NARUC Summer Committee Meetings

Committee on Water

Water Supply Planning: East, West, North and South

July 17,2007

United Water at a Glance

• 135 years in the US water market Headquarters in New Jersey

• Key Highlights

Revenues $535M Total assets $3.1B 2,200 employees Active in 20 States 7.65 Million people served

• Two Business Segments:

Regulated and Contract Services

26 Regulated utilities 150 O&M contracts

Large Regulated Water Utility base in Northeast US

$800M in Planned Capital Investment over next 5 years

Water Supply Planning

• Master Plans for each water supply system 20 year plans updated every 5 years

• Competing priorities everywhere Asset Management Approach 5-year capital plan updated every year

• Drivers affecting water supply planning Population Growth

> Development within franchise area> Private well failures

Wholesale Customer Growth> Neighboring municipal systems> Small system consolidation

Source Water Quality/New Regulations> Loss of supply source> Treatment improvements needed

Reliability to meet Peak Demands> Safe yield> Source reliability

United Water Examples

• Three Large Utilities surrounding NYC 1.2M population served

• Large Water Supply Projects $250M Investment

• Westchester County, NY United Water New Rochelle

• Rockland County, NY United Water New York

• Bergen/Hudson Counties, NJ United Water New Jersey

• Other “northern” systems Pennsylvania Delaware Connecticut Rhode Island

New York – Westchester County

• System Wholesale purchase of water from NYC Aqueducts from Catskill Watershed Connections to Croton and Catskill Aqueducts Croton supply did not get a filtration waiver NYC building filtration plant in NYC

• $50M Water supply project being delivered Initial planning 15 years ago Loss of supply – Treatment or alternate source needed New source selected – Delaware Aqueduct Project includes;

> New 43 MGD Pump Station> Connection to Aqueduct> Transmission Main> Related system improvements

• Water Supply Project Surcharge granted by PSC Investment surcharge every six months

• Future Needs Supply reinforcements

New York – Rockland County

• Water Supply is main priority for this utility

Population growth and peak demands Surface and ground supplies – fully

utilized (?) Political framework – water use limitations Commitment to deliver based on 2006

Rate Case

• Short Term Water Supply Program 5 year plan to maximize current supplies $15-20M Investment Water Supply Surcharge

• Long Term Water Supply Project Initial planning >20 years ago New Source of Supply $80M Investment In-Service 2015 Water Supply Surcharge

New Jersey – Bergen, Hudson Counties

• Large System (800k served)

• One source of supply – surface water

200 MGD Plant

• Source Water Issues Partnership with public water utility River augmentation Deteriorated quality

• Aged Infrastructure

• $105M investment to upgrade plant Improve reliability Improve water quality

• Future Needs Additional Water Supply/Treatment System reinforcements

Water Supply Challenges/Opportunities

• Water supply projects have long timelines Extensive governmental approvals needed Political resistance can exist

• Water supply projects are expensive High relative cost per unit volume Future expansion projects are a bargain Special project surcharges reduce capitalized interest

• Non-Revenue Water Leakage is clearly an issue Longer term opportunity

• Conservation/Peak Usage Water is relatively cheap Political resistance to control use Variable rate structures have been successful

• Water is state owned Sharing across borders is near impossible Opportunity exists/Political leadership needed

NARUC Summer Committee Meetings

Committee on Water

Water Supply Planning: East, West, North and South

July 17,2007