Good article on what's wrong with American water. Lots wrong, but that is where there is the potential too. Emphasis mine. Link provided above.

This should be water’s great moment. Why isn’t it?

The world of water through the eyes of GWI publisher Christopher Gasson.

These are weird times in the American water market. Inflation is out of control. Smaller contracts are attracting no bidders because contractors simply don’t have the staff to fulfil them. Tens of billions of dollars of unspent federal funds are piling up in Washington because utilities can’t work out how to access them. The S&P 500 share index is down 18% year-to-date, but the GWI Americas Water Index is down by 24%.

This is completely mad. At this moment in time, water in the US should be outperforming the rest of the stock market by a large margin. All the arguments why the rest of the economy might be weakening don’t apply to water. The extraordinary amounts of money available for water infrastructure through the Inflation Reduction Act and the Bipartisan Infrastructure Law mean that we enjoy greater certainty about future spending than any other sector of the economy. Furthermore, our tariff survey seems to suggest that fiscal drag is relatively limited: many US utilities have been able to increase their tariffs ahead of inflation. On top of that, the issue of wage inflation may be overblown – there is massive scope to improve labour productivity through implementing digital solutions.

At the same time, the demand-side drivers are stronger than they have ever been. 59% of the lower states are in drought. State water allocations are being cut back along the Colorado River. The Environmental Protection Agency is introducing new regulations covering PFAS which will require massive investment. This should be water’s moment in the US. The GWI Americas Water Index should be trading at a 20% premium to the rest of the market, not a 6% discount. What has gone wrong?

As I see it, it is a problem of agility. Water utilities have been too slow to respond to the changing economic environment, and are also too slow to take advantage of the opportunities it offers. The resulting weakness is impacting the whole supply chain.

I met up with George Hawkins, the former general manager of DC Water who now runs Moonshot Missions (and writes for GWI). He thinks that the US water sector is on the edge of tremendous opportunity. He compares the transformative potential of the current funding coming out of Washington to the way in which the Clean Water Act funding programme was transformative in the 1970s. The opportunity is there to reshape the sector from top to bottom. For the past 30 years, the US water industry has become increasingly polarised, with 30 or so of the most innovative utilities achieving extraordinary things, while the other 50,000 or so utilities struggle on from day to day. This decade, it should be possible to fix that, in order to ensure that every US water and sewer utility is world-class. Moonshot Missions is working on this challenge by connecting some of the US’s most transformative utility leaders with utilities who want change, and helping them make the funding propositions that deliver the difference.

We at GWI are also doing our bit. When we selected the theme for the American Water Summit in Los Angeles, we came up with the title: “Re-Thinking Water”. At that stage, the priority seemed to be around water reuse in the light of this year’s continuing drought in the western United States. Now we have rescheduled the event for 24-26 January 2023, I can see that we will need to be re-thinking water in the broadest possible way. There is a new urgency. We can’t afford to let the current pile-up of unbid contracts, unclaimed money, and underperforming water businesses continue. We have added an extra strand simply entitled “Money” to the event (alongside the existing Municipal and Industrial strands). It is where I hope this great untangling will take place. There will be sessions on “The Big Squeeze”, “Averting a Supply Chain Meltdown”, “The Productivity Imperative” and “The New Landscape for Financing”. By the end of it, I want everyone to be able to see the opportunity in these weird times in the US water market.