Bureau's uncertain future waters down commissioner's efforts

by: TRIBUNE FILE PHOTO - Commissioner Nick Fish says Portlands water from the Bull Run Watershed is the best in the country. But some suburban customers are moving to the Willamette River.City Commissioner Nick Fish wants to assure the Water Bureau’s suburban customers that the agency is under new management. Since being assigned the bureau by Mayor Charlie Hales last July, Fish has worked hard to prove he is focused on delivering basic services at the least possible cost.

Fish especially wants districts in Washington County that buy water from Portland to get his message. Several of them are working on plans to reduce their purchases. They include Tualatin Valley Water District and the cities of Beaverton, Tualatin and Tigard, which are looking at the Willamette River as a new water source.

“Portland’s water system is the envy of the country. It doesn’t make sense for them to spend the time and money to create a new source of water,” Fish says.

But Fish fears his message isn’t getting through because of the measure aimed for the May primary election ballot that would create an independently run water and sewer district. Supporters turned in initiative petitions to create the district with 50,213 signatures on Jan. 21.

Only 29,786 valid Portland voter signatures are needed to qualify the measure for the ballot. Fish thinks it will be tied up in the courts for years if it passes, raising questions about who is in charge of the city’s water system.

“The proposed district creates uncertainty and nobody likes uncertainty,” Fish says.

Water needs are growing

Fish is right — but it isn’t just the uncertainty created by the proposed district that prompted the wholesale customers to look for other water sources. The search has been on for many years, driven by the need to meet the needs of Washington County’s growing population and businesses.

The Hillsboro Water Commission has conducted a study that shows it is cheaper to tap the Willamette than buy water from Portland, in large part because of the cost of building a new pipeline through Beaverton. The TVWD has verified the finding and is partnering with Hillsboro to design a water treatment plant along the Willamette in Wilsonville and a new pipeline though Washington County. Beaverton, Tigard and Tualatin have each committed $100,000 to the design phase, guaranteeing the option of becoming partners at a later date.

Tigard also is working with Lake Oswego to purchase some of its water instead of more from Portland.

All of which is potentially bad news for Portland water ratepayers. Fish is hoping to find more customers for the city’s water to spread out future construction costs and hold down rate increases. Instead, sales to wholesale customers are likely to decline in coming years.

For example, TVWD expects its purchases of water from Portland will drop from 13 million gallons a day to just 2 million or 3 million when the project is complete.

“The future of the Water Bureau is in finding more customers,” Fish says.

Targeting wholesale customers

Portland has contracts to provide water to 20 cities, water districts and private water companies in the region. Portland routinely provides wholesale service to 360,000 people, with the potential to serve 440,000. Annual wholesale water sales account for approximately 10 to 15 percent of annual water sales and 40 percent of annual water demand.

Fish has made numerous efforts to reach out to the wholesale customers since being assigned the Water Bureau, according to his staff. Among other things, Fish has attended meetings of the Regional Water Providers Consortium, which includes most of them — a change from the previous administration. And he has spoken to Tigard Mayor John Cook about the advantage of continuing to buy water from Portland.

But plans in Washington County are well underway.

Most water providers in Washington County get their water from the Tualatin River and Portland. But the population of the county is expected to increase 75 percent by 2050, causing water demand to double. Because of that, Hillsboro began leading a study of possible future water sources and their potential costs several years ago.

The original idea was to raise Scoggins Dam on the Tualatin River 40 feet to create more capacity at Hagg Lake. But a seismic study revealed that a predicted Cascadia Subduction Zone earthquake could damage or even destroy the dam, threatening the major water supply for much of the county. The U.S. Bureau of Reclamation, which owns the dam, is studying ways to reinforce the structure. No plan or budget has been approved for the project.

After that discovery, Hillsboro studied four other water sources. They included buying more water from Portland, tapping the Willamette River near Wilsonville or Newberg, and building wells and a pipeline to use groundwater supplies near Scappoose.

The study concluded that building a water treatment plant near Wilsonville was the least expensive option at $870 million. A plant near Newberg would cost $995 million. Buying more water from Portland would cost $1.1 billion, in part because a new treatment plant would have to be built to meet the needs of industrial customers. The groundwater wells cost even more, at $1.4 billion.

Awkward position

Hillsboro designated the Willamette near Wilsonville as the preferred alternative for a new water source in September 2012. The TVWD board made the same decision in August. An agreement to build the project together and split the costs was then negotiated. TVWD will pay more than half because of its larger service area. The costs for Beaverton, Tualatin and Tigard to partner on the project have yet to be determined.

Both Hillsboro and TVWD will raise rates in coming years to cover the costs. The increases are projected at around 7 to 8 percent, including other operating and maintenance costs. Fish thinks something could have been worked out with Portland to keep the rate increases lower. But he is in an awkward position because he cannot guarantee who will be running the Water Bureau after the May election — the council or a new district board.

A lawsuit to determine how the district will function could drag the uncertainty out for years. And even if the measure fails, another one has been filed for the November ballot. It would designate Portland’s water system as a People’s Water Trust. No independent legal analysis of that measure has been done.