Shaping the Future with Private Water

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This is the Water Foresight Podcast powered by the Aquilaris Group, where we anticipate, frame, and shape the future of water through strategic foresight.
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Welcome to the Water Foresight Podcast.
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Today's guest is Jim Good, who's the CEO of Parkview Advisors.
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Jim, welcome to the Water Foresight Podcast.
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It is a privilege to have you with us today.
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Thank you, Matthew.
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The privilege is mine to be here.
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Thanks for the invitation.
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And I look forward to spending the next little bit with you talking about our favorite topic.
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Yes, our topic, water.
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I know that you have been around for quite some time in the world of water.
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Why don't you give our listeners a sense of where you've been in the world of water?
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Sure.
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And I would say that I got into water the way most people do.
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I started working on Capitol Hill for a United States Senator and naturally migrated into the water business.
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Umly partially joking, I did start my career there, but I worked on water issues for the guy, and that got me into actually a trade association that represents the private water companies.
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That's the National Association of Water Companies, and was able to do that for a few years, represented the interests of the sector on Capitol Hill and before federal agencies, mostly the EPA, but some others as well, and was recruited by one of the member companies, the California Water Service Company, to go back to California where I'm from originally and head up their public relations, government relations arm.
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Interestingly enough, it turned into mostly a business development job because they, like a lot of investor-owned utilities, especially at the time, didn't really have much of an emphasis on business development and yet had a bunch of leads, which you know in the mid-90s were scraps of paper for opportunities.
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So they, I was the new guy, they handed them over to me and said, here.
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And I ran with it, made the most of it, and helped that company expand into two or three other states and grow their portfolio of non-regulated business, like uh operation and maintenance contracts and single service functions, meter reading, what have you, and also acquisitions of both public and private systems.
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Wow.
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Did that for a number of years and then was recruited by our friends at Veolia, which at the time you may remember was called US Filter.
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Yeah.
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And they brought me over to head up business development in their western region.
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And I did that for a number of years and grew that footprint until I decided to move into operations and ended up running Veolia Waters Western Region for a few years.
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And then was asked to go to Pittsburgh and head up a business model that the company had at that time.
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I don't think they really have it anymore.
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It was called Peer Performance Solutions, where they would offer a combination of consulting services really focused on efficiencies and revenue enhancements, and then working with the agency to help implement them.
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Yeah.
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I did that, headed up that consulting business and it was interim executive director and then permanent in-house executive director, the Pittsburgh Water and Sewer Authority for five or six years.
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And when that ended, I hung out my own shingle with Parkview Advisors, which I still have to this day.
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That was interrupted for a few years during COVID.
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When like a lot of people, I saw my business model change.
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And I worked for Jacobs for several years, where I ran their industrial water OM business, which was kind of fun because it was uh enough like the work I'd been doing uh in terms of OM and water and water quality regulations and all that, but a little bit different and then different enough to uh make it interesting.
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Uh and then uh about a year and a half or so ago moved on from Jacobs and back in my consulting business park view advisors.
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And we really do a whole range of things for all sorts of different clients, whether they're small, large, public, private, uh you name it.
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And uh it keeps me involved in the sector.
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And I get to do my favorite thing, which is help water utilities and suppliers into the sector do what they need to do to help us all get better service for a reasonable cost.
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Yeah.
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Yeah.
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That's quite a career.
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That's quite a career.
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Yeah.
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Wow.
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Good companies in there, Violia Jacobs.
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They're still moving.
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They are.
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And uh that's uh never a bad day to be in the news, right?
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So uh I don't know.
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Some people may disagree with me on that.
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But you know, your your involvement across the water sector, especially in the private side of the world, causes me to want to revisit with you uh the challenges that we have today in the world of water and how the private water sector may provide solutions, one or more solutions to some of these challenges and how that could shape the future of water over the next 10 to 20 years.
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And, you know, give me your thoughts overall on the private water sector.
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Some of our listeners may not be entirely familiar with the private water sector, but kind of give us an overview, the the role of the private water sector from your experience.
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Yeah, sure.
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Well, I you know, the water, the private water sector, like the water sector itself, is is is vast and can be chopped and changed in any number of ways.
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I really like to think of it in sort of two uh sections.
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One would be the more operationally focused, and one would be the more maybe ecumenically focused.
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So you've got the investor-owned utilities, which are private, often uh traded on uh stock exchanges, big companies like American Waterworks, Calwater, where I worked, essentially utilities, um, some others.
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And they own water system assets just like a municipality does, and provide services and make sure folks get their water and get their phone calls answered and all that, subject to the exact same regulations uh from the Environmental Protection Agency and the state regulators as anybody else.
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Uh, the the main difference, other than the ownership model, is they uh are regulated by state utility commissions.
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So that their rates are established using that methodology, which balances fairness to the investors and fairness to the customers.
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Then the second big tranche there would be the contract operators.
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So these are private companies that enter into contracts with mostly municipalities, but also industrial customers to provide some suite of services, whatever those are that are negotiated.
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And those are companies, like we mentioned, Veolia, uh Inframark, Jacobs, those are the big ones.
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Uh and they don't own the assets, they operate them under contracts with the underlying owner, whether it's a municipality or an industrial customer.
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Then a third group that uh we see more and more of is you know what I would call the startup space.
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Uh and you've seen a lot of investment from private equity firms and uh funds trying to find the next big thing in water.
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And that that's an exciting place to be because there's a lot of really smart people trying to help find the more uh a more efficient way to provide information, to provide treatment, what have you.
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And the you know, there's a challenge there, and a lot of times that these very smart people don't know very much about the water business.
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Uh, and and they help to take a great idea and and roll it out.
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And yeah, honestly, we could do a whole episode or more on on that part of the business, but that is uh that's that is an important piece.
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Then uh I would say that the two other places, and like this is what I meant by ecumenical, of course, are suppliers, almost entirely private, and then the big engineering firms like a Jacobs or a Stan Stantech.
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I don't really talk about them too much because they they are really focused on providing the same services to anybody, but I think it's worth a mention that they're they're out there and they are private firms.
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And so that's that's kind of my overview of of what the sector looks like.
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Yeah, yeah.
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Well, the majority, if I have my figures right, the majority of the community water systems in America are the public, the municipal systems, about 85%, I think, give or take.
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And some people, depending on where you live, you may not have any experience or exposure to the private water industry.
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You may not even know that the operators, for example, you mentioned Inframark, for example, or Veolia Jacobs, they may be operating a drinking water or wastewater facility in your community.
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You may not even know it.
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And do you think, if I think about the future of some of the solutions that the private water sector can offer?
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Maybe this is a two-part question.
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I'm sure there'll be I'm gonna say conservatively two part.
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If you look out the next 10 to 20 years, uh, do you see a change in the in the nature of the services that these private water organizations, institutions, companies, if you will, do you see a change in the services that they will be providing to communities?
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And if so, what do you think those services might be?
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Where are we gonna be in 10 to 20 years?
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Do you think it's just gonna be the, hey, you either have the choice of selling your system or doing contract ops?
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Or are there other things that we're not thinking about that you're gonna see in 10 to 20 years?
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Your thoughts?
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I think there's a couple of things that that are likely to happen in in the period that you laid out.
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And I hope we don't come back and check to see how accurate I am.
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But the um I I think we'll see a lot of growth uh in the investor-owned utilities.
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So the ones that own the assets and the you know, like uh cow waters, American waters that type.
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And the reason I say that is is twofold.
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You know, we've all seen the reports by the American Society of Civil Engineers and what have you about the the big deficit in investment needs in in both water and wastewater utilities.
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And you know, there there's really very little federal money uh coming in anymore.
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Um, one data point I have is you know, last year, the two combined programs at the in the federal level, the drinking water fund and the clean water fund combined uh made about$2.8 billion available for the whole country.
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The 15 largest investor-owned utilities, which serve about you know 11 to 15 percent, like you said, they invested$6 billion.
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So more than twice as much for one-tenth of the population was invested.
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And that's that's a typical year.
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That's year after year after year after year.
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And what that means is these um, you know, they're building up an incredible economies of scale uh when it comes to providing utility services, and they're ensuring that folks get the level of utility services that that they're expecting.
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You know, we we in our country, we expect to turn on the tap, your water comes in clean reliably, and you flush the toilet, it leaves reliably, and whatever happens to it after that is taken care of.
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And with 45,000 water systems and 16,000 wastewater systems, many of them very small, prices increasing, regulatory requirements increasing, uh, the PFOS regulation, of course, being the most prominent example right now, and the lack of federal money, there's there's really no other source of the capital that's needed at a cost that's sustainable to the average customer.
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Yeah, and so I think that's gonna open the door there.
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Yeah, I also think maybe to drill down one level, historically, those private water companies are just that.
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They were water companies.
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In fact, I remember when I first went to work for Cal Water, one of the technical people told me, Oh, I'm I'm I'm terrified of clean water, I all those requirements to discharge clean water.
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I just want to provide drinking water.
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But now, two things.
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I mean, one is there's a much more emotional attachment to, I know that sounds funny, to drinking water by customers than wastewater.
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And that's a certain amount of distrust to the private sector, let's be honest.
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And people don't want to think about the private sector providing uh water service, and the wastewater systems just have not been generally as well funded and as well taken care of, and and people aren't as emotionally attached to hanging on to their wastewater.
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So I think you'll see a big, big uh increase in the amount of wastewater systems that uh go under private ownership.
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You've seen some of that, uh, for example, in Pennsylvania and New Jersey, uh primarily, but I think you'll see a lot more of that over the next 10 to 20 years.
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And so you'll you'll really see a reshaping of the sector.
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Maybe 20, 25 percent of the population will be served uh in that period by investor in water utilities.
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Still pretty small percentage, but that would be a doubling.
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Uh so that's my bold prediction.
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Yeah.
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Now, you know, you use the C-word capital, and I'm I think I've mentioned this on the podcast before, but I I forget which bill it was, but I think Amtrak, you know, if you're from the East Coast, you know what Amtrak is, right?
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I think that got more money than all the money allocated for water and wastewater systems across the country in one of those big infrastructure bills, right?
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I think Amtrak got what,$7 billion?
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Just one train company, right?
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Yeah.
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It kind of shows you how challenging the situation is, especially when there's what are we up to now between drinking water and wastewater?
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What does EPA estimate in total, like almost a trillion dollars now over the next 20 years?
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Yeah, I believe that's correct.
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Yeah.
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So the affordability issue, you alluded to that earlier in your comments, where water is now front and center for a lot of people.
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Maybe 15, 20 years ago, people didn't think about, you know, water and wastewater, but now they're thinking about it, right?
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It's become much more of a concern for everybody.
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But affordability is a feature of that concern.
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How do we, how do we put the capital in the ground or at the plants, you know, elevated tanks?
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How do we, how do we, how do we invest in the water infrastructure without really impacting materially the customer's bills?
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And really then my next question is how how does really the the private investment that's there from these private systems, how does that really help bring in some advanced innovations, technology to keep those bills as low as they possibly can be?
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So that's my long-winded two-part question.
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Yeah.
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No, those, and those are good questions.
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So uh, and I'll try to be reasonably concise in my answers.
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I think on the the technology question, the water sector is is generally viewed as a pretty conservative sector, and rightly so.
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I mean, who wants, you know, you use the word disruption when you talk about Silicon Valley.
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And as I say, you know, who wants their water service disrupted?
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And if if if you don't believe me, ask your mother, um, and she'll tell you uh who it is that wants their water service disrupted.
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So, but that aside, the investor owned water utilities are under a lot of pressure from the commissions that set the rate to keep rates down.
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And and one place that that's done is on the operational side.
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And without getting into too much detail about how rates are made, that drives the need for uh automation and innovation, and whether that's on automated meter reading or uh AI systems to help analyze the condition of a system and help make better and quicker decisions on where investments should go and where maintenance is needed.
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And that sort of thing will help hold costs down on the uh the service delivery side.
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On the rate side, the issue is uh really is one of assistance uh in a lot of instances about the affordability, uh you know, helping people meet the cost of their water bill, because it costs what it costs.
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And I've we've seen most of the the big water utilities, the most most of the big investor-owned utilities, at least in the big states, have programs in place blessed by the utility commissions to provide assistance to customers.
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And so that's something that's that's already being addressed.
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Now add to that the um characteristic of a of a large water utility, which is the economies of scale and the ability of, for example, uh I'll use another company, the American States Water, sometimes also known as SoCal Water, has operations in 30 communities around the state of California, which is not an unusual arrangement around the country for a utility.
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They're able to, in many cases, aggregate that rate base into a single uh number for their customers.
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And so that means if somebody's in a tiny little system that needs a lot of work, say it's a hundred connection system, and they're rolled into a water system that has a hundred thousand service connections.
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Well, now the cost of their upgrade can be done at a much lower unit cost because it's spread across the entire system than if that system stood on its own.
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So, you know, that rates are going to go up.
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The question is how much and can we moderate those increases?
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And I think, you know, those are three ways that we can see that happen innovation, rates payer assistance, and then rolling in consolidation into larger systems.
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Yeah.
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It seems that some of these private utilities have multiple systems, community water systems in in across one state or multiple states where they might have the ability to try some pilot projects or roll out some innovative techniques or technologies that maybe other systems can't because they're just simply a single fairly uniform water utility.
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Is that a is that another feature of the private water sector that should be considered?
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Yeah, I mean, you see it all the time.
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I mean, um, I know that they've been leaders in installing treatment to uh remove the PFOS, the forever chemicals from water sources.
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I've seen them be uh leaders in um the This is kind of an old school thing, but important backflow prevention to make sure that you know you don't siphon bad water into a water sipping system.
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The deployment of uh sophisticated platforms for supporting your customer service crew in the field.
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You know, I I just happen to know this because I'm a native of California, even though I don't live there anymore.
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Take the leadership in fire detection type technologies so you can figure out, you know, are is your infrastructure literally under threat?
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And or is there a fire brewing and we need to alert folks to get it out?
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And the other thing I would say is a lot of these companies have pretty impressive RD efforts.
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So they're, you know, they're at different ways to address contaminants or treatment technologies or or what have you that you know, some of the very, very largest municipalities do stuff like that.
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But it's more of a practical approach generally from the investriones because they can deploy it and use it uh to uh reduce costs, improve treatment.
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One of the things that may come as a surprise to folks who aren't familiar with the privates is, and I'm talking about the larger ones, there's a lot of very small mom and pops that aren't well capitalized, but the big ones, I mean, they are they do everything they can to ensure they have safe water delivered without violating drinking water regulations or clean water violations because yeah, one, it's their job, and two, just the publicity, the bad publicity they get if they don't do it is magnitudes worse for them than it is typically for a public agency.
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And so they're they're literally if you want to scare a water company executive, tell them you're about to get a uh drinking water, uh you just uh um MCL excursion.
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Yeah.
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Nobody wants to notice a violation coming through.
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Right, right.
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Yeah.
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You mentioned one thing that I want to connect here.
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When it comes to the the capital deployed and the innovations that try to keep rates low as we worry about affordability, how do the regulated private water utilities interact with the regulators, not just the environmental regulator like EPA, but also the public service commissions?
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How do they interact with the public service commissions in trying to maybe encourage them, win them over, get their support for these innovative technologies that may or may not be very familiar to these commissioners?
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Is is that a is that something we're gonna see in the next 10 to 20 years where there will be a better level of dialogue and communication, a more uh a greater willingness to adopt some of these innovations?
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I think so.
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I mean, you know, one of the one of the, and you kind of alluded to this, Matt, is one of the advantages that the the investor of utilities have is the big footprint, the big rate base.
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And so that gives them the ability to say, hey, we've got this new technology, let us try it just over in this one area, you know, with all the precautions from a safety standpoint and a cost standpoint.
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And if it works, we'll deploy it more widely.
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So that that's an advantage that they often have, plus the access to capital to fund these things.
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Yeah.
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The other thing, too, is you know, part of one of the biggest things that these utilities spend their time on is the dance with you, the utility regulators on you know how much you're going to invest, what's your return on capital?
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Some really inside baseball things.
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And, you know, there's back and forth and and and all that.
00:23:49.599 --> 00:24:28.160
But I think more to your point, as water becomes a more and more critical issue in the public imagination and supply issues become more uh critical, for example, with all the data center uh demands on existing supplies, it's going to move up on the agenda uh of the staff and the commission, the commissioners themselves get more attention and get more support uh in terms of working with utilities to make sure that these issues are addressed fairly from both a capital investment standpoint and a cost standpoint to customers.
00:24:28.400 --> 00:24:28.720
Yeah.
00:24:28.960 --> 00:24:43.920
One of the major underlying issues here in this conversation is if I am a general manager of a public water system, I can spend money on a particular pilot project, and that's perfectly fine.
00:24:44.160 --> 00:25:01.839
If I'm a private water utility and I want to spend money on a particular innovation or pilot project, there's no guarantee that that investment of capital will be viewed by the regulator as reasonable and prudent.
00:25:02.000 --> 00:25:10.480
I may lose, if I spend a million dollars on some new metering technology or some new treatment technology, will that be viewed by the regulator as reasonable and prudent?
00:25:10.559 --> 00:25:12.240
Well, I get my money back, right?
00:25:12.400 --> 00:25:12.559
Right.
00:25:12.720 --> 00:25:17.039
They may say, sorry, that was a very uh imprudent project.
00:25:17.200 --> 00:25:28.880
And so there's that underlying worry there as to how the economic regulators work on the private side when you compare to how you raise rates and generate revenue on the public side.
00:25:29.119 --> 00:25:31.519
Is that a fair overview of some of those concerns?
00:25:31.839 --> 00:25:32.480
It can be.
00:25:32.640 --> 00:25:44.160
I mean, I I don't want to, you know, I think going back to my example of so say a more experimental technology or an unknown approach might might be a better way to put it.
00:25:44.319 --> 00:25:44.720
Right.
00:25:45.119 --> 00:25:51.279
It would be hey, staff, we want to roll out this new meter technology.
00:25:51.440 --> 00:25:58.160
You know, 10 of the communities around the world and in the country have done it, but we understand you have some concerns.
00:25:58.319 --> 00:26:01.279
So let's do it over here, just a small area.
00:26:01.519 --> 00:26:05.839
And, you know, books will be fully open, transparent process.
00:26:06.079 --> 00:26:09.599
And yeah, let's let's we think it's gonna work, but let's make sure.
00:26:09.759 --> 00:26:13.039
So yeah, um, that's the type of way you you can get around it.
00:26:13.119 --> 00:26:13.680
Because you're right.
00:26:13.759 --> 00:26:24.480
I mean, you know, if you're a a general manager or a CFO of one of these utilities, you don't want to have to go back and explain to the folks that provided your capital how you just lost a million dollars.
00:26:24.720 --> 00:26:25.279
Yeah, yeah.
00:26:25.440 --> 00:26:37.759
Well, I think you're absolutely right, though, that there will be a lot of communication up front with all the regulators before you just, you know, run off and do these new technology pilot projects, right?
00:26:38.000 --> 00:26:38.240
Yeah.
00:26:38.480 --> 00:26:47.920
You're gonna make sure that, you know, and I didn't even I didn't even mention the consumer advocate that's typically involved in these uh private water regulatory systems, right?
00:26:48.000 --> 00:26:48.079
Yeah.
00:26:48.400 --> 00:26:50.160
Got to make sure everybody's on the same page.
00:26:50.400 --> 00:27:00.400
You know, the discussion of technology makes me think about the the issue that continues to be front and center, and that is aging workforce, the silver tsunami, as we like to call it.
00:27:00.559 --> 00:27:08.799
And yeah, you know, what do you think the private water sector will be able to do to address that challenge?
00:27:09.039 --> 00:27:14.079
And where will it take us uh in the world of private water over the next over the next 20 years?
00:27:14.480 --> 00:27:14.799
Yeah.
00:27:15.039 --> 00:27:22.160
So I mean, that is a big challenge that that is water and wastewater industry generally.
00:27:22.319 --> 00:27:25.119
It's not just the privates, it's not just the public.
00:27:25.440 --> 00:27:26.000
Absolutely.
00:27:26.160 --> 00:27:26.960
It's it's everywhere.
00:27:27.039 --> 00:27:28.640
Yeah, yeah, everyone's facing this.
00:27:28.880 --> 00:27:35.759
In many ways, the privates are better able to address this issue.
00:27:36.000 --> 00:27:50.880
And I'll tell you how, it's because, and this has come came from my experience working with contract operators as much as anybody, is you know, you've got you're not just limited to one geographic area.
00:27:50.960 --> 00:27:53.680
You know, you've you've got employees all over the place.
00:27:53.920 --> 00:28:11.680
And so that gives you flexibility to move people, to make that expertise, that certification, which is really the challenge in this sector, is these different certifications that you need for different types of technology, different from state to state.
00:28:12.000 --> 00:28:28.400
But I've seen many, many circumstances where the whole reason a contract operator was hired was because they had people with the right certifications and the experience to come in and operate a system, whereas a community wasn't able to do that.
00:28:28.559 --> 00:28:31.039
And furthermore, I think you know, two other things.
00:28:31.119 --> 00:28:42.160
One is the adaptation of technology tends to happen more quickly in the private companies, especially when it's not directly related to water quality.
00:28:42.319 --> 00:28:48.240
So yeah, new treatment technology, you'll you're gonna be very careful, very cautious with that.
00:28:48.400 --> 00:29:05.680
But maybe a new platform that allows you to harness uh say AI that's out there constantly monitoring stuff that's posted on next door and other websites, uh, and then making that available on somebody's cell phone in the field.
00:29:05.839 --> 00:29:07.039
I mean, we already have that.
00:29:07.200 --> 00:29:17.680
Uh uh, and and that that information could be used to to um yeah uh filter out the chaff and send employees where they're really needed.
00:29:17.839 --> 00:29:20.960
But also, frankly, I think a policy change is is needed.
00:29:21.119 --> 00:29:29.440
I mean, it needs to be easier to make to get certifications and make them portable from state to state.
00:29:29.599 --> 00:29:30.079
Oh yeah.
00:29:30.240 --> 00:29:31.279
And yeah, yeah.
00:29:31.599 --> 00:29:39.119
I think that's something that I think this the sector uh at large uh needs to do.
00:29:39.279 --> 00:29:50.079
Um I'm not saying don't get I'm not saying get rid of certifications, but you know, how about a program where you know if you were in the military for 10 years and you know you get some credit towards getting certifications?
00:29:50.240 --> 00:29:50.559
Yeah.
00:29:50.960 --> 00:29:52.240
Things like that that could be done.
00:29:52.400 --> 00:29:52.559
Yeah.
00:29:52.799 --> 00:29:53.039
Yeah.
00:29:53.279 --> 00:29:54.000
That's interesting.
00:29:54.160 --> 00:30:20.319
I I I wonder, and I'm I'm willing to be wrong here, but are this are are the are individual states, you know, in particular, maybe some of the state environmental agencies, creating their own problem by not having a sense of of certification reciprocity, where you have someone that wants to do it, like you, you know, I'm moved from California to somewhere else, and you know, I want to move and operate a wastewater plant, right?
00:30:20.400 --> 00:30:21.920
Or a drinking water system.
00:30:22.160 --> 00:30:25.359
And my credentials, you know, I've got 10, 20 years of experience.
00:30:25.440 --> 00:30:27.279
I want to move somewhere else and run a plant.
00:30:27.519 --> 00:30:42.000
And they, you know, is there that opportunity to do so, or do states put up barriers to that, thereby exacerbating the silver tsunami issue or the lack of otherwise the the lack of available talent?
00:30:42.160 --> 00:30:52.240
Is that a challenge that exists today that maybe um this silver tsunami issue may uh may address, may help address in the next 10 to 20 years?
00:30:52.559 --> 00:30:53.440
Well, absolutely.
00:30:53.599 --> 00:31:04.720
And, you know, one a treatment plant located in Montana and a treatment plant located in Florida are 95% the same.
00:31:04.960 --> 00:31:13.680
And, you know, like you said, why does the state regulator want to make it hard for somebody to deploy that knowledge from one state to another?
00:31:13.759 --> 00:31:16.319
Yeah, you know, regulations can be a little different.
00:31:16.480 --> 00:31:18.000
So maybe that's your focus.
00:31:18.160 --> 00:31:23.279
Let's have a test on our our state regulations so you can see where they're different.
00:31:23.440 --> 00:31:32.319
But there needs to be, it needs to be easier to uh move with a certification from one state to another, and not just at the lower levels.
00:31:32.400 --> 00:31:39.839
You'll in some states you'll see, let's say you have a five five-tier system with one being the lowest and five the highest.
00:31:39.920 --> 00:31:42.880
I'll say, okay, well, up to level two, it's easy.
00:31:42.960 --> 00:31:52.640
But if you want to come in and get a level five, you got to go through two years of training and and uh uh 4,000 hours of on uh hands-on experience.
00:31:52.720 --> 00:31:53.440
Well, well, why?
00:31:53.519 --> 00:31:55.519
I've just done that for 10 years, right?
00:31:55.680 --> 00:31:57.680
Yeah, it needs to be loosened up.
00:31:57.920 --> 00:31:59.200
Yeah, yeah, that's interesting.
00:31:59.359 --> 00:32:04.000
That's where that's that's worth another podcast episode, I think, just talking about that.
00:32:04.240 --> 00:32:13.119
Well, what about uh, apart from the people, we have you know never any discussions about water quality standards, regulations, you know, PFOS.
00:32:13.519 --> 00:32:24.480
Um, everyone in world in the world of water is talking about PFOS, you know, I'm thinking about what's the next PFOS, but how does the private water world how how do they how do they address this?
00:32:24.559 --> 00:32:26.079
Are they taking the lead on these issues?
00:32:26.240 --> 00:32:27.200
You know, what are your thoughts?
00:32:27.519 --> 00:32:28.319
Oh, very much so.
00:32:28.400 --> 00:32:54.880
I mean, I when you look at if you look at the utilities anyway, the investor-owned utilities, they've been very active in installing a treatment and and then as well uh pursuing the folks that developed PFOS and introduced it, you know, inadvertently or not, into the water supply to get those capital costs recovered.
00:32:55.119 --> 00:32:58.640
And and it's not just on a PFOS.
00:32:58.880 --> 00:33:08.240
Uh 20 years ago or so, uh there was a contaminant, well, this still exists, but it's MTBE, which is a gasoline additive.
00:33:08.319 --> 00:33:08.559
Yep.
00:33:08.720 --> 00:33:09.920
And yeah, you may remember that.
00:33:10.000 --> 00:33:13.759
And that was a big, you know, there's always sort of the contaminant du jour.
00:33:13.920 --> 00:33:14.079
Yeah.
00:33:14.319 --> 00:33:16.079
And 20 years ago it was that.
00:33:16.319 --> 00:33:17.759
And again, same thing.
00:33:17.920 --> 00:33:38.480
You would you saw these utilities out there installing the treatment because again, even if the regulation is a little fuzzy, because it takes some time for the regulators to develop these things, you know, once once a uh uh uh a contaminant gets known and measured, you know, there's a lot of pressure to remove it.
00:33:38.559 --> 00:33:41.759
And and the privates feel that intensely.
00:33:41.839 --> 00:33:43.279
So they'll take those steps.
00:33:43.519 --> 00:33:48.240
But on the same same token, you know, they didn't pollute the water.
00:33:48.480 --> 00:33:51.680
So let's go after the the ones who have.
00:33:51.839 --> 00:34:10.079
And and and so you know, I've I've seen that on a number of occasions where when there's a potential liable party, you know, they'll go after them and then be successful in recovering some, if not all, of the capital costs to install these expensive treatment facilities.
00:34:10.239 --> 00:34:19.599
So yeah, I think uh overall they have a very, very good record of uh protecting their water supply and protecting their customers' pocketbooks.
00:34:19.840 --> 00:34:29.679
Yeah, and it would you say that they have a good track record of seeing what's coming down the road and taking proactive steps to address water quality challenges?
00:34:30.079 --> 00:34:30.960
Yeah, by and large.
00:34:31.119 --> 00:34:49.280
I mean, you know, they they don't have any magical powers, but I do think that they because they do have sort of an added uh oversight by virtue uh oversight, over uh pressure, sorry, for being private, they tend to be more proactive.
00:34:49.440 --> 00:35:07.119
One company, you know, American Waterworks, they're sort of the 800-pound gorilla, they their water quality guy for decades, you might have known Mark Le Chevalier, yeah, but is a leader in um looking at uh Legionella and keeping that out of the water system and treating that.
00:35:07.280 --> 00:35:23.519
So, you know, I there's been a lot of very strong activity by the privates, both as individual companies and and collectively, to get in front of these things, find effective treatment technologies, and then when possible, recover the costs from the polluters.
00:35:23.760 --> 00:35:24.000
Yeah.
00:35:24.079 --> 00:35:24.639
Well, Dr.
00:35:24.719 --> 00:35:25.920
Mark is well known for that.
00:35:26.079 --> 00:35:27.840
That's been his whole career.
00:35:28.000 --> 00:35:28.239
Yeah.
00:35:28.480 --> 00:35:39.039
Well, one of the things we've seen recently is, and and you you kind of started to talk about this at the beginning of our interview, but we've seen some consolidation across the country.
00:35:39.199 --> 00:35:44.079
And by that I don't just mean private utilities acquiring public utilities.
00:35:44.159 --> 00:35:48.239
I we've seen consolidation among the private water utilities.
00:35:48.480 --> 00:35:58.000
What does that signal to you in the next 10 to 20 years as the private world continues to impact water quality, wastewater treatment, and the like?
00:35:58.159 --> 00:36:03.360
Where's where's this consolidation going to take us when we're sitting here talking about it in the next 10, 20 years?
00:36:03.599 --> 00:36:07.840
Yeah, well, I think it's a it's a two-edged sword.
00:36:08.000 --> 00:36:20.880
On the positive edge, I think it's great that you know the privates are out there acquiring, uh uh consolidating mostly smaller, privately owned systems.
00:36:21.039 --> 00:36:26.719
I mean, of that 45,000 water systems out there, a lot of those are privately held.
00:36:26.800 --> 00:36:30.719
They're small businesses, you know, they're literally mom and pop businesses.
00:36:30.880 --> 00:36:42.480
And they they're just not well capitalized by and large, and they they can't meet the requirements uh of the Safe Drinking Water Act or maintaining a system of customers' expectations.
00:36:42.719 --> 00:36:52.079
And you know, you've seen some acquisitions of public systems, especially in states uh with what's called fair market value legislation.
00:36:52.239 --> 00:36:52.400
Yeah.
00:36:52.639 --> 00:36:56.000
So Pennsylvania, New Jersey, Texas, California.
00:36:56.239 --> 00:37:04.880
Um, and so I think that's good because of the nature of the business, it the economies of scale really benefit uh the customers.
00:37:05.119 --> 00:37:12.239
I do think we need to be a little careful on the big the big end because you know, competition is also a good thing.
00:37:12.400 --> 00:37:39.519
And and while uh, you know, as a utility, really a competitive business, yeah, not really, but I think it's important to have the different bigger companies out there so you know a regulator can frankly look at the performance of the different companies and use that information as a way to uh moderate rate increases and and make sure investments are used and useful.
00:37:39.679 --> 00:37:48.559
And if we go to having only say two or three really big water utilities, that's I think that's gonna be a lot harder.
00:37:48.719 --> 00:37:50.880
So that would that would be my caution.
00:37:51.039 --> 00:37:54.880
Um it's it's really a kind of a case-by-case thing.
00:37:55.119 --> 00:38:03.280
Consolidation MA, it's not good or bad, but uh a consolidation can be bad or it can be good.
00:38:03.360 --> 00:38:05.280
I mean, they need to be examined carefully.
00:38:05.599 --> 00:38:18.079
Well, when we sit here and we think about where the private water utility world will be in the next 10, 20 years, what are your three opinions, if you will, as you look in your crystal ball?
00:38:18.159 --> 00:38:22.000
Where what do you think we're gonna see in the next 10 to 20 years from the private water system?
00:38:22.159 --> 00:38:24.639
Where what are some unique aspects from your position?
00:38:24.960 --> 00:38:37.519
Yes, I think we're gonna see continued consolidation of a lot of the smaller private and municipal systems into the bigger investor-owned utilities.
00:38:38.159 --> 00:38:49.119
I think we're going to see a shift of from a strong shift on the water systems to owning the wastewater systems.
00:38:50.079 --> 00:39:27.440
And I think you're really going to see a continued focus on affordability and how the access to technology, the um the uh large customer base and economies of scale can help make sure that you know excellent water and wastewater service continues to be affordable to ordinary Americans, not just you know, not just people uh up and middle class, but just regular people because everybody needs safe, reliable drinking water.
00:39:27.599 --> 00:39:32.000
And uh it's very expensive to provide, regardless of who's providing it.
00:39:32.079 --> 00:39:32.239
Yeah.
00:39:32.400 --> 00:39:36.800
Uh but let's figure out a way to do it that's uh uh maintains the affordability.
00:39:37.039 --> 00:39:37.440
Yeah.
00:39:37.679 --> 00:39:39.599
Those are all very good thoughts.
00:39:39.679 --> 00:39:44.320
And Jim, I want to thank you for being a guest today on the Water Foresight Podcast.
00:39:44.559 --> 00:39:45.920
Much to discuss.
00:39:46.000 --> 00:39:52.159
Uh, and I'm glad we were able to talk through those things with you, someone who's been in the world of water for quite some time.
00:39:52.239 --> 00:39:59.119
And tell us where we can get a hold of you if we're looking to uh have some further thoughts or discussions about these issues.
00:39:59.360 --> 00:39:59.519
Sure.
00:40:00.000 --> 00:40:06.639
Anyways, if you want to check out my website, uh Parkview Advisors LLC.
00:40:06.800 --> 00:40:15.280
Make sure you put the LLC in there, you'll you'll get somebody else.com or Jim at ParkviewAdvisors LLC.com.
00:40:15.599 --> 00:40:16.079
Wonderful.
00:40:16.239 --> 00:40:16.559
Wonderful.
00:40:16.639 --> 00:40:21.519
Well, Jim, you've given us a lot to think about when it comes to the future of the private water world.
00:40:21.599 --> 00:40:26.159
And I think some of your uh predictions will certainly come true, I think.
00:40:26.239 --> 00:40:28.000
Um, but I don't want to tip my hand.
00:40:28.079 --> 00:40:28.960
I'm just a host.
00:40:29.440 --> 00:40:32.880
So, Jim, again, it was great to have you on the podcast today.
00:40:32.960 --> 00:40:39.119
We thank you, the listener, for joining us today on the Water Foresight Podcast, and we look forward to seeing you on the next episode.
00:40:39.199 --> 00:40:40.880
Have a wonderful day.
00:40:42.159 --> 00:40:46.639
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