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Young Valve Professionals: Logan Moore

Young Valve Professionals: Logan Moore

In 2014, VMA's leadership created the Va...

VALVE Magazine: Readers' Choice 2017

VALVE Magazine: Readers' Choice 2017

Happy New Year to our VALVE Magazine rea...

Educational Opportunities Abound at New VMA Knowledge Forum

Educational Opportunities Abound at New VMA Knowledge Forum

From technical to manufacturing to human...

Offshore Production in a Low Oil-Price Environment

Offshore Production in a Low Oil-Price Environment

Three years ago, The Washington Post publi...

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Industry Headlines

Emerson Completes Acquisition of ProSys, Inc.

Thursday, 18 January 2018  |  Chris Guy

Emerson has acquired ProSys Inc., a global supplier of software and services that increase production and safety for the chemical, oil & gas, pulp &...

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Interior Coatings for Waterworks Valves

Interior Coatings for Waterworks Valves

Monday, 15 January 2018  |  John V. Ballun, P. E.

Since the 1990s, two types of epoxy coatings have been commonly specified and used for iron valves in the waterworks industry: fusion-bonded epoxy and...

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Industry Headlines

Emerson Completes Acquisition of ProSys, Inc.

10 HOURS AGO

Emerson has acquired ProSys Inc., a global supplier of software and services that increase production and safety for the chemical, oil & gas, pulp & paper and refining industries. ProSys complements Emerson’s May 2017 acquisition of MYNAH Technologies, which provides simulation and opera...

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ASCO Valve and Numatics Now Doing Business as ASCO, L.P.

2 DAYS AGO

Effective January 1, 2018, ASCO Valve, Inc. and Numatics, Inc. began doing business as ASCO, L.P. This change in legal entities affects neither current channel alignment nor purchasing processes—everything will remain the same, including product authorizations. Within ASCO, a business unit of Em...

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EIA Predicts Record U.S. Fossil Fuel Production

11 HOURS AGO

In its January 2018 Short-Term Energy Outlook, the U.S. Energy Information Administration (EIA) forecasts that total fossil fuels production in the U.S. will average almost 73 quadrillion British thermal units (Btu) in 2018, the highest level of production on record. EIA expects total fossil fuel prod...

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TransCanada Proceeding with Keystone XL Pipeline

12 HOURS AGO

TransCanada Corp. has successfully concluded the Keystone XL open season, securing approximately 500,000 barrels per day of 20-year commitments, positioning the proposed project to proceed . Interest in the project remains strong and TransCanada will look to continue to secure additional long-term con...

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U.S. Industrial Output Rose 0.9% in December

15 HOURS AGO

Industrial production rose 0.9% in December even though manufacturing output only edged up 0.1%. Revisions to mining and utilities altered the pattern of growth for October and November, but the level of the overall index in November was little changed. For the fourth quarter as a whole, total indus...

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Beige Book: Modest to Moderate Growth Prevalent Across U.S.

15 HOURS AGO

According to the Federal Reserve Beige Book, reports from the 12 districts indicated that the economy continued to expand from late November through the end of the year, with 11 districts reporting modest to moderate gains and Dallas recording a robust increase. The outlook for 2018 remains optimistic...

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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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