October 2021 Vol. 76 No. 10
Features
Inside Infrastructure: 2021 Shaping Up to be Landmark Year for Utility Construction
EDITOR’S NOTE
Eben Wyman is a veteran advocate for key underground utility and pipeline associations. He points out that maintaining an effective advocacy program is fundamental to the success of any organization interested in the happenings of the federal government.
Zack Perconti is an associate with the firm. Together, they will produce a bi-monthly article for Underground Construction providing keen insight related to laws, rules and regulations that directly impact the underground infrastructure markets.
It has become somewhat laughable when lawmakers and lobbyists use the term “Infrastructure Week.” Proposals to increase investments in American infrastructure have been the talk of the town in your Nation’s Capital for years. Both the Trump and the Biden Administrations have referred to infrastructure legislation as a high priority, but it seems that this year, things are lining up in the right way.
In July, the House of Representatives passed the $715-billion INVEST in America Act, largely along party lines. Also, after months of behind-the-scenes negotiations, the Senate passed a $1.2-trillion Bipartisan Infrastructure Framework bill followed by a $3.5-trillion partisan budget “reconciliation,” just before leaving town for the August recess.
While at the time this article was written, fierce debate was expected on a range of issues, the prospects for passing a comprehensive infrastructure package were stronger than they have been in years. Advocates engaged in underground utility markets were finally looking at significant investment in markets that were often considered “out of sight, out of mind.”
The bipartisan infrastructure bill authorizes $550 billion
in new spending for water and wastewater systems, broadband deployment, and surface transportation infrastructure, including:
- $55 billion for water and wastewater projects
- $65 billion for broadband deployment
- $65 billion to strengthen the power grid
- $110 billion for highways, roads and bridges
- $66 billion for rail
- $39 billion for public transit
- $25 billion for airports
- $47 billion for cybersecurity and climate change mitigation
The legislation would also spur investment in electric vehicle charging stations and encourage a transition to electric school buses, which are major priorities for the Biden Administration and its goal to transform the American economy to net-zero emissions. Importantly, the legislation also provided resources for carbon capture, use and storage, as well as for increased use of hydrogen, both of which will require significant pipeline construction work.
Let’s take a look at what’s on the table for utility construction.
Drinking water
The bill authorizes $14.7 billion from fiscal year (FY) 2022 through 2026 for the Environmental Protection Agency’s (EPA) Drinking Water State Revolving Fund (SRF) program that provides capitalization grants to states for loans supporting water drinking water infrastructure projects. It also extends the EPA grant program that supports replacement of lead water lines by five years (through FY 2026), while increasing annual authorization from $60 million to $100 million.
The measure includes $200 million over five years to reduce lead contamination in school drinking water and provides increases in compliance assistance grants – from $70 million in 2022, to $140 million by 2026 – to public water systems in small and disadvantaged communities. In addition, the bill would authorize $50 million annually, through 2026, for a pilot program to award competitive grants to states to implement improvements to water systems, with priority for states with a high proportion of underserved communities.
Another $50 million in grants for leak detection, repair and monitoring in small public and nonprofit water systems is also part of the water infrastructure language, as well as $50 million per year for larger systems to improve the resilience and sustainability of their infrastructure.
Wastewater
Like the Drinking Water SRF, the bill authorizes $14.7 billion, from 2022 through 2026, for EPA’s Clean Water SRF program, which provides capitalization grants to states for loans supporting water quality improvement projects.
The bill also authorizes $280 million annually, from 2022 to 2026, in grants to states to support municipal planning and construction of projects that address combined sewer overflows, including systems to notify the public when untreated overflows are released into waterways. At least 25 percent of grant funding in each state would have to be allocated to projects in rural or financially distressed communities, if there are enough eligible project applications, with at least 60 percent of that allocation dedicated to rural areas.
The legislation authorizes $75 million annually through 2026 in research grants to address water pollution and training at water treatment works. The current $25-million-per-year authorization runs through FY 2023. At least $50 million per year would be for grants to nonprofits supporting small, rural and tribal water treatment operations.
Finally, the measure would extend the annual $50-million authorization for the Water Infrastructure Finance and Innovation Act (WIFIA) loan program through FY 2026. WIFIA is a popular, but woefully underfunded, financing program intended to help pay for larger water/sewer projects, allowing traditional SRFs to help fund other needed projects across the country.
Importantly, $55.4 billion in “supplemental emergency appropriations” for state and tribal assistance grants, including capitalization grants through the Drinking Water and Clean Water SRFs, are provided specified activities for FY 2022 through 2026, including:
- $15 billion to replace lead service lines
- $5 billion to support disadvantaged communities impacted by emerging contaminants
- $4 billion to focus on polyfluoroalkyl substance contaminants
The measure would also provide $8.3 billion for the water and related resources activities, with $3.2 billion being set aside for aging infrastructure overseen by the U.S. Bureau of Reclamation.
Needed funding
EPA estimates that $271 billion and $473 billion will be needed for wastewater/stormwater and drinking water infrastructure, respectively. Seeing how federal spending has traditionally accounted for a meager 4 percent of all spending on America’s environmental infrastructure, and that hundreds of billions of dollars are sorely needed, the funding provided in the infrastructure package is long overdue and would be a sound investment in critical American assets.
Our underground water and sewer infrastructure ensures that Americans have access to clean drinking water and safe, sanitary wastewater systems, and helps to keep our economy moving. Investments in this infrastructure enhance public health and environmental protection, but also create high-paying jobs, generate significant economic activity and expand the local tax base.
In fact, a study sponsored, in large part by the National Utility Contractors Association, indicates that every $1 billion invested in water and wastewater infrastructure creates up to 28,000 new jobs, with average annual earnings of more than $50,000, and increases demand for products and services in other industries by more than $3 billion.
Lawmakers are even upping their game in annual SRF appropriations. In a “minibus” package passed earlier this year, congressional appropriators approved $1.9 billion for the Clean Water SRF (a 14-percent increase) and $1.4 billion (a 21-percent increase) for the Drinking Water SRF.
Let’s get this done
The federal government clearly has an important role to play in improving American infrastructure. Future articles will address other underground markets that would benefit, and this year, there’s lots to talk about.
Sound investments to deploy broadband and harden the electric grid are prime examples, and utilities and the contractors who work for them will all benefit, while the industry does its part to help the country climb out of a global pandemic that once seemed to doom the American economy. At the same time, we’re making sure that shortsighted policies that would restrict the use or access to natural gas are eliminated or mitigated, as much as possible.
This column will take a deep dive in all of these markets and the needed investments made by our nation’s policymakers. We wanted to start with a focus on critical water and wastewater infrastructure markets and the potential for Congress to finally step up and increase investments in our environmental infrastructure. •
WYMAN ASSOCIATES offers strategic consulting with its clients and direct advocacy before the United States Congress and executive branch agencies. Working with several allies in Washington and around the country, provides clients a constant voice in the national debate.
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