Fitch Ratings: U.S. water utilities emerge largely ‘COVID-proof’

Despite increased delinquencies and some bad debts, U.S. water utilities have fared better than originally expected a year after the onset of the coronavirus pandemic, according to Fitch Ratings’ inaugural peer review of the sector.

In fact, most water utilities saw improved revenue growth year-over-year despite the crippling effects of the pandemic on the broader economy, Fitch says.

“Water utilities have proven quite battle-tested between weathering the great recession, natural disasters, and now the coronavirus pandemic,” said Director Julie Seebach. “Increased residential water consumption helped to offset lower revenues from commercial customers while most utilities reacted quickly and scaled back discretionary costs as the pandemic took hold,” said Seebach.

Despite a slight increase in leverage for retail water systems, both retail and wholesale water systems remained very strong. Helping matters is the fact that leverage for water utilities overall has generally declined in each of the last five years, making the slight increase in retail water leverage in 2020 less of a concern.

Additionally, with robust liquidity and current days cash on hand of well over 550 days, water utilities are positioned quite well for the remainder of 2021, as the effects of the pandemic continue to subside and the broader economy flourishes. “The essentiality of water service, autonomous rate-setting and lack of competition are all underpinning strengths of water utilities that position them well in the coming year,” said Seebach.

Fitch’s inaugural “U.S. Water and Sewer: Peer Review” is available at

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