Western Water Issues: The Challenges of Growth

1
Western Water Issues The Challenges of Growth

• NARUC Water Committee Summer Meetings
• July 2008, Portland, Oregon
• Walton Hill, United Water

2
United Water at a Glance

• 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-Nations 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 OM contracts

United Waters 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
Boise River
Star

Middleton
Boise
Caldwell
Nampa
Lake Lowell
New York Canal
Kuna
Snake River
6
Boise Basin Water Supply History
Boise River
7
Boise Basin Water Supply History

• Develop the Weststarting 1908
• USBOR Reservoirs partially funded by selling
  bonds to new Irrigation Districts
• 40 year notes now paid off IDs have 40 year
  contracts with BOR for surface water rights
• Water suppliers contract (5 yr lease) with IDs
  for supply, or short term rental pool or water
  bank for unused rights (annual lease)
• Cornfields or lawnsdevelopment 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. gt40 Mid-Atlantic
  Region
• 50 increase in population 1988 to 2006

9
United Water Idaho (contd.)

• Conservation programs commencing mid-1980s
• 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 Systems1995

• UW Idahos 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 Idahos 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
Strategies for Success

• Aquifer Storage and Recovery

15
Strategies for Success

• Short term rental pool program--annual
• Increasing cost, decreasing reliability

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
  revenuedecoupling