December 2021 Vol. 76 No. 12

Editor's Log

Infrastructure Money and Reality

By Robert Carpenter, Editor-in-Chief

The Great Infrastructure Money Grab is on and at long last, underground construction markets are getting a reasonable share of the funding bonanza. Markets are anxious to secure their piece of the $550 billion of which $120 billion is designated for water, sewer and broadband. 

Another $65 billion is assigned to “strengthening” the power grid which, in many cases, means moving overhead electric lines underground. In fact, that is stressed in the funding descriptions. For years, utilities and government agencies have ignored rational arguments stressing the cost benefits of reduced maintenance and extended life-cycle gained by placing electric and telecommunications lines underground. Now, people are beginning to see past short-term savings in overhead installation in favor of the greater system reliability and long-term cost benefits of going underground. 

For the water market, a sizable chunk of the dedicated funding ($15 billion) is for dealing with perceived risks of lead pipe. The infrastructure funding bill envisions replacing much, if not all, of the remaining lead pipe systems in the United States. This reflects the still knee-jerk reaction by public officials and constituents that all lead pipe presents an emergency health risk. 

The truth is quite contradictory. After the Flint, Mich., incident – which, indeed, was a disaster – reports of lead pipe poisoning cropped up everywhere from schools to public buildings to neighborhoods. But upon further review, those scares were largely unsubstantiated. 

While getting rid of lead pipe absolutely needs to happen, it is rarely an emergency situation. Even in the Flint case, it was the unnecessary, twice flushing of an old system that caused leaching of the lead pipes, all made worse by ignoring engineering consultants’ recommendations. 

Lead systems, properly monitored to ensure no leaching is occurring, remain capable and safe water delivery systems with little if any public risk. Still, it would be prudent for any entity with active lead pipes to identify them, assess their condition, and develop plans and a timeline for removing them as they grow older and subsequently do reach an at-risk stage. 

Further water funding will come from $14.7 billion in additional EPA Drinking Water State Revolving Fund over the next five years. 

For sewer municipalities and agencies, $14.7 billion from 2022 through 2026 was also dedicated through the EPA’s SRF program. In addition, $280 million will be authorized annually, through 2026, to support state municipal planning and construction of projects that address combined sewer overflows. 

In essence, federal dollars for water and sewer programs have been more than doubled for the next five years. However, it remains important to consider that all this money is but a drop in the bucket when weighed against actual needs of America’s sewer and water infrastructure. Estimates consistently place a true needs figure to replace/repair/upgrade systems, at between  
$700 and $750 billion. 

That’s why I was concerned about some recent conversations I had with municipal personnel. Too many have the mindset that the government funding cavalry has arrived. Therefore, cities can avoid making tough funding decisions to repair their crumbling systems. 

The reality is much different. The infrastructure funding should be accepted as simply bonus bucks that present a rare opportunity for cities to catch up on their spending needs, while continuing to aggressively tackle infrastructure problems and projects. 

Another consideration for municipalities is that under the President Biden administration, most likely the EPA will be greenlighted to accelerate enforcement procedures via the dreaded Consent Decrees. Many cities are – and should be – running scared. Now is not the time to just settle for whatever money is available at low or no cost. Now is the time to be aggressive, make the challenging decisions (even if financially painful) and fully address problems. 

Of course, fiber was already red-hot and with another $65-billion investment, it will soon become white hot. The big winners here are the rural and underserved areas of the country for without this major government financial investment, there is little motivation for fiber companies to spend major money for minor returns. 

You still probably won’t see the mega-fiber companies break away from their business plans and build systems outside of highly populated areas. But now that funding is available, there should be an ample number of smaller companies enticed to take the plunge into rural America. 

Perhaps a major hiccup, as the Power & Communication Contractors Association recently pointed out, is that the bar has been set too low for fiber speeds in the new installations. The PCCA rightly recommends speeds of at least 100/100 Mbps in order to allow communities viable systems for not only commercial endeavors but medical and local government needs, as well. I would go so far as to predict even greater speeds will be needed in the very near future. 

No doubt the Infrastructure Spending Bill will have substantial impact on underground markets. Of course, we have to get past workforce and distribution issues, plus assuming the government doesn’t interfere or micro-manage, and succeeds in expediting spending. America’s underground infrastructure desperately needs that shot in the arm.

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