Report: Private Water Poised to Bridge $500 Billion in Investment Gap

Private water markets in the United States are poised for significant growth, according to a new report from Bluefield Research. With an infrastructure investment gap of more than $500 billion for drinking water and wastewater treatment over the next 20 years, a revised regulatory landscape is shaping new opportunities for private players looking to invest strategically in U.S. water.

A major step forward for the market came on June 10, 2014 when President Obama signed the Water Resources Reform and Development Act (WRRDA) into federal law. WRRDA aims to alleviate investment gridlock, which has plagued U.S. water infrastructure over the past 25 years. A series of private water-friendly proposals accompanies WRRDA, including the creation of a federal water authority, removal of caps on private water bonds, and guidelines for public-private partnership (PPP) legislation to support municipalities? financing upgrades and optimizing management of their water networks.

Currently, private water suppliers operate in a hyper-fragmented U.S. market that contains more than 100,000 systems. Privately-owned water supply networks serve 15 percent of the U.S. population. This market structure has challenged companies to realize economies of scale and capture synergies across asset portfolios. However, Bluefield analyzes how a diverse set of strategies- ranging from greenfield development by independent water suppliers to pursuing the investor-owned utility (IOU) model through acquisitions- is helping companies enter and grow in the United States.

The report, which analyzes the private water ownership opportunities in the United States, highlights the following:

  • Federal- and state-level policy affecting infrastructure grants, public-private partnerships and rate cases.
  • Private water ownership across key state markets.
  • Opportunities in public-private partnership models in U.S.
  • Private water company strategies and M&A, project development initiatives.
  • Investor-owned utility (IOU) asset portfolios and growth strategies.

State Regulation and Markets Analyzed: Arizona;?California;?Connecticut;?Delaware;?Idaho;?Illinois; Indiana; Michigan; Missouri; North Carolina; New Jersey; New Mexico; New York; Ohio; Pennsylvania; Texas; Virginia; and Wisconsin.
Private Water Companies?Analyzed:?American Water;?American States Water; Aqua America; Aquarion Group;?Artesian Resources; California Water Service; Connecticut Water; Corix Utilities; EPCOR; Great Oaks Water; Johnson Utilities; KKR; Macquarie Capital; Middlesex Water; Park Water; San Gabriel Valley Water; San Jose Water; Southwest Water; Table Rock Capital; United Water; Utilities, Inc.; and York Water.

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