6 Issues Facing Water Utilities

6 Issues Facing Water Utilities

As we approach the midpoint of 2018, here are some of the top challenges West Monroe sees in the water industry. Water utility leaders continue to face issues produced by years of underinvestment — aged infrastructure, highly-public water crises, and unmet customer service expectations. Furthermore, as water utilities introduce new technology to address these issues, there are increasing cybersecurity threats and needs. This is all happening at a time when customers have become more water-conscious, and water conservation has reduced revenue for water utilities and forced changes in rate design.

  1. Aging Infrastructure and Extreme Weather Events
    The American Water Works Association (AWWA) estimates that $1 trillion investment will be needed to replace aging water utility infrastructure over the next 25 years, and that number could increase to $1.7 trillion by 2050. Much of our water infrastructure has exceeded its useful life, and our water systems require significant repairs and upgrades to improve resiliency against climate change and extreme weather events. This is coupled with uncertainty about who will pay for these vital investments.
  1. Highly-Public Water Crises and Increased Attention on Water
    A number of water crises have been publicized in national media in the past few years, elevating attention on water utility operations nationwide, and eroding customer confidence in water treatment:Flint, Michigan: Water was not treated with an anti-corrosive agent, so iron pipes eroded and lead from service lines leached into the water supply.Charleston, West Virginia: A chemical spill occurred upstream of a water treatment plant, and crude MCHM (a chemical used to wash coal and remove impurities) contaminated the water system.Tampa, Florida: A massive sinkhole under a fertilizer plant dumped 215 million gallons of contaminated water into the Floridian Aquifer; nearby residents were not notified for weeks.
  1. Higher Customer Service Expectations
    Historically, the water utility industry has placed minimal emphasis on customer service – oftentimes referring to customers as “ratepayers”. Customers today expect the same level of customer service from their water utility that they are provided by other industries. This is changing the way water utilities operate their call centers, schedule customer appointments, design their customer portals, and communicate information about water service.
  1. Billing Accuracy
    Many water utilities have been in the media for billing accuracy issues in the past year, including Phoenix AZ, San Diego, CA, and Austin, TX. Manual meter reading is error-prone, and as utilities introduce new metering programs, the risk of issuing inaccurate bills and receiving unwanted customer attention increases. Once implemented, advanced metering infrastructure (AMI) provides granular detail on water consumption patterns and improves billing accuracy – but water utilities have also run into issues on these programs due to billing system errors during deployment.
  1. Data Access and Security
    The implementation of new technologies also brings security concerns. As sensors proliferate across water delivery networks, new strategies, and technologies are needed to manage the convergence of information technology (IT) and operational technology (OT). Data must be accessible and actionable to the right parties, and fully secure from malicious actors. Water utilities are using more automation, sensors, and devices in their water systems than ever before — and must undertake cybersecurity measures to keep water systems safe from external threats.
  1. Water Scarcity and Conservation
    While specific water challenges are different in every region, water conservation is growing in the public consciousness. Media attention on the extreme droughts and water scarcity in California, Cape Town, and Mexico City has elevated the international dialogue about protecting and conserving water resources. Water utilities are well positioned to lead water conservation efforts, as customer awareness of water scarcity is at an all-time high – and customers have a higher appreciation for the value of reliable and safe water service. As customers use less water, however, some utilities have seen a reduction in revenue – which is forcing a shift in rate design. Where water conservation has become the norm, water utilities are shifting rates from an emphasis on volumetric charges to fixed fees – increasing revenue predictability for the utility.

What additional challenges is your water utility facing?

Phone: 312-602-4000
Email: marketing@westmonroepartners.com
222 W. Adams
Chicago, IL 60606
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