One of the hallmarks of this period is that places will need to work harder for themselves. While the federal political environment and the global economic context shift quickly, localities must find their own place in this new reality. To that end, we are constantly on the hunt for places and institutions that are successfully leveraging their existing assets to build and scale new local industries. The Hampton Roads Sanitation District (HRSD) is a particularly unique example of this: it has evolved from a group of water treatment facilities to a revenue-generating hub for water innovation, complete with nearly a dozen patents and global partnerships. HRSD is on the path to seed a new water technology cluster in Hampton Roads, providing a powerful compliment to the region’s existing defense-focused economy.
For the past year, New Localism Associates has been working with the Hampton Roads Alliance on an Investment Playbook. This historic metropolis is home to 1.8 million people, 37th largest in the United States. Given its origins in the 17th century, Hampton Roads is distinctively polycentric rather than clustered around one central city. The metro has multiple cities with populations over 100,000, including Virginia Beach, Norfolk, Newport News, Hampton and Chesapeake.
Since the late 19th century, Hampton Roads has played a central role in the nation’s evolution as a global naval and shipping power. The metropolis now hosts 25% of U.S. shipbuilding and repair capacity; the U.S. Navy is a major driver of demand in this sector, with both Naval Station Norfolk (NAVSTA), the world’s largest naval base, and Norfolk Naval Shipyard (NNSY) playing critical roles. Newport News, meanwhile, anchored by Huntington Ingalls Industries plays an outsized role in the nation’s submarine and aircraft carrier industrial base. The Port of Virginia is the 3rd largest operating port in the Eastern Seaboard and the 6th largest in the United States.
And these are only some of the special competitive advantages in this historic place.
Among these mammoths of the defense industry, the Hampton Roads Sanitation District is an otherwise understated outpost. It’s SWIFT Research Center, which houses the bulk of its research and commercialization efforts, is at the end of a long service road near the Merrimac Bridge. But its importance should not be understated.
Incorporated in 1940, it has an ample set of powers and resources which has enabled it to be a vehicle for technology innovation and company growth and expansion. We recently visited Jay Bernas, the General Manager of HRSD, and had a wide-ranging discussion.
Can you start by giving us a quick snapshot of what makes HRSD so remarkable?
Absolutely. We think of ourselves not only has a highly functional public utility but also a driver for innovation and industry. A couple of highlights:
- We have developed multiple water technologies and processes that are shaping the global water industry while saving the region over $5B. These include:
- The Sustainable Water Initiative for Tomorrow (SWIFT), which is the largest project of its kind in the world. We are recharging the Potomac Aquifer with drinking-quality water while reducing nutrient pollution to the Chesapeake Bay by more than 80 percent for nitrogen and nearly 70 percent for phosphorus.
- With DC Water, we pioneered Partial Denitrification Anammox (PdNA), the first mainstream use of deammonification bacteria anywhere in the world — saving $1 million annually in operating costs and $100 million in capital costs.
- We have been awarded 11 patents (with five more pending) and are one of the very few U.S. wastewater utilities that earn royalties. We also lead or partner on 32 active Water Research Foundation projects, likely one of the highest totals of any utility nationwide. We have the largest R&D group of any wastewater utility in the country.
- We have partnered with multiple water technology startups, who are attracted to our appetite for innovation and ability to provide scale. (Two startups have recently been incorporated or have moved to Hampton Roads, and we hope there will be many more soon). We even have delegations from New Zealand, PUB (Singapore’s National Water Agency), and Denmark coming to visit our technology in the coming months.
- We have been approached by a growing number of water technology startups because of our research success and scale and are developing a broader platform to co-locate more research and commercialization activities to Hampton Roads.
- In addition to our research, we also do our “bread and butter” job well: we serve 1.9 million people across 20 cities and counties — more than 20 percent of all Virginians — making us the largest wastewater utility in Virginia and the 14th largest in the United States (out of 16,000).
- We have done all of this while being a source – rather than a drain – on local resources. With annual revenues of over $500 million and a ten-year capital improvement plan totaling $3.4 billion, we have the resources to tackle some of the biggest infrastructure and environmental challenges in the country.
These examples illustrate why HRSD is not just treating wastewater. We are shaping the future of water innovation, protecting public health, and driving economic opportunity in Hampton Roads and beyond.
How did you get to this point? Please describe the origins of the Hampton Roads Sanitation District.
The Hampton Roads Sanitation District (HRSD) traces its origins to the severe pollution crisis in the early 20th century, when more than 25 million gallons of raw sewage were being discharged daily into local waters. This contamination devastated the Chesapeake Bay’s world-renowned oyster industry, public health, and tourism. A 1934 U.S. Public Health Service report, backed by the Virginia Fisheries Commission, concluded that a regional solution was essential, recommending the creation of a single sanitary district to finance, construct, and operate sewage treatment facilities. After years of studies, public engagement, and political negotiations, a referendum authorized creation of the Hampton Roads Sanitation District in 1940, followed by the Governor of Virginia appointing a Hampton Roads Sanitation District Commission to oversee its operations.
HRSD has grown to serve twenty cities and counties in eastern Virginia and is one of the most innovative utilities in the country. We are a political Subdivision of the Commonwealth with 8 Governor-appointed unpaid Commissioners
Innovation is a fundamental part of your vision and operations. How does your remarkable record of innovation tangibly affect your customers?
Peter Drucker said, “Culture eats strategy for breakfast,” and we are firm believers in that. At our core, we protect public health and the environment. Innovation at HRSD means our customers experience more reliable service, lower costs, and lasting environmental protection.
This started back in the 1980’s when we patented the Virginia Initiative Process: High-rate biological wastewater treatment process using activated sludge recycle. We have since been granted 11 patents with five pending. We are one of the only US wastewater utilities to receive royalties. In addition, HRSD has thirty-two active Water Research Foundation projects, likely one of the highest in the country. The Water Research Foundation (WRF) is the nation’s leading research organization advancing the science of all water to meet the evolving needs of the water sector.
We currently have the largest water project of its kind in the world called the Sustainable Water Initiative for Tomorrow (SWIFT). SWIFT is an innovative water treatment project in eastern Virginia designed to further protect the region’s environment, enhance the sustainability of the region’s long-term groundwater supply and help address environmental pressures such as Chesapeake Bay restoration – the nation’s largest estuary, sea level rise and saltwater intrusion. In fact, we will significantly reduce our nutrient loads into the Bay: Over 80% of the Nitrogen and 68% of the Phosphorus loads from HRSD will be eliminated by the project’s completion.
SWIFT takes highly treated water that would otherwise be discharged into the Elizabeth, James or York rivers and puts it through additional rounds of advanced water treatment to meet drinking water quality standards. The SWIFT Water® is then added to the Potomac Aquifer, the primary source of groundwater throughout eastern Virginia. Taking a One Water approach and collaborating with our locality partners saved our region $5 billion because SWIFT has dual regulatory compliance benefits: Clean Water Act and the Chesapeake Bay Total Maximum Daily Load (TMDL).
Our most revolutionary discovery with our partner DC Water is Partial Denitrification Anammox (PdNA), which took a decade’s worth of research. We have the first plant in the world doing mainstream deammonification. Bottom-line, it saves $1 million a year in power and chemical costs and saved $100 million in capex by leveraging a relatively newly discovered bacteria called Anammox.
Innovation isn’t always technology as we regularly execute on big ideas to keep our ratepayer bills low. For example, in 2021, we recently closed a 24 million gallon a day (MGD) wastewater plant and diverted that flow to a larger plant and saved $239 million Net Present Value. We are in the process of closing another 24 MGD plant and are almost finished building a five-mile pipeline under the James River to divert that flow to a larger plant, which included a world record directional drill for its size and length. In addition, we recently partnered with Virginia Natural Gas where they will spend $30 million to build a pipeline and gas cleaning system to take our digester gas and inject it into their pipeline. HRSD will receive approximately $400k-$500k with zero capital outlay. Another example is when we were looking for a large piece of land to build a wet weather storage tank. There was a nearby city park so we worked out a deal where they gave us the land and we built a nationally recognized skate park on top of the tank, a win-win!
You boldly described to us your intent to make Hampton Roads a major player in the global water industry with new technologies developed, tested and built in your region and then distributed across the world. Please describe what you are trying to achieve, important successes to date and what this could mean for your regional economy and workforce.
We are striving to make Hampton Roads the Silicon Valley of Water Technology. This bold vision stems from our recognition of HRSD’s pivotal role in the region and our desire to magnify the impact of our technologies locally. With the largest R&D group of any wastewater utility in the country, we see a powerful opportunity to drive economic development while advancing innovative water solutions.
The concept is simple. Create an innovation ecosystem with HRSD as the anchor institution. Our objectives:
- Advance Water Technologies
- Enhance Operational Efficiency and Resilience
- Foster Collaboration and Knowledge Exchange
Our innovation ecosystem follows the familiar technology development pipeline — Idea, Test, Invest — but with a deliberate focus on removing barriers and enabling technology adoption. Ideas may originate from startups, universities, or our own team at HRSD. With fourteen wastewater treatment plants of varying sizes, we offer a unique opportunity to test technologies at scale. More importantly, our robust in-house R&D team works side-by-side with innovators to refine and enhance their solutions. Once a technology proves itself at scale, startups can leverage HRSD’s strong industry reputation to expand into other utilities. One notable example: we were so impressed by a startup’s technology during testing that we issued an RFP to deploy it across additional HRSD facilities. In addition, we collaborated with them to develop new intellectual property that will be launched in the coming months. Our venture capital and industry partners play a key role as we can present to them investment opportunities for tech that we find promising. As an example, we introduced one of our partners to one of our AI startups, leading to a new investment. Another partner introduced us to a Bill Gates-funded startup working to convert captured CO₂ and bio-based inputs into drop-in, low-carbon industrial chemicals like acrylonitrile—enabling high-performance materials that permanently sequester carbon. They were looking at the Gulf Coast area due to their port and rail system and I told them about how Hampton Roads has. They are now seriously considering our region because of Hampton Roads’ large port and rail systems and strong market for their product. Over time, we believe that this ecosystem can drive economic development opportunities by attracting startups to headquarter in our region.
For many people, what you’ve described seems like the antithesis of a public authority. Is HRSD an outlier? Do other public entities have the powers you have? Should they?
HRSD is unique, but we’re not an accident — we were designed this way from the start. When the Hampton Roads Sanitation District was created in 1940, it was given broad authority by the Virginia General Assembly as a political subdivision of the Commonwealth. More importantly, our Commissioners are Governor appointed, not elected, so it gives them the ability to have a long-term view. That governance design allowed us to operate regionally, across city and county boundaries, with the ability to finance, construct, and operate wastewater infrastructure leveraging economies of scale for the benefit of public health, the environment, and the economy.
Those powers — combined with a culture of innovation — are what make us an outlier in the public utility sector. Unlike many utilities that focus narrowly on operations, we have the ability, Commission buy-in, and proven track record to invest in research and development, pilot cutting-edge technologies, and enter into partnerships with universities, startups, and other utilities. It’s why we can patent processes, develop globally relevant water tech, and operate world-leading projects like SWIFT.
Some other public entities have similar enabling legislation, but many do not. Whether they should depends on the vision and governance model of the community. We believe that granting public utilities both the authority and the expectation to innovate can be transformative and key to keeping rates affordable. Our history shows that with the right governance structure, technical expertise, and commitment to collaboration, a public authority can deliver world-class environmental, economic, and social outcomes.
What is your wildest ambition for Hampton Roads? What do you need from other partners to make this happen?
Our wildest ambition is to make Hampton Roads the global capital for water innovation, not just the US — the place where the world comes to develop, test, and deploy the next generation of water solutions. In fact, we have delegations coming from New Zealand, Singapore and Denmark in the coming month to see our technologies. We envision a thriving regional ecosystem where clean water technologies are invented here, proven here, manufactured here, and exported worldwide, creating high-quality jobs and driving economic growth. In fact, we just learned that one of our AI startups is moving their headquarters to Hampton Roads to be close to HRSD. Also, another company was recently created in Hampton Roads and will focus on commercializing and manufacturing our technologies.
We’re already building the foundation through our patents, groundbreaking projects like SWIFT, and our role as a trusted, large-scale testbed for new technologies. But to fully realize this vision, we need:
Collaboration – Deep partnerships with universities, research institutions, startups, and established companies to accelerate innovation;
Investment – Venture capital, impact investors, and funding to scale promising technologies beyond pilot stages; and
Policy Support – Local, state, and federal leaders championing policies that enable faster deployment of proven innovations.
With the right partners leaning in, Hampton Roads can be to water what Silicon Valley is to tech — a place where innovation is not just encouraged, but expected, and where the benefits ripple far beyond our region.
Bruce Katz is the Founding Director of the Nowak Metro Finance Lab at Drexel University. Florian Schalliol is the Founder of Metis Impact, a boutique consulting firm.