provide some help in this arena – the US House has proposed $2.2. trillion for infrastructure – communications, as well as water/wastewater funding would be part of this funding.  Economists note the payback in economic activity is at least 1.57:1.   And another bill for $50 billion over 5 years for clean water has been proposed.  Whether that comes via WIFIA’s proposed $6 billion is unclear.  The US Senate has proposed $17 billion for AWIA funding, a far cry from the $2.2 trillion prior infrastructure bill and the needs projected.  But perhaps a start.  Stay tuned.