A first-ever report on the hidden financial risk for investors who buy the water and electric utility bonds that finance much of the country's vast water and power infrastructure was released October 22, 2010, by Ceres and Water Asset Management.
The report, The Ripple Effect: Water Risk in the Municipal Bond Market, evaluates and ranks water scarcity risks for public water and power utilities in some of the country's most water-stressed regions.
"Water scarcity is a growing risk to many public utilities across the country and investors owning utility bonds don't even know it," said Mindy Lubber, president of Ceres, which authored the report. "Utilities rely on water to repay their bond debts. If water supplies run short, utility revenues potentially fall, which means less money to pay off their bonds. Our report makes clear that this risk scenario is a distinct possibility for utilities in water-stressed regions and bond investors should be aware of it."