Debt Funding for Water Conservation Programs

The cheapest and quickest way for cities and towns is to use less “grey” infrastructure and concentrate on conservation, efficiency, and green infra- structure. But those solutions can be hard to implement on a large scale. Sometimes it is because engineers are more comfortable knowing what will happen with pumps and pipes. But often it is because we can’t figure out ways to fund large investments in things that don’t look like the assets we used to build. Many water agencies are effectively dealing with water shortages or growth in their service areas by creating “new” water out of already-developed supplies. A number of agencies have “turf buy-back” programs that will pay customers to replace their lawns with low-water-use landscaping. Others are starting major programs to provide efficient washing machine, toilet, and greywater reuse system rebates. Others are providing property owners and developers with incentives to install stormwater capture systems. Each of these actions creates mini-reservoirs that collectively provide substantial public benefits to local water utilities and their ratepayers. To really make a difference, these programs need to be larger than what can usually be funded through an agency’s operating budget without an unwelcome large increase in rates. That is why it is so important to consider how to use debt funding as part of the capital program, allowing the costs to be spread over the life of the benefits.

This report outlines how water utilities can debt fund water conservation programs. Click the link below to download the full report.