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June 15, 2009

June 15, 2009. Pipeline Safety & Efficiency. Pipeline Safety & Efficiency Our aging infrastructure not only poses significant safety hazards, but can impact public health. What strategies and best practices can be used to improve our infrastructure?. Operating Locations. Current operations.

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June 15, 2009

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  1. June 15, 2009 Pipeline Safety & Efficiency

  2. Pipeline Safety & EfficiencyOur aging infrastructure not only poses significant safety hazards, but can impact public health. What strategies and best practices can be used to improve our infrastructure?

  3. Operating Locations Current operations

  4. U.S. Water Industry Today • Highly fragmented; few providers of scale • No substitute exists • Only utility that is ingested • Infrastructure concerns • EPA Needs Survey - $335 billion over the next 20 years • Water is subject to multiple state regulatory jurisdictions (environmental & economic)

  5. Aging Infrastructure • Ongoing Problem: high plant rehabilitation and pipe replacement costs • Municipalities are deferring costs • Private companies face regulatory lag (disincentive to invest)

  6. EPA’s Estimate of the National Need for Water Infrastructure Investment $335 Billion Needed Over the 2007-2027 period up from $277 from 2003 Report to Ensure Compliance with Existing and Future Water Regulations Source: 2008 EPA Needs Survey

  7. U.S. Water Industry: The Most Capital Intensive Industry • EPA rules require large investment in filtration plants • Immense investment needed for distribution system and road repair • More capital per revenue than all other utilities Source: 2005 AUS Utility Reports

  8. Pipe Cleaning and Lining Before After

  9. Candidate for pipe replacement

  10. Connecticut –WICA Delaware- DSIC Illinois- QIP Indiana- DSIC Missouri – DSIC New York - SIC Ohio- SIC Pennsylvania- DSIC Infrastructure Surcharges

  11. Potential Benefits of a DSIC Program • Address aging infrastructure that presents water quality problems • Proactively addresses main breaks (boil water notices) • New mains installation to eliminate dead ends (facilitates looping projects) • Reduce unaccounted for water • Replace fire hydrants and larger pipe for fire flows • Provides economic reliability in the community • Allows coordination with DOTs and local government

  12. Potential Benefits of a DSIC Program • Mitigates rate shock • Reduces rate case expense • Promotes the acquisition of small and non-viable water systems • Allows for pro-active planning • Positive impact on capital attraction and cost of capital • Accelerates the replacement of aging infrastructure • Rate payer protections

  13. Proactive Service

  14. Summary • Prepare and plan for the future now • Infrastructure surcharges target environmental, operational and public safety concerns • Encourage economic development

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