Bond-issuing water utilities Tuesday pressed lawmakers who will reauthorize federal water infrastructure programs this year for more support, pointing to the billions in needed investments to update aging systems across the country.
The House Environment Subcommittee hearing came as Washington, D.C. deals with a massive sewer pipe collapse that has dumped millions of gallons of raw sewage into the Potomac River since Jan. 19. D.C. Mayor Muriel Bowser on Wednesday declared a public emergency. The Trump administration Friday sent in the Environmental Protection Agency to oversee repairs to the collapsed line, the Potomac Interceptor, as well as the Federal Emergency Management Act to coordinate disaster relief.
Also Friday, energy and commerce committee top Republicans launched an investigation into the spill, sending a letter to D.C. Water seeking information about what the utility knew about the risk prior to the spill and how it's being repaired.
Subcommittee chair Rep. Gary Palmer, R-Ala., said at Tuesday's hearing that Republicans had invited D.C. Water to testify at the hearing but the utility declined to attend.
"While I look forward to receiving answers [from D.C. Water] I want to focus on what a failure like this one in Washington reveals about our water infrastructure," said Rep. John Joyce, R-Pa. "All over our country aging systems need those critical upgrades," Joyce said. Federal support, especially for smaller rural systems, in the form of the Drinking Water State Revolving Fund represents a "much-needed lifeline."
State revolving funds for drinking and wastewater act as the primary federal funding for states, which then often leverage the money by issuing municipal bonds, most of which feature triple-A ratings, to make low-interest loans to cities, counties, water districts and other governmental entities to finance infrastructure projects.
The SRF programs, as well as the Water Infrastructure Finance and Innovation Act and other and water infrastructure assistance programs are up for reauthorization this year as funding runs out on Oct. 1, 2026. The 2021 Infrastructure Investment and Jobs Act allocated an unprecedented $55 billion for state revolving fund loans for water and wastewater projects.
"The state revolving fund is one of the most important water infrastructure tools available to small communities," said Eric Hill of the Russellville, Alabama Water & Sewer Board who testified on behalf of the National Rural Water Association and listed a number of projects the utility completed with SRF help. "Without the SRF's favorable loan terms and match requirements, most of these projects would still be sitting on a wish list."
One of the program's biggest problems is the length of time it takes to get the funds, Hill said.
"We applied in 2022 and are just now getting some of those funds," Hill said. By the time the utility got the money, prices had gone up because of engineer and contractor shortages, he said.
Despite the massive IIJA funding infusion, "we are hearing from systems across the country and across Alabama that the funds have been slow to reach the communities that need them most," Hill added.
He recommended that Congress tweak the SRF programs by simplifying the application process and offering flexible principal forgiveness levels "that reflect the realities of small-system financing." Congress should also extend project timelines beyond five years and offer relief from strict Build America, Buy America and labor rules, he said.
Lindsey Rechtin, CEO of the Northern Kentucky Water District who testified on behalf of the Association of Metropolitan Water Agencies, urged lawmakers to keep the SRF programs funded at "levels commensurate with the sector's documented needs."
The water and sewer sector requires more than $1.2 trillion worth of investment over the next 20 years just to maintain current levels of service, according to the EPA, Rechtin said. Drinking water accounts for $625 billion of that, and more than $235 billion comes from metropolitan systems serving more than 100,000 people, Rechtin said.
