Denver Water sets course for 2013 upgrades

Over the past five years, Denver Water has invested nearly $420 million in repairing and upgrading its water system, some of which was built more than 100 years ago. Like utilities across the nation, Denver Water faces the arduous task of staying on top of maintenance for its aging system to ensure area residents continue to receive high-quality, award-winning water and reliable service every day.

At its meeting Sept. 26, 2012, the Denver Board of Water Commissioners adopted a budget and rate changes to fund essential repairs and upgrades in 2013.

The 2013 budget is $341 million, which will fund a number of multi-year projects, such as replacing failing underground storage tanks, upgrading water treatment facilities to maintain water quality and meet new regulatory requirements, and replacing aging pipes. Next year’s budget will be funded by water rates, bond sales, drawing down cash reserves, the sale of hydropower and fees for new service (tap fees).

The budget calls for a rate increase effective January 2013 of $0.55 per month on average for Denver residential customers using 115,000 gallons annually (the average annual consumption for Denver Water’s service area) and about $0.91 per month on average for full-service suburban residential customers using the same amount of water. The amounts will vary depending upon the amount of water the customer uses and whether the customer lives in Denver or is served by a suburban distributor under contract with Denver Water. Customers in Denver tend to use less than 115,000 gallons per year; suburban customers tend to use more.

“In 2012, we completed a number of significant projects, like the $18.3 million upgrade of 100-year-old valves at Cheesman Dam, and a $17 million project to install a new hydro turbine and repair the 50-year-old valve system at Williams Fork Dam,” said Angela Bricmont, Denver Water’s director of finance. “We also reconstructed Harriman Dam, built in the 1890s, to bring it up to current standards.”

The utility also completed Lone Tree Reservoir — a 10 million-gallon circular underground storage tank — to help meet the needs of residents on the south end of its service area. By the end of 2012, Denver Water will have replaced, upgraded or rehabilitated nearly 25 miles of pipe in area neighborhoods.

Denver Water owns and maintains more than 3,000 miles of distribution pipe — enough to stretch from Los Angeles to New York — as well as 19 raw water reservoirs, 22 pump stations and four treatment plants. The utility examines and adjusts its capital plan as necessary each year.

“Looking ahead, we will need to continue to invest in our reservoirs, water treatment facilities, watershed protection, recycled water and conservation,” said Greg Austin, president of the Denver Board of Water Commissioners. “As always, our goal is to ensure that our customers, their children and grandchildren will receive a reliable supply of the highest quality water in return for the investment they are making in their water system.”

Rates for Denver Water customers living inside the city would remain among the lowest in the metro area, while rates for Denver Water residential customers in the suburbs would still fall at or below the median among area water providers.

The water department is a public agency funded by water rates and new tap fees, not taxes. Water rates are designed to recover the costs of providing water service — including maintenance of distribution pipes, reservoirs, pump stations and treatment plants — and also encourage efficiency by charging higher prices for increased water use. Most of Denver Water’s annual costs are fixed and do not vary with the amount of water sold.