Category Archives: Public-Private Partnerships

What Lessons from the Long-term Drought in the West Can New England use to address its Current Drought?

Over the last few years, when we think of drought in the United States, the western US and California in particular have taken much of the spotlight for exceptional drought conditions. While California’s drought conditions across the state have not ameliorated significantly, other areas of the country have slipped into severe drought. Parts of New England in particular are facing extreme drought conditions that rival the severity of California. Continue reading →

Thoughts on the Financial Structure of Water Projects

Two recent transactions in western water (San Diego County Water Authority’s Carlsbad Desalination Plant and San Antonio Water System’s Vista Ridge Project) provide an opportunity to discuss the economics of the structure of debt and equity payments to project developers.  For long-lived projects, a finance plan that matches the term of debt structure to the project’s life, makes both debt and equity payments subject to inflationary adjustments and deferred payments at the end of the payment period provides the best economic incentives for:

  • customers to conserve water
  • project operators to fulfill their contractual obligations

Plans that don’t incorporate these features will shift the economic burden of project costs to future current customers relative to current future customers, erode the economic incentives for customers to conserve water long-term and dilute the economic cost of project operators defaulting on contractual obligations. Continue reading →

Southern Nevada Seeks Public-Private Partnership for Infrastructure Finance

Pat Mulroy, General Manager of the Southern Nevada Water Authority kicked-off the session on public-private partnerships at the recent 6th Annual OC Water Summit with a characteristically powerful and persuasive presentation about Southern Nevada’s infrastructure program.  She challenged the private sector to step up and work with public agencies to finance the large infrastructure investments facing the water sector.  Southern Nevada’s challenges provided an excellent context for the panel discussion that included former LA Mayor Richard Riordan and California State Treasurer Bill Lockyer.  The discussion provides a roadmap for an expanded role for public-private partnerships in water infrastructure finance.  Continue reading →