Changing Capital Program Rules:How Utility Managers Can Cope With Skyrocketing Capital Costs

摘要

Water utilities are in the early stages of a 40 year period(referred to as the Dawn of the Replacement Era)of steadily rising capital costs.For the average utility this means that revenue requirements by 2030 will be ten times their revenue requirements in 2003 (without growth).As a sign of this rise in capital costs,the 2003 US EPA 20 year Capital Needs estimate(water)increased by 67%after 8 flat years.A majority of these needs are for transmission and distribution work whose replacement needs are expected to peak in 2040.The implications of these rising capital needs and some disturbing recent cost trends(rising raw materials costs,supply-demand conditions,shortages of skilled construction workers)could result in year after year rate increases at multiples of the rate of inflation.Wastewater 20 year needs show similar trends.