Congress Needs to Repeal “Buy America” Law

Water Ratepayers Will Pay a High Price if Congress Fails Act

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Communities will pay excessively high prices for water infrastructure upgrades during the coming decades unless Congress repeals a recently passed “Buy American” law. Rep. Robert Aderholt (R-Ala.) slipped the provision into the Infrastructure Finance and Innovation Act (WIFIA), which the president signed into law in June. It requires localities that accept federal water funds to buy only American steel pipes and other products necessary for water supply infrastructure upgrades—even when more affordable options are available. This blatantly anti-competitive provision will cast a long shadow over efforts to fix the corroding, leaking underground water pipes that plague many of America’s municipalities.

Many of the nation’s water networks are in an advanced state of decay. Government mandates that drive up repair will only make a bad situation worse. How bad is it? According to a 2010 U.S. Conference of Mayors report, rehabilitating the nation’s water and wastewater systems will require spending $3.8 trillion over the 20-year period 2009-2028. Underground pipes account for some 60 percent, or $2.28 trillion, of that total, according to the U.S. Environmental Protection Agency (EPA). 

Widespread corrosion in metallic pipes is the primary cause of an estimated 300,000 water-main breaks in North America every year. Hundreds occur every day. Gregory M. Baird, former chief financial officer for Aurora Water, Colorado’s third largest water utility, estimates that leaking underground pipes lose 2.6 trillion gallons of water every year, about 17 percent of all water pumped in the United States. Montana State University microbiologist and water researcher Timothy Ford argues that as pipes corrode and break, water escapes and diseases enter the system, posing a serious threat to public health.

Water systems are capital-intensive operations. When jurisdictions fail to raise sufficient funds to cover the cost of rehabilitating their underground water networks, repairs are put off, decay accelerates, and upgrades require even more funds. This is why the Aderholt provision will do so much harm. It limits the choices water utilities can make, which is a sure way to drive up the cost of repair and replacement.