America’s Water: Infrastructure in peril

J. Carl Ganter

I’m J. Carl Ganter, director of Circle of Blue. We’ve brought together people from around the nation here today, a really diverse group, to explore America’s water, its infrastructure in peril and what to do, how to fix it, how to finance it. This is an ongoing conversation.

To help take us on this journey for the next 90 minutes or so, we’re joined here on Water Street by David Brancaccio. David is host of the Marketplace Morning Report on American Public Media.

David Brancaccio

Thank you, Carl. I love how we’re live from Water Street. That’s like holding an open space conference on Park Avenue or what. I’m very honored to be here today. I have a special interest in the topic. Some years ago, I did a PBS TV special on climate change, and we looked at that issue through the prism of water security. We did that from the American west and from the Himalayas in India. We continue to try to keep an eye on these crucial infrastructure issues on my show every day.

It is indeed a time of tremendous challenge and perhaps change. We’ll talk about that. One week ago on May 4th, President Obama visited Flint, Michigan during his speech at Northwestern High School. The President criticized what he sees as the corrosive political attitude in the U.S. This attitude, he said, neglects public infrastructure investment and results in roads, bridges, water systems that function just above the failing grade.

The President chose Flint for his speech, of course, because of the terrible lead contamination scandal that has unfolded there for more than two years. The crisis left nearly 100,000 people afraid to drink, afraid to bathe, cook with their tap water. The city’s lead pipes became a national symbol of government neglect and of water systems that are outdated and need repair. The needs are large indeed. Estimates of the repair will range from hundreds of billions of dollars to trillions of dollars.

A bit of news just today, the American Society of Civil Engineers came out with an estimate saying that of the $3.32 trillion of infrastructure stuff that it has identified, we’ve only funded 1.88. What’s the difference? 1.44 trillion, that’s a piece of this. It might just be the pipes. What is $1.44 trillion? It’s $1,440 billion. It’s pretty close to the national budget of the entire United States for a year.

Pipes leak billions of gallons of treated water every day, wasting energy, wasting money. Broken pipes disrupt city traffic, commerce. Sewage spills during big storms force beach closures, spread disease. A warming climate is reducing supplies in the country’s fastest growing regions while fueling the growth of toxic algae blooms in places like the Great Lakes that can choke off aquatic life and threaten drinking water supplies.

Now today you’ll hear from four national water experts who’ll address big questions about U.S. water infrastructure, how to fix it, how to pay for it, and how to build systems that are suitable for our new century here.

We’ll be joined by Pat Mulroy of Brookings; Diane VanDe Hei, the CEO of the Association of Metropolitan Water Agencies; also Jeff Hughes, the Director of the Environment Finance Center at the University of North Carolina and Dr. Upmanu Lall, who’s director of Columbia University’s water center, the Columbia Water Center. We’re going to hear very importantly from you, people who are joined by phone and in person in four breakout groups that we’re convening a little bit later in the program.

Obviously, the challenge is great, but so is the opportunity, I think, to invest in new ways, to think about building systems that use less water, innovation, systems that discharge fewer pollutants, maybe consume less energy and are resilient to whatever Mother Nature throws our way.

Now first, to talk about some of these opportunities for a few moments, we are joined by former U.S. Secretary of Housing and Urban Development, none other than Henry Cisneros. Mr. Cisneros has spent a career fully engaged in urban infrastructure and politics and serves on the Bipartisan Policy Center’s Executive Council on Infrastructure.

Henry Cisneros thank you for joining us on the program.

Henry Cisneros

David, thank you very much for your good overview and also for your years of work and informing the American people in the unique way that you have in your various roles.

Thank you also to Circle of Blue and H2O Catalyst and all of the other organizations who’ve come together for this very creative way to bring people together with minimum inconvenience to hear about an important subject.

I’ll be very brief and just say the following. First, I did serve as Secretary of Housing and Urban Development. People think that that is generally a role associated with housing per se, public housing, homelessness etcetera, but the second part of the title involves urban development and the infrastructure of urban areas across the country. I’ve travelled to 200 different American cities on the job in every one of the 50 states and saw firsthand the inadequacy of infrastructure preparation for the continued competitiveness of American cities and their livability.

Today I work in one of my capacities as Chairman of the Executive Committee of a company called Siebert Brandford Shank, which is an underwriter of municipal public finance. In that capacity, work a lot on water questions.

The water issue is of course essential to the livability of American cities. We are witnessing something of an urban renaissance, particularly in the coastal cities where people are moving into neighborhoods that had long been abandoned. We see dangers even of gentrification. So much of the continued health of cities will depend upon dealing with the reality of obsolete water systems, some of them built in the 1800s, some of them still when construction occurs and pipes are dug out are wooden pipes from a century and a half ago. These are really important questions to the continuing forward progress of cities.

As Flint has taught us, these are also questions of immediacy, of urgency, of real human danger. It strikes me that there are three important questions, which ought to be addressed.

The first is what is the extent of the highest danger associated with water systems in terms of linear miles, if you will, or other measures of the extent? The second is what is the cost of fixing them in a triaged way? The most immediate that cause human danger and then beyond that, everything else that needs to be fixed. Then thirdly, what are the options for solutions?

With respect to these questions, the American Water Works Association believes in something like 5 million lines that constitute lead lined water systems to date. Some of these are particularly difficult because it’s not the main arterial water systems in the streets, but rather the private lines that run from the streets to the homes. There isn’t a really easy way for the public sector to get at them, and they are obviously extensive.

On the second question, what is the cost? The estimates are somewhere in the range of $30 billion to deal with just the immediate problem of lead lined pipes. With respect to what kinds of options exist to address it, we haven’t crossed that bridge as a country.

The principal measure in recent years has been public bonding of water system replacement with local public bonds. As we know, many communities are confronting revenue crisis and tax limitations and debt limitations. That instrument, if we rely on that, is not going to solve the problem.

It is in my opinion that we’ll have to be talking very soon about a major federal initiative on this immediate urgency of lead-lined pipes across the country, a concentrated [effort] in the Midwest and the older cities, the legacy cities of the country. This seems to me as an appropriate subject for the upcoming Presidential debates and certainly for the new administration to act upon in a creative way immediately after they take office. A federal role in dealing with the worst of the emergency that cannot be addressed through traditional means of local public finance through local debt structuring.

There may be other ways as well. The Bipartisan Policy Center is just completing in the next a taskforce that will look at private sector options, ways to bring private sector capital to this issue, including creative structures like REITs and master limited partnerships and other unused strategies which are going to be essential if we’re going to take on not only this immediate problem. But also the longer term question of replacement of infrastructure at large.

Let me just close by saying that beyond these immediate questions, what is the extent of the immediate emergency? What is the cost of replacing the worst of the toxic lines and what are the concrete financial options for doing it? It strikes me that there’s another question as well, and that is what are the other dangers in our water systems, but other infrastructure as well? What are the other dangers? I use the word advisedly, where is human health is at risk?

Then beyond that, what are the other desirable areas of infrastructure improvement beyond immediate danger, the need to make modern, obsolete systems as well as to deal with future challenges?

You are right, David, completely and it is certainly the proper motivation of Circle of Blue and the other organizers of this to address these kinds of long-term questions. I would just hope that the Flint crisis as well as others we confront and traffic congestion and other areas prompt us to recognize that we are falling behind as a country. It’s a question of national competitiveness. It’s a question of national health and wellbeing. It’s a question of building on the opportunities that present themselves to create new urban environments, more livable, more walkable, more prosperous, more equitable.

All of these questions would depend very heavily on a fundamental issue, and that is how are we going to sustain, from a construction and engineering standpoint, from a design standpoint, from a financing standpoint, the nation’s infrastructure?

Water obviously comes first. It is life giving, life sustaining, can’t do without it, never have as a human species as long as we’ve been gathering in urban places and can’t now.

Thank you very much for the opportunity to say a few words. More importantly, thank you for creating this venue and gathering people to begin to address these questions.

David Brancaccio

Thank you Henry Cisneros who has laid out some key questions for us to examine as we proceed here today. Among them, how are we going to pay for this? Will this show up in our individual or collective water bills? In many ways, it’s already in the bills. Circle of Blue’s Brett Walton has just reported on rising water rates across the country as people conserve water in places like California given the drought. Utilities are trying to make up for lost revenue. Brett, what’s going on with our water bills?

Brett Walton

Thanks David. Since 2010, Circle of Blue has been tracking residential water rates for 30 of the largest cities in the United States to see how prices and rates are changing. By and large, prices are going up. For a family of four that uses 100 gallons per person per day, prices increased in average for about 5 percent last year for our 30 cities. Prices are increasing not just year on year, but their increases accumulate. Since the beginning of the survey in 2010, prices have increased nearly 50 percent for households using as much water.

Prices are not the same as bills. Bills reflect individual decisions on how much water to use. As conservation happens more and more across the country, revenue is going down for some cities. That is an issue they have to deal with. The survey of course is a course tool. There are more than 52,000 community water systems in the United States. We look at only 30 of the largest.

Nonetheless, the survey is indicative of the major trends that are shaping the future of U.S. water infrastructure. Those major trends include the growth of conservation, as I mentioned, the need for revenue in order to reinvest in all these water pipes and pumps and systems to accommodate growth and changes in water patterns and the pressure to keep water affordable for the poorest customers. There’s been a big movement in the last few years as incomes have stagnated to make sure that water is affordable.

David Brancaccio

Brett, thank you very much here. All right, now we’re going to get a discussion going with our initial set of very wise panelists. It’s a great panel here. We have Pat Mulroy, Upmanu Lall, Diane VanDe Hei and Jeff Hughes. I’m going to start with Pat Mulroy, a person who better not find out you’re using water in a stupid way. Pat, thanks for joining us.

Pat Mulroy

My pleasure. Glad to be here.

David Brancaccio

Listen, open-ended question, and we’ll rotate through the panelists on this one. As you see it, what is the first problem that’s got to get solved here? What’s your priority?

Pat Mulroy

I’m going to stay on the subject of how we’re going to pay for it. I think there are two main things that have to happen.

First of all, I think we who have been in the water business for a very long time need to recognize that our customers look at their water bill in a very different way than they are used to their power bill, their cable bill, their cell phone bill. They see it as a tax, not as a utility expense.

The reason for that is simple, is we’ve used that money as tax revenue for general city purposes. That practice has got to stop. It makes it very difficult for us to be able to, in a straight-faced way, go to the public and convince them that their dollars are actually going to go towards fixing facilities when we’ve moved water away from the utility aspect of it into other city services, police, fire, parks, whatever it is.

The second one is we have to uncouple infrastructure from the resource itself. In doing that, one tool that’s being used out west that we implemented is an infrastructure surcharge. I always said to our customers, “Yes, water is a basic human right. Here’s your bucket. Go to Lake Mead. Take as much as you want.”

What you don’t have a basic human right to is billions of dollars of infrastructure that moves that water and lifts it 2500 feet to your home treated to a safe drinking water standard and all you have to do is turn on the tap. There’s a cost associated with that. To the extent that you share in that larger infrastructure, you have a responsibility to help pay for that infrastructure.

Separating the infrastructure cost from the resource costs where on the resource side, you can leave all those conservation triggers in place I think is going to become increasingly important. Otherwise, this infrastructure, from a financial standpoint, is never going to be tackled.

David Brancaccio

You’ve got to pay for those pipes and water. All right. Pat, thank you. Let’s switch to Columbia’s Manu Lall here. I gave a figure from the Civil Engineers that came out this morning, and that was for all infrastructure. They are just counting what? Pipes?

Dr. Upmanu Lall

Yes David. That’s the primary thing. I guess the way I want to address the question is in any enterprise where you’re making investments that are likely to last 50 years or 100 years, there’s an element of irreversibility about your decision. Once you choose to do a certain thing, you’re locked in because the next opportunity won’t come for a long time.

As Henry Cisneros pointed out, I think it’s really important for us to think about problems that have urgency, but in this particular context also think about what we want our water infrastructure to look like in the long run.

If you look at what Pat said, she wants to separate infrastructure from the resource. This is a really important point that I want to emphasize because we have no structure for pricing the resource. Many people essentially have free access to it, agriculture being one of them. Then we have the cost of delivering water to them through large-scale infrastructure dams and canals, among other things.

Overall, I think we need to have a real thought about what all are urgent priorities for managing the resource in the long run and what infrastructure elements would support that process.

David Brancaccio

Manu, is there a plan? In other words, is there a document I could consult now if I would want to see a closely argued 10-year plan for dealing with this?

Dr. Upmanu Lall

I don’t think so. This is something we started this year with our America’s Water initiative, and we are engaging a bunch of people to try to come up with a roadmap of exactly this sort. At the moment, there’s not been a real discussion about it in the water space. Perhaps there has been in the energy space.

David Brancaccio

I want to turn to Diane VanDe Hei at the Association of Metropolitan Water Agencies. Diane, any best practices come to mind from your cities, cities doing it in interesting ways or doing it the right way or a better way?

Diane VanDe Hei

I don’t know of any large water system that is not looking at alternative rate structures, particularly since what Pat said that consumers look at their resource differently than the infrastructure. Regardless of the resource, their infrastructure has to be paid for.

You have utilities looking at a baseline that you have to have in order to keep the infrastructure in good shape. Plus you have to be looking at climate change, the impact on water, making the system more resilient, sustainable and what that will cost. That’s kind of a base fee, and then you look at the other components of the system where you can vary the rates based on whatever factors you’re allowed to do in the locality. That’s an issue that I think every large metropolitan water system is looking at today.

David Brancaccio

I’m going to circle back in just a moment to Jeff Hughes on some of the finance stuff, but staying with Diane for a second, beyond innovative finance and interesting rate structures, do you have some metropolitan areas that are models for others? Is someone doing something interesting that the group should know about?

Diane VanDe Hei

I think there are different municipal models and I think they are important in terms of how efficient they are and how their ability to use the funds that come in when we pay our bills for the purpose for which it was intended. That was job one, to provide in our case drinking water.

An example, instead of a department within a city, you can create the authority that is publicly owned, and I’m a public person. It is structure in a way that the funds that come in, it stays there and it goes back into the system.

There’s another utility in the U.S. and I think the only one, and it’s Louisville Water Company that is both public and private. It’s a utility that the only stakeholder in the utility is the City of Louisville. It’s run by a business, but the City of Louisville gets a rate of return for its initial investment.

I think that’s a really interesting financial arrangement that other utilities should be looking at. Because if you talk to elected officials and others, the rate of return on their investment is something that they think about when some of the funds that go into the water system go to other services within the city. The Louisville model is very interesting and I think the only one in the U.S., but not the only one run like that in the world.

David Brancaccio

Jeff Hughes now who is Director of the Environmental Finance Center at UNC. Jeff, Henry Cisneros said the old way, let’s do a bond issue locally… It’s just not going to work anymore. Is he right?

Jeff Hughes

I think the answer is it’s not going to work for all of our challenges. We’re very proud of the municipal bond market that we have in the U.S., and I think it works well for many of our needs and will continue to work well. What we are seeing is some regions of the country that the revenue stream is not there to support the traditional municipal bond market. I think we are, as an industry, looking for some alternatives, but I don’t think we’re going to lose the municipal bond market as one of our chief go-to mechanisms anytime soon.

David Brancaccio

That will be part of the portfolio. What are other ways to think about it though? I know you’ve done a lot of thinking about that.

Jeff Hughes

I do and I think the mechanisms for raising the capital are an interesting place to work. I do think before we can get too far on the mechanisms for raising the capital, we probably have to get to the foundation, which is where’s the revenue going to come from?

In that, to answer your first question about where we go, I think it’s a business based on selling a product. For years, the product was gallons of water. I think what we’re seeing across the country, particularly in some forward-looking utilities is they are no longer pretending like they just sell gallons of water. If you look at the cost structure, many of these utilities are spending tremendous amounts of money on environmental protection, on economic development projects.

I think we are seeing some utilities that are selling the quality of life features and they are breaking that link to water, or what you need is just money to get me a gallon of water. We hear a lot the phrase, “one water,” coming in from some areas of the country where they are really promoting the utility as an economic development resource agency, not your old water and sewer department that nobody wants to really talk about except at budget time.

David Brancaccio

Economic development, also quality of life. You want to live in a world that’s safe and nurturing and prosperity. This is the monthly bill you’re paying.

Jeff Hughes

I think so. Particularly for things that are sometimes difficult for the average customer to relate to. Some of the money they pay their utility is literally going hundreds, if not thousands of miles away from their household to deal with really complex engineering challenges, particularly on the wastewater side. I think the average customer, when they flush their toilet, has absolutely no idea what it takes to reduce the impact of that waste on their local community’s water bodies, but also it might be reducing the impact on the water bodies of the community downstream.

David Brancaccio

Pat Mulroy, I want to ask you about this. Is there a way in which the public remains focused on this and opens up their pocketbook for these infrastructure remedies, improvements? Flint has this issue front and center now. California drought had it front and center for so many for a while, but are we ever really going to be focused in a sustained way? Will the public ever be focused in a sustained way on this and what does that mean for policy?

Pat Mulroy

I think they are and unfortunately or fortunately, it will happen in degrees. Where water becomes a significant issue and I’m one who tends to believe that’s going to increasingly become the case everywhere in the country, irrespective of where you are. Be it a water quality issue or a water availability issue, the public focus.

It is going to be the responsibility of the utility and the water leadership of that area to engage in a very transparent conversation with their community. Open their books, show the public, show their customers either in whether you put together structured, integrated resource planning groups that are made up of a cross section of your community where they actually dedicate a tremendous amount of time to becoming far more educated on the issue and they then become your messengers for the rest of the community. Or whether you do it through constant dialogue with community groups and which you say, “Look, here are our books. This is our resource picture.”

As long as the public believes and has confidence in the messenger that there is a real need that exists that is going to cause them to have to pay a little more and they will get something for their money, they will pay that additional amount. As long as they feel it’s being fairly assessed, and that’s always the magic, right there.

How do you assess these costs to where everyone feels they are paying their fair share and not being overly burdened in order to help someone else out?

David Brancaccio

Diane, what are the topology barriers to this? I have a feeling the following issue is going to come up in the breakout session. It’s an important theme, but whether or not our local approach to water utilities is an approach that has to be reevaluated? Maybe this is such a … A problem that’s so big, it’s really a federal problem.

Diane VanDe Hei

I think there are a couple of answers to that problem. I think going forward, it’s predominantly going to be paid for locally. More and more people are looking at water as a national issue, looking at water as a generator of jobs, of economic development. It’s impact on the national security shows something happens to some of the largest systems. I think there’s a role, although I do believe locally is where the money is going to come from predominantly.

The federal government and the state government have a role to play because every dollar that the federal government puts into water investment, they get about $0.93 of it back. There have been two reports out recently. One was I think 2014 and the other was just a couple of days ago that looked at … I don’t know where the number 30 comes from, but it’s the 30 water systems serving more than 500,000 people with drinking water, wastewater and storm water. That report looks at an average unit of $23 billion per year over the next decade in expenditures.

Also looking at about 289,000 jobs that are aggregated in that same time period, good paying jobs, permanent jobs.

In addition to the report that came out a couple of days ago from the Water Environment Federation and the WateReuse association took a slightly different look at the economic impact of the federal government investment in water infrastructure.

They looked at the economic benefit analysis and the increase funding for the Drinking Water Revolving Loan Fund and the Green Water Revolving Loan Fund. They found that for the money that the government put out that let’s say 37.7 I think is … billion dollars is the number they are looking at. They get back almost $30 billion of it in tax revenues because of the money that goes out, it’s loaned, it’s leveraged through the states. It’s a loan, not a grant, and so the money grows. That people get jobs and they pay taxes. The federal government gets a rate of return on their investment as well and that’s a pretty big investment and pretty big rate of return.

I think there is a larger role for the federal government to pay for some portion of the infrastructure needs that we have, particularly since we can’t just deal with today. If you look at climate change, we have to deal with resilience for tomorrow, sustainability in the future and you need to do that now and not 10 years from now.

David Brancaccio

Jeff Hughes, how do you come down this notion of we have to stop thinking about this infrastructure challenge as a local and regional issue? We have to start thinking about it as a national issue.

Jeff Hughes

I think the federal government has been an active participant for a long time. It’s gone up and down. We certainly had periods of time in the 70s and 80s where they were much more involved in putting out the pure grant funds. They’ve maintained an important player, particularly for many small communities in providing low interest loans, some modest sized grant programs, again, mostly targeted to smaller communities. I think what we’re finding, though, now is that as the needs go up, that federal assistance is not … is filling all the holes.

I think we’re going to have some challenging decisions about where we put our federal assistance. I think the math that’s hard to make work out, we’re trying to recreate just a massive grant program frankly. I do think there are certain financial challenges that local utilities could use a lot of help with.

For example, the federal government runs a fairly successful energy customer assistance program at the federal level. We have nothing of that sort at the water level. I know there’ve been some discussions about looking at that. There’s also some … We have some federal support to lower the cost of capital for very large transportation projects. There’s now interest in maybe using some of the federal financial power to route it and just offering enough grant programs, lower the cost of capital for these really massive, particularly multi-utility, multi-region.

I think there are some exciting things that the federal government will play, but I think the devil is going to be in the detail.

David Brancaccio

What will you need if Secretary Cisneros called for the next Presidential administration to make this a priority from the word go? They are going to have to start figuring what is the best way to even if there was the political will to raise the money, how it would be disbursed.

Let’s go over to Professor Lall. Fixing rusty, dangerous pipes is crucial, it’s lifesaving. It’s not interesting. It isn’t. We can’t make it interesting. What’s fascinating is thinking about the water systems of the future and opportunities for the future on how we can serve, how we think about technology. Share some of your thoughts about the water systems that we should have once we go beyond fixing what’s broken.

Dr. Upmanu Lall

Thanks David. We’ve been thinking about this issue from the following lens. You have traditionally three components of infrastructure for water delivery and treatment … Wastewater disposal and treatment. These are storage, distribution and treatment. If you consider that climate change or climate variability brings more floods and droughts or even just historically severe floods and droughts, you need to pay attention to storage. Distribution is the pipes as you were talking about.

The model we have had is a large centralized system for collecting water, sending it to people’s houses by pumping it over and then picking up that dirty water from there, pumping it back to a centralized location and then finding a way to dispose it. In between, we run into surface storm water disposal issues as well. This is a view of our infrastructure as it stands today.

If you think about it, and I’ll give you New York City’s example. I pay $3.90 per cubic meter of water for my bill. That’s substantially higher than some places, but it’s sort of in the middle of the road in a place where water is arguably not scarce. New York City has a fantastic system that has been around for a long time. Essentially outsourcing their water needs to the Northern part of New York.

Now of this $3.90 per cubic meter, around two-thirds to three-fourths of my bill is for the disposal of wastewater and storm water. It’s not the gallon bucket that I’m going to pick up that Pat was talking about, that disposal issue.

Now as the EPA identifies and promotes the treatment of additional contaminants, emerging contaminants, as many people are calling them, we’ll have to upgrade many of our treatment systems as well on the drinking water side. Then we have the wastewater that we generate and those will have to be treated back to drinking water levels. This is going to add expense.

Now an alternative to this would be to start thinking about should we be taking this highly purified water, using it to flush toilets and then getting it back out and retreating it to that same level or to dispose of in different ways?

An infrastructure of the future might actually look somewhat different. It might involve buildings being processing units for water so that you’re not spending huge amounts of money pumping and then re-pumping the water back and forth. They might have treatment systems that are built right there.

They might have sensors that the water that a person is taking out of your faucet is of an assured quality. And you don’t have the issue that you treat water to very high standards and it comes in through your ancient pipes into your own building, which is your responsibility perhaps and then you have lead coming out of it. I see remarkable changes possible and are clearly the questions that will come beyond the technology side is, Who pays for this?

My response to that is ultimately these costs are all going to be shifted down to the user in one way or another, either through general taxes or directly through rates. There are some moral decisions that have to be made in that context as well.

David Brancaccio

Some moral decisions. All right. In just a few minutes we’re going to do what we really want to do also is bring your voice into this as we break up into the smaller groups. I want to ask Pat, while we still have her on the line, about what might be a balance.

Pat, between infrastructure development, fixing for instance the water system and growth. It’s like if you’re building a highway, you add an extra lane. Often that attracts more traffic and more sprawl. How do balance these two issues? If we’ve got the water system that we wanted, maybe we’d be encouraging too much growth in a way that might be destructive in a different way. What do you think?

Pat Mulroy

I think that goes down to our usage patterns more than to an infrastructure issue to be very frank with you. I think as our communities grow, and they will grow, the notion that you’re going to use water to stop growth is foolhardy. It’s just not going to work. However, if we as a country are going to add significantly to our population, particularly in urban centers, then the American habit of using as much water as we want, whether we really need it or not has to stop. We as a nation use more per capita than anywhere else in the world.

I think conservation, and that includes both technology conservation with high efficiency washers and high efficiency showerheads and all those other things that are becoming rather commonplace in the market now with our habits are going to have to significantly change. We can accommodate additional people, but we can’t accommodate additional people with our old usage habits.

I think a more challenging question for us is there are a lot of new industries that are locating and relocating in this country that we don’t even appreciate as average citizens how water intense they are. It takes 1400 gallons of water to make a single cell phone battery. As we bring these kind of industries in, we need to be very thoughtful about making them pay for the necessary infrastructure footprint that they create, if you will. Having a significant connection charge and infrastructure charge as new industries move into an area I think is going to have to become the norm.

David Brancaccio

Pat Mulroy at Brookings. Now I’m going to switch back to J. Carl Ganter who is going to tell us how exactly we’re going to break into these groups. Carl?

J. Carl Ganter

Thanks so much David, and thanks everybody. This is really a terrific conversation and it’s an opportunity to get more specific, and we have an exciting way to do that here. We’re going to go into breakout groups. We have four separate groups. We have four leading experts here that you’ll have the chance to speak with, and they’ll be facilitated by terrific journalists as well. You’ll be in a breakout group in a virtual room with one of our speakers as well as with a journalist. If you’re on your social webinar, you’ll see on your screen right now the list of breakout groups. If you’re just on your phone, just make a mental note and I’ll run through this twice.

Our breakout groups, we’re going to have breakout group number one, and this is if you want to join this breakout group on your phone or your social webinar dash, touch this number.

For group number one, Pat Mulroy and the short version of the theme is, “Better together, a collaboration and water supply in disruptive times.” Our journalist facilitator in that room with Pat and with you is Annie Snider of POLITICO. Again, that’s Pat Mulroy, room number one, “Better together, a collaboration and water supply in disruptive times.”

Room number two is Diane VanDe Hei and in room number two you’ll be talking about cities and economies that run on water. How can businesses and cities work together on these grand challenges? Our journalist facilitator is our own Keith Schneider, senior editor at Circle of Blue, and Keith will be facilitating and helping lead that discussion with Diane.

In group number three, we have Jeff Hughes, and Jeff, as you know, will be talking about financing the replacement era. Can utilities balance reinvestment, conservation, revenue and affordability? I’m sure the conversation will go much further. Our journalist facilitator in that room is Brett Walton also with Circle of Blue and author of the water pricing story that we talked about earlier.

In room number four, Upmanu Lall from the Columbia Water Center will be talking about engineering smarter systems for the 21st century. How might water infrastructure be reengineered for 21st century challenges? Joining Manu Lall will be journalist facilitator and author Charles Fishman. Charles wrote the book, The Big Thirst.

This is the first in a series. This is a big conversation as we’ve heard. It’s a multi-trillion dollar conversation, and it’s not starting here, but it’s moving forward from here. How do we take that further?

A word to our journalists: Your mics will be on and so will our guests’. Have fun and we’ll be tuning in.