‘Fit-for-Purpose’ sustainability index: a simplified approach for U.S. water utility sustainability assessment

U.S. urban water utilities provide essential services to the vast majority of the U.S. population and industry residing in urban areas. The infrastructure that extracts, supplies, and distributes drinking water, and collects and treats used water is vast, but mostly unseen. The U.S. has over 51,000 Community Water Systems (CWSs) (EPA 2013) and almost 15,000 wastewater treatment plants (EPA 2009), or water resource recovery facilities (WRRFs). Most of these systems are managed independently. The overall network requires sophisticated operations and management and, while it generally works well now, much of the U.S. water infrastructure is at or near the end of its useful life. The investment needed to maintain drinking water services for the next 20 years is $384 billion (EPA Office of Water 2013) and $298 billion for wastewater and stormwater infrastructure (EPA 2009). However, the challenges include more than just aging infrastructure.

Even with a variation in local climate, topography, water quality, and other conditions, most U.S. urban water utilities have several common external drivers. These utilities have pressures such as fiscal constraints, aging infrastructure, increasing regulations, changes in climate, and for many, increased demands due to population growth. While not all U.S. urban areas’ populations are growing, the overall U.S. population is expected to grow by more than 30%, or almost 100 million people, by 2060 (Colby & Ortman 2015). This growth will likely occur in urban rather than rural areas (United Nations 2012). For those urban areas with declining populations, a shrinking rate base adds yet another external challenge to sustainable operations.

In response to these pressures, a few utilities are moving toward the ‘Utility of the Future,’ a concept outlined in a 2013 report by three organizations serving the wastewater sector, The Water Resources Utility of the Future: A Blueprint for Action (NACWA WERF WEF 2013). The Utility of the Future will no longer just treat, distribute, and collect water, but move towards sustainability by seeking new revenue streams, pursuing watershed-based environmental benefits, and meaningfully engage the public. It will reclaim and recycle water, recover resources, and utilize green infrastructure solutions. Essentially, the Utility of the Future concept describes a more sustainable utility.

The concept of sustainability, however, presents challenges for researchers and the water sector has not reached agreement on an operational definition of sustainability (Herrick & Pratt 2013). For the purposes of this research, a sustainable utility will provide its crucial services for current and future generations, protect public and environmental health, and enable economic growth, all while minimizing resource consumption. This builds on a common description of sustainability from the World Commission for Environmental and Development's publication, Our Common Future, known as the Brundtland Report (World Commission on Environment & Development 1987). This report describes sustainable development as ‘… development that fulfills the needs of the present generation without compromising the abilities of future generations to meet their own needs.’ A frequently used approach to measure sustainability is the triple bottom line (TBL), which categorizes actions, measurements, or metrics into economic, social, and financial components. The authors are evaluating a ‘TBL-plus’ framework proposal, which adds a fourth component of ‘infrastructure’ to the TBL. A TBL-plus framework has been used previously in the water sector, but with health and hygiene, functional, and/or technical components added to the TBL. (Hellström et al. 2000; Balkema et al. 2002; Guest et al. 2010)

Formal water utility sustainability assessments are rarely performed and sustainability indicators are infrequently tracked, either in the U.S. or globally. The concept of performance assessment, which measures and tracks performance indicators over time or benchmarks against other water utilities, is somewhat more common, but primarily outside the U.S. Examples include OFWAT's key performance indicators (KPIs) in England and Wales (OFWAT 2013) and the Australian National Water Commission's National Performance Report (National Water Commission 2014). The longer-term nature of sustainability indicators sometimes overlaps with sets of performance indicators, but not in all cases. This research takes into account performance indicators and assessment programs as they relate to utility sustainability.

Despite the tens of thousands of water utilities in the U.S., participation in existing sustainability assessments, reporting, and related performance benchmarking programs is extremely limited. This is due in part to a lack of standard U.S. reporting requirements for water utilities beyond U.S. Environmental Protection Agency (EPA) water quality permits. It is also influenced by the time and resource requirements of current assessment programs like the Water Environment Federation's (WEF's) sustainability reporting statements for wastewater utilities or the Blue City Index, which cite investments of days or months (WEF 2012; Van Leeuwen & Chandy 2013; Matichich et al. 2014) to collect data for the numerous indicators required by these programs (Haider et al. 2014).

The concept of ‘fit-for-purpose’ is gaining favor with water reuse and supply schemes. It entails matching water supplies of differing qualities to the most appropriate use (e.g. potable, industry, irrigation, etc.) (Brown et al. 2009). This work proposes that the concept of ‘fit-for-purpose,’ meaning a level-of-effort commensurate with end-user needs, be applied to research methods as well. In this case, for the assessment of a utility's sustainability. Eventually, the framework developed in this research program will be used to measure and compare U.S. urban water utilities via a sustainability index. A utility's relative sustainability can then be correlated to its internal attributes, ultimately helping utilities prioritize their efforts to be more sustainable.

Most U.S. utilities lack resources and/or interest to participate in a comprehensive sustainability index program that requires significant time, money, and/or staff. Sufficient data for a statistically valid, national analysis is therefore lacking. However, development of a ‘snapshot’ sustainability assessment could quickly and easily generate data. The researchers reviewed the literature, interviewed utility leaders, and surveyed water sector professionals to inform a snapshot of essential sustainability indicators for U.S. urban water utilities, limited in number and based on readily available data. This will ultimately help utilities prioritize limited resources to transition to a more sustainable operation.

There is a gap in current literature regarding urban water sustainability assessment, particularly in the U.S. Some of this gap relates to scale. Only about 11% of the papers on integrated water resource management in the last decade focused on cities or municipalities, rather than the water utility. Most were river basin or country-wide studies encompassing large-scale water resource management and reclamation (Gallego-Ayala 2013). Those focused on the city-scale tended to be Euro-centric, such as the City Blueprint (Van Leeuwen & Sjerps 2014), or studies on Australian cities (Brown & Farrelly 2009; Brown et al. 2009), two regions that operate in a different regulatory and reporting scheme than the U.S.

Those papers that studied the utility scale focused on specific countries, utility service type, or one component of the TBL. Hellström et al. (2000) developed a framework for analyzing the sustainability of Swedish urban water and wastewater utilities. Balkema et al. (2002) compiled a set of sustainability indicators from 15 studies on wastewater treatment systems. Kenway et al. (2007) compiled guidance on TBL reporting for drinking water utilities. Guest et al. (2010) evaluated sustainability metrics for decentralized wastewater treatment alternatives. Liner et al. (2012) proposed social metrics for drinking water utilities.

While several international organizations benchmark water utility performance data, U.S. participation is limited. The World Bank's IBNET (International Benchmarking Network) contains information from over 2,000 utilities in 85 countries, but only one U.S. utility provided data, Charleston Water System (IBNet 2015). The European Benchmarking Co-Operation performs an annual exercise and in 2013, 40 utilities from 18 countries participated in the program. Again, Charleston Water Systems was the only U.S. utility participating (European Benchmarking Co-operation 2015). In the United Kingdom (UK), water utilities are required to track performance via a set of KPIs. These KPIs are set by the utilities, the government, and the water industry regulator (Ashley & Hopkinson 2002). Canada has a National Water and Wastewater Benchmarking Initiative that started in 1997 and now includes 54 wastewater, 50 water, and 28 stormwater utilities, with results last posted for 2011 (AECOM 2013). Results are aggregated and individual utility data is not available. AWWA performs an annual benchmarking survey of mainly North American water and wastewater utilities. The 2012 report contains data from approximately 100 respondents who self-selected to provide their data. Data is blinded and presented by region or size of utility, further broken down into water, wastewater, or combined utilities. Raw data, however, is not available for analysis (Mercer 2013).

The U.S. has limited national water utility reporting requirements compared to KPIs in the UK or some water sector data required by the European Union's Water Framework Directive. CWSs must provide potable water quality data and report any violations. WRRFs are required to provide effluent water quality, as prescribed on their discharge permits, along with overflow or bypass events, if applicable. Therefore, the data needed for a sustainability assessment of U.S. water utilities is not required per current regulations and would need to be obtained independently.

Ultimately, the literature review affirmed the research gap for U.S. urban water sustainability metrics. It also underscored the challenges of tracking sustainability in the U.S. context. A list of preliminary sustainability indicators from the literature review informed the interview backup questions. The EAC then provided feedback on those indicators.

The literature review provided the foundation for the two data-gathering methods. First, an external advisory committee (EAC) of 12 U.S. utility leaders was formed and interviewed individually about sustainable practices using a semi-structured interview process. Second, the primary author surveyed water sector professionals online, using the freelisting method to establish a domain of sustainable practices. All methods and procedures for the EAC interviews and freelisting surveys were reviewed and approved by the University of South Florida's Institutional Review Board/Human Research Protection Program.

The EAC consisted of 12 U.S. urban water utility leaders from across the country. Members were selected using ‘convenience sampling,’ representatives to whom the researcher has access and who are leading transitions to sustainable operations. The technique of convenience sampling ‘often grants the researcher a level of access to and familiarity with the sample that guarantees a richness of data that could not be attained if the sample were less familiar, and therefore less convenient, to the researcher’ (Koerber & McMichael 2008). The EAC demographics are provided in Table 1. Participant job titles included: Chief Executive Officer, Chief Operating Officer, Commissioner, Deputy Director, Executive Director, General Manager, and Strategic Systems Manager. The combined coverage of the 12 utilities provides water and/or wastewater services to a combined population of almost 27 million people, or over eight percent of the U.S. population. Urban areas were defined as having 50,000 or more people per the United States Census Bureau (2015). The population served by the EAC's utilities ranged from as small as 60,000 customers to the country's largest utility with over 9 million customers.

The in-depth, semi-structured interviews with the EAC used a list of predetermined questions. Unlike structured interviews, which cannot stray from the predetermined questions, semi-structured interviews allow the researcher to ask additional questions that emerge from the interview responses. Key, open-ended questions related to sustainable practices asked of each EAC member are listed in Table 2. Questions were generally given to participants a week before the interview. During the interview, follow-on questions about specific sustainable practices and indicators were based on responses to the key questions. Ten of these individual interviews occurred face-to-face and two were conducted via teleconference. All interviews were recorded and lasted an average of 70 minutes, from a minimum of 60 to a maximum of 86 minutes in duration, totaling over 14 hours of interviews.

The primary author transcribed recordings using the Transcribe integrated audio player/text editor and then coded the transcriptions. Coding ‘is the process of organizing the material into chunks or segments of text and assigning a word or phrase to the segment in order to develop a general sense of it’ (Creswell 2014). Therefore, the process of coding inductively reduced the transcripts to significant practices through the selection of individual passages. This was followed by code manipulation where codes were studied for thematic connections and overlap, resulting in recoding and combining, as appropriate. This discourse analysis is ongoing and results presented in this paper emerged from key themes in the interviews.

Freelisting is an anthropological method used to establish a domain, or items included in a particular category by surveying not more than a few dozen people who are familiar with that category (Schrauf & Sanchez 2008). Depending on the coherence of the domain, approximately 20 to 30 participants are usually adequate (Weller & Romney 1988). For this work, freelisting responses were collected via online surveys and participants remained anonymous. Eligible participants for the survey included water professionals familiar with urban utility management. They were solicited from networks of water professionals (via the American Water Works Association's (AWWA's) Management and Leadership Division; Strategic Management Practices Committee; and Finance, Accounting and Management Controls Committee; and WEF's Utility Management Committee) and from the researcher's sector contacts using referral and convenience sampling. Freelisting permits the researcher to measure convergence around a domain, which can be determined by analyzing responses as they are completed. In all, 31 survey participants indicated which type of water utility they primarily work with (water, wastewater, or both) and then were asked to answer this question: ‘Provide up to 20 brief responses for the following. ‘List examples of sustainable practices for U.S. urban water utilities.’ Do not research the answers. Rather, simply provide answers in the order they come to mind.’ This resulted in a ‘free list’ of ideas that may fit in the domain of sustainable practices. Freelisting responses were evaluated to help identify and define the domain of sustainable practices for U.S. urban water utilities.

In this discussion, all personal names are withheld to protect the identities of the EAC members, but most members provided consent for their utilities to be identified. Each participant was first asked about using the TBL-plus framework, with the plus being infrastructure, as a water utility sustainability framework. All were familiar with the TBL framework and eight strongly supported the concept of adding infrastructure as a fourth component in this context. A manager from the Philadelphia Water Department stated ‘I love the plus…I like the idea of plus being infrastructure … it allows [the] economic [component of the TBL] to be more about finances, which is critical.’ Of the remaining four, none opposed the idea, but two wondered if infrastructure practices would be a part of the economic component of the TBL or distributed throughout. A manager from Alexandria Renew Enterprises asked ‘wouldn't the infrastructure piece be covered already from the economical piece? It almost transcends all three of them [the TBL components].’

Discourse analysis of the 12 interview transcripts of the open-ended questions about sustainable practices in the TBL-plus categories (questions number 2 through 5 in Table 2) resulted in 40 separate practices. The top eleven practices, with mentions by at least one-third of participants, are listed in Table 3. The TBL-plus component where the practice was mentioned most-frequently in the interviews is provided in the last column. Many of these practices resulted from code combining as described in the methods section with further descriptions of the practices below. Participants could mention more than one practice in the open-ended responses and were not asked specifically for the most important practice. The majority of the remaining 29 practices only received one mention.

Education and Communication was the most-frequently cited sustainable practice and combines public education, communication, and ratepayer surveys as practices. A manager at the San Francisco Public Utilities Commission asked ‘how do you get people to really appreciate the value of water?’ and noted, ‘One of the things we've been doing … is to really educate people on the value of water … because our infrastructure is invisible. You don't see most of it. It's underground.’ Public education and communication strategies were seen as proactive ways to connect with the community, build support, leverage other projects, and overcome past failures and tension with ratepayers. Ultimately, this external focus can positively impact the acceptance of rate increases needed to support future infrastructure needs, helping ensure more sustainable operations.

Asset Management was usually cited as an infrastructure-related sustainability practice with one respondent including it as an economically sustainable practice also. Asset management was always noted in the context of physical assets and is summed up by a manager from Seattle Public Utilities, ‘I think an important infrastructure-related sustainability practice is having a robust asset management system in place and … keeping good data on the infrastructure and having a good sense of when to run to failure versus when to do proactive replacement.’ Infrastructure is at the core of any water utility and the effective management of those assets is essential to a sustainable utility. Specific practices included simply knowing what and where your assets are, to knowing their operational condition, to having an asset management strategy for repair versus replacement. This strategy and longer-term plan for infrastructure renewal or replacement was often linked to a utility's financial planning, the next practice.

Bond Rating/Financial Management pulls several financial practices together that will impact a utility's bond rating and therefore its financial sustainability. It included practices like:

• full cost pricing, charging rates that cover current expense and debt service;

• a movement towards coverage of fixed costs, having a rate structure that is not completely dependent on volumetric rates, but rather has some fixed portion independent of water usage;

• keeping rate increases below a certain threshold; and

• maintaining a desirable bond rating resulting in borrowing at lower interest rates.

Community Return on Investment was mostly cited as a socially sustainable practice, but several also noted it was an economically sustainable practice. It reflects the desire for water infrastructure investments to provide a return to and/or support the community at large, not just benefit the utility. A manager at the Cincinnati water utility noted that ‘sustainability is all about creating outcomes. So in the end, if Cincinnati's utility hasn't become successful in supporting the overall economic goal of the community, then we haven't delivered the sustainability for that community.’ Specific ‘returns’ for the community include the creation of local, green jobs directly related to infrastructure improvements; increased property values from green infrastructure projects; minimizing disruptions to the community as a results of infrastructure construction; and even a reduction in crime due to infrastructure/community upgrades.

Habitat/Watershed Protection is a practice that both water and wastewater leaders cited. It includes practices that have impact beyond a utility's boundaries such as benthic studies, habitat restoration, providing minimum environmental flows, and impacts on commercial fishing. This practice excludes source water protection, which was noted, but only by two of the participants. Wastewater utility leaders noted the impact their discharges had on aquatic habitat, both from a water quality and quantity perspective. Water utility leaders focused on environmental flows, with a former manager at the Southern Nevada Water Authority stating ‘we have to find ways to share the water resources with all the aquatic habitat [and] aquatic species that we take the water from … and the land that we take the water from.’

Resource Recovery brings together the concept of recovering resources from water or wastewater in the form of nutrients, energy, and/or water (N-E-W). Specifically noted was: nutrient recovery from struvite precipitation or Biosolids land application; kinetic (in-pipe), heat (heat exchangers), and chemical (biogas conversion to energy) energy recovery; and water reuse programs as a form of water recovery. Energy neutrality was noted as a goal by two of the participants. A manager at the Metropolitan Water Reclamation District of Greater Chicago stated ‘I think that as a society we have to move into resource recovery. I think we have to look at this industry differently than just being a waste industry so we're moving towards those practices.’

Green Infrastructure is a sustainable practice categorized mostly as an environmental practice, but was also noted as both a social and infrastructure-related. It was mentioned in the context of replacing grey with green infrastructure for urban stormwater management. It included specific practices like green roofs and other practices which had multiple benefits including keeping stormwater out of combined sewer systems. A manager at Alexandria Renew Enterprises described green infrastructure as a way to ‘tie in things that a community needs with [its] wants.’ Related, a manager at DC Water noted it is a multi-benefit solution that can ‘control flooding, but have all these other benefits of greening the streets [and] jobs that are created … [to] obtain all of these goals.’

Meet or Exceed Permit brings together mentions of meeting your permit as a good environmental practice, but includes others who specifically noted going beyond permit requirements as a sustainable practice. A former manager at the Southern Nevada Water Authority observed that ‘just adhering to the regulatory standards is … an epidemic in this country, among wastewater agencies. They simply treat to the standard, whether that standard is appropriate or not because conditions change. … I think all of those pieces [including conservation, habitat protection, and water reuse] have to be part of what you would call your environmentally sustainable utility.’

Water Conservation was cited exclusively as an environmentally sustainable practice, by utility leaders from both arid and water-rich regions. The practice included the utility encouraging, coercing, or even forcing water conservation by its customers. This practice entails comprehensive programs for water users by the water utility, to extend the life of existing supplies. It is grounded in the acknowledgement that a sustainable future water supply is going to be dependent on using less water rather than exploiting new water sources for an increasing demand.

Affordability and the challenges of understanding your community's ability to pay was noted as a common issue for any urban utility. None of the utility leaders cited specific thresholds, although some industry standards exist. A manager at Spartanburg Water linked service levels and affordability by noting that a sustainable practice is ‘understanding the cost of your system and the capability of your community to pay for that system. You know you can set a service level way beyond the affordability of your community and you've got to know where that threshold is.’

Environmental Justice combines practices of making sure performance and service level is equitable throughout the service area, regardless of income level; to reaching out specifically to underserved areas in various languages; to having a specific environmental justice policy in place. Proximity of treatment facilities to surrounding neighborhoods and the subsequent impact on those neighborhoods was noted as an environmental justice issue.

Responses to the specific question about the most significant barriers to more widespread adoption of sustainability (question 6 in Table 2) revealed a diversity of opinions. Table 4 summarizes the responses. In addition to the most-cited barriers listed below, participants noted: risk aversion, short-term thinking, dissimilarity of utilities across the U.S., community pushback, politics, and disconnect from daily operations.

There was no consensus in the answer to ‘What actions do you believe would most effectively drive change and the accelerated adoption of the use of sustainability indicators?’ Responses, each only mentioned once, included: grassroots efforts in the utility, regionalization, removing utilities from municipal governance, linking sustainability to daily operations, developing better definitions of sustainability, sharing success of early adopters, making it a regulatory requirement, and making it a requirement by financial institutions.

A frequent follow-on question of ‘Who do you think should be the driver of these recommended actions?’ also did not produce a consensus response. Four of the participants thought the public/ community should drive it. Three mentioned politicians and two mentioned regulators. Professional associations and financial institutions were only mentioned by one participant. Three of the twelve participants provided more than one response and added that utilities or utility leaders should drive the adoption of sustainability indicators.

The specific question about current or future plans to report on sustainability generated few affirmative responses. Two had used GRI as a basis for previous sustainability reporting and one was interested in it for future work.

The utility leader interviews and water professional surveys proved to be a valuable exercise in assessing current thinking about U.S. urban water utility sustainability. The majority of the utility leaders supported the concept of the TBL-plus framework which created thoughtful dialogue about the elevated importance of infrastructure as an over-arching component of an urban water utility's sustainability. In the next phase of this research program, the TBL-plus framework will be used to ensure coverage of the four components in the recommended set of indicators. The responses by both the utility leaders in the interviews and the water professionals in the survey were a mix of practices that described both utility performance (indicating current or short-term assessment) and sustainability (indicating predictive, or longer-term assessment). The ‘snapshot’ set of sustainability indicators to be developed from these practices needs to focus on measurements of sustainability, with a longer-term timeframe, to differentiate it from existing sets of performance indicators.

The highest-ranking responses from both groups of participants had significant overlap, indicating strong support for certain practice areas. The practice of public education and communication ranked highest in the utility managers’ interviews. Resource recovery ranked highest in the water professionals survey. Both of these practices are linked to another high-priority practice, maintaining a high bond rating and having good financial management.

There was a difference in the ranking of public education and communication between the two participant groups. The interviewed utility leaders, selected because they are already leading transitions to sustainable operations, named this practice most frequently of the 40 practices noted. The surveyed water professionals, mainly from the AWWA and WEF utility management committees, mentioned this practice tenth of 90 practices, still high, but not at the top of the list. This may be due to the demographics of the surveyed water professionals, some of whom work for utilities, but are generally mid- to higher-level managers, not at the top of the organization. Others in this group are utility consultants, government representatives, academics, and technology providers. Therefore, the externally focused practice of public education and communication may be a more important part of sustainable operations from the perspective of top management at a utility, but this shift may not yet be fully integrated throughout the utility organization. Additionally, the shift to an external focus for U.S. water utilities is a relatively recent phenomenon, as noted in The Water Resources Utility of the Future: A Blueprint for Action which calls for further ‘public education and involvement’ (NACWA WERF WEF 2013). Some of the early adopters of this paradigm shift were the utilities selected for the EAC.

The practice of good asset management, reflecting the focus on infrastructure, was ranked highly by both groups. The practice of water conservation was noted by both water and wastewater utility leaders and professionals alike. Finally, both groups noted the integration of green infrastructure practices. Follow-on research will utilize Computer Assisted/Aided Qualitative Data Analysis Software, such as HyperRESEARCH, along with ANTHROPAC and SPSS, to further analyze and prioritize results. Ultimately, these practices will inform a brief set of sustainability indicators for U.S. urban water utilities.

Related questions about adoption of sustainability indicators revealed that sustainability reporting is currently not a high priority among even the most progressive utility leaders. No consensus definition of sustainability for urban water utilities exist and this lack of definition was noted as the highest-ranked barrier to adoption of sustainability indicators. Furthermore, a lack of incentives inhibits adoption, with neither U.S. regulators nor financial institutions requiring such reporting, as examples. Responses to the question about who should drive the adoption of sustainability indicators demonstrated a proclivity toward external drivers such as the community, politicians, and regulators. Far fewer noted the role utilities and their leaders can play in this movement, reflecting the significant challenge of widespread adoption of sustainability indicators by U.S. urban water utilities.

Assessing the sustainability of urban water utilities is an important step in continuing to provide their services for future generations. While sustainability indicators and assessments exist, they are infrequently used for water utilities, particularly in the U.S. Barriers to their adoption include lack of a consensus definition of sustainability, a lack of incentive to perform the assessment, and the resources required.

The theoretical framework presented herein proposes a method for determining key practices to inform a ‘snapshot’ sustainability assessment for U.S. urban water utilities. This assessment will be ‘fit for the purpose’ of generating data for related assessments and research programs. A TBL-plus approach, with a fourth component of infrastructure, can be used as a framework to ensure a balanced assessment of a utility's sustainability. Results from two sets of participants, U.S. urban water utility leaders and water professionals familiar with urban utility management, revealed some of the most frequently cited sustainable practices. These practices include: education and communication; asset management; bond ratings/financial management; resource recovery; green infrastructure; and water conservation.

The primary author acknowledges the assistance of the University of South Florida (USF) Patel College of Global Sustainability, which provided travel assistance for conducting the EAC interviews. Christian E. Wells, Ph.D. of the USF Department of Anthropology provided valuable input on the qualitative data methods. Also, the American Water Works Association and Water Environment Federation provided access to their members for the freelisting survey. This research was conducted under the supervision of the University of South Florida Institutional Review Board/Human Research Protection Program, Project No. Pro00020370.