Climate change means public utilities will need billions in upgrades over the next decade, report says
Climate change and increasingly severe weather events will take a toll on aging public utilities, especially water and sewer systems, leading to higher costs, higher debt loads, and rising rates for customers, according to recent research.
Events like droughts, wildfires, and storms will continue to challenge utilities, wrote analysts at Moody’s Investors Service in a May 7 report. “Worsening climate events and trends may also weaken a service area’s economy, making it harder for commercial customers and residential ratepayers to afford the higher rates needed to rehabilitate aging infrastructure and protect public health,” they added.
That’s even as America’s infrastructure continues to deteriorate, Moody’s noted. In 2003, the median remaining useful life of water and sewer assets was 34 years. In 2020, that figure had fallen 21% to 27 years, an indication that utility systems are depreciating faster than they are receiving needed investment.