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NAWC's Franklin to Congressional Committee: Consolidation helps struggling water systems

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BRYN MAWR, PA, SEPT 26, 2017 -- Aqua America's CEO Chris Franklin testified in front of the U.S. House of Representatives' Transportation and Infrastructure Committee's Subcommittee on Water Resources and the Environment this week. Franklin encouraged partnerships and system consolidations, among other topics at the hearing.

During the hearing entitled, "Building a 21st Century Infrastructure for America: Water Stakeholders' Perspectives," Franklin, President and CEO of Aqua America and President-elect of NAWC, discussed water and wastewater infrastructure, and actions the federal government can take to unleash innovative and sustainable solutions to meet the nation's water infrastructure needs.

Franklin's comments addressed the role of regulated utilities in addressing the nation's wastewater challenges. He mentioned municipal water systems and recommended actions for Congress to take in embracing the powerful combination of public service and private enterprise in communities across the country.

Franklin recommended Congress take action to incentivize partnerships and consolidation in the water sector, lower barriers to regulated water company investments, and encourage effective utility management that requires financial viability and accountability for performance.

While discussing ways to incentivize partnerships and consolidation, Franklin explained there are more than 50,000 drinking water systems and nearly 15,000 wastewater utilities that are highly fragmented and face numerous challenges, including limited access to capital, operational inefficiencies, challenges complying with EPA regulations, and reduced purchasing power.

Referencing lowering barriers to regulated water company investments, Franklin said there has been a longstanding prohibition against private entities being eligible for Clean Water State Revolving Fund (CWSRF) resources and, although the EPA does not prohibit such access to the Drinking Water State Revolving Fund (DWSRF), no less than 12 states have adopted such blanket prohibitions. Franklin urged Congress to seek to correct this imbalance by amending the Clean Water Act to ensure all wastewater utilities, regardless of their ownership model, are eligible for the CWSRF and hold states accountable for granting all utilities equal access to these programs that every taxpayer helps support.

During his testimony, Franklin stated that Congress should hold noncompliant systems accountable for adherence to effective utility management practices like financial viability, infrastructure stability and operational resiliency. He cited EPA's compliance database, noting there are presently thousands of domestic wastewater systems in significant noncompliance. He went on to say that failing and noncompliant water and wastewater systems not only create a growing financial burden, but they pose great risks to public health and the environment. On the other hand, private, regulated utilities have a long history of compliance.

"The regulated water utility sector is uniquely positioned to offer input to this committee because private water utilities, as regulated bodies, prioritize long-term planning," Franklin testified. "Investing in long-term infrastructure and implementing strategic planning processes are required by public utility commissions in the ratemaking process throughout the United States. It should not be a surprise that regulated water companies have a proven track record of consistently meeting the water and wastewater needs of communities in many areas across the country."

NAWC estimates that its six largest members alone collectively invest nearly $2.7 billion each year in their water systems, and these six companies provide service to about six percent of the U.S. population. In contrast, the current total federal appropriation for the Clean Water and Drinking Water State Revolving Fund (SRF) programs is approximately $2 billion annually.

Franklin's full testimony can be viewed here.

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