Energy & Tech
Who Pays For Water Infrastructure?
Private investment in public works isn’t a new idea: In 2014, former President Barack Obama launched an initiative focused on partnerships between public agencies and private companies to boost infrastructure financing and innovation. Now, President Donald Trump is calling for more such collaborations, and even outright privatization, in an attempt to shore up the nation’s aging highways and water systems.
Water infrastructure, for both drinking and irrigation, is especially in need of improvement in the arid West. Amid a wave of aging reservoirs, treatment plants and pipelines, and a Congress unwilling to pony up funding to fix them, the Bureau of Reclamation is considering private investment as a possible solution. While some municipalities in the U.S. have partnered with private companies on water projects, such deals are almost non-existent on the federal level.
Critics note that there’s a significant potential downside — private companies are beholden to their bottom line, and their goals may not always line up with the public interest. If the company goes bankrupt, for example, public-private partnerships can end up being costly for the public.
The Bureau of Reclamation recently held a meeting with industry representatives and asked for their feedback on five water infrastructure projects in the West that the agency says might benefit from private involvement or even ownership. The exchange was intended to gauge industry interest in this type of arrangement, and while the Bureau may ask for development bids in the future, it hasn’t yet done so. Here are the five potential projects the agency highlighted:
The project: Kachess Drought Relief Pumping Plant, Yakima River basin, Washington.
Estimated cost: $200 million.
What it would do: The Kachess Reservoir supplies irrigation water to farms. It’s much deeper than its gravity-fed outlet, though, creating a tantalizing untapped water source. A proposed floating pump station would allow water districts to reach almost twice as much water during droughts as they now can. The Bureau of Reclamation anticipates finding a private company to design, build, finance and maintain the pumping plant, while it or local water districts manage operations.
The project: Eastern New Mexico Rural Water System, east-central New Mexico.
Estimated cost: $527 million.
What it would do: This pipeline project would funnel water from the Ute Reservoir south to a handful of towns and counties that rely on the overdrawn Ogallala Aquifer. The federal government is footing the majority of the bill, but completing the project may take decades. The Bureau of Reclamation hopes to speed things up by finding a private partner to design, build, finance and manage the pipeline system, while the local water authority retains ownership.
The project: Paradox Valley Unit, Colorado River basin, Colorado.
Estimated cost: Unknown.
What it would do: The shallow groundwater beneath western Colorado’s Dolores River is naturally much saltier than seawater. The Paradox Valley Unit facility sucks up that groundwater before it can enter the Dolores, a tributary of the Colorado River, and injects it deep underground for disposal. But the injection well is causing more than 100 small earthquakes each year, prompting the Bureau of Reclamation to evaluate alternatives such as evaporation ponds or desalination. The agency is also considering a partnership that would transfer much of the control of the project — and the financial risks associated with it — to a private company.
The project: Yuma Desalting Plant, Colorado River basin, Arizona.
Estimated cost: Unknown.
What it would do: The Yuma Desalting Plant, located just upstream of the U.S.-Mexico border in southwestern Arizona, removes salt from agricultural runoff before it hits the Colorado. That treated water counts toward the amount the U.S. must send to Mexico, but when it’s not running, untreated runoff is shunted to another location and not counted. If the plant operated more often, the U.S. would be able to use treated water to meet some of its obligation, allowing more water to stay in Lake Mead. The Bureau of Reclamation is studying other treatment options, including building a new facility, retrofitting the old one and finding a private partner to design, finance, build, run and perhaps own the project.
The project: Arkansas Valley Conduit, lower Arkansas River basin, Colorado.
Estimated cost: $400-600 million.
What it would do: This 227-mile pipeline system was authorized in 1962 to provide clean drinking water to towns and rural areas in southeast Colorado, but never built. In 2009, Congress agreed that the federal government would pay for the project, with local funders repaying 35 percent of the cost over 50 years. However, only a fraction of the money needed for the conduit has materialized, leading the Bureau of Reclamation to consider a private partnership.