Scaling Up Public Investment In Localized Water Strategies

How Can Utilities Capitalize Spending On Consumer Rebates? Frequently Asked Questions

Green roofs, permeable pavements, water- efficient appliances and landscaping are all examples of “localized” water infrastructure distributed across homes, businesses, and public spaces. These strategies work in concert with and supplement conventional water systems but are often more affordable and flexible than centralized alternatives. At scale, they are highly effective and perform the same functions as centralized approaches – expanding supply, safeguarding water quality, protecting ecosystems, and managing urban runoff. For many water agencies, the challenge to scaling up localized infrastructure projects is how to pay for them. Consumer incentives for onsite and distributed water solutions, while providing real benefits to utilities, do not produce traditional assets for accounting purposes. So public utilities generally fund these programs out of annual operating cash, rather than bond proceeds. This limits the scale and impact of these strategies. But these programs provide lasting, multi-year benefits and so are not properly accounted for as annual expenses either. This FAQ addresses some of the questions public utilities face when considering whether and how to shift to municipal bond revenue, or other forms of public debt, to finance localized, distributed strategies.

As detailed in WaterNow’s TiR Toolkit (tapin.waternow.org/toolkit), in most cases, the answers to the questions outlined below demonstrate that what may seem like barriers to increased investments in distributed infrastructure can, indeed, be readily addressed.