Water System Upgrades Could Require More Than $1 Trillion Over Next 20 Years

Water quality projects needed to meet goals of the Clean Water Act will cost an estimated $630.1 billion nationwide over the next 20 years, according to the most recent Clean Watersheds Needs Survey (CWNS) conducted by the Environmental Protection Agency. The survey was completed in 2022 and published in a report to Congress in April.

The analysis comes on the heels of a second study, the most recent Drinking Water Infrastructure Needs Survey and Assessment. That analysis, finalized last September, found that water utilities nationwide will need to spend $625 billion over the next 20 years to fix, maintain, and improve the country’s water infrastructure. The two surveys together—one focused on wastewater and stormwater and the other on drinking water systems—indicate a total infrastructure funding deficit greater than $1.2 trillion over the next two decades.

The watershed needs report, which highlighted a total unfunded national need of $630.1 billion in 2022 dollars, indicates that clean water infrastructure needs dealing primarily with wastewater and stormwater have risen 73% since the last survey was completed in 2012. The survey, which the EPA is required to conduct periodically under the Clean Water Act, initially enacted in 1972, evaluates the capital investments needed to meet water quality regulations and address water quality issues that affect public health. California, New York, Florida, Virginia, Louisiana, and Georgia reported the highest needs and collectively accounted for 42% of the national total.

The survey covers four areas: public wastewater, stormwater, nonpoint source control, and decentralized wastewater treatment. Public wastewater treatment involves publicly owned treatment works that treat, store, and recycle wastewater; stormwater management involves controlling water runoff from rain or snow; nonpoint source control is the management of water pollution from sources such as runoff, drainage, or precipitation; and decentralized wastewater treatment refers to individual or community wastewater treatment systems.

The EPA added the nonpoint source control and decentralized wastewater treatment categories to the total needs in the 2022 survey in response to a 2014 law. That change increased the number of projects eligible for Clean Water State Revolving Fund financing. These new categories proved a significant reason for the notable increase in needs between the 2012 and 2022 surveys.

Still, the nation’s unfunded clean water needs are numerous and growing. And although the 2021 Infrastructure Investment and Jobs Act (IIJA) provided nearly $12 billion to the Clean Water State Revolving Fund and $1 billion for projects that address emerging contaminants, the results of the survey indicate that the needs that communities will face over the next two decades far outweigh those federal funds.

On top of this already daunting deficit, the EPA report estimates that the total national need is likely underestimated because of data and reporting challenges, lack of long-term planning by utilities and municipalities, and the exclusion of Tribal wastewater needs. Additionally, there may be a lack of incentive for states to complete this survey; unlike the drinking water survey—which is used to distribute state revolving funds for related projects, including allocations under the IIJA—the CWNS results do not change the formula used to distribute federal funds to Clean Water State Revolving Funds.

Aging infrastructure is likely to blame for at least part of the increase in need reflected in both the clean water and drinking water need surveys, a conclusion supported by evidence of failing water systems throughout the country. For example, in January, a flash flood in San Diego destroyed homes, flooded cars, and created a sinkhole, all because of its failing stormwater infrastructure, which has a deferred maintenance backlog of at least $2 billion. And in Prichard, Alabama—where the water infrastructure has been neglected for decades, resulting in water loss, flooding, and unreliable service—the total cost to repair pipes, sewage treatment, water treatment plants, pump stations, and other essential components could exceed $400 million. Although these repairs are expensive, continued neglect will eventually lead to negative consequences—in April, for example, the EPA issued an order to Hawaii County to address sewer discharge resulting from its failing wastewater treatment facilities.

Importantly, the watershed needs report also says that climate change will take a toll on aging infrastructure. Short-term risks—such as hurricanes, floods, tornados, and wildfires—and longer-term ones—such as rising temperatures and droughts, increasing precipitation, and sea-level rise—can cause broken pipes, overwhelmed stormwater systems, loss of power, and poor water quality, all of which prevent water systems from operating effectively and can have devastating effects on communities. For example, heavy rainfall in January overwhelmed wastewater facilities across three states in the Chesapeake Bay region, causing nearly 300 million gallons of contaminated stormwater to be dumped in local waterways in Maryland, Pennsylvania, and Virginia.

Many cities and states have noted these risks in planning documents and reports; for example, a report funded by San Francisco predicted that compared with historical levels, the city could receive nearly 40% more precipitation by 2100. Such an increase would devastate its existing storm and wastewater infrastructure and cause widespread flooding. And, according to New York City’s Wastewater Resiliency Plan, all 14 of the city’s wastewater treatment plants and 60% of its pumping stations were at risk of flooding as of 2013.

Water infrastructure funding has been one of the priorities of federal legislation such as the IIJA and the American Rescue Plan Act, but the EPA’s latest drinking water and clean water infrastructure surveys point to rapidly growing financial needs that far exceed the influx of funding. And while aging infrastructure is already presenting huge obstacles for cities, water utilities, and consumers throughout the country, climate change will only increase costs over the next several decades, underlining the importance of addressing critical water infrastructure projects in the near term.

Mollie Mills is a principal associate and Aleena Oberthur is a project director with The Pew Charitable Trusts’ state fiscal policy project.