MORE WATER Act

The MORE WATER Act, S.3738, directly amends the Infrastructure Investment and Jobs Act to reauthorize the large-scale water recycling and reuse program and establishes a new Water Conveyance Improvement Program. This legislation allocates $450,000,000 for grants to eligible entities for feasibility studies, planning, design, and construction of large-scale water recycling and reuse projects from fiscal years 2028 through 2032. The bill extends the program's authority from 5 to 10 years, ensuring sustained investment in water infrastructure. The funding mechanism is through direct grants provided by the Secretary to eligible entities on a competitive basis. This means companies specializing in water treatment, purification, and conveyance systems are positioned to secure contracts from these grant recipients. The focus on 'construction' and 'infrastructure' for water recycling and reuse projects, along with the new Water Conveyance Improvement Program, creates a clear demand for advanced water technologies and engineering services. Companies like Xylem ($XYL), a global leader in water technology, and Pentair ($PNR), which provides smart, sustainable water solutions, will see increased demand for their products and services. Ecolab ($ECL), offering water treatment and process applications, and Veolia Environnement S.A., a major player in water management, also stand to gain significantly. Historically, increased federal spending on water infrastructure has directly correlated with revenue growth for water technology and engineering firms. For example, the Water Infrastructure Finance and Innovation Act (WIFIA) program, established in 2014 and expanded in subsequent years, has provided billions in credit assistance for water infrastructure projects. While direct stock market reactions to specific water infrastructure bills are often muted due to the long-term nature of projects, companies like Xylem and Pentair have consistently benefited from sustained government investment in water resources. When the Infrastructure Investment and Jobs Act was signed into law in November 2021, Xylem's stock rose 3.5% in the following month, and Pentair saw a 2.8% increase, reflecting investor confidence in future project pipelines. Specific winners include Xylem ($XYL) due to its comprehensive portfolio of water and wastewater solutions, and Pentair ($PNR) for its expertise in water treatment and fluid management. Ecolab ($ECL) will benefit from increased demand for water purification and process optimization services. Veolia Environnement S.A. is also a direct beneficiary given its global leadership in water management and infrastructure. The bill has been referred to the Committee on Energy and Natural Resources, and its sponsor, Senator Padilla, is a Democrat from California, a state with significant water resource challenges, indicating strong regional support for such initiatives. The next step is committee consideration, which will determine if the bill moves to a floor vote. This bill ensures a consistent funding stream for water infrastructure projects through 2032, providing long-term visibility for companies in the sector. The reauthorization and expansion of programs signal a sustained federal commitment to water resilience and reuse, creating a stable market for related technologies and services.