New EPA Financial Impact Tool Helps Water Utilities Assess the Impact of Coronavirus
The U.S. EPA has released a new ‘financial impact tool’ that water utilities can leverage to assess the cost and revenue impacts of COVID-19 on operations. While the pandemic has not reduced water utilities’ ability to provide drinking water and treat wastewater, the industry has a role to play when it comes to helping their communities recover from economic hardship.
With this new tool, water utilities will be able to analyze the financial impact that the coronavirus has had on their operations, which in turn will enable them to enhance their ability to assist with the economic recovery efforts of their communities.
Nuts and Bolts of the Water Utility COVID-19 Financial Impact Tool
The Water Utility COVID-19 Financial Impact Tool was developed by the EPA’s Water Infrastructure and Resiliency Finance Center. It consists of a series of questions that determine the financial impact of the virus. The goal is to help water utilities understand their current financial situation so they can more accurately plan for their O&M and capital investment needs.
Although the pandemic has not impacted the ability to continue providing vital services to customers, the utilities themselves have likely experienced a financial hit. This includes revenue decreases as well as cost increases.
In terms of revenue, the declines are associated with reduced commercial and industrial consumption, a pause in service shutoffs for non-paying customers, and deferred or cancelled rate increase hearings. On the other side of the ledger, utilities have likely seen increased costs for overtime wages, personal protective equipment (PPE) purchases, and increased downtime due to partial economic shutdowns.
The financial impact tool is just the latest in a line of water sector support efforts launched by the EPA (e.g., EPA’s water utility pandemic checklist). Other efforts to this end include the designation of employees as essential workers, the provision of online resources to support operations, and WIFIA loans that are helping keep rates stable.
