| By Gregory M. Baird
Cities across the United States are struggling with maintaining existing infrastructure with supply chain disruptions and rising costs of equipment, manpower and supplies.
Likewise, developers are faced with many challenges to plan, finance and build basic infrastructure and housing units to allow for cities to continue to grow. If there is existing capacity in source water and treatment facilities, then underground pipe networks for water and sewer services need to be built before the streets, sidewalks and new homes.
Sustainable and Affordable Growth
The building industry and local developers have pressed cities to add or update pipe material specifications in “Developer Guidelines for Water Mains and Sanitary Sewer Systems” in order to reduce the cost of development that can be passed onto a home buyer. The development community wants steady, planned growth with stabilized and known costs. City impact fees, which are one-time payments charged to the property developer to offset the financial impact on public infrastructure due to growth, can range from 5 percent to 20 percent of the total project costs.
As the federal government pumps trillions of dollars into the economy for both COVID-19 recovery, social programs and unprecedented infrastructure funding driving low employment rates, the Federal Reserve now must compensate by raising the federal funds rate to increase the cost of credit and control the supply of money in the country’s economy, effectively cooling or slowing down the economy. Developers putting in the required water distribution, sewer collection systems and reuse or secondary water systems now are having to slow down the above ground building of homes as mortgage interest rates spike and home buying declines.
City finance departments are also having to make severe adjustments to revenue forecasts by reducing growth related incoming revenue. They are also delaying growth-related capital projects and looking for ways to cut operations and maintenance budgets to offset inflationary increases across all departments. Ensuring pipe specifications provide for the use of PVC from the competitive procurement perspective saves utilities money while meeting developers’ requests while trying to achieve affordable housing in both high and low market conditions.
Saratoga Springs, Utah, on the edge of Utah Lake which feeds into the Great Salt Lake, is a scene of new development with PVC water and sewer pipes being installed in all sizes. It’s neighbor, Lehi, Utah, is also using PVC and requires the use of secondary water systems using PVC purple pipes to ensure best water use practices for water conservation on community common areas. PVC pipe materials with the lowest break rates provide for the lowest maintenance costs and help preserve precious water in the west during times of climate impact and drought. Photos courtesy of Greg Baird.
Water Industry Forecasts
Bluefield Research, which monitors the capital plans for 600 water utilities, has reported many trends for the 2.2 million miles of drinking water pipe and 1.8 million miles of wastewater pipe installed across the United States. These pipes vary in material type depending largely on when and where the pipe was installed. In the total inventory of water pipes, 85 percent of water mains are less than 12 in. in diameter. Sixty seven percent of all water mains are 8 in. or less in diameter. These have higher break rates than larger diameter pipes and are the focus of corrosion studies, asset management planning and life cycle cost analysis.
Bluefield’s forecast of “Plastic as the New Iron for Water Utilities” included new and replaced pipe and hardware infrastructure that would make up more than 57 percent of municipal utilities’ total capital spend through 2026. A more recent report has an estimated $104 billion spend through 2030 with a 50-state analysis showing the majority (64 percent) of hardware equipment spend by utilities going towards new growth “greenfield network infrastructure” with the remaining 36 percent allocated to replacement and rehabilitation of existing underground assets. As a result, the use of PVC for water mains continues to expand across all regions of the United States with a special focus on new growth projects.
Water Utility Findings
The increased use of non-metallic pipe for aging infrastructure replacement and new growth is due to new research, pipe performance, durability, and lower overall life cycle costs. While the term “plastic” can generically refer to different pipes, the demonstrated high growth normally refers to PVC water and sewer pipes. When a term such as “newer” plastic materials is used, that more accurately applies to HDPE, whereas PVC has been around since the 1950s and used more widely starting in the 1970s.
A Utah State University water main break study in 2012 and 2018 surveying nearly 300 water utilities produced results with overall water main break rates increasing by 27 percent with the driving factor being failures in asbestos cement (AC) and cast iron (CI) pipes with increases of break rates by more than 40 percent. Lessons learned from recent studies point out that 75 percent of all utilities have some corrosive soils. Utilities with a higher percentage of iron pipe may experience a higher percentage of corrosion related breaks. Analysis of soil corrosivity shows that traditionally, the thickness of the iron pipe wall provided the additional corrosion protection. Cast iron pipes manufactured after World War II have significantly higher failure rates as a result. Cast iron pipe in highly corrosive soil is expected to have more than 20 times the break rate of cast iron pipe in low corrosive soils. Corrosion is an important failure mode for cast iron and is the predominant failure mode for ductile iron pipe, especially for the pipes smaller than 12 in. in diameter.
The studies also found that utility size matters when it comes to managing a pipe network and that PVC has the lowest main break rates across the pipe length categories. It was estimated in 2018 that 91 percent of all the installed water mains in the United States utilized a combination of cast iron at 28 percent, ductile iron at 28 percent, PVC pipe at 22 percent, and asbestos cement at 13 percent. Now, only two materials – ductile iron and PVC – remain as the competing options off the list of historical infrastructure for new installations and replacement. The gap between ductile iron and PVC has continued to close with estimates assuming a near 50/50 split on water distribution system projects. A driving factor has been cost, including an increased maintenance cost for corrosion control and cathodic protection.
Asset Management and Condition Assessment: Practical Tools for Both High Growth & Recessionary Periods
Public works departments manage existing assets, but also need to have new assets that can lower their overall cost of maintenance while providing great performance and longevity. PVC pipe projects have proven to bridge the gap of both new growth and lower life cycle costs and affordability.
Asset management and condition assessment are core components of effective utility management. Every organization needs an asset management plan in order to communicate, manage and adjust service level expectations to achieve community sustainability, balancing cost and affordability.
Condition assessment establishes the current state of assets as a means of prioritizing and forecasting maintenance and rehabilitation efforts. Condition assessment can also help operators understand the level of asset deterioration and its effect on probability and consequence of failure. Asset and infrastructure rehabilitation and replacement planning should include the input of both operations and maintenance to improve design and selection of assets that best perform in the environment while also considering lifecycle costs, new regulatory requirements, public health and community needs.
The reality of the nation’s aging infrastructure dilemma is that we are only beginning to ramp up our efforts to address the planning and cost. Proper installation, inspection and maintenance from the start of an asset’s life is critical to achieve a low life cycle cost. Cities must incorporate all of the best practices and available technologies — including computerized maintenance management systems and other cloud-based and digital solutions — to empower utility staff and ensure city assets are managed in a cost-effective manner.
Greg Baird is president of the Water Finance Research Foundation and a frequent contributor to WF&M. He specializes in long-term water utility planning, infrastructure asset management and capital funding strategies for municipal utilities in the United States. He has served as a municipal finance officer in California and as CFO of Colorado’s third-largest utility.
