By Fred Woods
Opelika Utilities is increasing its rates for water. Utilities bills after Aug. 1, 2014, will include a rate increase of $1.10 per 1,000 gallons of usage.
The typical residential customer, who averages using 4,000 gallons a month, will see a monthly increase of $4.40.
That’s about a dollar a day for water that most agree tastes good, is high quality and is delivered to residents’ homes 24 hours a day, seven days a week, 365 days a year – for a cost increase that might equal a half tank of gasoline for a car. Put another way, if someone had to buy his monthly water requirements as bottled water, it would cost something like $4,500 each month – meaning, increase or not, Opelika water is still a bargain over costly alternatives.
Bargain or not, most people don’t like cost increases. Some might be thinking, “Didn’t we just have a water rate increase three years ago?” While true, the Opelika Water Board reminds everyone that this increase, as well as the one before that, went to pay the costs of the new Saugahatchee Water Treatment Plant.
This latest increase can be attributed to continued increases in operational costs, such as the federally mandated requirement to use no-lead brass and bronze fittings and other components; materials such as chemicals and fuel; employee health care; tighter regulatory requirements; and the like. This is the first such rate increase in 10 years, since 2004.
Operating expenses, according to Opelika Utilities General Manager Dan Hilyer, PE, have increased 84 percent over this period and have primarily been absorbed out of current earnings. Hilyer said they have reached the point where this is no longer feasible.
None of this current increase will apply to new facilities. In fact, because of the foresight of Hilyer and the Opelika Water Board, no additional investment expense for water treatment, except for necessary maintenance and required upgrades, is foreseen for the next 30 years. And that’s a good thing because now we must address that part of the water system that gets clean, abundant water to the consumer – the distribution system.
Hilyer said, “Very few cities Opelika’s size have had the foresight and courage to build for the future, knowing current rates would have to increase to pay for it. Our water boards have provided this foresight and courage.”
Water supply problems plague much of the U.S. and have become a major limiting factor in industrial development, not only for the water-short Southwest but also for much of the eastern half of the country. Most cities consider themselves lucky to have one dependable water source and water treatment facility. Opelika has two: Halawakee Creek/Lake Harding with a guaranteed right to purchase 42 million gallons a day(mgd) and the city-owned Saugahatchee Lake with a dependable 8 mgd. This water is treated at two water treatment plants – Betts WTP on Halawakee Creek (capacity 16 mgd) and the Saugahatchee WTP at the Warner Williams Water Resource Park (capacity 8 million mgd). Opelika’s average daily demand is seven mgd (fall to spring), jumping to an average of 10 mgd during the summer.
Opelika’s water system does three things: secures water, treats it to make it safe and distributes it to consumers. For a number of years efforts have focused on the first two. Now Opelika must turn its attention to the distribution function, and part of the funds from this rate increase will begin this work.
Sixty percent of Opelika Utilities’ water distribution system is over 50 years old. One of the best places to see first-hand the effect of water pipes this old is on North 10th Street in the several blocks before it changes into Oakbowery Road. There have been so many breaks along this stretch in recent years that Hilyer describes it as “clamps holding hands.”
This is Opelika Utilities’ infrastructure problem. It’s all underground, so people don’t see it – until the old cast iron pipes break and the streets must be torn up for repairs. There’s about 190 miles of it, and it will cost an estimated $75 million (in today’s dollars) over the next 30-50 years to replace – requiring additional rate increases in the future.
A primary reason behind the need for future rate increases is that the nature of Opelika’s industry has changed. The city’s economy used to be based on a number of high water-using industries – textiles, rubber, Ampex, Diversified Products, etc. All these are now gone, and their replacements – Mando, Pharmavite, Gambro, etc.– are not big-water users. The possibility of changing the rate structure, itself, will be the subject of future coverage by the “Observer.”
On the positive side, Hilyer said the water board will do its best to divide this work into small-enough projects ($40,000-60,000 or so) that local firms can compete for so as to keep the spending in the local economy in so far as possible.