Estimating Benefits of Regional Solutions for Water and Wastewater Service (AwwaRF Report)

The Lehigh Valley in Eastern Pennsylvania is home to more than 600,000 people and includes the cities of Allentown, Bethlehem, and Easton. Most water and wastewater services are provided in the Lehigh Valley by 40 separate publicly owned utilities. The Lehigh Valley is one of the highest growth areas of Pennsylvania. This growth has created significant strains on land use policies and the provision of water and wastewater services. This project was devised to follow up on recommendations of prior AwwaRF research (Regional Solutions to Water Supply Provision, Order #91146) that had called for a new paradigm to evaluate regional collaboration. The new paradigm was called "benefits and issues." The intent of this project was to first quantify benefits and then discuss the issues that would need to be addressed in capturing those benefits. This research project was undertaken to demonstrate a method of quantifying the potential benefits of regional collaboration between utilities. Spreadsheet models were developed to project the future finances of typical small, medium, and large utilities. Despite the long-term nature of the capital investments and attendant financial risks, many utilities have only a short-term outlook. In contrast, the project methodology forecasts the financial condition of the model utilities in 2020. Results show where utilities will end up without trying to forecast the exact path they may traverse in getting there.