Realistically Planning to Spend Federal Infrastructure Money

By Joe Crea

The bipartisan Infrastructure Investment and Jobs Act of 2021 (Bipartisan Infrastructure Law or Infrastructure Bill) promises to inject $1.5 trillion across the country to “rebuild America’s roads, bridges and rails, expand access to clean drinking water, ensure every American has access to high-speed internet, tackle the climate crisis, advance environmental justice, and invest in communities that have too often been left behind,” according to the Biden administration. Of this investment, $55 billion will be directed to improve access to clean water by increasing contributions to state revolving loan funds over the next five years, and a large portion of this funding will be awarded as principal forgiveness loans.

With this prospect of billions of dollars of new federal funding for water infrastructure, many utilities will be tempted to rapidly increase planned capital investments. A rapid acceleration in capital spending can be achieved by some utilities, particularly those with outsized consent decree, asset management, or other regulatory-driven needs. However, accelerating the pace of capital spending will be easier said than done for many utilities. It is important that utilities in the latter group understand the importance of realistic capital planning.