In May 2014, Milwaukee experienced 82 water main breaks in five days, sending thousands of people scrambling for water and costing the city hundreds of thousands of dollars in infrastructure repair and property damage.
The series of breaks – although surprising in scale – are an all-too-frequent occurrence across North America. Aging infrastructure is an increasingly critical problem in the United States, and the American Society of Civil Engineers has recently calculated that the government needs to invest around $3.6T on water infrastructure alone by 2020.
According to some studies, there are around 240,000 water main breaks annually in the US, or around 650 every day – and water main breaks are only the most visible sign of a volatile system. Less obvious indicators, such as water availability and quality, often go unnoticed until it's too late. Aging infrastructure is partially to blame, but so is a lack of information. When Flint, Michigan, switched from using Detroit's water system to drawing its water from the Flint river in 2014, the river's more acidic water corroded the lead pipes that supplied water to the city, leaking dangerous quantities of lead into Flint's drinking water. By the time city officials acknowledged the problem and switched back to the old water source, irreparable damage had already been done to the city's plumbing. The social cost of this crisis is incalculable, as it's only now becoming clear how many children were exposed to high levels of lead in their drinking water, and the economic cost to Flint's businesses is immediate, and substantial.
Broadly, water infrastructure issues are beginning to cause significant business losses. These range from general (the lack of water availability in California, for example) to specific, such as water quality issues risking a major Ford manufacturing plant shut down to a dairy farm unable to sell milk products for months because of a significant contamination in their water source.
Given the right data, it is now possible for businesses to better assess and prepare for these water infrastructure related risks.
At ThinkData Works, we’ve partnered with WatrHub to provide insight into water infrastructure across North America. The data set is available here, available at zip code-level to enable analysts to assess water risks from a granular, intra-regional viewpoint.
The industrial Water Availability risk category evaluates the likelihood of service interruptions by the local water utility, which would disrupt industrial operations.
8 Factors used to evaluate this score include:
The Industrial Water Cost risk category evaluates the likelihood of water costs increasing by the local water utility, which would affect profitability of industrial operations.
10 Factors used to evaluate this score include:
The industrial Wastewater Cost risk category evaluates the likelihood of wastewater treatment costs and requirements increasing for local industrial operations, which would affect profitability.
9 Factors used to evaluate this score include:
The Water Quality risk category evaluates the likelihood of a water quality crisis which causes health risks.
4 Factors used to evaluate this score include:
Businesses will be able to incorporate these 4 critical Risk Categories into their valuation models and be able to leverage these factors into their strategic business decision making and risk mitigation processes.
This blog was originally posted on ThinkData Works blog.