Long-Term Federal Financing is Critical for US Dam Rehabilitation
Over 50 percent of US dams were built before 1970. As they age, their safety liabilities increase and effectiveness decreases. A new federal financing program could help with dam rehabilitation—but maximizing the program’s potential calls for congressional action, argue Martin Doyle (Nicholas Institute for Energy, Environment & Sustainability and Nicholas School of the Environment) and John Ryan (InRecap LLC) in a commentary at The Hill.
The new Corps Water Infrastructure Financing Program (CWIFP), managed by the U.S. Army Corps of Engineers, will have capacity to make about $7.5 billion of long-term loans, the bulk of which is specifically allocated to nonfederal dam improvement. Yet Doyle and Ryan say the program’s potential is limited by its statutory framework, shared with the Environmental Protection Agency’s Water Infrastructure Finance and Innovation Act (WIFIA). “Aspects of WIFIA law regarding loan features and federal budgeting perfectly adequate for municipal water systems will significantly constrain CWIFP’s capabilities for dam rehabilitation,” they note.
A bill introduced in the House last year addresses many of these issues, the coauthors say. However, they point out that the dam rehabilitation amendments could be improved when the bill is re-introduced in the new Congress. Specifically, they advocate for increasing the loan term for these long-lived projects and allowing adjustment of loan rates at execution to reflect what they would have been at the time of loan applications.