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Western Water Issues: The Challenges of Growth

Western Water Issues: The Challenges of Growth. NARUC Water Committee Summer Meetings July 2008, Portland, Oregon Walton Hill, United Water. 139 years in the US water market Key Highlights 1869-Founded as Hackensack Water Company 1890-Listed on the New York Stock Exchange

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Western Water Issues: The Challenges of Growth

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  1. Western Water Issues: The Challenges of Growth NARUC Water Committee Summer Meetings July 2008, Portland, Oregon Walton Hill, United Water

  2. 139 years in the US water market Key Highlights 1869-Founded as Hackensack Water Company 1890-Listed on the New York Stock Exchange 1930-First use of charcoal filtration 1989-Nation’s largest ozone filtration plant 1994-Merger with GWC 2000-Acquisition by Suez 2002-Acquisition of US Water 2007-Acquisition of Aquarion Water Company of New York Number two player with 8% share of private market Active in 20 states, 6.5 M population served Revenue $600M, total assets $2B 2,000 employees Two Business Segments: Regulated and Contract Services 21 regulated utilities, 138 O&M contracts Regulated business is highly capital intensive with low risk profile Contract Services business is not capital intensive, but has higher risk profile United Water at a Glance United Water’s strategy is to develop a well-balanced portfolio of regulated and contract service operations that can generate value in line with its risk profile

  3. Overview • A little Idaho history • Existing conditions • Future expectations • Solutions / Strategies for success

  4. Water Rights Debate in Idaho

  5. Parma BoiseRiver Star Middleton Boise Caldwell Nampa Lake Lowell New York Canal Kuna Snake River

  6. Anderson Ranch Built 1950 439,200 AF Arrowrock Built 1915 286,600 AF Lucky Peak Built 1957 293,100 AF Boise River New York Canal Lake Lowell Built 1908 173,000 AF Boise Basin Water Supply History Boise River

  7. Boise Basin Water Supply History • “Develop the West”—starting 1908 • USBOR Reservoirs partially funded by selling bonds to new Irrigation Districts • 40 year notes now paid off; ID’s have 40 year contracts with BOR for surface water rights • Water suppliers contract (5 yr lease) with ID’s for supply, or “short term rental pool” or “water bank” for unused rights (annual lease) • Cornfields or lawns—development affecting the uses of water rights

  8. United Water Idaho • 250,000 population in City of Boise and surrounding areas; 83,000 customers • 16 Billion gallons delivered annually • 20 MGD winter; 90 MGD summer • 11” rainfall per year vs. >40” Mid-Atlantic Region • 50% increase in population 1988 to 2006

  9. United Water Idaho (cont’d.) • Conservation programs commencing mid-1980’s • Public information, school education, xeriscaping program, water audit program, summer/winter rates, dual systems • 6 - 10 MGD Surface Water Treatment Plant Construction (second in 15 years) • 90 wells; aquifers reaching their limit • Uses of surface water rights changing

  10. Dual Systems—1995 • UW Idaho’s average residential bill = $350/yr. • 70% ($250) is for summer consumption • Seasonal rates • New developments pay $50/yr. for irrigation from dual system • Total bill now about $200 • $150 to UW, $50 for I.D. • Customers have nice lawns; UW Idaho’s summer peak (and revenue) are shaved • Peaking plants postponed, but lower revenue stream creates more need for rate cases

  11. Meeting the Challenge Natural Surface Flow Ground Water Conservation Short Term Rental Pool Contract Storage

  12. Strategies for Success • Purchase land - obtain water rights • convert back to habitat • basin exchanges of the water • Butte water rights win-win • “used and useful”? • “intergenerational equity”? • Regulatory support for securing current and future water supply

  13. Strategies for Success • Delivery from canals (become their customers) through five year contracts • Provides revenue and incentive for efficiency for IDs to improve their systems

  14. Aquifer Storage and Recovery Strategies for Success

  15. Short term rental pool program--annual Increasing cost, decreasing reliability Strategies for Success

  16. Strategies for Success-United Water Idaho Conservation Program • Program approved by PUC • Seasonal rates • Outreach and education: TV, radio, newspaper, community and municipal organizations • Comprehensive approach: “conservation kits”, irrigation improvements, xeriscape classes, indoor conservation tips, rain gutter devices, low flow nozzles • Costs deferred; regulatory issue of declining revenue—”decoupling”

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