Couple of good reports.
1) From Ceres - Water Ripples: Expanding Risks for US Water Providers
Download Water_Ripples
Here is the Executive Summary:
This report is a follow-up to The Ripple Effect: Water Risk in the Municipal Bond Market, published by Ceres and Water Asset Management two years ago. The Ripple Effect examined hidden risks facing investors who buy the municipal bonds that finance much of the country’s vast water infrastructure.
For decades water utility bonds have been considered among the safest possible investments, an assessment that rested on two flawed assumptions: that fresh water supplies would always be plentiful and that demand for water would always increase. Neither investors, credit rating agencies nor the utilities themselves fully questioned these assumptions.
The Ripple Effect proved controversial at the time, but in the two years since it was published we have seen mounting evidence of the risks facing water utilities and their investors, as well as some encouraging actions by bond market participants.
§ Water stress has continued to intensify. Back-to-back droughts in 2011 and 2012 brought increased attention to the vulnerability of the nation’s water supplies, especially as the impacts of climate change grow. Though the droughts caused billions in economic losses, most water providers were able to meet demand. Hard-hit Texas was a different story: cities with strong water efficiency programs already in place saw supplies and revenues from water sales remain stable; those that did not, such as Midland, Texas, saw both their reservoirs and and their credit ratings drop. Water supply security continues to challenge much of the West, and is forcing states such as Nevada, Utah and Colorado to consider hugely expensive pipeline projects to tap new water sources.
§ The market is beginning to change the way it prices water risks. For years, investors financing public water systems viewed the sector as low risk an investment as you could find. But that perspective is changing. Since the market crash, more water systems have had their credit ratings downgraded than ever before. The economic downturn brought with it a significant drop in water demand as foreclosed homes went vacant and connections for new homes plummeted. Water revenues went down, but the obligation to repay the investors who bought bonds to finance new water projects did not. Consequently, credit rating agencies have begun boosting their focus on these growing risks. Fitch Ratings and Standard & Poor’s released a number of special reports highlighting water availability constraints. In contrast, the largest of the credit rating agencies, Moody’s, has neither upgraded its credit rating methodology for the water sector since 1999 nor issued special reports of relevance to the water sector.
§ Declining revenue and rising costs are exacerbating water supply challenges. Credit risks associated with water providers are being heightened by four factors: growing needs for new investment to shore up old or failing infrastructure; a dearth of federal funding to support such projects; slow economic growth; and— most surprisingly—a pervasive trend of declining municipal water demand across the U.S. Together, these four factors have created a widening imbalance between borrowing costs for utilities and the revenue needed to cover those costs. Reduced water demand is desirable, but for utilities dependent on volume-based sales it often leads to rate increases, which in turn can further depress demand— a vicious cycle that is neither financially nor politically tenable for utilities.
§ Projecting future water demand is a highly uncertain proposition. Building costly infrastructure—such as water pipelines like those currently proposed in Nevada, Utah and Colorado—to meet future demand that doesn’t materialize could cost ratepayers and investors billions. And while investments in water efficiency and demand management may reduce the need for costly investments in new infrastructure, the urgent need to maintain and repair existing infrastructure will likely drive higher rates for customers regardless. In short, water is going to cost more: the only question is, how much more?
Since the publication of The Ripple Effect we have seen encouraging progress by investors, credit rating agencies and water utilities to address these issues, but much more remains to be done. Key focus areas should include:
Not waiting for a dry spell to manage water demand. Conservation measures, such as lawn watering limits and tiered pricing must be done on an ongoing basis, not simply when drought hits, if water utilities are to protect their financial viability and keep costs to consumers stable over the long-term.
Questioning water demand projections. Water use is changing and investors, credit rating agencies and policymakers should approach water systems’ demand projections with a healthy dose of skepticism.
Boosting understanding of how water rate structures influence demand. Investors and credit rating agencies should seek more information on the ways water rate structures influence demand and affect the stability of long-term revenue streams.
Building political support for sustainable water rates. Environmental and consumer advocates should take a far more active role in building political support for sustainable water rates by making the case that it helps consumers ensure long-term future water security and affordability.
Ceres will continue to work closely with water utilities and bond market participants to elevate these issues. Our work will continue to evolve around three key pillars: 1) increasing market transparency and achieving better disclosure by water utilities about how they assess and manage these risks; 2) helping water utilities and investors better value and price water so that water supplies and required revenue streams are sustainable; and 3) leveraging the capital markets to finance water efficiency across municipal, industrial and agricultural sectors.
Enjoy!
2) Auto-Integrating Multiple HEC-RAS Flood-line Models into Catchment-wide SWMM Flood Forecasting Models
Download AWRA_H&WM_2012_Integrating_HEC-RAS_SWMM
Here is the Abstract:
Flooding in Ontario is fairly common. Recently two Ontario conservation authorities, the Toronto and Region Conservation Authority (TRCA) and the Credit Valley Conservation Authority (CVC) have developed flood forecasting models (FFMs) that process real-time radar-rainfall and leverage multiple existing HEC-RAS model datafiles. In these FFMs PCSWMM represents the watershed hydrology and hydraulics in a real-time decision support system that computes watershed responses using long-term continuous simulations. The Don Valley watershed FFM comprises 67 subcatchments, 2734 conduits, 2376 junctions, 17 storage ponds, and 4 orifices representing the G. Lord Ross Dam, while the Cooksville Creek watershed FFM comprises 30 subcatchments, 302 conduits and 250 junctions. Although the primary purpose of these FFMs is to estimate peak computed water surface elevations throughout the watersheds, up to 2 hours prior to the rainfall events, the focus of this paper is the constituent procedure of rapid conversion of HEC-RAS datasets into conceptually-equivalent SWMM5-compatible models, and to verify the methodology.
Thanks to Harry Zhang of the AWRA Hydrology and Watershed Management Committee.
"I tried to harvest some water from fog, but I mist." -- apologies to M.D. Rosenberg
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