The AI Interview: Diane VanDe Hei, CEO of the Association of Metropolitan Water Agencies

Executive shares how water investments will assure health and safety of our nation’s communities

American Infrastructure: The COVID-19 outbreak has altered the way our citizens live and how our businesses and municipalities function. Talk about the importance of water during the pandemic and why it’s important for the government to provide necessary funds to keep things functioning.

Diane VanDe Hei: Municipal utilities have put consumer interests at the forefront of their response to community needs during the coronavirus crisis. Members of the Association of Metropolitan Water Agencies (AMWA), the nation’s largest publicly owned drinking water systems, have accommodated the needs of families, communities, local businesses and major industries harmed by COVID-19 by waiving late payment fees and penalties, suspending service shut-off for non- or late payment and even restoring service to those without essential utilities.

“As Congress continues to develop legislation to respond to COVID-19, emergency revenue assistance for community water systems and funding to prevent low-income households from falling behind on their water bills must be part of the equation.”

Congress has acted swiftly to extend aid to many distressed sectors of the economy, including the utility sectors. However, AMWA members are ineligible for many aid programs put forth due to their size, status as municipal utility or other eligibility factors. This includes not only direct aid, but also many tax incentives and employer and employee assistance.

It is imperative Congress provide federal assistance to municipal utilities to help offset their revenue losses as a result of the COVID-19 crisis. Funds should be made available for municipal utilities to recoup projected revenue losses directly resulting from decreased demand, and not limit local aid solely to COVID-19 expenses. Congress should also strongly support financial assistance programs to allow homeowners, renters, and businesses to maintain essential utility services during this public health emergency.

AI: Can you provide some figures that detail the current landscape of the financial downturn from the pandemic on water utilities?

DVH: It is important to note that professionals who operate thousands of community water systems nationwide do not have the luxury of telework; they remain on duty in the field, operating pumps, making emergency repairs and monitoring water quality. But even though their work is ongoing, the economic fallout of the pandemic will hit water systems and their customers hard. An estimate developed this spring by AMWA and the American Water Works Association forecast that over the course of one full year drinking water system revenues could be reduced by nearly $14 billion – or nearly 17% of the sector’s annual total. Of this sum, nearly $5 billion represents losses from increased customer delinquencies, and more than $500 million results from many utilities’ decisions to halt water service shutoffs for nonpayment during the public health emergency. As Congress continues to develop legislation to respond to COVID-19, emergency revenue assistance for community water systems and funding to prevent low-income households from falling behind on their water bills must be part of the equation.
When estimates from the wastewater sector are added to those of drinking water utilities, losses rise to more than $30 billion in annualized revenues as a result of water shutoff moratoriums, increased late payments, reductions in non-residential water demands and fewer new customers related to the COVID-19 pandemic.

AI: Until the needed funding is available, how are municipalities carrying forward to navigate through the pandemic toward a brighter future?

DVH: Municipal utilities remain focused on preventing the spread of COVID-19, assuring the safety of our customers and our employees, and continuing to provide safe, reliable, and affordable utility services to the community.

AI: Is there anything else you’d like to add?

DVH: We encourage Congress to take actions that will assure the health and safety of our communities, lower costs of providing critical utility services, and enhance our ability to exit this economic downturn swiftly.