Thought Leadership

The last IIJA supplemental appropriation has been made, SRF and WIFIA authorizations have lapsed, and FY2027 opened on a stopgap. Billions in IIJA dollars are still moving through the pipeline, but every one now carries a deadline, and the base program behind them is shrinking. The question for a utility CFO is no longer whether federal funding is changing. It's which assumptions in your capital plan were built on it.

Almost three-quarters of utilities report an asset management plan fully implemented or in progress. On paper, the sector looks mature. But the framework utilities use to self-assess actual management maturity tells a different story — and the gap between the two numbers is the real state of the industry.

Pipe networks get the sophisticated tools: GIS-based condition mapping, failure-rate models, leakage indices. Treatment plants and other vertical assets get age-based schedules and OEM recommendations. The problem: treatment assets command the majority of capital dollars, not pipes — and the research literature shows the same imbalance.

A 2024 peer-reviewed review of water utility performance-indicator research — examining 108 published studies — found that despite widespread use of performance indicators across the sector, the findings of that research are not reliably making it into improved utility outcomes. Utilities are measuring. Few are closing the loop.

The pattern reveals something more consequential — and more correctable. Across every publicly verifiable downgrade in U.S. water, sewer, and wastewater utilities, capital plan structure shows up as a contributing or primary factor in nearly every case. The story isn't about interest rates. It's about how a CIP performs under real financial conditions.