Indiana water infrastructure needs $2.3B in urgent work

by Dan Carden, originally posted on December 4, 2016


INDIANAPOLIS — The state’s aging water infrastructure needs $2.3 billion in immediate repairs and $815 million a year in additional maintenance spending to protect human health and stem the loss of some 50 billion gallons a year that never make it to a customer.

A new Indiana Finance Authority report, commissioned by the General Assembly, found the state’s 554 independent water systems are struggling to maintain quality service as water pipes, mains and other underground assets reach or exceed their useful lives.

“Leakage from these old mains has recently become urgent,” the report declares. “If Indiana addresses the problem now, the cost of maintaining the system will not cause societal or economic disruption.”

Indiana has more than 46,000 miles of water pipes operated by community water systems that serve 4.76 million Hoosiers, or 72 percent of the state’s population.

A majority of Indiana’s pipes were installed after World War II, though some still in use date back to the 1890s, and have been “overused, undermanaged and need to be replaced,” according to the report.

Moreover, at least some of the pipes are made of lead, or other metals now corroded by age, and potentially are releasing chemicals into distributed drinking water that can cause kidney damage, anemia, hypertension and abnormal brain development.

“In some utilities, there is no inventory of lead service lines. In others, these lines are clustered in the older parts of town where customers do not have the financial resources to pay for replacement,” the report found.

“The risks posed are unprecedented, and the problem is challenging because of the unforeseen difficulty of locating the problem pipes.”

Continued use of older pipes also causes water leaks — the average age of a ruptured water main is 47 years — which contributes to the pre-consumer waste of a mind-boggling 50.7 billion gallons of water each year from the 248.3 billion gallons supplied across Indiana.

Water systems of all sizes in the state report nonrevenue water, that which never makes it to a customer, comprises between 19 and 24 percent of the water they produce, which is in line with national averages.

The total cost of Indiana’s nonrevenue water is $54.6 million a year, according to the report.

Lake and Porter County communities primarily are served by medium (3,301-10,000 customers), large (10,001-100,000) or very large (more than 100,000) water systems, while outside Michigan City most LaPorte County water comes from small systems (3,300 or less customers).

The report found customers of larger water systems, and providers overseen by the Indiana Utility Regulatory Commission, paid less for their water than Hoosiers buying water from small providers, mostly due to per capita operating costs for smaller systems that are more than twice that of larger systems.

As a result, the average customer unit retail cost for water was lowest in the mostly urbanized northern third of the state, while central and southern Indiana residents paid more due to the proliferation of small water systems outside of metropolitan areas.

At the same time, Lake County water systems reported they need to spend at least $400 million to bring their infrastructure up to nationally recognized acceptable levels.

That’s the most for any county in the state and about one-sixth of Indiana’s $2.3 billion immediate repair need.

The report suggested ongoing annual water infrastructure maintenance across Indiana will cost an additional $815 million a year.

In total, Indiana currently spends about $16 billion a year for education, health care, transportation and all other state services.

“Indiana’s relationship with drinking water systems will need to evolve if the utilities are going to move beyond this critical funding deficit,” the report said.

It recommends Hoosier lawmakers devote general fund appropriations, potentially from new taxes, to help meet the state’s immediate water infrastructure needs, particularly older pipe replacement.

The report also urges the regional consolidation of local water systems to reduce costs, standardization of water asset management and the appointment of a state water czar to coordinate improvement and financing efforts across the numerous agencies responsible for water oversight.

“The goal is for the state to begin working to support the assets that improve everyone’s life and the health of the natural environment,” the report said.

State Sen. Ed Charbonneau, R-Valparaiso, who helped commission the report as former chairman of the Senate Committee on Environmental Affairs, said the results shine a needed light on how Indiana manages a necessity that’s often taken for granted.

“This information will serve as the foundation for our discussions during the 2017 legislative session as we seek ways to protect customers, ensure the health and safety of every Hoosier and protect an asset that is critical to the economic well-being of our state,” Charbonneau said.

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