Consolidation Feasibility Study for Rocky Mountain Region Utility

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With their wastewater treatment plant operating at capacity and drinking water source of supply drying up, one Colorado utility was presented with a series of serious challenges and one important question: Should they forge ahead alone or attempt to enter into a regional solution with their neighbor? Going at it alone would require the utility, which services 3,700 equivalent residential customers, to invest over $17 million in renewable water supplies and another $10 million in a wastewater treatment plant in the immediate future.

    Location: Englewood, Colorado, United States
    Region: Americas
    Service Offering: Management Consulting
    Market Sector: Water & Wastewater
    Status: Complete

    Consolidating would mean giving up the utility’s autonomy and signing onto the neighboring utility’s renewable water plan and the substantial mill levy associated with it. The utility, after having gone through a previously unsuccessful consolidation effort less than a decade before, was leery of the benefit to their customers. Were the really economies of scale to be gained in a consolidation?

    MWH, working in collaboration with both utilities, created long range financial plans to calculate the impact on rates for both utilities’ customers under “status-quo” and consolidation scenarios. The consolidation needed to benefit customers from both districts in order for it to be economically or politically feasible. With numerous special districts being served by the original utility, all rate impacts had to take account mill levies associated with water and wasterwater service.

    MWH presented the analysis to both District Boards that showed consolidation resulted in lower rates for all customers and, therefore, benefitted both Districts. Because of the location and capacity of the original utility’s wastewater treatment plant, the utility could forego their $10 million investment. Adding the utility’s customers, under new rates, to PWSD’s renewable water plan (expanded under consolidation) led to lower projected future water rates. After agreement from both utilities on the benefits of consolidation, it was put to a public vote; however, the utility’s customers chose to maintain their independence rather than consolidate.

    Our address

    Englewood, Colorado, United States
    39.650785, -104.987690

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