Paying for Clean Energy and Global Climate Change: Sweden and the Road to Paris, December 2015

When I was growing up, my family would drive up each summer to the northeastern United States to visit my paternal grandparents. My grandmother grew up in a Swedish-speaking household, with Swedish immigrant parents, in the Boston area. From my grandmother, and my father, I learned many things as a boy about Sweden that fascinated me, like traditional holiday cooking, decorating, and dress, especially for St. Lucia’s Day, a winter holiday (December 13) that begins the extended celebration of Christmas. And I admired Sweden’s history of technological innovation, socioeconomic progress, and the push in their society for justice, peace, and a clean environment. For example, chemist Alfred Nobel (1833 – 1896) established and endowed the Nobel Prizes (note that a prize for chemistry was just awarded to a UNC-Chapel Hill scientist). And Dag Hammarskjöld (1905-1961) became the second Secretary General of the United Nations, posthumously receiving the Nobel Peace Prize in 1961. There was much to admire about the land of my ancestors.

Sweden continues to innovate and move forward today on many such fronts. For example, with the 2015 United Nations Climate Change Conference (Nov. 30 – Dec. 11, 2015, in Paris, France) now imminent, Sweden has announced its intention to become one of the first countries in the world – and possibly even the first – to become fossil fuel free, generating all of its electricity from clean energy. The Paris U.N. meeting will be the 21st yearly session of the Conference of the Parties (COP21) to the 1992 United Nations Framework Convention on Climate Change (UNFCCC) and the 11th overall Conference of the Meeting of the Parties (CMP11) to the 1997 Kyoto Protocol. The Paris conference intends to achieve a legally binding, universal agreement on climate from all the world’s nations (unlike Kyoto).

So far, Sweden has announced no timetable for implementation of the national fossil-fuel-free plan. Whatever the timeline, Sweden appears to intend to strengthen their attempts in Paris to persuade other countries to follow their example in international climate negotiations. But how will Sweden, a country of approximately 9.8 million people, pay for this ambitious plan? And have any other governments already attempted this?

Continue reading

Key Financial Indicators for Water and Wastewater Systems: Current Ratio

In previous posts, we outlined how to use the financial statements of a water or wastewater system to calculate the key financial indicators of operating ratio (a measure of self-sufficiency), debt service coverage ratio (a measure of a system’s ability to pay its long-term debts), and days of cash on hand (a measure of a system’s financial security). Another key financial indicator is current ratio.

Current ratio, also known as quick ratio, is a measure of short-term liquidity or the ability to pay your current bills. It is most often calculated by dividing unrestricted current assets by current liabilities. In other words, could a water or wastewater system pay all of the bills currently sitting on someone’s desk with the cash it has on hand?

Continue reading

Fitting Together the Puzzle Pieces: Developing a Sustainable In-Lieu Fee Program for Wetland Mitigation

Depending on where you live, you might have wandered through scaffolding that supports new high-rises in a rapidly-developing city, or driven past brand new housing developments cropping up where wetlands used to thrive. You might have wondered about the environmental impacts of construction and the long-term impacts of newly paved surfaces replacing natural habitat. Fortunately, the EPA requires developers to consider these impacts prior to construction in order to avoid adverse impacts, minimize their impacts, and finally, provide compensatory mitigation for the unavoidable impacts to wetlands. But how do local and state governments organize systems and structures to manage these processes?

Continue reading

Four Trends in Government Spending on Water and Wastewater Utilities Since 1956

According to data collected and published by the Congressional Budget Office (CBO), federal, state and local governments in the United States spent more than $2.2 trillion in the last 59 years on operations, maintenance and capital infrastructure of water and wastewater utilities. That equates to more than $4,131,000,000,000 in 2014 dollars, adjusting for inflation of infrastructure-specific costs. Following our earlier blog post demonstrating that federal spending on water and wastewater utilities decreased since the 1980s, we analyzed the data and identified 4 more trends in how government spending on utilities changed between 1956 and 2014.

Continue reading

The Revenue Ups and Downs of the Water Business

The Upside: The water business sells one of the most important, if not the most important, products on earth. It is a product that can be used for thousands of purposes and one that has limited competitive pressures compared to other products (an overseas producer probably won’t take your market share anytime soon).

The Downside: Technology is working against it – innovation and behavior change are constantly putting downward pressure on sales. While water is an essential product, the business is not immune to the impacts of economic conditions – low growth and industrial decline can have a major impact on the bottom line. Regulation and less available supply in many states have forced providers to launch campaigns to sell less of their product. Market entry for new providers, particularly profit seeking companies, can be quite difficult and is often met with public scrutiny.

The Business: In some ways, providing water can more closely resemble a public health service than a commercial business. However, it is a business, and it must have a healthy bottom line to maintain qualified staff and sound infrastructure to ensure the public health benefits of reliable drinking water. For these reasons, the EFC actively studies the bottom line of this essential business. The business woes of many California utilities have been highlighted in the press recently as communities have been asked to cut their sales significantly. How has the business fared over the last ten years of national economic ups and downs and drought induced sales pressures?

Continue reading

« Older posts