While critical investments are needed to ensure safe, reliable service and meet industry standards, NTMWD continuously identifies efficiencies and ways to avoid, minimize or defer costs wherever possible across all three services.
Here are a few major ways we’ve managed costs over the past few years:
Refinancing bonds each year results in future savings. In FY19, the District refinanced bonds which will result in an estimated total savings of $18.2 million between 2019 and 2039. In the previous two fiscal years (FY18 and FY17) the District refinanced bonds estimated to have total savings result of $8.7 million between 2018 and 2029, and an estimated total savings of $18.6 million between 2017 and 2038, respectively.
The District applied for and received low-interest financing for the Bois d’Arc Lake project through the Texas Water Development Board (TWDB) State Water Implementation Fund of Texas (SWIFT) for the Bois d’Arc Lake project. To date, the TWDB has committed $1.477 billion in low-interest financing through the SWIFT funding mechanism. Use of SWIFT funding is anticipated to save the District and its ratepayers more than $230 million in interest costs.
The District also applied for approximately $460 million in low-interest financing through the Texas Water Development Board Clean Water State Revolving Fund (CWSRF) Program for the Sister Grove Regional Water Resource Recovery Facility project. Financing through CWSRF is anticipated to save the District and its ratepayers over $200 million in interest costs over other financing options.
The North McKinney Parallel Interceptor Phase II project was canceled from the Capital Improvement Program with estimated cost savings of $25M in FY2018 through 2020 by modifying short term operations of existing lift stations and force mains, and refining long term strategies to transfer flow from the Upper East Fork Interceptor System to the planned Sister Grove Regional Water Resource Recovery Facility.
Through partnerships with the City of Allen and Town of Fairview, we identified alternatives to increase capacity in our wastewater conveyance system through cost sharing to build the Sloan Creek Lift Station and Force Main to serve the growing populations of the two cities. This new facility saves us from having to further expand existing facilities and allows us flexibility on where to send the future flows. This project saves the UEFIS Members and Customers over $9 million.
In FY18, the District was able to get reduced piping costs on the Trinity River Main Stem Pump Station project by purchasing pipe during manufacturing down time. This project required 17 miles of 72-inch-diameter pipeline, and by reducing piping costs the District saved approximately $13M.
By focusing on immediate capacity needs due to regional population growth, the District reduced the planning-level construction estimate by $10.2M for the Wilson Creek Regional Wastewater Treatment Plant Expansion. The project is using an alternate delivery method to leverage the value engineering that contractors can bring to the design process. In addition, an evaluation of solids handling at Wilson Creek RWWTP realized a life-cycle cost savings of $31.2M. The method will reduce truck traffic and more efficiently control odors.
For the Princeton Lift Station and Force Main project, the District identified $6.1M in potential construction cost reductions by minimizing well depth, optimizing pump sizing, reusing existing odor control equipment, reducing force main size, and adjusting alignment to minimize tree mitigation and property acquisition costs.
With the Main Stem project coming online in late 2019, the District has developed an updated Raw Water Supply Operations plan. With an overall remote pumping electricity budget of $16.5 million, an annual savings of up to $1M during non-drought years is anticipated by minimizing the substantial costs of pumping water from five remote supplies.
The Morrow Renewable High BTU Gas Plant at our 121 Regional Disposal Facility went online in December 2017 and is operated by Morrow Renewables. The methane produced by the landfill is harvested and converted to clean-burning renewable natural gas for energy production and other beneficial use. The District receives a royalty on the gas produced and a share of the revenue generated which goes toward reducing landfill operation costs.
The District successfully implemented a pilot program for the routine exercising of large diameter water transmission system valves in the transmission system. Proactively maintaining isolation valves in the transmission system prolongs valve life and avoids emergency expenditures for valve failures that can cost up to $200,000 or more for a single valve. Additionally, the program ensures valves will operate properly resulting in minimizing service disruptions to members and customers. The first phase of the program was implemented without adding additional operations crews and equipment.
Wastewater pipeline cleaning is critical to ensure installed capacity aligns with operational capacity. Typical approach is to clean all pipes as part of a systematic pipeline cleaning and inspection program. Our wastewater operations staff is using an innovative technology to inspect our pipelines using multiple sensors to detect condition and where cleaning is needed. We then clean only where needed. This reduced linear footage of pipe cleaning in FY18 from 66,842 ft to 4,719 ft, with a corresponding estimated savings of $1,242,460.
The districts energy program has goals that seek to control power supply costs and reduce demand when and where operationally feasible, especially during the on-peak periods of the summer. During the summer of 2019, combining the advanced fixed supply positions the district put in place with our suppliers and with the 4 Coincident Peak (4CP) efforts from the water operations team, the district was able to achieve ~$3M in cost avoidance. The 4CP program gives NTMWD the opportunity to voluntarily reduce energy consumption during the on peak hours of the day in June, July, August and September. The Energy Reliability Council of Texas (ERCOT) refers to these peaks as the, four coinciding peaks (4CP) of the summer. The reductions in demand are realized in the following calendar year invoices.
In FY19, the Mesquite Regional Wastewater Treatment Plant and the McKinney Lift Station enrolled in the Oncor Commercial Load Management (CLM) Program. This program compensates the District for curtailing demand when Oncor needs to quickly reduce its overall demand on the power grid. The program compensated the District $16,000 for its participation.
The District has reduced overall energy costs through a robust energy procurement strategy which includes hedging significant volumes of power years in advance to lock in prices at favorable rates. The district recently partnered with one of its two retail electric suppliers, to integrate the benefits and economics of an offsite utility scale solar project being developed in South Texas. In this unique offering, the district will benefit from the low power costs afforded by a large utility scale solar asset, while avoiding many of the commercial risks that typically accompany these types of power agreements. It is projected that this agreement will bring an estimated $14MM of savings to the district vs. buying traditional energy.