Click here to view the rate structures effective June 1 2008
The Ames Water Treatment Plant has a rated capacity of 12 million gallons per day. Between 2003 and 2007, the rate of growth in the peak summer demand for drinking water has grown at approximately six percent per year. The treatment plan was operated at 82% of its rated capacity during the summer of 2007. If the rate of peak summer demand continues to rise at the same rate is has for the previous five summers, the treatment plant will reach its maximum capacity by 2012.
Constructing additional capacity requires two very precious commodities: time and money. Typically planning for a capacity expansion begins when demand reaches 85% of capacity. This is to allow time for the new facilities to be designed and constructed before demand exceeds the capacity. The entire process, from the initiation of design until the first drop of water is treated, typically takes five years.
As of 2008, the cost to construct new treatment capacity costs approximately $2 per gallon of capacity. Thus, to build 3 million gallons per day of new capacity will require approximately $6 million. At the same time, the existing Ames Water Treatment Plant utilizes some components that date back to the 1920's. Many parts of the existing facility are tiring, and need to be rehabilitated or replaced. When considering both the cost of new capacity along with the need to renovate or replace the existing capacity, the cost of the looming Water Treatment Plant project approaches $30 million.
When the "supply and demand" curves cross and there is insufficient capacity available to meet the demand, there are two options: reduce the demand or construct additional capacity. Staff from the Ames Water and Pollution Control Department are tackling both options simultaneously.
During the summer of 2007, the City launched a "Smart Water" campaign that encourages conservation as a socially conscious action. Since that time, the Smart Water campaign has evolved into a citywide "EcoSmart" program that encompasses the numerous conservation initiatives throughout several City of Ames departments.
Experiences from other communities around the United States have shown that conservation-oriented rate structures can have a positive impact on demand. Seasonal rate structures and inclining block rate structures are common in the west and southwest portions of the country, and according to recent surveys they are becoming much more widely adopted.
Staff from the Ames Water and Pollution Control Department presented background information to the Ames City Council at a workshop in August 2007. As a result of that discussion, staff was directed to look at options for rate structures that would encourage seasonal conservation.
On March 4 2008, staff presented a conceptual rate structure to the Ames City Council. The rate structure proposed a seasonal inclining block rate structure for residential and irrigation accounts, and a series of seasonal flat rates for various classes of commercial and industrial accounts. Council endorsed the concept, and asked staff to propose an option whereby large customers with a flat demand profile (meaning they use essentially the same volume of water year-round) would be exempt from the seasonal rate structure.
On March 25, staff presented Council with a new rate ordinance in draft form. The draft ordinance had combined the various commercial and industrial accounts into a single seasonal flat rate structure. The structure also included a provision that would exempt those customers who use more than 100,000 cubic feet of water per month during the winter and who have a summer peak of less than 120% of their winter average.
The purpose of the new rate structure is two-fold. First, the rate structure is intended to encourage conservation during the peak consumption season of June through September. Second, the intent is to shift the cost for the construction of additional treatment capacity to those uses of water that are driving the cost. It is important to understand that the structure is NOT intended to draw a distinction between "good" or "bad" uses, nor to designate "efficient" versus "wasteful" uses. The focus is simply on the seasonal pattern of use.