The Clean Water Bargain: A Lean, Mean Water Delivery Machine

A biogas co-generation facility is under construction at the Northeast Water Pollution Control Plant

A few posts back, we explained how the rising costs faced by PWD are a large part of what’s driving our proposed rate adjustments. We should also explain that we aren’t proposing these adjustments without first doing everything we can to balance these increasing costs with cuts to our expenses.

Some of the most significant savings came from the Green City, Clean Waters plan. This plan is what the Philadelphia Water Department put forward as a way to meet requirements for reducing the overflow of sewage into the Delaware and Schuylkill rivers during rain events. Where other cities have been faced with up to an $8 billion cost for creating entirely new tunnels to separate the stormwater from the wastewater, PWD will spend about a quarter of that over the next several years on green infrastructure meant to keep much of the stormwater from ever entering the system. The end result: fewer streets being torn up to install new tunnels and more trees and other greenery throughout the city, providing cleaner air and water while reducing the urban heat island effect that cooks us each summer.

you’ve refinanced your home recently to take advantage of historically low interest rates, then you know how much you can save in your own budget. The water department issues bonds nearly every year to fund major capital expenses. With falling interest rates and an improved bond rating, we’ve been able to refinance much of this debt, saving more than $40 million just in the last few years. As we mentioned in a previous post about our intention to improve our bond rating even more, we hope to reduce these interest payments even further and realize more savings.

We’ve also made it a point to chase down delinquent ratepayers and increase automation of metering and billing systems to make it more efficient to collect. Since 2001, when we created the Revenue Protection Unit, we’ve been able to recover more than $25 million in additional billings. The days of people getting unmetered, free water at the expense of everyone else are long since gone.

PWD maintains a Rate Stabilization Fund (we’d call it a rainy day fund but the term hits a little too close to home for a water department) so that increased expenses or drops in revenue don’t have to be entirely passed on to the customers and our rate adjustments can be kept lower.

Finally, since the cost of energy is one of the driving forces behind our overall expense increases, we have sought either to reduce the amount of energy we use or produce it ourselves from renewable sources. The Northeast Water Pollution Control Plant (NEWPCP) Biogas Project will generate electricity and thermal energy for use on-site, fueled mainly by biogas from the NEWPCP digesters. This project is designed to generate 5.6 MW of power and is expected to reduce PWD energy costs by more than $12 million over the course of the 16-year contract with renewable energy company Ameresco, Inc.

At our Southeast Water Pollution Control Plant, we’ve installed a 250 kW solar array expected to pay off its entire installation cost in just nine years. And get this—the federal government paid for half of it! The project was made possible by $850,000 from the Recovery Act’s Energy Efficiency and Conservation Block Grant awarded to the City from the DOE and $850,000 from PWD and technical assistance from DOE’s Solar America Cities program. After nine years… nothing but nice, clean, solar-generated electricity.

PWD remains committed to keep our own costs low so that any rate adjustments we request are as reasonable and low as possible for our customers.