Water and Wastewater

America’s water and wastewater systems form the backbone of public health and quality of life for most Americans. Approximately 17,500 publicly owned treatment works operate across the country, providing wastewater treatment services to roughly 270 million people—about 80% of the U.S. population. The remaining 20% rely on decentralized systems like septic tanks. These systems treat and distribute water, remove and treat wastewater, and manage stormwater runoff through a complex network of pipes, treatment plants, and pumping stations that operate 24/7.

Aging Infrastructure and Rising Costs

One of the biggest challenges facing American water and wastewater utilities is aging infrastructure. Many treatment plants and pipe systems were built 40–50 years ago and now need replacement or major upgrades. The EPA estimates the nation needs $630 billion in wastewater infrastructure improvements over the next 20 years, with additional significant spending required for drinking water and stormwater systems. This aging infrastructure, combined with regulatory requirements, inflation, and supply chain disruptions, has driven up the costs of water services. If you’ve noticed your utility bills rising in 2025, water and wastewater rate increases are part of that trend.

The Funding Challenge

Despite the massive infrastructure needs, funding remains a critical bottleneck. The water utility sector faces an estimated $110 billion funding gap annually—nearly 60% of what utilities need to spend. Traditionally, state and local governments have borne the financial responsibility, covering about 92% of wastewater infrastructure spending while the federal government contributes roughly 8%. This funding structure means local communities often struggle to balance necessary infrastructure investments with keeping water rates affordable for residents.

Federal Support and Future Priorities

To address these challenges, federal programs like the Infrastructure Investment and Jobs Act have provided historic funding through mechanisms such as the Clean Water State Revolving Fund (CWSRF). The EPA also offers technical assistance through initiatives like the Closing America’s Wastewater Access Gap Initiative, which helps communities with failing septic systems or inadequate wastewater infrastructure. Moving forward, utilities and policymakers are focusing on better asset management, expanding funding programs for combined sewer systems, addressing emerging contaminants like “forever chemicals” (PFAs), and ensuring water rates fully reflect the true costs of service delivery and maintenance.