Utility financial stress test and COVID-19 sensitivity dashboard

The financial impacts of the coronavirus pandemic to water and wastewater utilities are still being assessed, however, a Raftelis study done for the American Water Works Association and the Association of Metropolitan Water Agencies estimates indicate the potential for a nearly 15% decline in revenues to drinking water utilities. Clean water utilities’ revenue will be similarly impacted according to the Water Environment Federation and the National Association of Clean Water Agencies.

The Financial Impact of the COVID-19 Crisis on U.S. Drinking Water Utilities

View the report here

The severity of the financial effects on each utility will be specific to the customer base they serve, duration of stay-at-home orders, local job losses, and other community-specific socio-economic factors. Raftelis has developed a Financial Stress Test that examines how these variables might impact utility-specific operations and how reduced revenues and deferred rate plans may impact operations, capital planning, and creditworthiness.

To provide on-demand monitoring of the effects of rapidly changing variables, Raftelis’ COVID-19 Sensitivity Dashboard can be added to a utility’s financial planning model. This creates levers for variables that may be adversely impacted by COVID-19, such as customer account growth, changes in demand by class and rate tier, and delinquent bill fees. These levers allow for decision-makers to see immediate results of the effects each of these variables will have on revenues and key metrics. Information is presented both numerically and visually through a series of graphs including:

  • Operating Financial Plan
  • Debt Coverage Ratio
  • Days Cash on Hand
  • Typical Customer Bill

To learn more, view our insight on stress testing your financial plan or see how we helped Fairfax County and Raleigh Water with their financial stress testing.