About Martin Kropelnicki
Martin Kropelnicki, board chair of the National Association of Water Companies (NAWC) and CEO of California Water Service Group, appeared on NYSE TV LIVE on February 17, 2025, to discuss the future of water utilities. He stated that the water industry faces challenges including aging infrastructure, climate change, and evolving water quality standards. Kropelnicki noted that water is "the only utility where the product is ingested" and said there is "no room for error from a chemistry perspective." He described the water industry as "the most capital intensive of the utilities," citing about $3.50 of invested capital for every $1 of revenue, and said that public markets help finance the business.
Kropelnicki said that NAWC member companies have had to improve emergency preparedness and response in recent years, including installing backup generation to maintain water pumping during power outages and wildfires. He identified new EPA water quality standards for PFAS and other contaminants as a top priority for 2025, adding that the industry is "racing to adapt" to those changes while also addressing climate change challenges.
Source: AI-verified profile updated from Martin Kropelnicki's recent appearances.
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Transcript (14 segments)
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Interviewer0:00
Now the National Association of Water Companies is celebrating 130 years of providing safe, reliable, and affordable water to millions of Americans. With growing challenges like aging infrastructure and climate change, the role of private water companies has never been more critical. Joining me now to talk about the future of water utilities is Marty Kropelnicki. He is the board chair of NAWC and CEO of California Water Service Group. Marty, it's great to have you in studio.
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Martin Kropelnicki0:29
Thank you for having us. Fresh off the bell podium, that was great.
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Interviewer0:34
Amazing. Let's talk about how your company has evolved in the past 130 years.
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Martin Kropelnicki0:38
Sure, sure. So NAWC is an association, so we represent the private water industry, private regulated water. So our member companies serve approximately 40 million Americans every single day, water and wastewater services.
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Interviewer0:53
And what are the biggest challenges that you're seeing in the overall landscape today, especially when it comes to maintaining and upgrading the quality of these water infrastructures?
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Martin Kropelnicki1:04
Yeah, well, a couple things on that. One, there's no room for error as a utility. Water is the only utility where the product is ingested, whether it's your coffee, what you drink in the morning, what you use to make Kool-Aid for your kids. Water is ingested, so there's no room for error from a chemistry perspective. Now factor in evolving water quality changes like PFAS and PFOs, forever chemicals that are in the water, how to treat that, how to get that out of the water system. And then as you said in your opening remarks, climate change is a big deal. California Water Service Group, which I'm chairman of out west, we've been living climate change issues for a long time with wildfires, wildfire readiness, dealing with sustainability issues as the weather patterns change. So there's a whole plethora of things that NAWC members deal with every single day that they're in operation.
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Interviewer1:51
And how does being a publicly traded company help water utilities invest in long-term sustainability?
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Martin Kropelnicki1:56
Yeah, I think most of our investors understand it's a long-term play. And so the water industry, believe it or not, is the most capital intensive of the utilities. It's about $350 of invested capital for every $1 of revenue. So essentially we invest a lot, and we raise a lot of capital from our stockholders, and then we invest that and we get a long-term return on it. So the markets are really important in terms of helping us finance the business.
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Interviewer2:23
Of course, and you're here at the epicenter of global financial markets. But with climate change also impacting water resources, talk to me about how the industry is adapting to this ever-changing landscape.
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Martin Kropelnicki2:35
Sure. Well, I think you've seen some of it just recently with the wildfires down in Southern California. Over the last 10 years, we've had to really up our game in terms of emergency preparedness, emergency response, dealing with power outages. So having backup generation put in place because if you don't have power, you can't pump water. And the last thing you want to be as a water company is in a position where the power goes out, there's a fire, and you can't pump water. So making sure you have resiliency built into the system to make sure you can respond to any disaster.
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Interviewer3:06
We have about 30 seconds left here. Key priorities for 2025?
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Martin Kropelnicki3:08
2025, PFAS and PFOs, right? Water quality at top of the list. There's new water quality standards that the EPA put out there. We're all racing to adapt that. And of course, dealing with climate change.
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Interviewer3:21
Well, thank you so much, Marty Kropelnicki. He is the board chair for the Association of Water Companies and President and CEO of California Water Service Group. Thanks for joining.
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Martin Kropelnicki3:28
Thanks. An honor to be here.
