4 ways Covid-19 is impacting the US water sector
Water thrusted into unchartered territory
As Covid-19 wreaks havoc on national healthcare systems and economies, water and wastewater providers have been thrust into uncharted territory.
The municipal water sector is predicted to be affected “long beyond” the current healthcare crisis, with the short-term impacts catalysing new approaches to urban resilience.
That’s according to a new white paper from Bluefield Research, entitled: Covid-19 Water Industry Impact: Navigating towards Resiliency.
The Bluefield team believes the areas most likely to be impacted by the current pandemic include: capital and operating expenditures; workforce management; affordability; customer communications and resilience planning.
"The Covid-19 pandemic is both a massive near-term threat, and a long-term opportunity for the water sector,” said Keith Hays, co-founder and vice president of Bluefield Research.
He told Aquatech Online: “In the near term, municipal utilities are suffering the cumulative impact of local economies freezing, demand patterns shifting massively overnight, and limited personnel to manage operations. This calls for enhanced remote management, emergency response, and restructuring of operating budgets.”
Aquatech Online has summarised the white paper down to four key highlights, detailed below.
Anticipating revenue reductions
Accelerating the digital buildout
Push to improve communications
The global economy, let alone the US economy “almost overnight” snowballed into an all-out freeze on non-essential economic activity, the whitepaper said.
In the second quarter of 2020, the gross domestic product (GDP) in the US is anticipated to decline 20 per cent.
Commenting on how this would affect municipal operating budgets, Bluefield said “state and municipal governments will be squeezed further as their key revenue sources disintegrated seemingly overnight, thereby increasing pressure on community water financing”.
For solution providers and engineering consultancies, there could be a major hit to corporate earnings, downsizings and even “bankruptcies for smaller, venture-dependent organizations on discretionary budgets”.
Water, and other major utilities such as telecom and power workforces have “morphed overnight”, with entire sectors shifting to telecommuting models.
As a result, network operators and their emergency protocols, asset redundancy and remote management are automation efforts are being tested, the whitepaper said.
Bluefield said digitally mature utilities who have previously made the investment before Covid-19 will be seeing the benefits now.
“Utilities that have already invested heavily in remote monitoring and digital asset management will likely see more immediate benefits from a resiliency perspective.”
Meanwhile, for “most” utilities it is too late “rapidly transition” to significant operational control of their assets in the next three months, said Bluefield.
Despite the digital acceleration, there is still a significant proportion of utility workforces needing to perform functions on site: at least 1.25 million workers.
And employees working on site account for more than 70 per cent of “industry personnel at greater risk of coronavirus exposure”, said Bluefield.
To address this, water companies are increasing cleaning, rotating teams and implementing social distancing.
This echoed a recent member surveyed from the American Water Works Association (AWWA) that showed the top concern was “Absenteeism/continuity of operations”.
Prior to the Covid-19 crisis, water bill affordability was already a major challenge for water utilities.
Bluefield estimates that if rate trends continue, 36 per cent of households won’t be able to afford water within the next five years, let alone at the end of the downturn.
This compares to only 21 per cent of US utilities who said they can fully cover costs and services.
In the US, more than 100 utilities in over 30 states agreed that during the coronavirus crisis they would halt the practice of cutting off water to homes that fail to pay their water bills.
However, the question remains for how long this can continue? The white paper said moving forward, the key will be “leveraging innovation to do more with less”.
“This includes insight-driven solutions to optimise billing rates and structure, moderate rate changes, and equitably address the infrastructure investment gap.”
The white paper referenced “distrust and actions” among customers as a result of utilities’ inability to “educate its customers on the quality and value-added services”.
As a result, consumers continue to flock to supermarkets to “hoard bottled water and toilet paper”, putting to the test water utilities’ communication strategies.
Bluefield said effectively communicating the quality and value of their services was already a challenging task for municipal water utilities; this has become even more pressing.
Furthermore, a shift to “disposable wipes” in light of early toilet paper shortages was referenced by the researchers as exacerbating sewer blockages which even under normal circumstances “is an expensive repair”.
Hays added: “Long term, the pandemic offers an opportunity to improve resilience through digitalisation, which will strengthen both emergency response capabilities, and day-to-day operations.”
- To download the complimentary white paper, click here.
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