US-based ratings agency Fitch Ratings stepped into the evolving fall-out from the lead in drinking water crisis in Flint, Michigan, by highlighting the potential cost and financial pressures that may emerge across the country as a result of the attention now focused on the issue.
The agency has issued a warning that as much as $50 billion may need to be spent on removing lead service lines, although this figure was considerably less than the one it issued just a few days before that, which put the possible total cost at $275 billion.
There are believed to be more than six million lead service lines in the US. Lead levels is US drinking water are governed by the Lead and Copper Rule, which the Environmental Protection Agency may strengthen either later this year or next year. Fitch said that lawsuits filed against the city of Flint and the city of Chicago ‘could have a broad, long-term impact on the entire US water sector’. It added: ‘In light of these lawsuits and the heightened public focus on possible lead contamination, Fitch expects any proposed rule revisions will likely move the industry toward removing all lead service lines.’
Current regulation emphasises corrosion control as a means of ensuring the presence of lead service lines does not impact water quality. In Flint, questions are being asked as to why anti-corrosion measures were not put in place when the city switched water supplies from Lake Huron to the Flint River in 2014.
Fitch also cautioned that reprioritizing and accelerating lead pipe replacement would add significant additional capital needs to the sector. This, it said, could compete with other critical infrastructure projects.
While Fitch put the upper limit of service line replacement at $50 billion, it also said it could be as low as a few billion dollars. The EPA has put the total infrastructure investment needs for the sector at $385 billion up to 2030. Fitch said such costs could be manageable if spread out, but added that ‘implementation cover a shorter time span may create stress for individual credits.’
- USA, municipal water, Flint, lead