Why Trump’s Infrastructure Spending Plan Will Be a Boon for the Water Industry

water pipe

by | Dec 19, 2016

water pipeIt’s a good time to be in the water industry.

Congress last week passed the Water Infrastructure Improvement Act, which authorizes nearly $10 billion in federal investments and represents an economic opportunity for water technology and infrastructure companies.

This includes $170 million allocated to Flint, Michigan to improve its water infrastructure and prevent the increase of lead poisoning cases. It also includes $550 million for drought-stricken California.

“These measures will provide opportunities for water technology and infrastructure companies to work with utilities as the regulations for more reuse and better water management strategies come into play,” Abhirabh Basu, who leads Lux Research’s water intelligence service, told Environmental Leader.

Additionally, president-elect Donald Trump wants to spend $1 trillion on US infrastructure in the next 10 years and this includes water infrastructure spending, according to the Computer Technology Industry Association (CompTIA).

“The Trump transition team just reached out to us yesterday looking for concrete, distinct recommendations for smart water technologies and efficiencies,” CompTIA’s David Logsdon, senior director, public advocacy, new and emerging technologies said in an interview.

In October, well before Trump was elected, Navigant Research said it expected global revenue from smart water networks to grow from $2.6 billion in 2016 to $7.2 billion in 2025.

So what can the water industry expect from the Trump administration? While neither the president-elect nor his transition team have provided specifics, it’s a safe bet that the industry will see increased federal dollars headed its way along with private investment infrastructure. Replacing US water pipes alone would cost at least $1 trillion over the next 25 years, according to the American Water Works Association.

Basu points out that the Trump administration has said it plans to provide strong oversight on “clean air and clean water.”

“Increasing the funding to support new infrastructure is likely going to help the water industry, particularly if this opens up capital spending for fixing the distribution system,” he said. “Today, operational and maintenance costs per year have skyrocketed to $72 billion — a 60 percent increase in annual expenditures since the 1990s — whereas annual capital expenditures have leveled off at around $38 billion. The reason for the huge increase in O&M spending is because the buried infrastructure has been in place for nearly 100 years, a large part of which is reaching or has exceeded its useful life.”

Smart-technology companies and Internet of Things products will also likely receive a boost from the incoming administration, Logsdon said. These products, including sensors and intelligent pump control systems, can also play a role in helping businesses and communities better manage water and not lose water — and money — from leaks and waste.

Logsdon points to the city of North Miami Beach that in 2015 hired energy and water technology company Itron to deploy its leak detection technology.

“Over the course of the project, the North Miami Beach utility was able to identify and repair 21 leaks, saving 27 million gallons of water and $38,000 annually,” Logsdon said.

When asked to look ahead and predict where the revenues for water companies will be under the Trump Administration, Logsdon said: “the sky is the limit.

“Particularly since we are trying to define infrastructure as urban, suburban and rural, think of all the verticals impacted, whether its agriculture, whether it’s energy. If industry does its job right and clearly articulates to the transition team and the new Congress, what the landscape looks like, that will help drive opportunities.”

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