FINANCING WATER INFRASTRUCTURE

In early September, 2014, a bill was introduced in the House of Representatives of Congress called the "Water Supply Cost Savings Act" (HR 5659) The title of the bill may remind one of the dog whose bark is worse that its bite. The bill makes findings of the need for financing new water infrastructure, especially for small water systems. For example, it states that, according to EPA, the shortfall in drinking water infrastructure funding for small utilities is $64 billion, and "small communities often cannot finance the construction and maintenance of drinking water systems because the cost per resident for this investment would be prohibitively expensive."

However, the bill offers no financing plans or programs to alleviate the acknowledged funding shortfall. Instead, it orders EPA and the Secretary of Agriculture "to provide drinking water technical assistance to include information on cost-effective, innovative, and alternative drinking water systems"; requires small systems applying for grants and loans to consider alternative sources of supply; and requires EPA and the Secretary to report to Congress on the use of innovative and alternative water systems.

Earlier in 2014, the federal "Water Resources Reform and Development Act" became law. (HR 3080) The Act includes the "Water Infrastructure Finance and Innovation Act" (WIFIA). This provision is a pilot federal loan program for large water and wastewater infrastructure projects. WIFIA loans, however, will not cover the entire cost of a project, and the borrower is prohibited from financing the balance of the cost by issuing tax-exempt municipal bonds. Therefore, this financing arrangement may have a tendency to encourage privatizations or public-private partnerships.

Perhaps' if Congress is seriously concerned about the infrastructure funding needs of small water and wastewater systems, it could consider creating a national "Water Infrastructure Financing Bank" for the benefit of small systems which may not have cost-effective access to credit markets. Initially funded by Congress, the Bank would make loan interest loans to qualified small utilities for needed infrastructure improvements. The loans would be repaid from system revenues much like the protocol for payment of municipal bond debt service. The Bank and its loans would be independent from USEPA and state environmental agencies, whose regulatory demands may have created the need for many of the infrastructure improvements in the first place. Thus, separation of financing functions from the regulatory functions may provide more effective opportunities for small systems.

A CHRISTMAS GIFT

The photograph above shows a small segment of the Rio Grande river just south of Taos, New Mexico. The river simply is one of the countless millions of waterbodies that cover the earth, ranging from oceans to creeks to puddles to huge underground aquifers.

All of this water, in one form or another, is a gift. But, obviously, not all share in this gift, for one reason or another. So, this Christmas season perhaps water can become a much needed gift for some.

Organizations such as Water For People* and many churches have programs which fund and construct water wells and systems in villages located in developing countries. These programs seek to make the gift of clean water possible, but depend upon the generous resources provided by those who already receive the gift of water.

But wait, there is more! Another gift may be possible. It is ironic that many who already share in the availability of clean water fail to actually drink sufficient amounts of water for good health. So, this Christmas perhaps each of us can also give to ourselves the gift of water.
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* see waterforpeople.org

OWNING WATER?

According to a recent report, a wastewater utility in Texas has asserted that it owns treated effluent from its facility and retains ownership even after the effluent is discharged into a river.* The ownership claim was made in an application for a "bed and banks" authorization to help support uses of the river.

Ownership of water, or the lack of ownership, can be a complicated and inconsistent issue across the United States. And, ownership of water does not necessarily mean control or permitted use of water.

For example, in Texas it appears that ownership and control of water depends upon the source of water. Groundwater below land is the property of the landowner, but withdrawal of the water is subject to controls by the state. Surface water is owned by the public and controlled by the state. Storm water is the property of the landowner until it enters a natural watercourse.

Another example is the use of Lake Michigan as a drinking water source. The water may be held in trust for the benefit of the public, but withdrawal of water is subject to control by a US Supreme Court decision in the case of Chicago area; state allocations; an international compact, and other law.

Still another example may be the ownership of a tract of land on which there is a wetland. Te landowner may own the wetland, but may be prohibited from draining or developing it by federal or state law.

If a water utility takes raw water from a source, whether groundwater or surface water, and treats the water to USEPA standards, does it "sell" the treated water delivered to a customer? A sale would imply ownership of the water first by the utility and then by the customer. Some oourts have held that a utility does not sell water. Rather, its charges are for providing a service--finding source water, treating it and delivering it to a customer. In turn, it would appear to follow that a customer has use of the water but not ownership.

Along the same lines, when a drinking water customer flushes wastewater delivered to a sewer, does the wastewater utility (often the same utility that delivered the drinking water) acquire ownership if the influent? Or, does the utility merely provide and charge for a service--receiving and treating wastewater to enable it to be delivered to a waterbody?

In many ways, issues of use or control of water may of greater importance than ownership. At best, the issue of ownership would seem quite fluid.

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*"Water Rights...Even After It Leaves The Pipe?",
WEF Magazine, Nov. 2014, p.19

HAPPY THANKSGIVING. TURKEY

In a few days, most Americans will celebrate Thanksgiving Day with a robust turkey dinner. My mother, like millions of other mothers, always roasted a hearty turkey for the occasion.

One year in my childhood, however, that routine almost changed. My grandfather had raised a goose. This was no ordinary goose. In addition to a constant companion for scraps at the dinner table, the goose was an attack security guard which challenged all who approached. It also was obese, tipping the scales at 30 pounds when any respectable grocery store goose was lucky to weigh about 10 pounds. My grandfather surely knew how to fatten fowl. As Thanksgiving approached that year, Gramps decided to gift the Monster Goose for our celebratory meal. My mother discreetly emptied the freezer, laid the goose to rest, and dashed to a store for a customary turkey.

Speaking of well fed turkeys, I found an interesting court decision on feeding the birds.* For several years, General Mills had sold a turkey farmer feed for his turkeys, on credit. The farmer gave the seller a promissory note for the amount owed. When General Mills sued the farmer for non-payment of the note when due, the farmer counterclaimed for alleged damages alleging that the feed was inadequate, causing damage to his flock. The primary issue at trial was whether the feed contained vitamins required by turkeys. As the court put it, "Vitamins are essential to growth and life in men and turkeys."

Both sides presented extensive testimony by scientists and turkey farmers on the feed. The judge, however, was impressed by a 13 year old girl named Barbara. "She raised a little flock of turkeys on plaintiff's feed and on the witness stand related her experience....Truth, innocence and brightness adorned her even as a mantle. Her turkeys,'cabined,cribbed,confined,'grew and thrived and topped the market on plaintiff's feed."

The court held that the feed sold the farmer was in accordance with the seller's representations, and the alleged losses sustained by the farmer were due to infectious diseases, not the feed. Judgement on the note was awarded to plaintiff.

For many years, U.S. Presidents have been presented with a live turkey for their annual Thanksgiving dinner. In accordance with established tradition, presidents then issue an Executive Order granting the turkey amnesty. Thereupon, the saved turkey is sent away probably eventually to be consumed by someone else. No doubt, the White House then munches on a different roasted turkey for Thanksgiving. So, in the end, what does the Executive Order accomplish? It kills two birds with one stone?

What does all this turkey talk have to do with water? Well, turkey leftovers can make for delicious soup.

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* General Mills v. Clark, 52 F.Supp. 244
(W.D.Mo.1943)

WHO DO YOU BLAME FOR CLIMATE CHANGE SEVEN MILLION YEARS AGO/

According to a recent report, scientists now believe that the Sahara desert formed seven million years ago due to climate change.*

A large sea called Tethys formed some 200 million years ago between what were then the African and Eurasian continents. Then, about 100 years later, the sea began to contract, and about 5 million years ago it wound up divided into the current Mediterranean, Caspian and Black seas.

Scientists found that, when Tethys was its old, large self, it facilitated rainfall over North Africa due to temperature differences between its warm water surface and cool surrounding land. These temperature differences allowed moisture fro the Atlantic to be carried over the area. When Tethys began to shrink, it created a climate change which resulted in much less rainfall on the Sahara area, thus ultimately causing a desert.

United Nations reports now assert that climate change is occurring due to human activity. global warming being man-made. So, who caused the climate change that created the Sahara desert? If the age of its formation is correct, it arose about the time that early mankind allegedly evolved. Do we blame them or chimpanzees?

In a way, water created a climate in North Africa, and water also changed that climate. Rainfall resulted from temperature differences involving the sea, and rainfall ceased when the water in the sea contracted. It is thought that Tethys contracted when squeezed by the two continents approaching each other. Who do we blame for that?

As I write this, most of the United States is buckling under an invasion by the arctic vortex for the second year in a row. It is bringing heavy snow, sub-freezing temperatures and high winds--all abnormal compared with historical data. The only warming I am experiencing is micro-warming belching from a much burdened home furnace as I squint out the window at a premature, autumnal winter scene.
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*"Sahara May Be Twice As Old As Thought", Science News,
November 1, 2014, p. 12

DEALING WITH RISKS

As discussed in the prior post, water and wastewater utilities can be exposed to several different types of risk in their operations. What measures or strategies may be available to utilities to deal with or to mitigate such risks?

* Ratemaking. It is obvious that efforts to control risks to operations likely will require expenditure of funds, and the primary source of funds generally is operating revenue produced from rates for services rendered. The adequacy of revenue to fund, for example, new infrastructure, or security measures, or new sources of supply, is dependent upon rates which recover all revenue requirements--all the costs of service.

Revenue will not be adequate if rates are not reviewed and adjusted frequently to assure that all costs are being recovered. Further, unless there is some local legal impediment that permits recovery only of operating expense , the costs of service to be recovered should include depreciation expense and/or other cost items necessary to fund reserves such as renewal and replacement reserves.

Many municipal-owned water and wastewater systems have been built initially by developer contributions of cash or plant during growth periods. Unless adequate reserves have been recovered through rates over subsequent time, such systems will face difficulty in funding replacement infrastructure when the need arises.

Depending upon the nature of a proposed expenditure to deal with a risk, a utility may be able to consider the amortization of the cost in rates over a relatively short period of tine.

* Debt. Incurring debt, typically by means of a bond issue, has been a traditional funding mechanism for municipal-owned utilities. Of course, the feasibility of this mechanism is dependent upon the sufficiency of revenues produced by rates. Payment of debt service is a cost of service. In addition to bond issues, utilities may be able to participate in low interest revolving loan programs available on the state level.

* Grants. Certain governmental agencies, such as the US Environmental Protection Agency, have given grants of funds from time to time for improvements to facilities. Of course, grant money tends to be limited.

* Joint Actions. Another possible way to mitigate risk is to engage in a joint action with one or more other entities-the notion that there is safety in numbers. For example, a municipality facing a costly upgrade of its water system could consider privatization- the sale of the system to a regulated investor-owned utility. Consolidation might result in economies of scale as well as a means to finance needed improvements. Or the municipality could enter into a public-private partnership with an investor-owned utility, whereby the town might retain ownership of the system, which would be upgraded and managed by the investor-owned utility.

A water system needing to upgrade its treatment facilities may find a better alternative in purchasing water from a wholesale joint action agency or a neighboring utility with available surplus capacity. In the same way, a wastewater utility may find it more efficient to deliver its wastewater to a larger regional treatment facility than to maintain its own plant.

WATER AND WASTEWATER UTILITIES CAN FACE MANY RISKS

Many assume that water utilities and wastewater utilities are relatively risk free operations. After all, in the case of water, one installs a pipe in the ground or into a water body to collect some water, then somehow makes the water collected "pure", and furnishes it to customers in pipes, all of which is generally hidden from public view. The same is true for waste water-- when a toilet is flushed, that is the end of the matter. In actuality, however, water and wastewater utilities can be exposed to many challenging risks in their operations. Here are some examples:

* Aging Infrastructure. Utilities, particularly those in operation for some time, must deal with infrastructure that may be beyond its useful service life and requires repair, replacement and upgrade. Infrastructure work obviously is capital intensive and strains funding options for utilities as well as service reliability.

* Diminishing Sources Of Water Supply. As is evident in several areas of the United States, water utilities are experiencing reduced sources of supply, due to drought, excessive withdrawal of ground water or population exceeding available water sources. Hunting for more water or rationing water delivered to customers can be frustrating.

* More Restrictive Regulations. Compliance with governmental regulations is a constantly moving target for utilities. Moreover, compliance issues tend to impose the need for infrastructure and operational enhancements, necessitating increases in capital funding and revenue requirements, and resulting in unwelcome rate increases or revenue shortfalls.

* Contamination of Source Water. Recent examples of source water pollution include upstream industrial chemical spill and algae. While a water utility may not have caused a contamination, it faces the burden to provide safe water, which means it generally has to deal with the consequences of upstream contamination of its source water, no matter what.

* Leaks. Unaccounted water can be a real headache for utilities, particularly in areas where water supplies are limited. Finding leaking mains is not an easy task, but must be done.

* Main Breaks. Nothing is more troublesome than a main break that floods a street or nearby basements, particularly if it happens in the middle of winter.

* Vulnerability. In today's world, utilities face the risk of terrorism and vandalism. Security measures can be expensive and imperfect, but are necessary.

* Finished Water Quality. If a contaminant required to be removed is not removed in the treatment process, water and wastewater utilities become exposed for any adverse effects on customers or receiving streams, as the case may be.

* Conservation. Using less water may be meritorious. However, for water utilities, conservation can translate into revenue reductions and idle capacity, which in turn can translate into rate increases to customers for using less water--a public relations headache.

* Waste water Issues. Wastewater utilities face many of the risks encountered by water utilities, and have a few more of their own. For example, inflow and infiltration of storm water can cause sewer backups into homes and the need for excess flow bypasses of a treatment facility. Flushing into the wastewater system of certain products can interfere with biological treatment processes or be beyond treatment capabilities, such as the case of certain medications.

In my next posting, I will discuss how water and wastewater utilities may be dealing with the risks they may face.

A HARVEST OF FRUSTRATION

The year has passed quickly, from a mean-spirited Winter to a Spring that was an extension of Winter to a Summer that was a Spring, and now to Autumn. I watch my lawn disappear under a blanket of discarded leaves falling as a gentle rain of from tired limbs. Today, I came across a poem by Robert Frost, fitting for the season, called "Gathering Leaves":

Spades take up leaves
No better than spoons,
And bags full of leaves
Are light as balloons.

I make a great noise
of rustling all day
Like rabbit and deer
Running away.

But the mountains I raise
Elude my embrace,
Flowing over my arms
And into my face.

I may load and unload
Again and again
Till I fill the whole shed,
And what have I then?

Next to nothing for weight;
And since they grew duller
From contact with earth,
Next to nothing for color.

Next nothing for use,
But a crop is a crop,
And who's to say where
The harvest shall stop.

What does this have to do with water and wastewater utilities? Substitute "regulations" for "leaves".

GLOBAL WARMING OR GLOBAL FATTENING?

A new hypothesis asserts that climate change has resulted in fat people. The sort of climate change it is talking about is that encountered when a person moves from a cold climate location to a warm climate.* According to this notion, people living in cold areas have genes that produce higher metabolic rates, thereby maintaining warm body temperatures and resulting in less obesity. However, humans migrating to warmer climates develop lower metabolic rates to remain cool and, accordingly, hold on to excess fat. If this hypothesis is proven true, it would seem that alleged global warming is causing the current growth in fat people. (Those who migrate for the winter to Florida or Arizona take note.)

But wait--is there global warming? According to a published report, "since the turn of the century, global average temperatures have remained flat despite an unabated rise in greenhouse gas emissions."** Some apparently not willing to acknowledge that global warming may not exist now have developed a hypothesis that excess global heat is being swallowed by oceans and stored as warm water deep under the surface. If deep ocean waters are becoming warmer, then will fish and other sea life become fatter under the climate change hypothesis discussed above? Of course, if fish become fatter, then people eating such fish may become even fatter, allowing for a further hypothesis that global warming does indeed cause obesity.

Speaking of fat, remember England's King Richard III, the Royal whose remains were excavated in 2012 from under a paved parking lot? Before getting his crown, he is said to have a lean diet of bread, barley, ale and water. However, once crowned, it is claimed he ate luxury meals, such as game birds and freshwater fish, downed with wine. His diet analysis was based on two teeth, a rib and an upper leg bone. It is not clear whether richer foods may have made him obese or contributed to his demise in battle. When he was found, he was just skin and bones.***

All of this gives food for thought. If global warming does exist, and if it causes obesity , maybe the solution is to drink more water to cool body temperatures, wash food through one's system and to fill stomach cavities to dampen appetite. And, of course eating less and more wisely might help, too.

(Was the unusually large frog in the photo above affected by global warming?)

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* "Ancient Genes, Modern Meals", Science News,
September 20, 2014, p. 18
** "Two Oceans Implicated In Warming Lull",
Science News, September 20, 2014, p.10
*** "Richard III Ate Like A King",
Science News, September 20, 2014, p.17

THE OTHER CLIMATE CHANGES

We hear much discussion about climate change these days--the purported changes in earth weather patterns. Many assert that such climate change is caused by human activity. Governmental agencies increasingly seek to regulate such activities under the assumption climate change can be controlled. Others assert that such regulation is misplaced because either climate change does not exist or, if it does exist, climate change results from the earth's natural cycles over time.

Regardless, another type of climate change appears to be causing discussion: increasing concern over intrusion by administrative agencies and their regulatory power into details of private lives of the public.

For example, Senator John Thune (R. South Dakota) recently expressed concern about a proposed rule that would enable EPA to garnish wages to pay for fines levied by EPA for violation of its compliance orders.* He said, in part, "The EPA has been busy trying to expand its authority over the lives of Americans by arbitrarily imposing a multitude of new and expensive regulations that are leading to higher costs for middle-class families."

Along similar lines is a recent editorial from the Bismarck Tribune.** It asserts that EPA has compiled detailed maps of not only permanent waterways but also of intermittent streams and wetlands as a means to expand its regulatory power over a wide range of canals, ditches, reservoirs and wetlands. It stated, in part, "Burdening private landowners and the farming and ranching community by extending the EPA's jurisdiction to include seasonal waterways would come at a price. If the EPA is allowed to make a new ruling defining temporary waterways as being within its control, private landowners' rights will be diminished. The EPA's approach is problematic in many ways. The lack of transparency from yet another government agency further erodes public trust. The intent of the maps strongly suggests an underlying motive to expand reach and control--another troubling example of government overreach."

A recent editorial commentary in Barrons discussed concern over the regulatory fallout from the Affordable Care Act ("Obamacare").*** It pointed out that today regulations promulgated by administrative agencies and subsequent court decisions are more overreaching than the actual legislation enacted by COngress. It said, "We really can't know what a bill will mean until long after passage, when the courts tell us what the regulations mean." The commentary added:"Although the doctrine of enumerated powers was paramount for more than a century and a half, few Americans now living can imagine the restraints on federal power that held sway as late as the 1920s. Nowadays, the ninth and 10th amendments are "dead letters" in a country that does not even remember what a dead letter office was....What we now know is that we have lost our constitutional government of laws enacted by our elected representatives. Now we are governed by rules and judges."

When governmental agencies dictate what students can eat for lunch and what kinds of toilets and light bulbs people can have in their homes, one can understand a growing climate change of concern over what may seem to be unfettered regulatory expansion over private activity. From a constitutional standpoint, perhaps we have moved from a government of enumerated powers to one of enumerated prohibitions--if the constitution does not say government cannot do something, then it has the power to do it. That is climate change in and of itself.

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* Rapid City Journal, July 21, 2014, p.B4

** Reprinted Rapid City Journal
September 5, 2014, p.B3

*** July 28, 2014, p.39

DROOLING FOR FOOD

We have had exceptional amounts of rain in the Midwest this summer. So, when I ran across an article on drooling by animals, I drooled with curiosity.*

It seems that moose and reindeer slobber when they graze on grasses. They have good reason to drool. Scientist have found that grasses enjoyed by such animals host certain fungi that produce strong alkaline toxins. These toxins can make animals so sick that they avoid munching on the grasses.

Big animals, however, fight back against such grass defenses by drooling on their anticipated meal. Moose saliva dropped onto grass has been found to reduce toxin levels on the grass by up to 70% over time and to slow the spread of fungi. Of course, spit is not like shaking salt for seasoning prior to digging in. Time is required for saliva to do its thing.

Scientists have studied animal drool by having zoos collect spit when animals were anesthetized for medical reasons. That sounds like a fun job, although the procedure is not entirely clear.

Interestingly, drool reduced toxins only on grasses in good growing environments. Drooling on water stressed grasses did not counteract toxins. So, water has an important role for good moose meals.

One wonders what came first: did animals evolve to produce drool in order to combat fungi in grasses desired for food, or was drool developed for some other purpose and by chance animals found that it made grass eating more appetizing? No doubt, further research would be needed.

Santa Claus is said to have eight reindeer. I do not recall any story about them drooling as he makes his rounds. I do recall, however, my mother admonishing me as a child to keep my mouth shut while eating because drool has no place at the table. Now, my wife says the same thing. Frankly, drooling never made a meal taste better for me, although I often have drooled like a moose for some chocolate mousse. Now that is food for thought.

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*"Moose Drool Subdues Grass Defenses,"
Science Newa, August 23, 2014, p. 9

SALTY WORDS

Salt always has had importance in the United States. At the beginning of the 1800s, a prime source of salt in the fledgling new country was at the bottom of Illinois, along the Ohio River near the boundary with Indiana. Originally discovered and used by the native Indians, these salt deposits fell under the control of advancing frontiersmen. Indeed, mining the salt became quite profitable.* Thus, there is Saline County in Illinois, presumably named after salt. (As a sidebar, in the 1830s, a group of men from northern Illinois approached the bank in Shawneetown, then a bustling city in the salt area, for a loan to organize a city called Chicago. The bank turned down the loan request saying that Chicago would never amount to anything and had no future. In the 1930s, the Ohio River flooded and wiped out Shawneetown. The whole city moved up a hill and left behind what is now Old Shawneetown and the crumbling walls of a bank building.)

Today, the health effects of use of salt to flavor food continues to be controversial. However, quite a different controversy involves the use of salt in residential self-regenerating water softeners that discharge salty waste brine into the wastewater system.

This concern particularly exists in drought prone areas of the United States, such as California. Because of the scarcity of fresh water sources, utilities are under pressure to reuse or recycle treated wastewater. Obviously, salty recycled wastewater is not feasible for most purposes. However, conventional wastewater treatment plants are not able to adequately treat high salinity influent without installing costly advanced treatment technology.

Accordingly, in California, some municipalities enacted ordinances banning use of self-regenerating water softeners. Courts, however, rejected such ordinances on the ground that state law pre-empted local action. While there is no state ban, the legislature did enact a protocol that enables local bans when necessary to enable wastewater systems to comply with state effluent discharge standards (Assembly Bill 1366).**

Some cities now offer financial incentives to homeowners to remove their water softeners altogether or to replace them with so-called demand-initiated regeneration ion exchange softeners.

Interestingly, one method to reduce salinity levels in brine is through use of the reverse-osmosis process. A recent report states that salty water which does not pass through the membrane may be able to be harvested to run an electricity generation turbine. So, salt have have power.***

Obviously, not all sources of water--particularly well water--are of the same quality or of good quality. Often they contain high levels of naturally-occuring minerals that adversely affect taste, odor and color, producing scale in pipes and discoloring in appliances and laundered clothing. Accordingly, residential water softeners can be expected to remain in demand.

Over the years, some water utilities that tied to operate central softening equipment at their treatment plants found that the process could be unreliable, resulting in customer complaints, and removed such equipment from service.

From time to time, some have asserted that water softeners can have a negative impact on septic tanks. It has been reported that Texas has imposed a ban on water softeners that discharge to septic tanks, asserting that high salt brine can destroy beneficial bacteria. However, recent scientific reports have disputed this assumption and even have suggested that salt can be beneficial for the septic tank process.

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*Owens, "Isaac White And Manliness In Early Illinois,
Journal of Illinois History, Spring, 2014

**See"Stopping A Problem At Its Source",
WE&T Magazine, July, 2014, p.22

***"The New Power Of Salt Water", Wall Street Journal,
August 30-31, 2014, p.C-4

QUENCHING SUMMER HEAT

Some of my prior posts have mentioned my spending summers as a young boy at our family's modest lake cottage in Indiana. In particular, I have fondly recalled the cold, fresh well water that flowed from the old green hand pump hanging over the kitchen sink.

On hot August days, when the sun roasted all who ventured outdoors, more intensely when it reflected off the sandy ground, the old green hand pump yielded refreshing, cold water. It restored our energy while we hibernated indoors to thumb through pages of old issues of Life and Saturday Evening Post magazines or to snooze to a crackling radio buzzing country music about forsaken love from some forsaken station.

But, when temperatures soared to 95 degrees, there were times when cold, fresh water and indoors captivity really did not seem do it for me. Those were the times when I had to convince my mother that we needed to walk about 2 miles, in the heat, to the local grocery store for provisions. So, then I would pull my radio flyer red wagon and we would walk.

The store was perched on the main highway, a two lane pavement with limited traffic, mostly Studebakers made in South Bend. The grocery sported a large blue and white metal sign reading "Royal Blue", which covered much of the peeling paint side of the small frame building. Thus, we always referred to "going to the Royal Blue" when grocery hunting was the mission of the day. One entered through a screen door that squeaked loudly and slammed shut with such a loud thunder that elderly customers would palpitate. Across the middle of the screen door was a metal push plate that read "Rainbow Bread" with a picture of a loaf of white bread in a colorful wrapper. I always remarked to myself that I had never heard of that brand, but then we were in Indiana.

As my mother busied herself among the small aisles of canned goods, I beelined to the low freezer chest near the door bulging with tempting frozen treats. Yes, there were the twin popsicles(R) in different flavors waiting to be grabbed by thirsty hands. They were actually two popsicles(R) on separate sticks, but stuck together. However, experience taught that I should avoid these, as they always would melt prematurely in the hot walk home, drizzling over my face and shirt and producing sticky hands--leaving me hot and thirsty all over again after a few short steps.

Instead, I reached for the prize, the ultimate thirst quencher and heat remedy--a fudgsicle(R). This treat is chocolatey, thick, and most important, melts more slowly on the tongue--making for a more satisfying and cleaner walk home in the heat.

The irony, of course, is that any delicious frozen sweet treat generally seems to provide only temporary relief from 95 degree summer sunshine. When we arrived back at the cottage, I was hot and sweaty all over again from the long walk and pulling a much heavier wagon. The first thing I did was to beeline to the old, green hand pump and gulp a large glass of cold, fresh--and quenching--water.

GOOD BUGS BEING DEBUGGED?

My wife is an antiques dealer. So, it is inevitable that I become involved in her hunting activities from time to time. A couple of days ago, I was scanning a listing for a farm auction. In addition to the typical farm items--such as chicken feeders, manure spreaders and tractor parts--was an outhouse. Now, there must be a story there, such as the owners were retiring and did not want to take their outhouse with them to their new apartment. However, I am not sure how marketable an outhouse is as a collectible antique.

But, I got to thinking how simple a concept an outhouse is for wastewater disposal. Modern wastewater collection, treatment and effluent disposal can be rather complicated, and of course, is highly regulated.

For example, hand sanitizers have become popular, not only in hospitals but in homes, in stores and even at gas stations. A recent report suggests that triclosan, an antimicrobial commonly found in products such as soaps, sanitizers and toothpaste, may interfere with the biological actions by microbes necessary to break down solids in wastewater treatment plant processes.* The report also suggests that antimicrobials may facilitate growth of microbes immune to drugs.

Is regulation of antimicrobials in wastewater coming soon? How would that be accomplished? The only apparent methodology to reduce levels in wastewater is to cause users to use less of sanitizers and sanitized soaps and other products. How the federal government may think it can do that will be interesting to see. Perhaps EPA could give grants to everyone to build outhouses, in which case I might want to attend that farm auction and bid on one. But, even outhouses depend on biological action by good bugs.

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*"Triclosan May Spoil Wastewater Treatment".
Science News, July 26, 2014, p.9

GOING PLACES WITH WATER

According to a recent report, astronauts' urination may enable them to go boldly where no human has gone before.* As space travel pushes toward new frontiers, researchers on earth are exploring potential new uses for the travelers' human waste, such as urine.

In particular, research is focusing on the urea bioelectrochemical system which uses "forward osmosis" to treat urine. According to the research, this system removes urea and converts it to ammonia. In turn, the ammonia is used as fuel in a direct solid alkaline fuel cell system to generate electrical energy.

The report indicates that this process has the potential for recycling urine into drinking water (with the addition of reverse osmosis) as well as electricity. Research is ongoing, and one of the issues yet to be resolved is developing a system that works under zero-gravity conditions found in space.

Who knows--maybe at some point in the distant future people on the go will travel in space in ships propelled by electricity generated by their own urine, illustrating another beneficial use, and need, for water.

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*"Waste Not, Want Not",WE&T Magazine
July,2014, p. 21

WEIRD WATER

Most people are aware that water can have different states, such as a liquid or as ice. And most people are also aware that liquid water ordinarily freezes into ice at 0 degrees Celsius (32 degrees Fahrenheit).

Despite all the essential uses of water and extensive general knowledge of its properties, scientist still are researching and learning about more of its sometimes weird characteristics.

For example, it has been determined that "pure" water can remain in a liquid state well below the freezing point of 0 degrees Celsius. Scientists now have supercooled water to -46 degrees Celsius in the liquid state. According to a recent report, this is the lowest temperature recorded where water has remained a liquid.*

Some of water's odd properties, such as ability to absorb heat, change at low temperatures. Yet, supercooled liquid water looks like ordinary tap water, except it will freeze at supercooled temperatures when it touches a foreign surface, such as a dust particle. Some researchers have proposed that if water is cooled to -50 degrees Celsius, it may split into two liquid states.

Of course, while research into the unusual properties of water can be interesting, it does not help much those many parts of the world that suffer the unavailability of adequate supplies of clean fresh water essential for life.

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*See"Supercooled Water Hits Record Low",
Science News, July 12, 2014, p. 18

WHERE'S THE WATER?

We live on the surface of the earth's crust, and what we see is only on the surface. Thus, we know that about 71% of the earth's surface is covered with water, and about 97% of that water is saline water in the oceans. So, fresh water--that which we drink and use in our lives--comprises only about 3% of all the water on the earth's surface.

Between the earth's crust and its core is a thick layer called the mantle. Now, according to a recent report, scientists believe that the mantle contains a huge amount of water deep in the earth.* It is suggested that this water is about 440 to 660 kilometers below the surface, perhaps where the upper mantle transitions to the molten lower mantle. Some have suggested that the mantle may contain as much water as all of the surface oceans, or even more.

Some of the mantle water may date back to early earth history. Another source may arise when tectonic plates collide, allowing ocean-soaked crust to seep into the mantle.

What does all this mantle water mean for us surface dwellers? Our wells penetrate only the earth's crust, so mantle water may be a wishful source of supply. On the other hand, mantle water may have other impacts, such as causing tectonic plates to move or producing volcanoes.

One thing may be sure: still waters run deep.

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* "Water Permeates Earth's Interior", Science Newa,
(July 12, 2014, p. 9)

PANTS

The oldest known pants have been discovered in the Yanghai graveyard in the Tarim Basin of western China. * They were found with excavation of remains of two men. It is believed that the pants are about 3,000 years old and belonged to a nomadic horseman.

The pants appear to be quite stylish, with wool straight-fitting legs with woven decorations and "a wide crotch." It is suggested that nomadic herders in Asia invented such pants so that they could more comfortably ride horses. The wide crotch was not explained.

Apparently, prior to the pants invention, Asians and Europeans got by wearing gowns, robes, tunics, togas and loin cloths. While such apparel could be seen as uncomfortable for riding on a horse, it is to be noted that native Americans commonly wore loin cloths while on their horses. Before the recent discovery, the oldest trousers found in China were about 2600 years old, and were burgundy in color.

"Pants" does not always mean the same thing to everyone. In the United Kingdom, for example, "pants" commonly means underwear, whereas "trousers" are the outerwear most people commonly call "pants." So, if touring England, best not say "I like your pants."

Interestingly, there was a 1920 British film called "Trousers." The romantic story line is described: "A woman who dresses like a man falls in love." I will not disclose the ending in case you see the movie.

Along a similar line, in 1919 a woman became the first female in Puerto Rico to wear trousers in public. Sh was jailed, but later released after the pants charges were dropped. In 2013, A French law finally was revoked which required women to get permission from city authorities before dressing like a man, including wearing trousers, except if holding bicycle handlebars or reins of a horse.

How does all this relate to water? Well, at some point, whether 3,000 years ago or even today, trousers have to be cleaned. This likely would be particularly true in older times before the invention of underwear. Therefore, one wonders how often and how pants were washed.
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*See"Earliest Pants Worn Bt Horse Riders", Science News, June 28, 2014

SHOULD EPA REGULATE YOUR URINATION?

What's in your urine? Generally, human urine contains three macro-nutrients: nitrogen, phosphorus and potassium. Typically, urine comprises only about one percent of residential wastewater streams, but it contains about eighty percent of the nitrogen, fifty-five percent of the phosphorus and sixty percent of the potassium, as well as other nutrients such as sulphur, calcium and magnesium.

According to a recent report, attention now is being focused on the harvesting of such nutrients by means of "urine diversion" ("UD"). * UD is the separation of human urine from the wastewater influent stream at the point of urination. Interest in UD appears to be growing because urine can be used for agricultural fertilization and because at least two of the nutrients--nitrogen and phosphorus--when discharged from wastewater effluent contribute to over-enrichment of waterbodies. In particular, such over-enrichment causes algae blooms which result in adverse impacts on aquatic life.

Residential UD systems will require installation of urine diverting toilets and separate piping to channel urine to a storage tank somewhere in the front or back yard. Generally, a UD toilet has a split personality design, with a partitioned bowl. The front section of the bowl receives urine, which along with a small amount of water is flushed to the urine storage tank. On the other side of the partition, the back half of the bowl collects feces and toilet paper, which is flushed to the regular wastewater sewer the old-fashioned way or can be sent down a chute to a different tank in the basement or yard for eventual composting. In public buildings, urinals would be connected to UD systems.

While residential UD systems may have benefits, one wonders how practical is the design of a UD toilet. Specifically, a user necessarily will need to have accurate aim to make sure deposits reach the correct compartment of the toilet bowl. Such aiming could cause issues for some users. In addition, some homeowners may not appreciate having a urine storage tank in their front yard. However, the UD tank could be disguised by yard decorations, such as a small windmill, a small pagoda or a plastic deer, and some perennials.

One wonders whether implementation of UD systems in a step forward or a step backward for humankind. Would it be simpler just to walk into the garden and urinate on the tomato plants or the zinnias? Or in an urban setting, would it be simpler to empty a chamber pot out the window on to the street, where the accumulated flow eventually would be flushed from the streets into appropriate destinations? Possibly, houses could have mobile urination outhouses, disguised as potting sheds, that could collect urine and discharge it to different parts of the yard to nourish grass and plants.

UD systems, and their installation and use, would seem to be a likely subject for regulation by EPA. Water saving toilets and other water appliances already are regulated in some fashion by the government. Perhaps government grants can be made available for retrofitting UD systems in neighborhoods. Best to be pro-active and start practicing your aim.

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*See Emerging Issues, Spring/Summer 2014

MOVING MOUNTAINS FOR WATER

According to to a recent report, withdrawal of large volumes of groundwater in California's Central Valley is causing nearby mountain ranges to rise and may also be triggering small earthquakes.*

Over the past 150 years, the aquifer in this area has been depleted by about 160 cubic kilometers of groundwater. A concern beyond the loss of such water is that the resulting mountain movement could stress the San Andreas Fault.

The United States Geological Survey (USGS) reports that from 1900 to 2008, U.S. aquifers were depleted by more than twice the volume of water contained in Lake Erie and explains more than 2% of the observed global sea level increase during that period. In the period 2000-2008, the depletion rate averaged 25 cubic kilometers per year. Municipalities in the Gulf Coastal Plain, High Plains, Pacific Northwest and Desert Southwest have experienced declines of groundwater levels up to hundreds of feet. As an example, pumping from the large and important Ogallala aquifer since the 1940s has resulted in a lowering of the water table of up to 160 feet.

According to USGS, use of groundwater in the highly populated Milwaukee-Chicago corridor has reduced groundwater levels by as much as 900 feet. In the last half of the 20th century, Chicago suburbs experienced accelerated growth, with their water systems almost exclusively relying on groundwater. As pumping increased, wells were drilled deeper , not only to get more water but water of higher quality. As growth continued, however, wells became less reliable-- particularly deep wells such at the 1500 foot level or more, which began to mine salt water. Fortunately, for most of these communities eventually Lake Michigan water became available, enabling wells to be retired. Of course, cities away from Lake Michigan do not have Lake water as an option.

Draining of fresh water aquifers is not limited to the United States. It is a global issue. So, what is the point? It should be obvious. If this trend continues unabated by common sense conservation and development of alternative sources of supply, withdrawal of groundwater may not just move mountains--but people everywhere may have to move mountains to find water.
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*Science News, June 14, 2014, p.9

WASTE NOT, WANT NOT--BIG TIME

When it comes to governmental regulation, it seems that the focus on water conservation primarily is on ultimate users--particularly homeowners. Thus, in the United States, much regulatory attention has been given to water appliances such as low flow toilets, shower heads and faucets. Water utilities have experienced the effects of such efforts through reduced revenue and the need to increase rates to recover revenue shortfalls--which by itself can be a conservation measure.

However, perhaps water conservation also should be practiced on a broader scale, particularly by governmental entities. For example, drought conditions in California have been well publicized. Notwithstanding, it has been reported that the federal Bureau of Reclamation recently drained reservoirs into two California rivers to help baby salmon more quickly swim to the Pacific ocean. It has been asserted that the some 23 billion gallons water diverted for the benefit of fish would have been sufficient for the annual requirements of a city of 500,000.*

Recently, officials in Portland, Oregon drained a finished water reservoir of 38 million gallons of treated water after it was discovered that a man allegedly urinated into the reservoir. Subsequent test results should no health risk from the water.**

In the latter 19th Century, the Chicago River, which flowed into Lake Michigan, was reversed by diverting Lake water into the river. As the Lake was the water source for the residents of Chicago, it was found that they were coming down with cholera due to sewage that was being discharged into the river and entering the Lake. Today, more than 100 years later, Lake water still is being diverted to keep the river flowing backward, despite chlorination and other water treatment requirements and modern wastewater treatment.

On a smaller scale perhaps, water utilities also can participate in unnecessary loss of water. For example, one continues to see large quantities of water drained during hydrant flushing. And, many utilities continue to experience substantial leakage from their distribution mains.

If clean water is the limited resource that is claimed, then it may be incumbent that every one, including governmental entities and utilities, share in the responsibility to protect it for the benefit of humankind that really needs it.

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* "California Drains Reservoirs in the Middle of a Drought", Wall Street Journal,May 24-25, 2014, p. A11

** "Portland Criticized For Flushing Reservoir After Man Urinated In It, Water Online, May 16, 2014

WHERE IS HOME?

Most sources appear to define "home" as the place where a person lives--in effect, "home" means the same as "house" or other dwelling. Other definitions tend to be more metaphysical. For example, home is said to be the place where a person belongs; or is a place of refuge or rest; or to use the classic definition, "home is where the heart is."

Frankly, however, none of these definitions adequately characterize "home" for me. Perhaps the best definition I have found was in a television documentary a few years ago. The film featured a very old man who was living alone in a modest cottage in Siberia. He had occupied that cottage for much of his life. After his wife had passed away, the family repeatedly begged him to leave the cottage for a warmer climate elsewhere. He refused to move. He said he did not want to leave his home. "Why?", he was asked. He explained, "Home is where the trees know you. This is my home."

My mind has churned for some time over his definition of home--"where the trees know you". I know it is profound, but I still do not fully understand it. However, it suggests something greater than longevity. Rather, it suggests that home is where there is a mutual respect and understanding between humankind and nature is a sphere in which both dwell. Without that, perhaps, there is no home.

I would expand that definition, however. "Home also is where the water knows you." Some dwellings in parts of the world do not have access to reliable sources of safe water. The water does not know them. In other parts of the world, persons waste clean water, or use excessive amounts, or abuse rivers and lakes. The water does not know them. But in some areas, persons use water carefully and conservatively, and respect their rivers and lakes. The water is able to know them.

Does your water know you, or do you simply know the water? Are you at home?

AFFORDABILITY OF WATER SERVICE--PART 2

One issue arising from any discussion of affordability of water service is how should affordability be measured. Is it really simply a percentage of some assumed mean or median household income statistic? Water service benefitting users is not confined to water entering a house from a service line tapped into a street main. A public utility water system also includes water provided to hydrants that are essential for fire protection, water to places that provide employment to occupants of houses, water to shops where such people shop for food and goods, etc. Moreover, how should the percentage of income spent for water service compare to how much water users' income is spent on such items as cigarettes, television, beverages, etc.?

Court decisions may provide a measure of affordability. Under case law, a utility is required to charge reasonable rates for its service. Reasonable rates are defined as rates which recover reasonable costs of service from those who receive the service and thereby cause the costs. Generally, utilities establish reasonable rates by using the "cash basis" methodology or the "utility basis" methodology. Under the cash basis, rates are established to recover all the cash requirements of the system, including debt service, operating and maintenance expense, and reserves for repair and replacement Under the utility basis, rates are established to recover operating, maintenance and depreciation expense and a reasonable return.

Accordingly, affordability of rates for water service could be measured by the reasonableness of the rates--ie, whether the rates recover reasonable costs of service. Rates which recover more than costs of service from a customer class would be unreasonable. The same would be true for discounted rates to any customer class. Discounted rates would imply subsidization by other classes of customers--ie, unreasonable rates to the others. Accordingly, discounted rates would be unreasonable.

Another concern is whether it would be appropriate for water public utilities to engage in "social engineering", particularly even in the case of municipal-owned water systems, enterprise accounting is required. Subsidies for lower income utility users may be more appropriate for general governmental or other institutions. This may be true given the general legal prohibition against unreasonable rate discrimination in favor of or against particular classes of customers. Rate discrimination can arise when a particular class of customers is charged more or less than the reasonable costs to serve the class.

AFFORDABILITY OF WATER SERVICE--PART 1

From time to time, some commentators have sought to address "affordability" of rates for public utility water service. More recently, such discussions may be accelerating as utilities seek to cope with rising costs of service resulting from more stringent regulations, infrastructure replacements and increased operating expenses.

Some times, affordability is viewed as an issue only for low income water users. Other times, the concept is seen as a matter of willingness to pay, particularly if based upon perceived value of water or perceived poor quality of service, regardless of income level.

Indeed, some authors have asserted that utilities should educate customers as to the "value" of water and water service. Frankly, such "value" has no rational relationship to rates based on cost of service recovery. In the case of unwillingness to pay due to perceived service issues, utilities can and should respond with corrective measures on a timely basis--which sometimes by themselves can result in rate increases to fund infrastructure upgrades.

Generally, it has been suggested that "low income" water customer affordability can be measured as a percentage of total income--for example, 1 to 2.5 % of median household income, as computed by one or more federal or state agencies that compute that sort of thing.

Assuming "low income" can be defined, the issue becomes how rates for water service can respond. Generally, two alternative rate scenarios have been proposed by some commentators: (1) a discounted base rate specifically only for low income customers; or (2) an entire discounted rate structure solely for low income users.

Under a discounted base rate, low income customers would be entitled to an initial rate block of say 5,000 gallons per month, at a charge below cost of service. Some have asserted that this would be akin to a "lifeline" rate. A discounted rate structure would have all rate blocks below cost of service, but perhaps would recover more of cost as the blocks increase.

In my next post, Part 2 of this series will discuss issues arising from "affordability" rate proposals.

TOILET PAPER AND CLIMATE CHANGE

In March, Consumer Reports reported that it tested toilet paper and found that rolls have become narrower, the tubes in the center of the rolls have become larger, the number of sheets per roll have become fewer and the sheets have become smaller.

The toilet paper rolls were tested for strength, softness, disintegration and ease of tearing. How the toilet paper was tested for these conditions is unclear. The various brands of rolls ranged in cost from 8 cents per 100 sheets to over 44 cents per 100 sheets.

In a prior post, I discussed the challenge one faces to find a beneficial use for the empty cardboard tubes once the toilet paper roll is used up ("NO END IN SITE OR SIGHT", May 29, 2013). If the tubes have grown in diameter, that task may have become more difficult. On the other hand, the larger tubes may be useful for growing seedlings by handy gardeners this Spring; or better yet, the tubes may make good beer bottle or can holders to enhance bathroom or other experiences.

Interestingly, the report also stated that Americans use an average of 46 sheets of toilet paper per day. Again, it is not clear how this finding was determined. Perhaps it was as a result of a question at the last census or something to be reported on an IRS form. Regardless, now I am worried that I am not an average American because I use far less than 46 sheets of toilet paper per day.

Then I got to wondering whether the number of sheets used per day has any relationship to climate change. Is it possible that in warmer periods, people spend more time in bathrooms and use more sheets; in in colder time, people use fewer sheets because they spend less time there?

The more I think about empty toilet paper tubes and number of sheets of paper being used, the more likely I could wind up two or three sheets to the wind.

A SHOWER STALLED

Recently, the Chicago Tribune published an article written by travel guru Rick Steves captioned : "European Loos Not Made For Lingering."* The gist of the article is that European bathrooms, and particularly the shower stalls, can be quite quirky.

However, the article does not mention an issue that my wife and I repeatedly have encountered during travel in Europe and stays at hotels: how does one turn on and turn off the showers and adjust the water temperature. While using shower controls should seem an easy enough exercise, the controls tend to be rather unique and foreboding, and no hotel provides instructions as to how to use them.

For example, during our travel to Europe earlier this month, at one well-starred hotel, the shower stall controls comprised three small, unmarked levers. Randomly moving one lever activated a roaring river of cold water out of the low faucet designed to fill the bathtub in which I was now standing, but not the shower head. The other levers appeared to do nothing, like placebos. Finally, after some 15 minutes of standing in the rushing cold water in the bath tub and frantically twisting all three levers, somehow water began to drip from the shower head. We have no idea how this happened, so we had to keep everything running as each person popped in and out of the stall. Of course, the whole process had to be repeated the next morning.

Another example on the same trip involved a shower stall that had no levers or any other visible controls. Instead, the only thing that was showing was a chrome tube with a rounded end coming out of the wall, and having the appearance of a large suppository suitable for an elephant. Again, only after at least 15 minutes of grasping and twisting at this tube did water magically begin to pour from the shower head.

Any one who has seen Dvorak's opera Rusalka can readily conclude that European showers are controlled not by levers and handles but by Vondik, the water goblin.

We have concluded that the pressing matter of shower stall controls is ripe for regulation by some EU or UN agency so as to provide uniformity of controls and public information on use of the controls. In the meantime, we will seek assistance from Vondik next time we travel to Europe.

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* (Section 3, p.2, April 13, 2014)

U.S. SENATE ATTACKS ALGAE!

In February, the U.S. Senate made a bold move to legislate a fight against harmful effects of algae blooms on fish. It passed S. 1254, a bill whose title has a bit of a bloom itself--the "Harmful Algal Bloom and Hypoxia Research and Control Amendments Act."

The subject blooms, of course, are the growth of blue-green algae in waterbodies, and hypoxia is the depletion of oxygen in waterbodies--which can be caused by the die-off of algae blooms. The bill would require the Under Secretary of Commerce for Oceans and Atmosphere (another title bloom) to establish a task force to study algae and causes of hypoxia, to create an action plan and to report to Congress. The bill would provide $92 million to fund the project.

It is good to learn that Congress apparently has made algae a high priority concern and has taken such positive action to address the issue. On the other hand, one wonders whether it will be as decisive in dealing with such issues as the economy, unemployment, national debt, defense, the budget and foreign policy, to name a few. These "blooms" may be more difficult to control.

CAN POLLUTION NOT BE POLLUTION?

Some times, court decisions can be difficult to understand and explain. For example, recently an appellate court in essence held that pollution is not pollution.

Neighbors of a hog confinement facility sued the operators of the facility and owners of land on which hog manure was applied. Plaintiffs complained that odors were a nuisance that were causing loss of enjoyment of their property. The operators' insurance company declined to defend the suit, citing the "pollution exclusion" provision in the operators' umbrella insurance policy.

The Appellate Court held that the pollution exclusion did not apply because the alleged odor pollution was not "traditional pollution." * The Court relied upon a prior state Supreme COurt decision which held that: "Given the historical background of the absolute pollution exclusion and the drafters' continued use of environmental terms of art, we hold that the exclusion applied only to those injures caused by traditional environmental pollution." The Supreme Court did not define "traditional pollution", but found that the accidental release of carbon monoxide due to a broken furnace does not constitute the type of environmental pollution contemplated by the pollution exclusion provision. **

Te Appellate Court stated that "we do not find the hogs, their manure, nor the smells associated with these things constitute traditional environmental pollution." The Court acknowledged that the state Environmental Protection Act deemed odor a contaminant that would constitute air pollution if it unreasonably interfered with the enjoyment of life or property. However, it said, "even if the odors at issue in this case constituted air pollution for purposes of the Act, this does not mean the odors constitute 'traditional environmental pollution.'...Generally speaking, the scope of the things seen as hazardous to the environment, as reflected in environmental protection laws today, is far greater than what wee conclude our supreme court had in mind when it spoke of 'traditional environmental pollution.'"

If odors associated with hog processing do not constitute "traditional pollution", does this mean that odors from a wastewater treatment facility also do not constitute "traditional pollution?" In any case, how can any allegation of a violation of environmental statutes or regulation not be deemed "traditional pollution" when those laws essentially define what is "traditional pollution."? Or does all of this mean that , if sewage odors do not constitute "traditional pollution", then the only basis for challenging odor is through a nuisance theory, not through regulatory air pollution violation?

Some times, court decisions are difficult to understand and explain.

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* Country Mutual Insurance Company v. Hilltop View,
2013 Ill.App.(4th)130124

** American States Insurance Co. v. Koloms,
177 Ill.2d 473 (1997)

NO END TO CONTRACTS?

Water utility operations and services are governed by contracts with suppliers, employees, customers, consultants, engineers, accountants and even lawyers. The importance of crafting carefully such contracts, therefore, cannot be overstated. Sometimes, however, oversight or carelessness in drafting can cause unintended results--often by reason of a court decision.

For example, a recent state appellate court decision involved a contract between a manufacturer and a sales representative for the manufacturer. The termination provision of the contract stated that the contract may be terminated only by the written agreement of both parties. The manufacturer sued, requesting a judicial ruling that it could terminate the contract unilaterally because the termination provision was unenforceable. It also stated that it was not represented by counsel during the negotiation and drafting of the contract.

In its decision, the Appellate Court stated that a contract that is terminable only upon the mutual agreement of the parties is indefinite in duration, and that state public policy prohibits contracts of indefinite duration. Therefore, the Court held that "as a result, a sales representative agreement terminable only upon the mutual agreement of the parties is not sufficiently definite in duration and in terminable at will." *

It bears repeating: contracts can be structured with care and clearly stating the parties' intent--with the assistance of counsel, or contracts may be structured by subsequent court decisions with possible unintended results for the parties. The choice should be obvious.
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*Rico Industries, Inc. v. TLC Group, Inc,
2014 IL.App. (1st)131522

DRINKING WATER ENCOUNTERS PERCEIVED CLIMATE CHANGE

It has been like a 1950s science fiction thriller: "THE ATTACK OF THE GIANT POLAR VORTEX!"....Coming to all the theaters near you, for an extended stay. It sends chills up your spine!

As I huddle before my furnace enjoying record high heating bills this endless winter, I squint at three foot plus drifts of snow in the yard and icicles clinging from the roof. News reports echo record snowfalls and record frigid temperatures, and even weather reporters seem to tire of the weather. Both water service lines and the entire Great Lakes are frozen.

Yet, many politicians continue to assert that warming climate change is upon us, and they call for embrace of their proposed regulatory agendas. However, I remain a climate change skeptic--not only because the polar vortex has turned me into a human snowman. As one report has it, the polar vortex has wiped out 95% of the stink bugs in the Washington, DC general area. I am happy that I survive to pay the heating bills.

But, wait there is more. As recently reported in the Wall Street Journal by two professors of atmospheric science: *

" The warming numbers most commonly advanced are created by climate computer models built almost entirely by scientists who believe in catastrophic global warming. The rate of warming forecast by these models depends on many assumptions and engineering to replicate a complex world in tractable terms, such as how water vapor and clouds will react to the direct heat added by carbon dioxide or the rate of heat uptake, or absorption, by the oceans.

"We might forgive these modelers if their forecasts had not been so consistently and spectacularly wrong. From the beginning of climate modeling in the 1980s, these forecasts, have, on average, always overstated the degree to which the Earth is warming compared with what we see in the real climate."...

"The models mostly miss warming in the deep atmosphere--from the Earth's surface to 75,000 feet--which is supposed to be one of the real signals of warming caused by carbon dioxide. Here, the consensus ignores the reality of temperature observations of the deep atmosphere collected by satellites and balloons, which have continually shown less than half of the warming shown in the average model forecasts."

Again, this reminds me of the Chicago television weatherman who invented the "Vice President In Charge Of Looking Out The Window" to confirm that reality matched his forecast models.

So, how should water utilities respond to allegations of climate change? The importance of respecting and conserving ground water and surface water sources of supply cannot be overstated and exists today separate and apart from climate change concerns. Accordingly, it really is not a matter of being bullied by panic over climate change assertions. Instead, for water utilities, it should be a matter of continued protection of freshwater resources, through such measures as encouraging use of more efficient water appliances by users, implementation of rate structures that give proper signals, implementation of expanded desalination facilities and recycling, installation of meters where they are not installed, etc. These, and many other, steps are needed, not because of climate change fears but because fresh water is such an essential but limited resource.

I am putting on another sweater and welcoming the return of the polar vortex this week with numb arms and hot chocolate. Then I will look out the window and watch for any melting of snow which has buried the outdoor Christmas lights and decorations, including the smiling Santa face, probably until April or May...if the climate ever changes by then.

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* McNider and Christy, "Why Kerry Is Flat Wrong on Climate CHange", February 20, 2014, P. A15

AS THE EPA WORLD TURNS

US EPA these days seems to be a lightning rod for controversy, and at times, a soap opera for legal drama.

For example, in January, Arizona state legislators introduced a bill proposing to nullify EPA regulations on the ground that EPA's rule making authority violates the 10th Amendment to the US Constitution. That Amendment, of course, provides that powers not delegated to the federal government are reserved to the states, or to the people.

Along similar lines, several Senators introduced a bill in the US Senate proposing the "Restoring the 10th Amendment Act" (S 1632). The bill would give state officials standing to challenge proposed regulations during any public comment period, based on assertion that a proposed rule would violate the 10th Amendment. The bill would require a federal agency to post a challenge online. The agency would have to certify that the rule would not violate the 10th Amendment, giving a supporting legal basis for such a conclusion.

It has been reported that EPA currently is working on a proposed controversial rule that would expand the definition of US waters, which is the basis for much of its scope of regulation. In other words, EPA may be defining its own jurisdiction. According to some reports, the rule could include most natural and artificial tributaries and wetlands adjacent to or near large downstream water bodies. Also, the rule could allow EPA to assess the aggregate effect of isolated wetlands and water bodies on downstream waters and regulate them, too. Indeed, the rule could include intermittent ditches, which are dry except for when it rains. Perhaps EPA regulation of birdbaths would not be a fantasy under such an expansive rule.

Farmers are challenging efforts by EPA to eliminate an exemption from Clean Water Act discharge permitting for farmyard storm water runoff. In one situation, EPA has appealed an adverse court ruling (Alt v. EPA, 4th Cir. No. 13-2534).

Meanwhile, EPA has proposed stringent carbon emission limits for power plants that many assert will preclude new coal burning plants because of high compliance costs. Such action has stimulated a proposal in the US Senate for a vote under the Congressional Review Act, which empowers Congress to overrule federal regulations by a simple majority of both houses. A presidential veto of a Congressional disapproval vote would be possible, but would confirm administration efforts to bypass Congress through agency regulation.

Finally, decades of EPA regulation have imposed billions of dollars of cost on water and wastewater utilities, and their customers, for installation of compliance treatment infrastructure. Despite this, in West Virginia, an industrial spill into a river source of water supply contaminates a water utility's system with a chemical no one seems to know about, causing a shutdown of the distribution of drinking water to the users.

And so, the EPA world turns and turns and...

SOURCE WATER CONTAMINATION--THE ELEPHANTS IN THE ROOM

Suppose that a water utility is in compliance with all applicable safe drinking water standards and regulations. Then, one day, an unregulated chemical contaminate migrates in the ground to its wells or spills into a river just above its intake. Suppose further that this contaminant is not removed by conventional treatment processes and enters into the utility's finished water and is distributed system-wide to its customers. Will the utility face possible liability for unsafe water at customers' taps? Or is compliance with standards and regulations a defense to such claims?

It will be interesting to see how the current West Virginia chemical spill situation fully plays out. In 2002, the California Supreme Court held that claims for damages from contaminated drinking water against regulated water utilities who met all standards were preempted by the jurisdiction of the state public utilities commission. However, claims against unregulated water utilities were allowed to proceed, even though the utilities met the applicable standards *

One of the more immediate effects of the West Virginia chemical spill situation is the introduction in the US Senate of the Chemical Safety and Drinking Water Protection Act, proposing tighter regulation of chemical facilities with the objective of enhancing protection against chemical spills which could threaten water sources of supply. The proposed statute would require regular state inspections of above ground chemical storage facilities; require industries to develop state approved emergency response plans ; allow states to recover their response costs; and aid utilities in having tools and information to respond to emergencies. On February 4, a Senate hearing was held on the West Virginia spill issues.

The Wall Street Journal reported that, after the chemical spill in West Virginia contaminated its water system, the affected utility's officials said they were unfamiliar with the contaminant and did not know it was being stored.about one mile upstream from its river intake. ** In 1996, a federal program required states to conduct source water assessments regarding their respective water utility systems. However, the program did not require development of source water protection plans. After 9/11, water utilities were required to conduct vulnerability assessments, but these were intended to identify threats from terrorism, not pollutants.

It would seem that a proactive water utility could consider some possible measures to mitigate against risk of contamination of its sources of supply, including:

1. A utility could seek to establish more effective channels of communication with state agencies involved in monitoring industrial activity in proximity to the utility's sources of supply, including any state source water protection plan.

2. Years ago, a Chicago television weather man invented a "vice president in charge of looking out the window" to make sure his forecast were consistent with what actually was happening outside. A utility could conduct its own survey of nearby chemical storage and process facilities--in other words, actually look for itself and ask questions. And, based on such investigation, it could develop an assessment of risks to its system.

3. A utility should have an emergency response plan in place which anticipates the possibility of contamination from an unknown or unregulated contaminate introduced into its source water by chemical spill, chemical migration, or other toxic spill.

4. A utility should have adequate insurance coverage for possible contamination outbreaks.

Surprises may be welcome for milestone birthday parties, but not for water utility operations!

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* Hartwell Corporation v. Superior COurt of Ventura County, 38 P.3rd 1098 (CA 2002)

** February 4, 2014, P. A3

A GROUNDHOG'S DAY

Today, February 2, is Groundhog Day. If a groundhog sees its shadow today, there will be six more weeks of winter. If it does not see its shadow, Spring will be near. Therefore, the Day is of both great personal as well as public interest. You see, I am a groundhog, as today is my birthday.

Exactly what is a groundhog? Frankly, it is a rodent, and a member of the marmot group. It also has been known over time as a woodchuck, whistle-pig and land beaver. It lives in burrows. An average groundhog excavates about 700 pounds of earth per burrow and may have several burrows. It hibernates in winter, and breeds in February--perhaps in "tunnels of love". It is a vegetarian, and may well visit your vegetable garden.

Of all the native animals in North America, the groundhog is the only one to have its own day. In 1841, a Pennsylvania storekeeper wrote in his diary "Last Tuesday, the 2nd, was Candlemas day, the day on which, according to the Germans, the Groundhog peeps out of his winter quarters and if he sees his shadow he pops back in for another six weeks nap, but if the day be cloudy he remains out, as the weather will be moderate." An 1871 commentary on February 2 similarly stated: "On that day the groundhog comes annually out of his hole, after a long winter nap, to look for his shadow. If he perceives it, he retires again to his burrow, which he does not leave for six weeks--weeks necessarily of stormy weather. But if he does not see his shadow, he stays out of his hole till he can, and the weather is sure to become mild and pleasant."

Perhaps the most famous groundhog is Punxsutawney Phil, who has attained rock star status as forecaster to the nation on February 2 every year. However, the truth of the matter is that many towns in the Unites States have their own groundhogs making their own forecasts based on whether shadows are seen there. So, there may well be a variety of predictions. Overall, it seems that groundhog forecasts are correct only about 40% of the time.

In a town in Spain, annually in January, there is a day when townspeople celebrate by throwing dead rats at each other. No doubt tomatoes are out of season. At any rate, we should be happy that we don't have to throw groundhogs at each other every February 2.

Groundhog Day is a de facto holiday in the United States. I urge the President to bypass Congress and issue an executive order establishing Groundhog Day as a national holiday. Of course, that would mean that schools and banks would close and there would be no mail delivery, so that full appreciation could be given to the honored rodent. Because different groundhogs in different locations could give different forecasts, perhaps there should be federal regulation of groundhogs to facilitate uniform forecasting.

What does all of this have to do with water. Well, six more weeks of winter will mean six more weeks of snow, ice and freezing rain--along with frigid cold!

I just stepped outside. I saw my shadow, which means six more weeks of winter. Happy Holiday!

WATER UTILITY PRIVATIZATION UPDATE

An article in the current issue of Water Environment & Technology magazine asserts that public-private partnerships between municipal-owned water utilities and investor-owned water utilities continue to increase.*

According to the report,the trend is being driven by the municipal utilities' need to upgrade infrastructure and a corresponding lack of sufficient financing resources to get the job done. Cities seem to be recognizing that they cannot afford the necessary capital investments in their water systems, particularly with competing other needs within the cities.

In addition, according to the article, municipal utilities are turning to privatization to achieve more cost-effective management of capital improvements as well as of daily system operations.

The article also points out that privatization can provide access to expertise, new technologies and operational best practices in addition to financial resources.

The key issue in any privatization arrangement, in my experience, is the CONTRACT -- the agreement that structures the deal, including the relationships and the responsibilities. This is true whether the privatization may be as simple as an outright sale of the entire system, or a more complex design/build arrangement, or a concession, or an operation management concept.

When privatization is distilled to its essence, it boils down to a shift of risk from municipal ownership to investor ownership of the local utility. That shifting of risk, when effected through a fair and adequately structured contractual arrangement, benefits both the local government as well as its customers. However, as the article states, the parties to privatization should focus on the long term and on performance standards more than design standards. Of course, performance standards must come with consequences if they are not met.

A recent Illinois SupremeCourt decision adds an interesting twist to the privatization discussion.** A a town entered into what in essence was a public-private partnership with a contractor, whose responsibility was to maintain and repair portions of the municipality's water and wastewater infrastructure and to operate its treatment facility. The Court held that the contractor was subject to the Illinois Prevailing Wage Act because the contractor was not a regulated public utility company considered as such by the state utilities commission or other state agency. Even though the contractor performed utility functions, the court said, it did not fall within the public utility exemption from the Prevailing Wage Act.

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* "When Public Goes Private", LaShell Stratton-Childers,
Water Environment & Technology, January, 2014, p.13

** People v. E.R.H. Enterprises, 2013 IL 115106

REGULATORY AGENCY TRANSPARENCY UNVEILED A LITTLE

Much political lip service has been given to the need for transparency in decision making by administrative agencies. However, it seems that all that talk often does not translate into reality.

Recently, an Illinois Appellate Court decision focused on transparency of two related state regulatory agencies.* A large oil refinery filed several applications with the Illinois Environmental Protection Agency ("EPA") for certifications that certain infrastructure improvements were "pollution control facilities." Certifications would result in preferential property tax treatment. Under the procedure, EPA evaluates such applications and makes recommendations to the Illinois Pollution COntrol Board ("PCB'), which makes the decisions whether to certify.

A group of local government taxing bodies, including school districts, served a Freedom of Information request ("FOIA") on EPA asking for copies of the refinery's applications. EPA denied the request.

EPA recommended that the PCB grant the first group of applications. The local taxing bodies filed petitions to intervene in the PCB proceeding. However, the same day, the PCB granted certification and dismissed the petitions to intervene as moot.

The local bodies filed a motion for reconsideration. The PCB held a "closed deliberative session" on the motion. At a subsequent open session the PCB announced its denial of the motion, without discussion or permitting public comment. When other applications of the refinery came before the PCB with EPA recommendations, the local bodies filed additional petitions to intervene. The PCB held another "closed deliberative session" to discuss the additional petitions to intervene. At a subsequent open session, the PCB voted to deny the petitions and issued a written decision.

The local bodies filed suit for declaratory and injunctive relief alleging that EPA violated FOIA law and the PCB violated state open meetings law. The trial court granted summary judgement for defendants.

The Appellate Court reversed. It agreed with the claim that EPA violated FOIA, stating "the Agency clearly violated FOIA by not providing the public records plaintiffs requested as statutorily mandated."

THe Illinois Open Meetings Act requires that all meetings of public bodies be open to the public, unless certain specific exceptions apply that permit closed sessions. The PCB asserted that its "closed deliberative sessions" were permitted under the exception for consideration of "evidence or testimony" presented at a hearing. The Appellate Court rejected the assertion, stating: "all citizens of the affected municipalities had an interest protected by the overarching policy in this state that the people's business be conducted openly to inform the public. Given that policy, we reject defendants' claim that approval or disapproval of that issue was properly considered in a closed session instead of the clear sunshine of public scrutiny." The Court also found that the PCB open sessions violated the Open Meetings Act because public comment was prohibited.

Most state laws, as well as federal law, have some form of FOIA and open meetings requirements. The Court's decision may offer some hope for greater transparency in regulatory agency proceedings.

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*Roxana Community Unit School District No. 1 v. EPA,
2013 IL App (4th) 120825 (2013)

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PROMISES

When I was about 13, my father promised to take me fishing at a creek nearby. The creek was bordered by a thick forest of mature oak trees. Historically, the creek served as a water and fish source first for Indians, then for immigrant German farmers who settled adjacent prairie. However, currently it was shallow and yielded only "bullheads" and crawfish. One could hop rocks to the opposite bank, and the ruins of an old limestone bridge that once spanned the creek imposed curiosity.

Today, the creek serves primarily as a conduit for effluent from upstream wastewater treatment plants and for storm water sewer inflows, sending its burden to the Mississippi river via two other rivers.

The promised fishing was deferred several times by various interventions. However, one cold, snowy January day, my father surprised me saying he wanted to take me to the creek's woods to show me how to use my new official Boy Scout ax. It was one of those with a one piece steel head and handle, and a blade so sharp that could slice cheese from six feet away.

After we arrived in the forest, my father selected a 10 inch diameter log lying on the ground as the intended target for an ax demonstration. Then he made a looping swing of the ax to begin the cutting. Unfortunately, the log was frozen like a rock. and the ax bounced off the log to make its first cut into my father's ankle instead. Promise, and lesson, over.

Promises, it seems, may be easy to make, but difficult to fulfill at times. In the provision of public utility water service, customer perception of the quality of that service can be critical. A utility can be providing good service, but if customers perceive otherwise, a utility may suffer from unrest and opposition from its customers. For example, if a utility promises to promptly resolve a customer concern or complaint, it is essential that the promise be fulfilled. If action is delayed or overlooked, a perception can arise that the utility provides poor service--regardless even if there was a good reason for delay. In this example, timely communication to the customer of the likely delay may have adequately satisfied the customer.

The point is that a utility has a responsibility not only to provide good water, but also to provide good service. Empty promises can not be justified by good intentions. Disappointed customers may become utility management's frozen log.

RAISING WATER SERVICE RATES TO BENEFIT CUSTOMERS

Last week, the Wall Street Journal reported that the Chinese government is raising rates for water service charged urban users with high levels of demand.* According to the Journal, cheap pricing for water in China had reflected a government policy to protect against inflation. However, low rates were resulting in overuse of water resources and deferred investment in infrastructure.

Under the rate increase, higher uses of water by customers will result in rates that are multiples--3x or 1.5x, depending on demand--of the base rate for water service. Thus, the revised rate structure is intended to encourage conservation as well as to facilitate new investment in water treatment facilities to meet expected more stringent drinking water standards in the near future.

The article also points out that the increased rates will address the "profitability concerns" of Chinese water utilities , as many allegedly operate at a loss or with low revenues that result in a disincentive to upgrade infrastructure to improve water quality.

Does this story sound familiar? Whether it is China, the United States or any other country, reasonable rates that recover all the costs of water service from customers who cause those costs are an imperative for safe and adequate water service. Revenue requirements include not only operating expenses but also funding of reserves for replacements, upgrades and expansions of infrastructure or for funding of debt service incurred for those purposes.

Depending on the availability of adequate sources of raw water supply, rate structure can facilitate conservation measures. Historically, water utilities frequently have structured their rates with declining rate blocks or steps for higher usages, reflecting economies of scale. However, rising rate blocks, along the lines of the Chinese model, have been implemented to encourage conservation of water resources.

In the United States, often water utilities--particularly those owned by municipalities--have maintained low rates that do not recover full costs of service and have resisted rate increases for political reasons. Maintenance of insufficient rates does not benefit water users, for all the reasons apparent to the Chinese regulators. Customers benefit only when revenues are sufficient to enable utilities to recover all costs of service and to fund infrastructure that assuredly provides safe and adequate water to meet demand.

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* January 4/5, 2014, p.A6