SIC 4952
SEWERAGE SYSTEMS



This category includes establishments primarily engaged in the collection and disposal of wastes transported through a sewer system. These private and public organizations usually treat the wastewater they collect before discharging it into the environment.

NAICS Code(s)

221320 (Sewage Treatment Facilities)

Industry Snapshot

Conventional sewerage treatment in the United States today releases nearly 27 million tons of carbon dioxide into the air each year. Wastewater management has become big business now that federal amendments to the Safe Drinking Water Act (SDWA) of 1996 and the Clean Water Action Plan of 1998 have put new life and new money into environmental protection. Concurrently, the increasing deregulation of public utilities and the privatization and public-private partnership development in wastewater treatment has caused the industry to grow at a faster pace than other industries in the United States.

The Environmental Protection Agency (EPA) has strengthened its legislation by imposing criminal and civil penalties on violators of the wastewater cleanup mandates. From Royal Caribbean Cruise Line's 1999 multi-million-dollar fine for dumping waste into the intracoastal waters to the $1.3 million fine and prison sentence for a Richmond, Virginia wastewater treatment executive, EPA continued to show that it meant business when it said "clean up." As municipalities worked to meet the EPA's expectations, all were looking at the huge price tag of repairing or replacing sewage infrastructures.

Organization and Structure

Organizations in the wastewater industry are responsible for collecting wastewater from homes, businesses, and institutions, for treating wastewater to acceptable standards before discharging it into a waterway, and for disposing of residues called sludge. These activities entail building, operating, and maintaining a transport system and constructing and operating primary treatment facilities that remove or dilute toxins, synthetic debris, human waste, and other refuse.

Wastewater managers are expected to devise a system that transports wastewater as much as possible by gravity and that offers almost no threat of disruption in flow or service. The manager must also ensure that wastes do not seep into water supplies and that plant effluents are treated in a manner that does not significantly harm the environment. In accomplishing their duties, managers must comply with numerous state and federal regulations, financial restrictions, and political pressures. In addition, wastewater managers are often charged with developing resource recovery programs.

The majority of wastewater treatment plants consist of holding reservoirs that contain, chemically treat, and aerate wastewater until pollutants have settled out and the water can be safely jettisoned into a natural waterway. A few treatment plants use other systems. Approximately 300 municipal and industrial artificial marshland wastewater treatment systems were in operation across the country in the late 1990s. These marshes use plants and microorganisms to absorb and biodegrade the organics.

The two main sources of wastewater are residential and industrial. The large majority of residential wastewater is discharged into local sewer systems and treated by local utilities or publicly owned treatment works (POTWs). In 1999, there were approximately 16,000 POTWs across the nation. However, it was estimated that millions of homes still maintained on-site disposal systems, including septic tanks, cesspools, and outhouses—septic tanks alone numbered over 23 million in 1999.

Industrial waste is often pretreated at its source to remove hazardous wastes that require special handling. After being treated in surface impoundments or on-site treatment plants, the water is either discharged directly into the environment or released into local POTWs. About 80 percent of all industrial wastewater is eventually processed by POTWs. Industries that discharge waste into POTWs become subject to many of the same state and federal standards that regulate municipal wastewater facilities.

Types of Organizations. Most organizations that provide wastewater treatment services are publicly owned and operated as nonprofit entities. They may be established under a variety of organizational structures. A regional wastewater authority, for example, provides service either directly or through governmental entities such as cities, townships, water and sanitation districts, and counties. The regional authority may provide direct service and billing to individual customers, or it might offer wholesale service to several governmental entities that would in turn provide service and billing to local customers.

Large centralized treatment facilities, such as regional authorities, benefit from economies of scale. The drawback of this type of arrangement, however, is that centralized facilities often require pumping of wastewater over long distances. As a result, they tend to be less energy efficient and produce greater amounts of residue in a concentrated area than satellite (or local) treatment plants. Municipal special service districts, which represent a more localized wastewater organizational structure, avoid these drawbacks. Localized utilities though, often have higher costs and lack capital for investment in new technology.

In addition to POTWs, some wastewater treatment facilities are operated by private companies that have a profit motive. These companies bid to either own or manage the wastewater plants or a portion of the operation for a set period of time. The private company's incentives for providing quality service are both profit and the hope of winning the bid again when the contract ends. The private companies also inject private capital into the operation, which frees the community's capital for other uses.

Background and Development

The first sanitary sewer system was built in 1843 in Hamburg, Germany. Twelve years later, construction began in Chicago on the first U.S. sewer system. In the 1870s, the first U.S. wastewater treatment plants were built. By the end of World War II, wastewater treatment plants served nearly 30 percent of the 145 million Americans. As population and housing increased significantly after the war, so did wastewater treatment plants and sewer systems.

The proliferation of professional wastewater treatment was stimulated by federal government efforts to control pollution caused by residential and industrial discharge. The Federal Water Pollution Control Act (WPCA) of 1956, for instance, established a grant program to help communities construct state-of-the-art facilities. Amendments to the WPCA in 1972, as well as the Clean Water Act of 1977, boosted development of wastewater infrastructure by mandating clean water standards. For example, the National Pollutant Discharge Elimination System (NPDES), created by the Clean Water Act, set limits on the amount and quality of effluent and required all municipal and industrial dischargers to obtain permits.

A few of the other laws and regulations that impacted the wastewater industry, either directly or indirectly, were the Water Facilities Act of 1937, the Water Resources Research Act of 1964, the National Environmental Policy Act of 1969, and the Safe Drinking Water Act of 1974. In the 1980s, important legislation included the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) of 1980, amendments to the Safe Water Drinking Act in 1986 and 1996, the Resource and Conservation Recovery Act (RCRA), and the Water Quality Act of 1987. The Safe Water Drinking Act was amended in 1996. The Clean Air Act and the Clean Water Act of 1998 were essentially reauthorizations of the earlier acts.

When the number of contaminants, particularly chemicals, began increasing at a rapid pace, Americans began to demand a cleaner environment, and federal regulations became more stringent during this time. As a result, the number and capacity of wastewater treatment plants ballooned. Privatization was one technique used to control the rising cost of POTWs. Private wastewater companies typically existed only in areas that were too small or remote to support a municipal treatment system. New legislation encouraged many communities to privatize utilities to achieve cost savings. Initial results of privatization efforts were mixed, and some analysts suggested that private companies often operated at a higher cost than municipally owned systems.

The federal government, however, continued to encourage municipalities to take on wastewater treatment responsibilities. An EPA grant program was announced in 1997 for rural communities with fewer than 3,000 residents. These communities were eligible to receive grants from a $50 million fund established by the EPA and authorized by congressional appropriations in 1996 as part of the Clean Water State Revolving Fund loan program. This loan fund offered loans at low interest for wastewater treatment and projects.

Because this loan source was shrinking just at the time equipment from the 1970s and 1980s needed improvements, more plants were looking at the feasibility of privatization. In addition, changes in 1997 to Internal Revenue Service (IRS) regulations regarding fees, length of contracts, and the sale of facilities were considered a positive sign to an estimated 30 U.S. cities considering this type of public-private "partnership." The percentage of public to private wastewater plants was anticipated to reach 50/50 by the year 2020.

Because in some locales water and wastewater are under the same roof, there are many variations of private involvement in public wastewater plants. Some companies may operate just one phase of the operation, and in another city, one company may operate and maintain the entire water and wastewater process. An industry consultant estimated that in 1997 there were more than 500 contracts for facilities with capacities greater than one million gallons per day (mgd). Some cities had successful arrangements while others found private involvement problematic. Some of the cities that have some form of privatized wastewater systems are Indianapolis, Indiana; Cranston, Rhode Island; New Orleans, Louisiana; Fulton County, Georgia; and Schenectady, New York.

In 1999, the Association of Metropolitan Sewerage Agencies (AMSA) represented more than 210 wastewater treatment facilities nationwide, up from 160 members just a few years earlier. AMSA members now serve the majority of the country's sewered population. Collectively, AMSA facilities treated and reclaimed approximately 18 billion gallons of wastewater each day in 1999. AMSA reported that sewer service rates rose a modest 2.3 percent in 1998, about 0.7 percent above the level of inflation as measured by the Consumer Price Index.

AMSA is a member of a coalition of 60 public and private groups known as the Rebuild America Coalition. The group focuses attention on strengthening the nation's infrastructure at the federal, state, and local government level. The 1999 Rebuild America Infrastructure Survey, released in January 1999, indicated that 70 percent of those Americans surveyed stated that quality infrastructure was "very important" to their quality of life. According to the survey, an easy majority of the American public would support a one percent increase in taxes for the guarantee of safe and efficient sewage and water treatment and the return of fishes to local waterways. Only 13 percent of those surveyed believed that the quality of their tap water had improved in the previous five years. Conversely, 30 percent believed that water quality of local rivers, lakes and coastal areas had actually deteriorated. As of 1999, local governments shouldered 90 percent of the funding burden for clean water programs. Americans were split in their opinions as to whether this burden should shift to the federal government or remain with the state and local communities.

During the latter years of the decade, global warming and "El Nino" seasons created numerous floods and heavy rains. Sewer overflows (SSOs) became a national nightmare. The EPA attempted to form a committee to draft national policies for the prevention of SSOs during heavy storm events, at a proposed cost of more than $80 to $90 billion to the American public. In July 1999, five national organizations, including the AMSA, the National League of Cities, and the National Association of Counties, walked out of committee talks in protest of the proposed EPA regulations. As one participant noted, "Leaving communities vulnerable to lawsuits and enforcement actions is no way to deal with this issue. The realities of operating a sewage collection system have somehow been lost in these talks."

Current Conditions

The main problem facing the wastewater industry is the involuntary release of sewage into the country's water supply as well as a rapidly deteriorating sewage infrastructure. The EPA is responding with increased regulations, but many municipalities are feeling the financial burden of upgrading systems to achieve compliance. The EPA has targeted combined sewer systems that use the same pipes to transport wastewater, sanitary sewage, and storm water, which can overflow into the local water supply during heavy rains. At the beginning of 2003, 772 U.S. cities used combined systems. Municipal sanitary sewer systems, which collect only sanitary sewage and wastewater, are also facing stricter regulations from the EPA under revisions to the National Pollutant Discharge Elimination System permit, namely an increased effort to avoid spillovers and improve reporting when spillovers do occur. The EPA estimates that the new regulations will cost an additional $93.5 million to $126.6 million annually.

Much of the effort to provide adequate sewage systems will be targeted at upgrading a rapidly deteriorating infrastructure. Steve Allbee, a project director for the EPA, told Waste News in January 2003, "Cities will have to increase revenue 3 percent above inflation to pay for the improvements the federal government is asking for, the EPA's gap report says. That could mean almost doubling water bills in the next 20 years. This is a very big public policy problem, and it is hitting a large number of cities and will continue to do so."

Industry Leaders

USFilter, based in Palm Desert, California, is a subsidiary of French-owned water conglomerate Vivendi Environnement. In 1997 the company acquired Wheelabrator, one of the pioneers in operating and maintaining public wastewater utilities, from WMX Technologies of Oak Brook, Illinois. This acquisition established USFilter, which owns Culligan, as North America's largest private water and wastewater service organization, operating more than 200 municipal and industrial water and wastewater treatment plants. In 2002 the company reported revenues of $4.2 billion and employed 15,500.

American Water Works Company, owned by Germany's utility giant RWE's water unit, Thames Water, is one of the largest U.S. water utility holding companies. Along with providing water utilities to 2.5 million customers (10 million people in 20 states), it also operates wastewater treatment facilities in some areas. The company reported a net income of $161.5 million on $1.4 billion in sales in 2002.

Other industry leaders include United Water Resources and Ionics Inc. United Water Resources provides water and wastewater treatment services to approximately 7.5 million people in 16 states. The company reported revenues of $500 million in 2001. Ionics Inc. of Watertown, Massachusetts, reported a net income of $4.8 million on revenues of $335 million in 2002.

One of the largest publicly owned and operated wastewater utilities in the United States is the Hyperion treatment facility, the largest of four wastewater plants in Los Angeles, California. Hyperion serves 4 million people in a 600 square mile area. The plant can handle 450 million gallons of wastewater per day and is unique in that it burns its sludge residue to help produce the energy that operates the plant.

Workforce

Workers in the wastewater treatment industry are typically employed by POTWs, engineering and construction companies that build and improve facilities, or consulting firms. The industry hires a disproportionate share of engineers and chemists. Consultants typically provide services such as hydraulic analysis and modeling, feasibility and financial studies, design and specifications for construction, lab services, resource recovery, hazardous waste management, and environmental litigation.

According to the U.S Bureau of Labor Statistics (BLS), the industry employed approximately 177,000 persons in 2001 and predicted good job opportunities through 2006.

Research and Technology

Several companies continued to offer marsh wastewater treatment, called constructed wetlands, for smaller communities. This treatment method is estimated to cost 50 percent less than traditional mechanical treatment systems and operates without chemicals. The "living machine" is an artificial marsh, using tanks rather than a pond, where organisms and plants do the same work of biodegrading and absorbing. This method is an alternative in locations where soil conditions prevent the use of a pond. Living Earth Technology Co. installed its system in one municipality and found it about 15 percent less expensive in terms of capital costs than competing technology and approximately the same in terms of operating costs. There was 66 percent less sludge than conventional methods, and no chemicals were used to treat the wastewater. Therefore none of the remaining waste was considered an environmental hazard.

An article published in the Winter 1998/Spring 1999 issue of Earth Island Journal proposed the adoption of "sewage forests," trees specifically planted and grown near sewage treatment plants. According to the article's author, Daniel Wickham, the trees seem to thrive in the fertilized soil and they provide a tremendous service by absorbing phenomenal amounts of carbon dioxide from the atmosphere. He cited one such experimental forest in Martinez, California, in which redwoods have grown 40 feet tall in as little as nine years.

A new process for wastewater treatment systems in cold climates uses modified snowmaking equipment to treat wastewater without the use of chemicals. The process, similar to freeze drying, flash freezes the wastewater after solids have been removed. The quick freezing explodes bacteria and separates gases as the water is sprayed into the air. Harmless nutrients remain, which are released into the soil during the spring thaw.

Of course, making lemonade from bad lemons is the American Way. In September 1999, the ThermoEnergy Corporation announced its creation of a thermochemical process that makes combustible fuel oil out of wastewater sludge. The Sludge-to-Oil Reactor System (STORS) boasted a nonbiological technology that eliminates the anaerobic sludge digestion unit from wastewater treatment. The company alleged that the resulting fuel product has 90 percent of the heating value of diesel fuel.

On-site sewerage treatment plants are used by companies such as Anheuser-Busch, Inc. The company reduced its wastewater treatment costs by installing anaerobic/aerobic bio-energy recovery systems. The new technology required about 75 percent less energy than traditional aerobic treatments and cost about half as much to install. Methane gas produced by the new system replaced about 15 percent of the natural gas used as fuel at the breweries. On-site treatments are not limited to factory settings—a Santa Monica office park has an on-site sewage treatment plant that uses the treated water for its lake and landscaping.

Further Reading

American Water Works Association. Journal of the AWWA, vol. 91, no. 1, 1999.

Association of Metropolitan Sewerage Agencies. News Releases Online. Available from http://www.amsa-cleanwater.org .

"Creating Fuel Oil from Wastewater Sludge." Civil Engineering, September 1999.

"Former Executive of Richmond Wastewater Treatment Business Sentenced to Three Years in Jail and Ordered to Pay $1.3 Million Fine." FDCH Regulatory Intelligence Database, U.S. Environmental Protection Agency, 2 September 1999.

Hoover's Company Profiles. Hoover's, Inc., 2003. Available from http://www.hoovers.com .

Laughlin, James. "Job Outlook Good for Plant Operators." WaterWorld, October 1999.

Mays, Susan and Paul Roy. Pollution Engineering, June 1999.

Seachman, Steve. "American Citizens are Left to Swim in Government Cesspool." Insight on the News, 26 August 2002, 44-45.

Shaw, Susan E., and Stig Regli. "U.S. Regulations on Residual Disinfection." Journal of the AWWA, vol. 91, no. 1, 1999.

Truini, Joe. "Cities Turn to Gov't for Help with Sewers." Waste News, 6 January 2003, 14.

U.S. Department of Labor, Bureau of Labor Statistics. 2001 National Industry-Specific Occupational Employment and Wage Estimates, 2001. Available from http://www.bls.gov .

U.S. Environmental Protection Agency. The Clean Water and Drinking Water Infrastructure Gap Analysis, September 2002. Available from http://www.epa.gov

——. Guidance on the Privatization of Federally Funded Wastewater Treatment Works, August 2000. Available from http://www.epa.gov .

Wickham, Daniel. "Sewage Forests: Cleaning Water and Cooling the Planet." Earth Island Journal, Winter-Spring, 1998-99.



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