EWEB scales back Willamette treatment plant proposal

The Eugene Water and Electric Board of Commissioners is backing a smaller water treatment plant on the Willamette River over a larger proposal expected to cost nearly $500 million.

The board Tuesday, Aug. 4, decided to pursue a treatment plant with capacity to treat 19.4 million gallons per day (MGD), projected to cost $431 million. It passed over an earlier, favored proposal for a $498 million plant producing 30 MGD, the utility’s projected average daily demand, after updated cost estimates raised eyebrows.

“What we found is that both plants will create a (financial) strain on the water utility, but the 30 MGD plant strains them more,” said John Hairston, EWEB’s CEO and general manager, adding, “The larger the project, the greater the borrowing required.”

A preliminary financial model based on the 19.4 MGD plant projects a 19.75% annual increase in the utility’s revenue requirement — how much EWEB needs to collect from customers per year to cover costs — in each of the next three years, before declining in later years. 

The utility has not yet determined how those costs will be divided among customers, but Deborah Hart, chief financial officer of EWEB, said the utility wants to bring a proposal that would increase rates at a level “as low as practical” by the October board meeting, where staff will return with refined financing scenarios.

“We know that every dollar of investment eventually shows up on our customer bills, and we must consider the community’s realistic ability to afford what we’re asking them to pay,” Hairston said.

The Eugene Water & Electric Board is one of the largest utilities in the region relying on a single source, the McKenzie River, for its drinking water. 

The utility says a second water source is needed to reduce the risk of impacts from disruptions, such as wildfires, severe weather or hazardous spills. EWEB’s only drinking water treatment plant, the Hayden Bridge Filtration Plant, is 76 years old, and leaders say it will need to be taken offline by 2040. 

EWEB plans to build the new treatment plant off McVay Highway in Glenwood. Later in the meeting, the utility’s board directed staff to begin the procurement process for a CMGC, a construction manager/general contractor, to be brought in during the design phase. 

EWEB staff will return “early next year” with a proposed contract, said chief water operations officer Karen Kelley. The board will vote in late 2027 or early 2028 whether to approve the guaranteed maximum price for the project before construction starts. The plant is projected to be fully commissioned in 2032, Kelley said in early July. 

EWEB kept water rates flat for five years between 2017 and 2021, but the scale of the treatment plant investment now requires additional revenue, leaders said. The combined residential electric and water bill increase for an average residential customer — someone using 9,000 gallons of water and 1,600 kilowatt hours of electricity — is projected to be about 6.2% in 2027. 

EWEB commissioners who previously expressed support for a 30 MGD plant said the updated financial analysis changed their minds, and voiced support for the 19.4 MGD option, which would reduce the treatment plant’s projected cost by about $67 million. 

Cost estimates for both proposals increased since the board last reviewed its options.

Some commissioners noted that EWEB already has water rights for 19.4 MGD, but would have needed to obtain additional rights for the 30 MGD option. The larger facility remains “EWEB’s long-term buildout goal” for the future, according to a utility news release.

“The 30-million gallon was an option that presented itself as something that long term would have been good,” said Commissioner John Barofsky. “I think now that we’ve seen more of the actual financial impacts and some of the other information that we’ve gotten, I also agree that 19.4 is probably the direction that we should go.”

The Willamette water treatment plant accounts for roughly two-thirds of EWEB’s 10-year capital improvement plan budget for the water utility. The plan includes $36 million in projects that are deferred three to five years, including two river-crossing pipeline projects, upper-level reservoir replacements, Hayden Bridge transmission main replacements and Hayden Bridge filter rehabilitation.

Commissioner John Brown said the utility will need to do some “heavy lifting” to rally support behind the treatment plant project.

“This is going to affect every one of us,” he said. “No matter whether it’s option one or option two, it’s going to hurt. People are not going to water lawns. Consumption is going to go down.”

Correction: An earlier version of this story included a quote that should have been attributed to Commissioner John Brown but was mistakenly attributed to CEO and General Manager John Hairston.