New Report: Growing Water Scarcity in U.S. is 'Hidden' Financial Risk for Investors Owning Utility Bonds

BOSTON, Oct. 21 /PRNewswire-USNewswire/ -- Growing water scarcity in many parts of the United States is a hidden financial risk for investors who buy the water and electric utility bonds that finance much of the country's vast water and power infrastructure, according to a first-ever report on the issue released today by Ceres and Water Asset Management.
The report, The Ripple Effect: Water Risk in the Municipal Bond Market, evaluates and ranks water scarcity risks for public water and power utilities in some of the country's most water-stressed regions, including Los Angeles, Phoenix, Dallas and Atlanta. The report shows that some of the nation's largest public utilities may face moderate to severe water supply shortfalls in the coming years, yet these risks are not reflected in the pricing or disclosure of bonds that public utilities rely on to finance their infrastructure projects. There are about 50,000 public water utilities in this country serving an estimated 258 million Americans. The electric power sector is enormously water-intensive – it accounts for 41 percent of the nation's freshwater withdrawals.
"Water scarcity is a growing risk to many public utilities across the country and investors owning utility bonds don't even know it," said Mindy Lubber, president of Ceres, which authored the report.  "Utilities rely on water to repay their bond debts. If water supplies run short, utility revenues potentially fall, which means less money to pay off their bonds. Our report makes clear that this risk scenario is a distinct possibility for utilities in water-stressed regions and bond investors should be aware of it."

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