for water and waste water agencies
Increasing Trust, Support and Investment
Why Branding for Utilities
Some might say that utilities do not need to develop a brand because they are monopolies and have no competition. Utilities may not have direct competition in terms of who will provide the service, but they are competing for investment dollars in their communities and need to be trusted.
The Need for More Investment in Water and Wastewater
How great is the need for investment in water resources and infrastructure?
Environmental Protection Agency (EPA) estimates have ranged between $151 billion to over $270 billion over the next 20 years. For water and wastewater, the Water Infrastructure Network (WIN) has estimated investment needs to be over $450 billion over the next 20 years, while the Congressional Budget Office (CBO) has its own equally staggering estimate.
These analyses dramatically illustrate that water and wastewater utilities will need to invest more in their systems. What may be more thought-provoking is that water and wastewater utilities are not the only ones who are feeling the impacts of past under-underinvestment and need more money. This underinvestment could arguably include roads, bridges, schools, disaster preparedness, and others, meaning people may have even less disposable income in the future and the competition for dollars will increase.
In addition to the possibility of past under-investment, utilities are facing a variety of important issues that can put upward pressure on water rates and fees, including:
- Complying with Tighter Regulations - Whether related to lead, disinfection byproducts, or arsenic, utilities are facing tighter regulations that are straining their budgets.
- Developing New Water Supplies - Communities tend to tap the most convenient and least expensive water sources first. New supplies, like recycled water or seawater desalination, tend to be more expensive than current supplies.
- Water for the Environment - Communities are finding that past practices are no longer sustainable. Overdraft of aquifers reduces lake and stream levels, significantly impacting fish and wildlife habitats. Reserving water to preserve the environment is becoming a higher priority in many communities - and fish and wildlife don't pay water rates.
- Higher Material and Chemical Costs - With the increasing growth of other economies around the world, the demand for basic construction materials, such as steel, cement, and PVC, are increasing and prices are going up. This trend will continue as these economies expand and their people demand a higher standard of living.
- Increasing Energy Costs - Water is heavy, and it takes power to pump it to homes and businesses. Implementing advanced treatment will require more energy. Increases in electricity rates will have an impact on future utility budgets.
- Maintenance of Aging Water and Wastewater Systems - Communities that have deferred investment in system maintenance and upgrade will face higher costs due to increasing construction and material costs and time constraints that limit their ability to coordinate with other public-works efforts.
- Increasing Knowledge about Contaminants - Our ability to test for water contaminants is far outpacing our ability to understand health effects. With ubiquitous information on the Internet, people will expect more testing and that the utility address a wider range of contaminants.
- Changing Workforce Costs - Water utility employees are, on average, over 48 years old. Capturing employee knowledge and recruiting new and younger talent will be expensive and difficult if utilities are perceived as falling further behind in technology and business practices. This situation will only get worse as baby boomers retire and labor markets become more competitive.
These issues will impact different utilities in different ways, but trends point to a need for increased investment and higher rate increases.
All of these issues put pressure on utilities to improve their ability to communicate about the service they provide and secure investment from their communities. The principles of marketing and branding will help utilities be extremely clear about the specific value they provide.
Building a strong utility brand increases trust, support, and investment.