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COVID-19 Is Bad For Business For Water Utilities, But Consumers May Benefit

RACHEL MARTIN, HOST:

America's 50,000 water utilities are being hit hard by the pandemic shutdown. Many already struggled to pay for upkeep of water treatment plants and pipes. Now some fear they may go out of business. But as Daniel Ackerman reports, that actually might not be a bad thing for customers.

DANIEL ACKERMAN, BYLINE: In downtown Millbury, Mass., construction workers blast through bedrock under the street.

PAUL LAWSON: They're hammering the rock out of the way so they can put the new pipe in.

ACKERMAN: Paul Lawson (ph) is managing this installation of a foot-wide water main.

LAWSON: This system was originally put in 1895.

ACKERMAN: That's really old, but lots of U.S. water systems are way past their engineered lifespans. And Lawson says many, especially smaller ones, can't afford proactive maintenance.

LAWSON: It's tough. It's really tough to do, you know? So that's why a lot of mains just get fixed when they break.

ACKERMAN: And while you listen to this story, two aging water mains will burst somewhere in the country. Federal funding for water infrastructure has dropped by 80% since the 1970s. Now the COVID-19 pandemic means some people can't pay their water bills and utilities have lost some of their biggest customers.

EMILY SIMONSON: A lot of the businesses that pay higher water rates are shuttered, and so that means that a lot of utilities are seeing high revenue loss.

ACKERMAN: Emily Simonson is a senior manager at the nonprofit U.S. Water Alliance. She says aging drinking water systems also violate EPA health standards for millions of Americans each year. President Trump and some in Congress have long called for a boost in infrastructure spending. But so far, no major bills have passed. Simonson says one way for water utilities to escape the funding crunch is through consolidation. Merging with a nearby utility can streamline staffing and maintenance costs. Plus...

SIMONSON: If you're buying, say, chlorine to help treat your water and you're buying it at much higher quantities, the cost goes down. And so that means that consumers can save more when their utilities consolidate.

LAWSON: Those savings can also improve water quality. That happened in the town of Maumelle, Ark., in 2016. Mike Watson was mayor at the time. He says he got complaints from residents that the water smelled bad.

MIKE WATSON: And it also was ruining their appliances, such as water heaters would die after five or six years just because of the sediment that was built up in the bottom of them.

ACKERMAN: Maumelle's water utility needed to drill new wells and upgrade the treatment plant.

WATSON: The engineers started putting all that together, and there was going to be an increase. There was going to be a water increase of at least 50% of your bills.

ACKERMAN: It was going to cost too much, so the utility in neighboring Little Rock took over. Watson says some Maumelle residents were wary about losing their local utility. And they initially had to pay a fee to connect to the new system. But Watson says he can't argue with the results.

WATSON: I would rate it as at least a nine or a 10. It's a better quality water.

ACKERMAN: Lawmakers in California, Kentucky and North Carolina have passed bills that incentivize consolidation. Those states have each seen dozens of mergers. Nationally, 13% of rural water utilities say they're already forming regional partnerships, the first step towards consolidation. Simonson expects the current crisis will push more to follow suit.

SIMONSON: We know that the system we have right now isn't very resilient in the face of shocks like a pandemic.

ACKERMAN: But merging smaller utilities could help them keep water flowing without draining customers' bank accounts.

For NPR News, I'm Daniel Ackerman. Transcript provided by NPR, Copyright NPR.