What is WIFIA? WIFIA stands for the Water Infrastructure Finance and Innovation Act, the name of the federal act that authorized an interesting new federally managed water and wastewater infrastructure funding mechanism. WIFIA includes both direct loans and a new credit enhancement/guarantee mechanism (more on WIFIA guarantees in a future blog post). The WIFIA program was first created in 2014, but its funding appropriation and program guidance was not completed until the end of 2016. The US Environmental Protection Agency (EPA) announced the Notice of Funding Availability for WIFIA on January 10th, 2017. Borrowers interested in taking out a loan with this year’s funds have until April 10th, 2017 to submit letters of interest that will be considered by EPA.
Here at the Environmental Finance Center we work with a lot of data, but all the data in the world is useless if you can’t convey the story of the data to people who need to understand it. In line with our mission to support informed financial decision-making, we produce Utility Financial Sustainability and Rates Dashboards and Excel-based tools to help local governments and stakeholders visually decode complex data. Since I joined the EFC last year as a Data Specialist & Project Manager, I’m happy to say that it is my job to make sure that the visualizations we produce get the message across as efficiently and accurately as possible. Based on my experience I’ve put together some tips on how to give your charts a makeover to give your viewers the biggest impact.
However, you don’t have to be a data nerd to benefit from these makeover guidelines (although, welcome to the club if you are!). Anyone can use the following tips for more effective visualizations, whether you’re presenting at a board meeting or reviewing your own personal budget.
For water and sewer utilities regulated by a state’s public utilities commission (PUC), mounting a rate case can be an expensive proposition. In fact, for some particularly small utilities, mounting a rate case can be more expensive than operating the utility for many months. It’s no wonder, therefore, that utilities may be reluctant to undertake rate cases on a regular basis. Some utilities may even wait longer than a decade between rate increases, a decision that may preserve short-term fiscal health, but can be costly in the long term.
The unpredictability of future costs makes it difficult to design new rate structures in preparation for a rate case. In my study at the EFC of rate structures across four different states, I’ve found four, region-specific challenges utilities may confront that lead to financial instability. These are declining water sales due to reduced demand and conservation measures, volatility in the price of power, drought stressors, and environmental and health regulations. The challenge in a rate case, therefore, is, how can the utility commission ensure the cost of service is fair to the consumer and that rates allow the utility to remain fiscally healthy? The three strategies discussed below can help utilities remain fiscally stable while avoiding constantly mounting rate cases by designing rate structures that adjust for uncertainty in future conditions.
There’s a lot we don’t agree on; however, there’s one thing we can all say is true—everyone deserves access to clean water. Drinking water and wastewater utilities have taken on the responsibility of providing clean drinking water and to uphold public health standards in neighborhoods and communities. Unfortunately, there’s always a trade off: utilities have to invest in a variety of innovative technologies and infrastructure to ensure they are up to date with current drinking water standards. In order to do so, utilities typically need to rely customer revenues, which can raise another problem—affordability.