Inter-Utility Water Purchase Agreements to Increase Reliability and Drought Resistance

Authors:

  • Reed Palmer - Hazen and Sawyer

This paper discusses the leading edge risk-based tools and analyses that are supporting three water utilities in the Research Triangle Region of North Carolina to craft an innovative inter-utility water purchase agreement focused on maximizing water system reliability during periods of drought while optimizing water sales revenues and facility development costs. Such an agreement would take water distribution system interconnections a major step beyond traditional emergency backup and water transfers.

The three water utilities are the Town of Cary, the Orange Water and Sewer Authority (OWASA), and the City of Durham. Cary, together with the neighboring Town of Apex, owns the only intake and treatment facility on Jordan Lake, the largest surface water supply source in the region and Cary’s sole water source. OWASA and Durham both own independent surface water supply and treatment facilities, but for water supply planning purposes have obtained allocations from the 100 mgd Jordan Lake water supply pool, which is owned by the State of North Carolina and managed by the Army Corps of Engineers. These two utilities presently have no access to this water except through their interconnections with Cary. The three communities have had mutual aid purchase agreements in place for many years and a long history of cooperation during severe droughts. The present inter-utility initiative aims to take this cooperation to the next level and on a longer term basis (a) to increase the reliability of the OWASA and Durham systems during periods of drought, (b) to reduce OWASA and Durham’s costs for developing water supply and treatment infrastructure, while © increasing water sales revenues to Cary at minimal risk. Minimizing risk is the key objective of the analytical tools and approach that have been developed to support the water purchase agreement initiative. With this goal in mind, it is important for each utility to answer questions such as how often and how much (the frequency and quantity of) water Durham and OWASA would need to buy from Cary, and whether or not the current and future treatment capacity at the Cary-Apex Water Treatment Facility (WTF) is sufficient to provide it.

This paper describes the process developed to answer these questions for the planners at each utility. However, the answers to these questions may be complicated by the need to factor in the threat of climate change, which may reduce the safe yield of existing water supply systems. As such, these questions are addressed in the context of future hydrologic uncertainty. The modeling took into account an array variables to establish the water purchase agreement’s sensitivity to changes in hydrology, each utility’s projected demand, the purchase triggers for Durham and OWASA (i.e. the hydrologic criteria under which Durham and OWASA would purchase water from Cary), as well as time of year when water sales would be available. The results show that OWASA would likely be able to rely on a purchase agreement to assure water supply reliability between now and the expected date of completion of its next major water supply storage addition in the mid-2030s. The City of Durham however, would likely need to make other infrastructure investments to access additional water supply sources. This could be accomplished by increasing its allocation on Jordan Lake and providing increasing transmission capacity between Cary and its service area, or through other alternatives currently under evaluation.

For more information, please contact the author at rpalmer@hazenandsawyer.com.

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