Waterfund LLC announces new California and Texas Water Cost Indices
New data reveals the financial impact of climate stress and ageing infrastructure
SAN FRANCISCO, CA – 1 April 2015 – Waterfund LLC announced today the addition of California and Texas to their network of global Water Cost Indices. Building upon the Big Data platform developed with research scientists from IBM (NYSE: IBM), Waterfund collected and processed water data from fifteen major municipalities throughout Texas and California to build these new indices.
Waterfund’s Water Cost Index (WCI) measures the total cost of delivering a unit of freshwater to the end consumer. Since its inception in 2013, the WCI has become a critical benchmark in determining capital allocation in an industry where production costs often exceed the final price charged for retail water. The new California and Texas composite WCIs confirmed the financial effect that climate stress and ageing infrastructure have had on the cost of delivering water to households and industries. While inflation increased a modest 8.7% from 2009 to 2014, California’s WCI rose 36.7% and Texas’s WCI climbed 19.8% over the same period.
“We are pleased to roll-out California and Texas Water Cost Indices at a time when each state faces the challenges of providing a safe, long-term and consistent supply of freshwater for their growing industries and residents,” said Evan Olsen, Chief Operating Officer of Waterfund. “In addition to a combined population of over 64 million, each state is a major contributor to our nation’s food supply, oil and gas industry and many other critical and water dependent businesses. The core issue for these states and our nation’s water supply is a lack of capital to update and improve their water infrastructure. These new WCIs will create important benchmarks that will stimulate capital investment in the California and Texas water industries and lead to more efficient capital allocation.”
By measuring the true underlying cost of water at specific locations throughout the world, utility and water project managers can use the WCI as a key metric in funding agreements, hedging instruments, business analysis and water rate evaluation. At the same time, the WCI will offer investors the opportunity to gain exposure to a new asset class, water, with a return that is not correlated with the S&P or the Federal Funds Rate. Most importantly, for water consumers, Water Cost Indices are a transparent benchmark, that will increase investment in the water infrastructure improving access to freshwater and reducing the threat of a potential major water supply disruption.
ABOUT WATERFUND LLC
Waterfund LLC was founded in 2012 by Scott Rickards with the goal of building the first flexible financial products tailored for the water industry and to increase water infrastructure investment. A range of data products and index-linked solutions are now available. Waterfund LLC uses publicly available data to measure the full cost of water on a recovery basis. For more information about Waterfund LLC, visit: www.worldswaterfund.com
 As measured by the US Bureau of Labor Statistics CPI for All Urban Consumers (CPI-U)