When serving as Mayor of Philadelphia, Pennsylvania Governor Ed Rendell was surprised by a sudden need to replace a number of water supply pipes. Following a prolonged cold period, the Philadelphia temperature suddenly warmed to over 50 degrees, causing 58 water pipes to burst throughout the city. Rendell recalls that the city’s water management team reported back that many of the pipes were installed in the 19th century and were not buried deep enough to avoid the stress caused by the rapid change in temperatures.

Although few utilities currently use equipment brought into service during the 1800s, managing aging infrastructure is an ever present challenge for most water providers. Most utilities grew up along with their communities, providing increased services to meet the need of a growing consumer population. Building new facilities to meet increasing need only made sense and new customers meant additional revenue to the provider.

Aging plant and equipment eventually reach the end of their service lives however. As they approach this point, utilities that do not enjoy an expanding revenue base face serious challenges to their ability to provide service into the future. Should a significant facility or treatment plant suddenly go off-line or fail, customers would potentially face significant increases to service rates to replace it. Even when older facilities are scheduled to be removed from service, the cost of replacing the existing one could also mean major price increases to existing customers.

Bob Hebert, columnist for the New York Times in a recent opinion, seemed to call for federal intervention to replace aging facilities in an opinion piece from February 15, 2010. “”Ignoring these problems imperils public safety, diminishes our economic competitiveness, is penny-wise and pound-foolish, and results in tremendous missed opportunities to create new jobs on a vast scale.” Hebert seems to believe that the federal treasury should use the ‘jobs’ argument as justification for providing this funding. In the end, this probably only generates a false impression that Washington will be riding to the rescue of small utilities and water providers.

Squeezing every possible day of service out of existing facilities is good management. But providing continued service with old facilities is begging for trouble. At some point, water and sewer service providers will have to confront the very real possibility that they will have to replace expensive plant and facilities by themselves. Handling these costs – some of which could be enormous – has many managers losing sleep.

The best way to handle this problem according to Hebert, is to look for help from the national treasury. Budget hawks are sure to resist. With the current deficit and budget crises, resolving this conflict won’t be easy and could certainly be expensive. Communities and water utilities – like Rendell’s Philadelphia water department – will still have to come up with a way to pay for repair and replacement costs. Washington may not have the ability to help.

The American water utility industry is made up mostly of small providers serving fewer than 3,300 customers. These utilities must confront the high cost of infrastructure repair and replacement without outside help. And spreading a multi-million dollar cost for replacing a water treatment plant among only a few thousand customers can add a great deal to each customer’s service rates.

The Times Hebert recognizes that a failure to replace important infrastructure has far reaching negative consequences. Finding the dollars to do the job is – as it always is – the main problem. Water providers need to plan sooner rather than later for the unavoidable need to replace expensive equipment and facilities – or wait for the next set of pipes to burst and figure out how to pay for it then.

Specializing in Water Utility Consulting, author Jason Mumm is a respected economic advisor to water and wastewater service providers nationwide. His organization, StepWise Water Utility Consultants, assist utilities improve operations, improve cash flow management as well as manage customer fees in a difficult economic situation.

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