Low interest loans made available from the EPA will save hundreds of millions of dollars during the course of critical infrastructure improvement projects
San Francisco, CA – With construction now underway on a transformative set of projects at the Southeast Treatment Plant, the San Francisco Public Utilities Commission (SFPUC) and its funding partner, the U.S. Environmental Protection Agency (EPA), are now estimating that low-interest loans will save local ratepayers more than $850 million, highlighting the importance of the SFPUC’s strategic system investments.
The SFPUC is one of the single largest recipients of the EPA’s Water Infrastructure Finance and Innovation Act (WIFIA) loans, which aim to accelerate investment in the nation’s water infrastructure by providing long-term capital funding at below-market rates. Two low-interest loans totaling more than $1.2 billion provided by the EPA will help the SFPUC achieve its goals to upgrade the sewer system and are projected to help ratepayers save $850 million over several decades.
“At a time when our nation’s infrastructure network is in dire need of improvement, the SFPUC is moving forward with essential projects because of our timely investments,” said SFPUC Acting General Manager Michael Carlin. “The undertaking at the Southeast Treatment Plant will make our system more seismically resilient and environmentally sustainable while improving our operational efficiency. And we will be doing all this while saving our ratepayers hundreds of millions of dollars.”
The American Society of Civil Engineers recently released its annual report on the state of the nation’s infrastructure. The report gave the country’s wastewater infrastructure a grade of D+, highlighting the need for critical investments like the ones the SFPUC is taking at the Southeast Treatment Plant.
The SFPUC is making extensive generational improvements to the Southeast Treatment Plant (SEP). The largest such facility in San Francisco, the SEP treats 80 percent of the City’s wastewater and is critical to protecting public health, the environment and the economic stability of the City. The SFPUC has made incremental upgrades and maintained the SEP throughout its life but large-scale investments are needed to fully transform the outdated facility into a modern resource recovery facility that will reduce odors, improve earthquake resiliency, prepare for sea level rise and ensure operational redundancy and efficiency.
The $1.2 billion in WIFIA loans are the result of a multi-year effort by the SFPUC to secure low-interest loans and grants for capital projects. Those efforts also include securing more than $500 million in state funding, which is estimated to save ratepayers an additional $350 million over the next 30 years. Combined with the savings from the WIFIA loans, ratepayers will realize $1.2 billion in total savings from SFPUC investments.
The first WIFIA loan was announced in 2018 and is a $699 million investment to help finance the Biosolids Digester Facilities Project, which will replace and relocate the outdated existing solids treatment facilities with more reliable, efficient and modern technologies and facilities. The new facilities will produce a higher quality biosolids, capture and treat odors more effectively, produce more than 1 million gallons of recycled water per day, and maximize biogas utilization and energy recovery.
In 2020, the EPA announced a second WIFIA loan totaling $513 million which will be used on other projects at the SEP, including the new Headworks Facility. The headworks facility is responsible for the first step in wastewater treatment, removing debris, trash and grit from the wastewater flow. The current facility is more than 35 years old, and the new one will better protect downstream equipment, improve efficiency and help control odors.
“As one of the first to apply for a WIFIA loan, the San Francisco Public Utilities Commission is a trailblazer in the water sector, dedicated to finding innovative financing solutions that deliver value to ratepayers,” said Jorianne Jernberg, Acting Director, WIFIA Management Division. “WIFIA is thrilled that the SFPUC has continued to utilize the program to great success, leveraging WIFIA’s low rates to save hundreds of millions of dollars while investing in upgrades that protect the environment and increase community benefits.”
When these projects and others currently underway are completed, the SEP will be transformed from what was built as a pollution treatment plant into a resource recovery facility that smells better, looks better and works better.
All these projects fall under the umbrella of the Sewer System Improvement Program (SSIP), a multidecade effort to improve and modernize the City’s combined sewer system.
Increasing natural disasters brought on by climate change have reinforced the importance of the reliability of this vital lifesaving infrastructure and the value in avoiding more costly and disruptive emergency repairs. After successfully completing a massive improvement program for its water system, the SFPUC has now turned its attention to the SSIP, one of the nation’s largest and most ambitious infrastructure improvement programs of its kind.
About the San Francisco Public Utilities Commission
The San Francisco Public Utilities Commission (SFPUC) is a department of the City and County of San Francisco. It delivers drinking water to 2.7 million people in the San Francisco Bay Area, collects and treats wastewater for the City and County of San Francisco, and generates clean power for municipal buildings, residential customers, and businesses. Our mission is to provide our customers with high quality, efficient and reliable water, power, and sewer services in a manner that values environmental and community interests and sustains the resources entrusted to our care. Learn more at www.sfpuc.org.
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