Rising Risks

Cities are using new cloud technology to fight increasingly expensive and catastrophic flooding

Key Points
  • This summer was one of the wettest on record in much of the Northeast.
  • Extreme rain is posing new challenges to old, outdated storm water systems.
  • New companies are using cloud technology to help cities nationwide find ways to mitigate the damage from costly flooding.
How high tech and real estate team up to protect cities from flooding
How high tech and real estate team up to protect cities from flooding

Intense storms are becoming much more frequent, resulting in heavier rainfall and flooding that wreaks havoc on local infrastructures, budgets and economies.

This summer was one of the wettest on record in much of the Northeast. Study after study have shown that storms with extreme rain are becoming more common, and consequently posing a new challenge to old, outdated stormwater systems in cities large and small. Most of the nation's stormwater systems are simply unable to handle the increasingly heavy rainfall. And it gets worse as urban development increases because there are fewer places for water to go.

That's why, instead of looking on the ground for answers, new companies are turning to the technology cloud to find ways to manage what comes out of the sky.

One four-year-old company, Boston-based Opti, installs underground smart water management systems that connect to the technology cloud and track the weather. The systems control water coming into and out of urban lakes, retention ponds, tanks, pipes, cisterns, even constructed wetlands.

"We're able to take the weather forecast and use it to predict how much runoff is going to occur, and drain the facility down in advance to create new storage without building a new major capital asset," Opti CEO Marcus Quigley said.

Albany lake using Opti system
Diana Olick | CNBC

By draining the water before the storm hits, the tanks, lakes or ponds have the capacity to hold much more water when the intense rains fall. In Albany, New York, two summers ago, a few random rainstorms caused over $3 million in damage to sewers overwhelmed by unusually heavy water. That is why Joseph Coffey, commissioner of Albany's Department of Water and Water Supply, turned to Opti.

"I've been here 4½ years, and I think what we call the 'rain bomb' storms have been a little bit more severe, particularly this year," Coffey said. "These extreme rainfall events are causing flooding, basement backups and combined sewer overflows into the Hudson River."

Opti installed its system in Washington Park Lake, right in the heart of the city's downtown, as well as one of Albany's constructed wetlands.

In the lake, the water is held back by a large panel, which makes sure the level is maintained at a certain elevation. At the bottom, a valve is connected to cloud infrastructure through a nearby control box. The system watches the weather every second. When the cloud says a storm is coming, the valve opens to drain the lake, making room for more rainwater.

"So far it's been a relatively short period of time that we've had it in play, but it's worked great. We seem like we have less of a frequency of the flooding in the streets, and we probably have managed this backup in the basements pretty well," Coffey said. "But the other benefit that it has, we probably have fewer combined sewer overflow events in the Hudson River, and that's a big benefit for us because that's a regulatory issue."

The system also saved the city a considerable amount of money, sparing the need to build new drains, sewers and reservoirs.

"Typically, the savings are in the range, on the capital side, from 50 to 90 percent, and you can tell what that probably means to local communities. We all know there isn't enough money to go around," Quigley said.

Opti's cloud control box
Diana Olick | CNBC

The potential for companies like Opti is huge. From May through July, much of the East Coast saw rainfall up to three times normal levels, according to the National Oceanic and Atmospheric Administration. Nine of the top 10 years for one-day extreme precipitation events have occurred since 1990, according to the Environmental Protection Agency. The more water, the more expensive the damage.

According to Quigley, nearly a million sites nationwide could use Opti's technology to control flooding. Opti now has more than 130 systems deployed in 21 states and is in major cities including New York, Pittsburgh and Chicago. Opti's revenue has grown tenfold in its four years, doubling last year alone, according to Quigley. Its largest private investors are Sidewalk Labs, Missionpoint Partners and Ecosystem Integrity Fund.

"We love simple tech solutions that have a lot of power, and this is the kind of thing that is beautiful because it saves customers money, particularly in old cities," said James Everett, co-founder of the Ecosystem Integrity Fund. "We believe that tools like this should become best practices. It's new for municipalities. It's not the way they've typically thought. We invested about a year and a half ago, where we thought the company was starting to emerge from the difficult pilot stage. We believe it's going accelerate."

While Opti is using its technology to manage and direct water underground, another company is setting its sights and its technology higher, literally, on rooftops. Rainbank is a recent start-up that turns rooftops into reservoirs. Its system is now employed on the roof of the Water Department in New Orleans. Much like Opti, it also uses cloud technology connected to valves. Instead of ponds, it uses rooftops to hold water during heavy rainstorms and then release it slowly once the storms have passed.

"These devices are remotely controlled," said Rainbank CEO Kevin Dutt. "They talk to each other, and they also talk to our server in the cloud, and our server is running algorithms, evaluating a storm and deciding when is going to be the most intense period of a storm. With that information, it tells these valves when to close, when to start collecting water."

Dutt insists the rooftops don't leak because they are built structurally to hold a lot more water or weight than they actually do.

"So we don't take a risk in any way in that way," he said.

Opti valves
Diana Olick | CNBC

The technology Rainbank uses is also relatively cheap. It is nothing compared with what increasingly intense storms are costing local economies.

"It's really becoming debilitating to the infrastructure of our cities," Dutt said. "It is limiting transportation and movement of commerce around the city. It's also causing damage, which is actually costing cities and private owners money to fix infrastructure damage."

So far, Rainbank is on rooftops in a dozen cities, including Philadelphia, Milwaukee and St. Louis.

"The U.S. spends about $5 billion to $10 billion a year on storm water mitigation. We think we can be a major player in that potential market," Dutt said.

This week, Boston Mayor Martin J. Walsh announced the "Resilient Boston Harbor" initiative, which aims to protect the city's 47-mile shoreline from major flooding due to climate change. This follows an extremely wet winter of back-to-back nor'easters that left much of the city's downtown and seaport districts underwater.

Walsh said the city will commit 10 percent of all new capital funding, or about $16 million annually, to resilience projects.

"We're not just planning for the next storm we'll face. We're planning for the storms the next generation will face," Walsh said. "A resilient, climate-ready Boston Harbor presents an opportunity to protect Boston, connect Boston, and enhance Boston, now and for the future. As we enter a new era in our harbor's history, Boston can show the world that resilience is not only the ability to survive adversity, but to emerge even stronger than before."

-- CNBC's Erica Posse and Lisa Rizzolo contributed to this report