Could water utilities transform the way the electric sector did?

A mix of government incentives and regulations revamped the electricity sector. Could a similar approach work for water? Credit: Stocksy/Paul Edmondson

Water utilities nationwide are grappling with aging infrastructure, environmental degradation and climate change.

Existing water systems are also highly centralized and supported by old-fashioned financing models. But what if instead of simply replacing the physical infrastructure and financing mechanisms, the sector reinvented them?

That was the approach California took to its electricity sector in recent decades, a success story that could be adapted to the water industry, according to a paper in Environmental Management. In the paper, Newsha Ajami, director of urban water policy at Stanford’s Water in the West program, and her Stanford colleagues outlined four key elements to a potential plan.

Step one: Water sector leaders must recognize that regulations and market drivers are essential to catalyzing change. For example, electricity utilities in California incorporated renewable energy sources into their systems mainly because regulations required them to do so, and while they were meeting these mandates, technology costs gradually decreased. The researchers see similar potential in the water sector, for example, if policies are enacted that require water utilities to diversify water supply systems or achieve certain water efficiency levels.

Second, they say, water utilities must expand beyond traditional funding sources and rely on a diverse set of public and private funds to implement non-conventional water solutions. As part of this, policymakers and regulators must emulate the electricity sector’s path, enacting policies that enable utilities to fund and finance projects in new ways. This approach could be adapted to the water sector through measures such as stormwater fee programs, tax credits or so-called green bonds, which are specifically earmarked for environmental and climate-related projects.

Third, policymakers, regulators and decision makers must […]

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Could water utilities transform the way the electric sector did?
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Could water utilities transform the way the electric sector did?
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Water utilities nationwide grapple with aging infrastructure and climate change. But instead of replacing infrastructure & financing, can we reinvent them?
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