Investors challenging water utilities

April 8, 2013 | By Barbara Vergetis Lundin

Investors who finance the U.S. water infrastructure are posing clear challenges to U.S. water utilities.

These investors -- who purchase bonds that pay for pipelines, treatment plants and other key infrastructure -- want better information on how water utilities are managing risks like aging infrastructure, climate change, tighter water supplies and uncertain water demand.

In a letter to the National Federation of Municipal Analysts (NFMA), a dozen investors managing $40 billion in assets requested that water utilities be subject to stronger disclosure requirements on issues like water supply scenario planning, climate change impacts, and pricing strategies.

"Without better disclosure, investors are blindly placing bets on which utilities are positioned to manage these growing risks," said Sharlene Leurig, a water financing expert at Ceres, who helped prepare the letter sent to the NFMA Disclosure Board. "The operating environment of water providers is changing, and investors need to be sure utilities whose debt they are holding are adapting. If utilities are not adapting, they may end up not having the money to repay their debts."

The letter follows a new Ceres report which outlines failing infrastructure, growing water availability pressures, declining revenues, falling per-capita water use, and other risks that water utilities are facing.

For more:
- read the letter
- download the report

http://www.fierceenergy.com/story/investors-challenging-water-utilities/2013-04-08