A Strategic Assessment of the Future of Water Utilities
Robert C. RENNER
Executive Director
AwwaRF
1. Introduction
In order to characterize and respond to future trends, the Awwa Research
Foundation (AwwaRF) funded a project entitled, “An Update to the Strategic
Assessment of the Future of Water Utilities” in 2004. Efforts focused on thedevelopment of Future Trend Papers, future trends grouped into plausible
scenarios and the development of future strategies. The project included
assembling a group of water utility leaders at a futures workshop.
At the workshop, utility leaders reviewed trend papers, heard futurists, debatedover water utility trends, and identified and ranked approximately 19 trends interms of certainty and desirability. These trends were then grouped into several
potential future scenarios.
The expert workshop was designed to gather the wisdom and expertise of theparticipants by conducting thorough breakout group discussions. The workshop
included 35 water professionals from across the U.S. and 6 project team members
from McGuire Environmental Consultants, Inc., the principal investigator for theproject. The primary objective of the workshop was to develop, through in depth
discussions, ten top future trends and formulate strategies to deal with each trend.
2. Top Trends
The top ten trends that were identified are listed below. A summary of each trends
potential implications, as well as potential coping strategies, are described in thereport.
1.

Energy2.

Drinking Water Industry Employment and Workforce Issues

3.

Political Environment

4.

Regulatory Trends

5.

Population and Demographic Trends

6.

Total Water Management- 253 -7.

Customer Expectations

8.

Information Technology

9.

Utility Finances

10,

Information Security- 254 -A Strategic Assessment of the Future ofWater Utilities

AwwaRF
Mission: Advance the science of water
to improve the quality of life

Rob Renner•– Sponsor research– Develop knowledge– Promote collaboration

Awwa ResearchFoundation••

A Strategic Assessment of the Future ofWater Utilities
Top Ten Trends
1. Population

6. Workforce Issues

2. Political Environment

7. Technology

3. Financial Constraints

8. Energy

4. Total Water Management

9. Increasing Risk

5. Customer Expectations

10. Regulations

Centralized research program for drinking waterutilities

Agenda is planned and guided by drinking waterutilities
Research covers a broad range of topics
including source water, treatment, infrastructure,and management for drinking water utilities

Population GrowthU.S. population steady increase over the past 40years
Expected to maintain that rate into the next century
with the South & West experiencing greatest growth.

Strategies address this trend: Integrated resources planning using scenarios &contingencies.
 Become involved in watersheds.
 Communicate with consumers.
 Stake out position on development?

Population: New Demographics

Population: Regional Growth Globally, # of persons>60 yrs is ~600M in
1999, and projects to ~2Bby 2050.
 The # of older persons
will be larger than the #of children (0(0-14) for thefirst time.

U.S. Population Projections

2000 – 282,125,000

 People are now living
20 years longer

2030 – 363,584,000b
Source: The Reporter, June 1999

Political Environment

Finance: Utility Constraints

The political environment is grows complex.
There is a surge in NGOs that will play a greaterrole in public policy decisions. Public
participation will play a larger role. Term limits
in many communities require greater outreach.

The challenges of replacing and repairing
infrastructure will strain many systems.
Doubling to tripling of rates over next 20 yrs.
Rising rates will require “costcost-containment”containment”.
Labor unrest potential.

Strategies to address this trend: Develop & maintain state of the art communications.
 Documentation of financial & capital improvement
plans to improve transparency.
 Develop communicators & processes Leverage NGOs & relationships

Strategies to address this trend: Documentation of infrastructure & rate needs.
 Communication to stakeholders.
 Optimize utility efficiency.

- 255 -Total Water Management: GlobalWarming - Intergovernmental Panel on
Climate Change

Total Water Management
Water utilities will need to increasingly
consider broader policy impacts on theirwater sources.

• Projects global temp increase from 1.4 5.8°
5.8°C from 19901990-2100.

Strategies to address this trend:• Widely varying regional responses,• Precipitation expected to increase in N.
midmid-high latitudes• Glaciers/iceGlaciers/ice-caps continue to retreat.
• 3°C melts the 1.8 mile thick Greenland Ice

 Documentation of infrastructure & rate needs.
 Communication to stakeholders.

Cap raising - oceans rise by average 7
meters w/in 1000 years (Nature, 2004).

 Optimize utility efficiency.

Total Water Management : Water Use
Trends by Category, 19501950-2000

Total Water Management: Alternative
Water Sources

Public water use isincreasing

Expansion of alternative
supply use: Desalting Recycling Conjunctive Use Conservation

Source: USGS, March 2004

Impairment is widespread• Use of “marginal”
marginal” supplies (cost& quality) growing• Membrane costs dropping &energy efficiency improving• Real & perceived quality issues• Water/Growth: chicken or egg?
• 1950 seawater desalting US$4/kL;
now ~US$0.65/kL• Residuals disposal issues grow

USEPA 2004

10.0

Customer Expectations
Bottled Water Sales Figures per Beverage Marketing Corp.

9.0

Customer Expectations

Bottled water sales haverisen about 8.0% per year
since 1993

5.0
3.0

Strategies to address this trend:

2005–2005–$9.8B
Projected

4.0$Billion

6.0

7.0

8.0

Customer service can be improved.
Understanding customer needs, desires, andbest methods of communication will help
ensure there is never a disconnect between
the customer and the utility.

1.0

2.0

 Use statestate-of –thethe-art outreach methods tounderstand & frame interactions
 Provide governing bodies consumer info

• 5.1 → 18.2 gal/capita 19851985-2000

1984

2000

2003

Workforce Issues: Education Levels

Workforce Issues

Achievement on the Natl. Assessment of Educational Progress
2000 Math Exam
Only 19% of 12th graders scored high enough o be considered“proficient”
proficient” or better.

There are significant changes occurring in
the workforce including retirement,
education, increased technology, conflicting
generational values, ethnicity and gender.
Strategies to address this trend:

40%

Below Basic

30%

Basic (demonstrated“partial mastery” of mathknowledge and skills)
Proficient (demonstrated“solid” academicperformance”

20%

 Understand generational & workforce differences& needs of employees.
 Provide workforce flexibility.
 Conduct more training programs.
 Develop apprenticeship programs.

10%

Advanced

0%
Grade 4

- 256 -Grade 8

Grade 13

Source: Wall Street Journal,
August 3, 2001

Workforce Issues: The Brain Drain

Technology
Technology is rapidly evolving. Its becoming
smaller, cheaper and disposable.
disposable. This trend
will continue. OnOn-line monitoring will become
the norm.

More than 40% or U.S. labor
Force will reach retirement age
by the end of this decade.
More than half of electric utility
Workers will be eligible w/in 5 yrs# of workers between 35 and 44
is expected to shrink by 7%

Drinking Water Treatment Technologies

Energy Multiple drivers pushing new

Energy and reliability will become a major
issue for utilities. Petroleum based energy
will give way to other forms within 20-40years. Alternative fuels will become thenorm.

treatment techs.
- Need to seek additional source water.
- Impaired/degraded sources- Increased demand- New/future SDWA regulations.
- Emerging contaminants.

Strategies to address this trend:- Consumer demands.

 Develop an energy plan for each utility.

 Major residuals handling issues loom

 Aggressive energy conservation.
 Assess backup energy needs & availability.

Increasing Risk Profile

Regulations

Utility risk issues (e.g. IT, physical security,and litigation) are increasing.

Regulations will continue to challenge waterutilities. These regulations will impart fear in thepublic and are likely to increase sales of bottled
water and POU devices.

Strategies to address this trend: Assess internal capability and needs.

Strategies to address this trend: Outsource functions where appropriate.

 Develop clear compliance cost info for stakeholders.

 Develop specific risk management policies.

 Early engagement in regulatory/legislative process.
 Understand where public stands on issues.
 Fund and develop alternative regulatory paradigm.

Technology: Drinking Water Regs

• Stage 2 DBPR
• LT2ESWTR• Distribution Rule?
• On-line MonitoringThe EndThank You

EPA Regulated Contaminants

2006

2002

2004

1998

1996

pg/L molecular levels?
2000

1994

1992

ng/L
1988

µg/L

1976
1978
1980
1982

01990

40
20mg/L

1986

80
60

Range ofPossible
Future
Total
Additions

New
Radionuclides
Microbes
Organics
Inorganics

1984

140
120
100

Source: US EPA- 257 -