Like many jurisdictions, Ontario is working to ensure the financial and environmental sustainability of municipal water, wastewater, and stormwater systems. While “doing more with less” is the reality for most utilities, one of the biggest challenges for water and wastewater utilities is raising additional funds to resolve growing infrastructure deficits.
As executive director of the University of Waterloo’s Centre for Advancement of Trenchless Technologies, Mark Knight advocates for cost-effective solutions that extend the life of existing buried assets rather than big capital projects that require hauling and replacing old infrastructure, perhaps before the end of its useful life.
The question, he says, is where to find the money. “Eighty per cent of the cost of running a water or wastewater network is operational. If we spend money to do certain types of optimizing capital works, we can substantially reduce that cost. But in most municipalities, there’s a political lack of will to raise rates.”
Southern Ontario Water Consortium’s Brenda Lucas agrees that new mechanisms are required to close the funding gap. Like Knight, she also wants to see cost-effective, innovative solutions at work.
Innovation in Ontario
While the water industry is inherently against taking risks—and for good reason since its job is to ensure the health and safety of drinking water—the Walkerton tragedy initiated a process that changed the attitude toward innovation in the province. Strict regulations have improved confidence in Ontario’s water systems, but it has become more challenging to introduce approaches beyond conventional technology.
That said, there is a critical mass of technology companies, research institutes, and organizations that make water a big focus for Ontario. Recognizing the potential for Ontario to become a dominant player in the sector, the provincial government passed the Water Opportunities Act in 2010—an act to promote Ontario’s expertise to the world.
The Water Technology Acceleration Project (WaterTAP) was formed as part of the act to be Ontario’s water sector champion on the world stage and strengthen the province’s environment of water technology innovation.
Changing the flow
Currently, infrastructure funds from the provincial or federal governments are earmarked for capital, rather than operational, expenditures. As part of its mandate, WaterTAP—as well as other stakeholders—is exploring ways to tweak how these funds flow to municipalities, and how those tweaks can better support innovation.
As chair of WaterTAP’s Invest to Save working group, Lucas leads a collection of industry experts who are particularly interested in alternative ways to finance infrastructure improvements through investments in optimization and efficiency.
Lucas says public dollars should be directed to approaches that are cost effective and have multiple benefits. “A dollar invested in a different way could save municipalities from spending several times that amount on traditional capital infrastructure,” she says. “We want to help open the door to funding non-capital approaches or capital approaches that offset traditional requirements.”
Leading by example
After forming in 2013, the Invest to Save group began collecting case studies from Ontario to demonstrate the savings associated with innovation, whether it’s the use of new technologies or, simply, a different approach to the problem. “The opportunities are endless,” Knight says. “On the wastewater side, pipes are leaking into groundwater tables and causing issues with infiltration and inflow—sometimes contributing up to 30 or 40 per cent of the flow to plants. We’re paying to treat that water! In some cases, we’re spending millions building bigger plants when we could actually just work to reduce those flows.” For example, he says, municipalities could invest in fixing and relining pipelines and gain tremendous capacity.
Programs like Ontario’s Showcasing Water Innovation are a great source of these cases, and working group members have contributed stories from their own experience as well as gathering them from peers. From small town to large city, there are plenty of examples to share.
When Ministry of Environment guidelines required the town’s water treatment plant to treat its filtration residues before discharging into the Tay River, Perth, Ontario (population 5,840) was looking at a price tag of $2 million to $3 million for the conventional solution. Instead, the town invested $800,000 to construct a Geotube facility to help manage plant residue, saving 60 to 70 per cent of the possible cost. Additionally, the town preserved tax revenues by preventing the loss of lagoon capacity for 80 new homes.
North Grenville, Ontario
The slightly larger town of North Grenville has a Master Servicing Plan that required an additional costly activated sludge wastewater treatment plant capable of dealing with more stringent effluent requirements, particularly for phosphorus. The conventional solution, estimated to cost $9 million to $11 million, would include a tertiary treatment train for phosphorus. Instead, the town implemented a phosphorus trading program, funding inexpensive reduction infrastructure at the pollution source to reduce removal requirements at the plant, as well as a staged upgrade of the existing plant. For every dollar invested in that program, it’s like saving $8 to $21.
The rated capacity of the City’s wastewater treatment plant was too low to accommodate projected future growth, but an expanded facility would result in more stringent effluent requirements due to increase flow into the Speed River. Expansion and addressing effluent would cost up to $13 million, including anaerobic digestion and ultraviolet disinfection, but Guelph decided to take a different route.
The City implemented an optimization program for infrastructure and processes to re-rate the treatment plant, thereby deferring the need for expansion. A focus on “human infrastructure” resulted in investment in staff training and skills development, enabling staff to improve process control, including reduction of ammonia and chlorine residuals in the effluent, which eliminated the need for UV-disinfection costs.
The Invest to Save concept encourages municipalities to explore innovative solutions before seeking provincial funding. But there’s more to the concept, and it involves a shift in the way we think about regulation and procurement.
“Performance-based regulation, rather than prescriptive regulation, means we can get the same outcomes using different technologies,” says Lesley Herstein, a University of Toronto PhD student who has been working with the Invest to Save group. “To get to this point, we ultimately need a shift in procurement practices to qualifications-based selection versus price-based selection.”
In other words, municipalities need more latitude to produce the required results. They need to have the opportunity to “do more with less” with a little more creativity.
To enable non-traditional approaches, there needs to be a shift in the way infrastructure programs are built and delivered, Lucas adds. “Currently, there is no mechanism in infrastructure funding programs that provides incentives or funding for implementing these types of approaches. It’s also difficult to account for the return on investments in approaches that offset traditional requirements, such as green infrastructure, even though we know it provides real value.”
In addition to gathering case studies, the group is assembling a set of recommendations and consulting with peers, as well as the regulatory bodies. It’s clear that municipalities are starting to think long term—whether they’re spending government or municipal funds, they must look for the most efficient ways to meet performance targets. WC
Brian Mergelas is WaterTAP’s chief executive officer. This article appears in Water Canada’s May/June 2014 issue.