Drinking Water Line of Business

March 11, 2014 Discussion

with the Council SPUN Committee

2

1. Then and Now

2. Overview

3. Customer Services & Service Levels

4. Drinking Water Investments

5. Cost of Services

Structure of Presentation for Drinking Water LOB

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Drinking Water Then: The Great Seattle Fire

• 1888 - mayor proposes Cedar River for public water supply

• Private companies can’t handle demand from population growth

• Special election set for July 1889 on $1 million construction bond

• One month before vote, Great Seattle Fire left downtown in ruins

• Low flow from private companies contributed to the destruction

• Voters overwhelmingly authorized construction of Cedar River Supply

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Drinking Water Then: Forward-Thinking Utilities

• 1901 - Cedar River pipeline in service.

• Development of protected water supply spurred by typhoid outbreaks.

• Cedar River supply eliminates need to drink contaminated lake water.

• In-city reservoirs constructed.

• Pipeline expanded three times over next 50 years.

• Water service begins to expanding cities east of Lake Washington.

Volunteer Park Reservoir, 1900

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• South Fork Tolt River (Carnation) added as second source in 1960s

• 100 percent ownership of Cedar Watershed, 66 percent of Tolt Watershed

• Protected from all uses, except tribal hunting

• SPU patrols and manages watershed forests

Drinking Water Now: Two Protected Supply Sources

Chester Morse Lake, Cedar River Watershed

South Fork Tolt River Watershed (Carnation)

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Water System

Overview: Drinking Water Service Territory & Infrastructure

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• 1.3 million customers • Two watersheds • 193 miles of transmission

pipelines • 1,680 miles of distribution

mains • 400 million gallons of water

storage • Many pump stations, valves,

fire hydrants

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Seattle Retail Service Area

Wholesale Customers

Watersheds

Overview: Seattle’s Regional Water System

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Water System Water

Overview: Drinking Water Process from Source to Tap

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Overview: Regulatory Drivers and Commitments

Regulations:

• State Dept of Health

• Safe Drinking Water Act

• Water System Design, including fire flow & pressure

• Water Use Efficiency

• State Dept of Ecology

• Water rights

• Dam safety

Commitments:

• Wholesale water contracts

• Cedar River Habitat Conservation Plan

• Muckleshoot Indian Tribe Settlement Agreement

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Overview: Water Consumption Over Time

0

20

40

60

80

100

120

140

160

180

200

220

240

260

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

1,000,000

1,100,000

1,200,000

1,300,000

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

2011

Total Consumption

P

Population

Po

pu

lati

on

Co

nsu

mp

tio

n in

Millio

ns o

f G

allo

ns p

er

Day

(An

nu

al A

vera

ge)

10 Water

0

25

50

75

100

125

150

175

200

225

250

275

300

Oct

No

v

De

c

Ja

n

Feb

Ma

r

Ap

r

Ma

y

Ju

n

Ju

l

Au

g

Se

p

Oct

Ave

rag

e C

on

su

mp

tio

n i

n M

GD

Ending Date for Week

24-hr Consumption, 7-Day Moving Average

WY 2014 WY 2013 Average WY 1999-2008 Average WY 1994-2000 Average WY 1985-1991

Through March 3, 2014

Notes: A. 7-day moving average is calculated using data from the day of and the previous 6 days.

0

50

100

150

200

250

300

350

1975 1980 1985 1990 1995 2000 2005 2010

Ga

llo

ns p

er

Pe

rso

n p

er

Day

Peak Day & Annual Average Consumption in GPD per PersonSeattle Regional Water System: 1975-2013

Peak Day

Annual Average

170 gpd

91 gpd

151 gpd

Seattle Public Utilities

1992 Drought

Portion of Rate Increases Due to

Declining Consumption:1983-2013

$1.10$1.47

$2.60

$3.49$0.32

$1.21

$2.87

$1.10

$1.79

$3.82

$6.36

$0

$1

$2

$3

$4

$5

$6

$7

1983 1993 2003 2013

Ave

rag

e R

ate

Pe

r C

CF

in

Co

ns

tan

t 2

01

3 $

s

Impact of Declining Consumption

Average Rates with Constant per Capita Consumption

45% of rate increases since 1983 due to declining per capita consumption

Average Residential Rates and Bills

in Constant 2013 $s: 1985-2013

$0

$10

$20

$30

$40

$50

$60

$70

$80

$0

$1

$2

$3

$4

$5

$6

$7

$8

198

5

198

6

198

7

198

8

198

9

199

0

199

1

199

2

199

3

199

4

199

5

199

6

199

7

1998

199

9

200

0

200

1

2002

200

3

200

4

200

5

200

6

200

7

200

8

200

9

201

0

201

1

201

2

201

3

Ave

rag

e M

on

thly

Bil

ls in

Co

ns

tan

t 2

01

3 $

s

Ave

rag

e R

es

ide

nti

al R

ate

s/C

CF

in

Co

ns

tan

t 2

01

3 $

s

Average Rate per CCF

Average Monthly Bill

Drinking Water Customer Services & Service Levels Regional System • Supply drinking water that meets or exceeds Department of Health regulations • Respond to 90 percent of high priority drinking water problems within one

hour • Provide in-stream water for fish and meet other tribal, regional, state, and

federal commitments • Achieve goals for water conservation & leakage loss

Retail System • Meet state requirements for water system pressure • Limit yearly drinking water outages totaling more than four hours to less than 4

percent of retail customers

Wholesale Customers • Meet pressure and flow requirements of wholesale drinking water contracts • Limit unplanned outages in transmission system to within the maximum agreed

duration

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Are We Meeting Our Service Levels?

The short answer is YES The longer answer is: • We have extremely high quality drinking water

that we will continue to maintain and protect

• We have an abundant supply of water – enough until 2060 and beyond – for people and fish

• We have a transmission & distribution system that is very reliable

• We respond quickly when problems arise

• We meet our conservation and leakage loss goals

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Water System

* Cedar Habitat Conservation Plan

Drinking Water Investments: Where We Are in Our Investment Cycle (Graphic Uses 2011 Data)

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$0

$20

$40

$60

$80

$100

$120

($ in

Mill

ion

s)

Cedar Treatment Facility

CHCP*

Tolt Treatment Facility

Reservoir Coverings

Debt Service

CIP

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Drinking Water Investments: Completed

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Tolt & Cedar Water Treatment Facilities

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Tolt Water Treatment Facility

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Covered Reservoirs

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Beacon Reservoir covering protected public health and added open space

Lincoln Reservoir covering in Cal Anderson Park

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Today

System Control Center Improvements 2004

Drinking Water Investments: Future

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Morse Lake Pump Plant

Chester Morse Lake on Cedar River

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Watermain Replacement & Rehab

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University Village water main break - 2013

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Watermain Replacement and Rehab - continued

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Extreme case of tuberculation

Overview: Water Distribution Main Age

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Cost of Services: 2015-2020 Baseline (= current services + meeting firm regulatory requirements)

Average annual baseline increase = 4.3% from 2015-2020

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Cost of Services

In 2020 baseline, average cost per gallon of water delivered to your home or business is slightly more than a penny a gallon

Typical residential monthly bill in 2014 = $38.93

Typical residential monthly bill in 2014 for household on low income rate assistance = $19.46

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Trends in Utility CPI