Colorado Needs $2.2 Billion for Wastewater Upgrades

Federal funding to help pay for new treatment facilities is declining.One of the best-kept secrets in America is that the pipes and plants that provide us with clean water are falling apart. Colorado is facing a fast-growing burden on its wastewater infrastructure, with needs of about $2.2 billion, according to the U.S. Environmental Protection Agency.

EPA on Wednesday (Jan. 16) released its report to Congress, the Clean Watershed Needs Survey 2004. Between the last report in 2000 and this one, Colorado was one of six states that saw its needs in water quality infrastructure grow by more than 50 percent. Much of this growing need was in small communities – totaling $158 million, according to EPA estimates.

EPA looked at eight categories of needs in wastewater treatment and collection and storm water treatment. Nationwide it found that investment needed to address wastewater and stormwater issues totaled $202.5 billion.

Colorado’s portion of this is about $2.2 billion, which is an increase of more than 50 percent from the 2000 report. According to Donna Davis, unit manager for EPA’s outreach and project assistance unit in Colorado, the dramatic increase is partly the result of a more thorough survey, and partly the result of a steadily aging system.

The main federal funding mechanism for infrastructure improvements – apart from having ratepayers pay for them directly – is a federal “revolving fund” that provides low-interest loans for infrastructure improvements.

In 2004, Colorado got $10 million from this program. It has been cut substantially by the Bush administration, and the state will doubtless get less in 2008.

EPA’s Davis says that a lot of Colorado’s wastewater infrastructure was built in the 1960s and 1970s under a federal program that provided construction grants. Many of these facilities are now aging. Plants and distribution lines have to be replaced:

“We’re not going to be able to provide funding for all the needs that there are out there. The funding we provide are loans at a reduced interest rate, about 20 percent below market rates. That subsidy won’t be available to a lot of communities that need it.”

Davis also said that the 2004 survey of water treatment infrastructure was undertaken before the oil and gas boom had really hit in western Colorado. Population growth in small Colorado towns will probably increase the burden of paying of clean water in small towns.

In 2002, EPA produced a “Gap Report” that examined the need for water infrastructure upgrades against the funds available to pay for needed upgrades. They found that, depending upon the assumptions one makes about the future, “capital needs for clean water from 2000 to 2019 range from $331 billion to $450 billion.” The mid-range estimate was $388 billion.

In addition, “Estimates of capital needs for drinking water over the twenty-year period range from $154 billion to $446 billion.” The mid-range estimate was $274 billion. In addition to capital construction, operation and maintenance is expected to cost between $72 billion and $229 billion, with a mid-range estimate of $148 billion.

Current federal capital spending for clean water is about $13 billion a year; for drinking water, $10.4 billion a year.

“A third of Americans now drink their water out of bottles,” says Gretchen Daily, a Stanford University biology professor. “That tells you something. There have been nationwide declines  in water quality. The good thing is that there are a lot of opportunities for win-win investments in natural capital where paying to protect it costs much less than trying to provide the benefits of it another way — like through bottled water.” 

Tracy Mehan, former assistant administrator for water at EPA, says, “We’re going to see some increasing problems in not keeping up with population and economic growth, increasing levels of traditional kinds of pollution. If you freeze the frame now, we’re okay. But these things are aging.”

As Mehan notes, the U.S. has among the lowest water user rates in the world. “The average American pays more for soft drinks, than for water and wastewater charges on an annual basis,” he says. “The Congressional Budget Office once claimed that, even if you paid for the entire infrastructure `gap’ through rate increases, that same household would be paying less than one percent of average household income.”

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Dan Whipple

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