New Infrastructure Planning Tool Helps Deliver Just-in-Time Water Projects
One of the toughest decisions water utilities face is when to develop new water projects. If new infrastructure is built before it is needed, it can be an underused asset impacting the financial health of the utility. Not only may rates increase to finance the project, but the utility’s debt ratio may reduce its credit rating, making it harder to secure funding for future projects. And if new infrastructure is brought online too late, it can cause water shortfalls, watering restrictions and water use permit violations. Bringing projects online at the right time is critical in ensuring a utility’s financial health, regulatory compliance and customer satisfaction.
Tampa Bay Water has been working with Cornell University and the University of North Carolina/Chapel Hill to build a water supply infrastructure planning decision support tool to help identify timing of when new supply sources should be online as demand for water in the region increases. This decision support tool combines yield and reliability of the regional system with a full financial model, allowing decision makers to look at different future scenarios of projects and their implications on the uniform rate.
This new decision support tool can analyze a range of future uncertainties, including member government demands and climate, while simulating how different configurations will perform under these varying conditions. The model includes key financial metrics information for the Board to consider and use to make informed decisions regarding timing of projects and debt issuance.
Tampa Bay Water presented the model to its member government utility directors June 18, and to its board July 19.
“This new, cutting-edge computer model will help us make critical decisions on two major questions facing water utilities: one, when should we develop new projects, and two, what projects should we develop?” said Ken Herd, chief science and technical officer for Tampa Bay Water. “By delivering new projects ‘just in time,’ Tampa Bay Water will be able to maximize water delivery while minimizing financial impacts.”