opinions+water: Texas Water Utilities Provide a Snapshot of Financial Conditions and Prospects for Addressing Texas Water Infrastructure Needs in 2021 and 2022

opinions+water: Texas Water Utilities Provide a Snapshot of Financial Conditions and Prospects for Addressing Texas Water Infrastructure Needs in 2021 and 2022

Recently, Water Opinions LLC teamed up with the Texas Water Infrastructure Network (TXWIN) for the second annual assessment of current and future Texas water infrastructure projects, financing, and other issues facing Texas water utilities. TXWIN distributed the survey to its members and recruited the Texas Section of the American Water Works Association, Texas Water Conservation Association, the Water Environment Association of Texas, the Texas Water Utilities Association, and the Texas Rural Water Association to distribute the survey to their members as well.

“79% of respondents are still concerned that the reliability of the Texas energy grid could impact their operations.”

In summary, the survey found that Texas water utilities are moving forward with new water infrastructure projects, primarily to address aging infrastructure. However, Texas water utilities are hoping to reap the benefits of new federal infrastructure funding under consideration, while navigating the primary threats of maintaining their workforce, dealing with increased construction costs, and the uncertainly regarding the reliability of the Texas energy gird.

Looking at the specific results, with Winter Storm Uri and the 87th Texas Legislature in their rearview mirrors, 79% of respondents are still concerned that the reliability of the Texas energy grid could impact their operations. Despite some concerns about revenue declines, a substantial majority of respondents, 72%, are currently building, bidding, or preparing to bid new capital projects. The respondents ranked the need to replace aging infrastructure as the top driver for new capital projects, while the need to meet future demand based upon population projections ranked as the second most significant driver of new capital projects. Climate change ranked last out of six drivers for new water infrastructure projects, while later in the survey, 42% of respondents indicated they are concerned about the impact of climate change on their operations.

“A substantial majority of respondents, 72%, are currently building, bidding, or preparing to bid new capital projects.”

Some 40% are currently using state or federal financing for their water infrastructure projects. However, if additional federal water infrastructure funds, such as those contemplated in the federal ‘stimulus’ measures or COVID relief funds, become available, 94% will consider using those funds. Some 71% indicated that if they turn down state or federal funding it would most likely be because there are too many regulatory requirements with the use of those funds. Some 91% are either concerned about or experiencing increased construction costs due to market conditions and the availability of material and equipment for capital construction projects, while 73% are presently concerned about the ability to maintain their current or future workforce.

“[I]f additional federal water infrastructure funds, such as those contemplated in the federal ‘stimulus’ measures or COVID relief funds, become available, 94% will consider using those funds.”

91% are either concerned about or experiencing increased construction costs due to market conditions and availability of material and equipment for capital construction projects, while 73% were presently concerned about the ability to maintain their current or future workforce.”

The 2021 Texas Water Capital Needs Survey found that 40% of the respondents are currently experiencing revenues declines. If future cuts are required to address revenue declines, 60% of respondents intend to cut capital programs, while 21% would opt to cut public relations and public advocacy programs, 18% indicated that operations and maintenance would be cut, and 17% would opt for reductions in staff to offset revenue declines. Finally, 68% of respondents believe that water infrastructure is not being adequately prioritized as an essential means to ensure public health, safety, and economic stability in Texas, which represents an increase from 58% who answered this question in the 2020 survey.

TXWIN enlisted the assistance of Water Opinions LLC (wateropinions.org) to develop the original Texas Water Capital Needs Survey in 2020 (click here for the 2020 survey results). The 2021 Texas Water Capital Needs Survey was expanded from the original 12 survey questions to 25 questions (click here for the 2021 survey results or view below). As in 2020, all responses collected in 2021 were anonymous. As a result, 254 survey responses were registered between August 5 and August 20.

 

Complete 2021 Survey Results