Great Water Cities Panelist Susan Story Discusses Need for Infrastructure and Water Supply

July 22, 2015

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Susan Story, president and chief executive officer of American Water Works Company, Inc. (Voorhees, N.J.), will sit on the Water Leaders Session panel at WEFTEC 2015. Photo courtesy of American Water Works Co. Inc.

Susan Story, president and chief executive officer of American Water Works Company, Inc. (Voorhees, N.J.), will sit on the Water Leaders Session panel at WEFTEC 2015. Photo courtesy of American Water Works Co. Inc.

At WEFTEC® 2015, Susan Story, president and chief executive officer of American Water Works Company, Inc. (Voorhees, N.J.), will share her perspective on the challenges facing the water sector. On Sept. 28, Story will participate in a panel discussion with water sector leaders about changes in cities throughout the U.S.

The Impact of Leadership: Culture, Communication, and Community in Great Water Cities” is part of a series of Great Water Cities conversations hosted by the Water Environment Federation (WEF; Alexandria, Va.). In these conversations, leaders share lessons learned about managing water to improve resilience, livability, and economic vitality.

A veteran utility executive with more than 30 years of experience, Story leads a team of 6400 employees to deliver safe, clean, affordable, and reliable water services to an estimated 15 million people in more than 45 states and parts of Canada. She began her career at Southern Company (Atlanta) as a nuclear power plant engineer and later became executive vice president as well as president and CEO of Southern Company Services. She currently serves on the boards of directors for the Bipartisan Policy Center (Washington, D.C.) and Alliance to Save Energy (Washington, D.C.), and on the board of advisors for the Moffitt Cancer Center (Tampa, Fla.). She was recently the national chairman for the Center for Energy Workforce Development (Washington, D.C.) and served on the boards of the National Renewable Energy Laboratory (Golden, Colo.) and the Alliance to Save Energy (Washington, D.C.).

  • What do you think are the biggest issues the water sector is facing today?

The two biggest water sector challenges facing our nation today: water supply and aging infrastructure. These are very real issues that will affect our economy, our standard of living, and other basic life functions into the future if we don’t plan well and execute the right actions now.

Of the [1.6 million km] 1 million mi of water pipes in the U.S., a major water main breaks every 2 minutes, and [7.6 billion m3] 2 trillion gal of treated water are lost every year at a direct cost of about $2.6 billion. With the [1.13 million km] 700,000 mi of sewer mains, more than [3 billion m3] 900 billion gal of untreated sewage is discharged in the U.S. every year.

The [U.S. Environmental Protection Agency (EPA)] estimates that the cost of investment to simply keep the system operating as it does today for the next 20 years will be more than $650 billion, and the American Society of Civil Engineers (Reston, Va.) estimates that $1 trillion is needed over that same timeframe. And that is just to address the infrastructure issue, not water supply, although the two are interrelated given the [potential] savings of up to 25% of the nation’s treated water that is lost through aging infrastructure.

American Water is a leader in delivering innovative solutions to address the two key water issues. Unlike electricity, where you can build a plant to create more, if you have reduced surface water or ground water supplies, and you’ve optimized conservation, your remaining options are pretty much desalination and water reuse. American Water is leading in all of these supply options as well as in conservation efforts.

The fact is that water is critically needed for both energy production and for the growing of food — and the EPA’s report on the “Importance of Water to the U.S. Economy” notes that 94% of our economy is based on this water-energy-food nexus. So, while some might say we can’t afford the investment, the fact is that we can’t afford not to invest.

  • Are there any particular issues that have been more challenging for American Water?

I think the historic drought in California is certainly a challenging situation for our industry as we deal not only with that state specifically but use it as a primer for potential future challenges in all parts of the country.

We do have adequate water supplies in all of our districts throughout California, and we’re monitoring our groundwater and purchased water supplies carefully. We’re also working with the fire departments to make sure they have adequate fire flows to fight the wildfires that are ongoing out in California.

As you know with the drought worsening, the governor of California issued a 25% mandatory reduction in water usage. We’ve been a leader for years in educating our customers [by] offering rebates for water efficient appliances and fixtures and providing incentives for drought tolerant landscaping. Our customers have already reduced their water usage significantly statewide and [by] as much as 17% in Sacramento, since 2013.

In addition, we’re piloting a unique program in Monterey using advanced water meter technology that will enable customers to more proactively manage their water use and also help detect leaks and breaks in the system.

It’s important to note that the current state of the nation’s water and wastewater infrastructure is also worsened by drought. Drought exacerbates the flaws in the pipes through contraction and expansion of the ground. This is the same circumstance with freeze/thaw conditions. Any weaknesses in the pipes are stressed, which causes increased breakage and leaks.

Obviously, right now this is a big challenge in California and Texas, but it goes beyond these traditionally dry states. The report on freshwater supply from the Government Accountability Office (GAO) states that 40 of 50 state water managers expected shortages in some portion of their states under average conditions in the next 10 years.

Additionally, the overall challenge of climate variability poses a variety of risks to America’s water infrastructure. It manifests itself through extreme weather events. The infrastructure that makes up water and wastewater systems is built for resiliency and sustainability of operations during weather events or other circumstances that could potentially interrupt service. When events that were historically considered to be “100-year” events happen more and more frequently, utilities must prepare for a new “normal.”

For U.S. water providers, addressing the impact of climate variability will require finding solutions to maintain adequate levels of water supply to communities, ensuring high standards of water quality in the face of droughts or flooding, and balancing the need for infrastructure improvements while keeping this vital resource as affordable as possible.

  • Has American Water had to make any cultural shifts or organizational restructuring in recent history to respond to changes in the economy, or environment? What other changes has American Water recently made to respond to the changing world around it?

How you win in business matters. How you get financial results matter. At American Water, we are about success day by day, done the right way, not quarter to quarter at any cost. What keeps us grounded are our values.

Our five values, which we updated early this year, are safety, trust, environmental leadership, teamwork, and high performance. Easy to understand what they mean, but lots of hard work to live them every day.

Safety is listed first, because safety is not just a priority or a strategy; those things can change year to year. Values don’t change, and neither will our commitment to the safety of our employees, customers, and communities.

Environmental leadership is not just what we do; it is who we are. This thing we do — delivering clean, safe, reliable, and affordable water — is critical to health, our ways of life, and our economy. We must ensure that we address the national issues of a sustainable water supply and replacement of aging water and wastewater infrastructure for the sake of our customers today and for future generations.

Trust and teamwork go hand in hand. Trust and teamwork start with us at the top.

High performance. We believe that the vast majority of us desire and are driven to give our best to the task at hand and take pride in our achievements.

But there is another element. We know that changing markets and customers mean that, while we must always hold on to those foundational behaviors, which have made us really good in the past, we must also reach out for that which will make us better for the future.

  • Public and private partnerships seem to be growing in popularity. Do you believe that the sector is seeing partnerships more as a viable option for projects?

The current challenges faced by municipal-owned utilities and increasing environmental requirements faced by communities and businesses only heighten the need for private sector collaboration. American Water is a proven leader in providing expert solutions across the federal, municipal, and industrial markets. We are actively engaged in the [public-private partnership] market, particularly in contracts that establish long-term partnerships with the federal government and municipalities.

In the municipal space, we have many successful public-private partnerships in the areas of [operations and maintenance], water reuse, and desalination. In a public-private partnership with American Water, the public — the customers — truly come first; that is foundational to our business model. We are dedicated to local involvement, improving the quality and reliability of customer service and community water or wastewater systems, updating pipes and treatment plants to handle new growth, and being a good neighbor in the areas we serve. Our industrial customers also benefit from our expertise and efficiency, as we operate and manage every aspect of the industrial water cycle.

We understand that the needs of every community are unique. That’s why we create solutions customized to the challenges facing each of our partners.

  • What are you hoping to share and/or learn from the Great Water Cities panel?

This is all about collaboration to address our challenges. There is so much good work going on right now in the water industry and beyond to do just that. For example, American Water is also part of the Bipartisan Policy Center (BPC)’s recently announced establishment of a new Executive Council on Infrastructure (of which I am serving as co-chair), which aims to identify measures to encourage private investment in infrastructure and promote economic growth. As America contends with the growing need to build and maintain critical infrastructure — particularly relating to water and wastewater — and the lack of government funding to do it, the BPC is convening experts from some of the nation’s leading companies to explore ways to bridge that gap.

Like the Great Water Cities panel, each time we bring minds together, we increase our chances to learn and leverage ideas from one another and that is so important given our water challenges.

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