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One utility in the Rocky Mountain region has relied on groundwater to meet their drinking water needs. However, as its aquifers become less reliable, the utility is faced with finding a new solution to meet water needs. In addition, the utility is faced with proving to the newly formed City that it is cost-effectively meeting the needs of its customers. In order to secure renewable water supplies from a regional partnership, the utility (a community of 3,500 customers) would need to invest $16.6 million in capital, as well as increase their operating costs by $2 million annually. The utility borders two other utilities that share the need to invest in renewable water. Would there be economies of scale to be gained by joining with a larger utility, would there be benefit to having the City control the Special District, or would it be best to maintain independence? These are the questions the utility needed answered.
Rocky Mtn Regional Utility Consolidation Feasibility Analysis
Location: Castle Pines, Colorado, United States
Region: Americas
Service Offering: Management Consulting
Market Sector: Water & Wastewater
Status: Complete
MWH management consultants, working in collaboration with all three utilities, created long-range financial plans to calculate the impact on rates for all three utilities’ customers under “status-quo” and consolidation scenarios. Without consolidation benefiting all partners’ customers, in comparison to the status-quo, consolidation was not feasible economically or politically. The analysis also included studying what consolidation scenario most benefitted the customers of the original utility.
MWH presented the analysis to the utility board showing that, while there was benefit to most all consolidation scenarios, one scenario over all others provided the most benefit to all partners. MWH proceeded with a more in-depth analysis of the preferred consolidation partner; however, under further scrutiny the benefits for the consolidation partner were not as strong as originally thought. Consolidation did not occur, but valuable information about the utility’s capital planning and financing options were discovered.
Our address
- Address:
- Castle Pines, Colorado, United States
- GPS:
- 39.4717664, -104.89483469999999