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Where Valves Are Used: Everywhere!

Where Valves Are Used: Everywhere!

Valves can be found just about anywhere ...

Oxygen Cleaning: A Validated Process is Critical for Safety

Oxygen Cleaning: A Validated Process is Critical for Safety

From time to time, we re-publish well-re...

Inspiration and Automation: Keys to Best-in-Class Operations

Inspiration and Automation: Keys to Best-in-Class Operations

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Industry Headlines

Emerson Opens Solutions Center in Singapore

Friday, 17 November 2017  |  Chris Guy

As part of its drive to make Singapore a hub for the delivery of Industrial Internet of Things (IoT) technologies and services for customers across As...

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Industry Headlines

Emerson Opens Solutions Center in Singapore

2 DAYS AGO

As part of its drive to make Singapore a hub for the delivery of Industrial Internet of Things (IoT) technologies and services for customers across Asia Pacific, Emerson opened a customer-focused Solutions Center at the regional headquarters of its Automation Solutions business in Singapore. To mark...

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Emerson Proposes to Acquire Rockwell Automation

3 DAYS AGO

Emerson chairman and CEO David N. Farr has sent a letter to Rockwell Automation president and CEO Blake D. Moret proposing to acquire all outstanding shares of Rockwell for $225 per share, consisting of $135 per share in cash and $90 per share in Emerson shares. The total enterprise value of the tra...

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Energy Outlook Shows a World in Transformation

5 DAYS AGO

The resurgence in oil and gas production from the United States, deep declines in the cost of renewables and growing electrification are changing the face of the global energy system and upending traditional ways of meeting energy demand, according to the World Energy Outlook 2017 . A cleaner and more...

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U.S. Shale Output Expected to Rise Again in December

5 DAYS AGO

“U.S. shale production for December is expected to rise for a 12th consecutive month,” according to the Energy Information Administration (EIA), “as oil prices remain near their mid-2015 highs.”

Reuters reports that “projected gas output would increase in each of the major...

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U.S. Industrial Output Up 0.9% in October

2 DAYS AGO

Industrial production rose 0.9% in October, and manufacturing increased 1.3%. The index for utilities rose 2.0%, but mining output fell 1.3%, as Hurricane Nate caused a sharp but short-lived decline in oil and gas drilling and extraction. Even so, industrial activity was boosted in October by a return...

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Empire State Manufacturing Survey Shows Continued Growth

3 DAYS AGO

Business activity continued to grow strongly in New York State, according to firms responding to the November 2017 Empire State Manufacturing Survey. Though the headline general business conditions index fell eleven points from the multiyear high it reached last month, it remained firmly in positive ...

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Making Progress On Improving Our Aging Water Infrastructure

spr11_watermain_break_photo.jpg

The nation’s utilities are employing rate increases, technology and other tools to maintain and, in some cases, upgrade or replace, our water infrastructure.

The frequency of water leaks and main breaks occurring across the U.S. is increasing at a steep rate as years of unchecked deterioration take their toll on a water infrastructure that, in places, dates back to the second half of the 19th century. Utilities and state and federal agencies are well aware of this growing dilemma. However, the unusually high number of devastating main breaks is significantly increasing public awareness of the dire condition of the country’s water system.

In February 2011, news outlets across the country reported that Kansas City, MO, experienced 467 main breaks this winter alone—a 73% increase in the number of breaks the city experienced during the winter of 2010. Montgomery and Prince George’s County, MD, which deliver water to 1.8 million people, also made news headlines for breaks in their water systems. According to one article, both counties set a record in December 2010 for having the largest number of water main breaks in a single month—647. The following month, Prince George’s County experienced a 54-inch water main break that damaged nearby businesses and leaked an estimated 50 million gallons of water.

While municipal spending on water systems is taking place, much of it is for emergency repair, and it is not nearly enough to cover the estimated spending gap for necessary repairs and replacement. As stated by the American Society of Civil Engineers (ASCE) in its 2009 report, “America’s drinking water systems face an annual shortfall of at least $11 billion to replace aging facilities that are near the end of their useful lives and to comply with existing and future federal water regulations. This does not account for any growth in the demand for drinking water over the next 20 years.”

To address the shortfalls, municipalities and water utilities are looking at a variety of funding sources, including municipal bond issuance, higher water rates and increasing operational efficiencies.

Municipal bond issuance is a common funding source for water systems. However, some investors have recently expressed concern about the risk of possible municipal defaults. Results of a Reuters poll published in February 2011, found that more than half of Wall Street professionals, including municipal bond traders and investors, anticipate that up to four multibillion-dollar municipal bond defaults will take place this year.

Fortunately, certain investment analysts and ratings agencies have a more optimistic view of municipal bonds that focus on water systems. A recent Fitch Ratings report explained the relatively stable credit quality of water bond issuers. The report cites numerous supporting factors, including the essentiality of water and its monopoly status, which has helped shield the water sector from certain economic factors.

Some analysts say that recovering more of the actual cost of water—if not moving toward full-cost pricing—could be an important avenue to increase the investment needed in our aging water infrastructure. They point out that water rates in the U.S. are typically less than in other developed countries. In fact, results of the International Water Report and Cost Survey, conducted by NUS Consulting Group in 2007, indicated that U.S. water rates were the least expensive at 66 cents per cubic meter average compared to the 13 other developed countries that were surveyed (Denmark’s rates were the highest at $2.25 per cubic meter).

A significant source of funding for water and wastewater comes from the revenues generated by user rates; therefore, pricing water to accurately reflect the costs of providing quality water services is one strategy that utilities are using to maintain infrastructure and encourage conservation.

However, as rates increase, utilities will need to proactively educate consumers on the true value of water to absorb the shock of higher rates and ease consumer acceptance of those rates, according to Avoiding Rate Shock: Making the Case for Water Rates, a study sponsored by the AWWA [American Water Works Association] Water Utility Council. The study found that consumers get upset over rate increases because of misunderstandings about the true value of a safe, adequate supply of water, and that a consistent, structured communications strategy can build support for rate increases.

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