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Aging U.S. water infrastructure is leaking megawatts and dollars

May 2, 2013

By Jared Anderson AOL Energy  

The US is in the midst of an infrastructure problem that many predict will cost astronomical sums to fix the Power grids, bridges, municipal water systems and much of the infrastructure that facilitates modern society was built decades ago and is now in need of repair or replacement. But the levels of investment required to upgrade critical services are often prohibitively high for federal, state and local government agencies struggling to recover from the global economic and financial crisis.

However, while financing often remains a challenge, considerable long-term economic and energy savings can be wrung from upgrading municipal water supply and treatment systems, according to Colin Sabol, Chief Strategy & Growth Officer at water technology company Xylem Inc.

Sabol recently told AOL Energy that 50% to 75% of the total capital costs at public utilities go to supplying energy for water supply and treatment. At the same time, the U.S. loses 1.7 trillion gallons per year to leaky water pipes. "That's water we spend all this money to transport, so I see megawatts leaking, and that volume of loss is compelling to anyone who studies economics," Sabol said.

Additionally, water and wastewater utilities are typically the largest consumers of energy in municipalities, often accounting for 30-40% of total energy consumed, according to EPA estimates.

"There is a terrific economic return IRR [internal rate of return] but a utility has to take out a bond or increase tariffs, which is difficult," said Sabol. The payback period is often three years, which can be challenging for a public utility to finance, so he spends a lot of time raising awareness among utilities and local politicians. "It's an industry that's been underinvested."