EWEB thinks big, moves to secure 1886 water right

Presenter Commissioner John Barofsky urges the EWEB board to think big, and they respond with unanimous approval for a 30 million-gallon-per-day treatment plant on the Willamette. At the July 7 board meeting, EWEB CEO John Hairston:

John Hairston (EWEB, CEO) This is likely the largest investment the water utility will be making in its history.

Presenter Commissioner John Barofsky: 

John Barofsky (EWEB, commissioner) I would really like this board to really consider thinking big and thinking long-term, because if we step up and do it the right way, when we do have the opportunity, because Hayden Bridge is from what has been represented to us, is going to need to go offline—and not for a week. 

It’s going to need to go offline for the six months that we can do it. A couple of the other reasons that I’m leaning into that is, one, the people that are sitting at the table, specifically Laura (Farthing), and her ability to bring in projects at or below cost in this construction cycle that we’ve had. 

We’ve seen her do that at College Hill and at East 40th. So we’ve got a really good project manager who has brought in big projects at or below cost. When you find good people that can do the job, strike while the iron is hot.

Presenter Commissioner John Brown:

John Brown (EWEB, commissioner) I want to give credence to what he said.

I think we’re going to become a regional water supplier whether we want to or not. You look for Cottage Grove, Creswell, Junction City, Coburg, Veneta, where do they get their water? It’s all groundwater. A lot of it’s challenged and they don’t have the resources that we have from the major rivers and the glacial-fed resources. 

And so we become a regional water supplier. That’s going to be critical. It’s going to be a significant rate impact, and we’re going to have to deal with it. 

But you’re absolutely right, the economy of scale is to build it out and bite the bullet, because where else are these bedroom communities going to get their water? The supply isn’t going to increase. It’s decreasing, the groundwater supply is decreasing, and it’s going to be surface water. And that’s the one thing that we have.

Presenter Chief Operations Officer Karen Kelley:

Karen Kelley (EWEB, COO) Just to start off, want to remind folks that Eugene’s drinking water does face significant risks. These are not hypothetical risks. They are events that have already occurred. 

Hazardous spills in the McKenzie River. I think we had three in the last month. Wildfire in the watershed. An ice storm that came close to taking Hayden Bridge treatment plant offline. And in each case, the system held. But each event exposed the vulnerability of relying on a single source. 

Redundancy serves two purposes. It allows the utility to take our treatment plant offline for maintenance without disrupting service, and it protects the community from extended emergency outages that can be devastating to public health and our economy. 

National data scaled to Lane County suggests a one-day outage could incur an economic loss of between $29 (million) and $57 million. In addition, an extended outage could also trigger reactive regulatory mandates that would be far more costly than proactively and planfully addressing the vulnerability. 

EWEB has been contemplating adding a second source for decades—literally six decades—and it is a best practice for water systems of our size. Because of the size and complexity of the project, many boards have wrestled with making an investment of this size, and the rate pressures have been a recurring factor. We’re well aware of that. 

At the same time, this board—thank you for this—you have made some deliberate strategic investments in water infrastructure, resiliency, in particular transmission upgrades, water storage, and the seven emergency water stations that we have throughout town that’s capable of providing one to two gallons per person per day of emergency non-potable water. 

These are excellent investments. Again, we are grateful for those, but they were not standalone efforts. They were built in preparation for the next pillar of resiliency, which is our water treatment. 

We did receive direction at that October work session, and that direction was to reassess the 2017 preliminary design in the context of today’s risks. In addition, develop alternatives for three different capacities that would provide different levels of service to our community. Those were 10 million gallons a day, 19.4 and 30 million gallons a day. 

Next, we were asked to estimate the cost of remaining a single source. And last but not least, to continue advancing the permitting and land use approvals.

By 2020, the estimated cost of the 2017 plan had risen from $70 million to $90 million, and by 2025, the same plant carried an estimated cost of $160 million, more than double the 2017 estimate. 

The primary drivers for that escalation were COVID supply chain disruptions and broader inflationary pressures that drove up construction costs across the utility industry. 

Now we’re in 2026, and the risk landscape has evolved significantly since the 2017 design was completed. Events of the past several years have made clear that a second source is not just an earthquake preparedness measure. The 2020 Holiday Farm Fire and the 2024 ice storm both came close to causing citywide water outages. These are the kind of weather- and climate-driven events that we can expect more frequently with climate change. 

At the same time, Hayden Bridge is aging. Key treatment processes are approaching the end of their useful life. Taking the plant off for inspection, maintenance, and eventual upgrades will be an operational necessity by 2040. That requires a second source with enough capacity to carry the system while the plant is offline. 

This factor was discussed with the board last October. It is a newer and more immediate driver of this project than it was in 2017.

And then we have a factor unlike any other, which is our water rights. EWEB holds water rights on the Willamette River, along with a permit that must be put to beneficial use by 2033 or risk forfeiture. Water rights are among the most valuable commodities in the world. 

If we pass the deadline for putting water rights to beneficial use under our current permit, they could be subject to additional conditions and restrictions moving forward. We continue to see that play out in the legislative process. 

Permitting construction and commissioning of a treatment plant takes about nine years from start to finish. EWEB has already begun that process, and the current trajectory puts full commissioning in 2032. So the window for decision-making is narrowing and we have very little margin for further delay.

With me tonight is Laura Farthing. She’s our principal engineer in the water utility and also the project manager for the Willamette treatment plant.

Presenter: Laura Farthing:

Laura Farthing (EWEB, Willamette): The raw water intake and the transmission pipeline are being designed to provide 30 million gallons a day. They’re hard-to-complete projects, so it’s better to do that to the full build-out now. 

And then the treatment plant will have a varying capacity. So you’ve heard us talk about 10 million gallons a day, 19.4 (MGD), and 30 MGD. But what does that really mean in real world? 30 MGD corresponds with our projected average day demand. 

That capacity would allow us to take Hayden Bridge off for extended periods from about October until the end of April. Really depends on the weather and when demand start ramping up. 

So the first step we did is we did hire a consultant after we met with you in October, and we went through the 2017 treatment plant. We started with that to validate the cost that we brought to you. What we found was that was really an initial build plant with a limited capacity. So as Karen had mentioned, it had been value-engineered to meet the budget target of 2017. 

What that means is that it had full water treatment capacity that would match Hayden Bridge’s finished water quality, plus meet our customer expectations—to 2.5 million gallons a day.

That plant would then be able to be ramped up to 10 million gallons a day in the event of a catastrophic event, like an earthquake. What you didn’t have was solids handling. So it had solids handling up to that 2.5 million gallons a day.

But the assumption was when you had to ramp up to 10, that there would be opportunities to either pump and haul your solids, or that you would be able to overflow directly to the river, which would likely be a permit violation. However, you know, in a regional event when you need the water, that would likely be forgiven.

So we did validate those costs. They are $160 million. And this is the treatment plant that all previous cost estimates have been based on. But as we mentioned, with the new risk of Hayden Bridge continuing to age and needing to take that offline, we need to take that offline during the winter time. 

So the Willamette and the McKenzie River have very similar composition on an everyday kind of water flowing basis. But during storm events, the Willamette does have greater swings in organic material and higher turbidity, which means that we need more treatment to handle the things that the river could bring at us. 

That 2017 plant didn’t include ozone to a capacity that would allow us to treat for taste and odor in the wintertime or meet our customer expectations. And we needed additional solids handling. 

So I said that was undersized. So what we did is we looked at what would happen if we look at those three capacities and bring all of that treatment back so that we can provide high quality water to meet customer expectations throughout the entire year, including the winter time. 

And so really, why we’re recommending 19.4. Why now? So it is cheapest to build this out to a capacity that we need rather than phasing it. Phasing can add up to 50% these projects. So with phasing, we actually don’t have enough time that we could effectively phase it and have Hayden Bridge offline by 2040. 

And as Karen mentioned, we have secured permits for this. Those permits start to expire in 2032. The process to get those is long and it’s complicated. We have learned that there are certain parts of the permits that if the extension process requires us to reapply, meaning that we would have to go through the environmental rules of whatever the rules are at the time that they expire. 

So 2032 and then the water rights, we really can’t emphasize those enough. We have the fifth-oldest water rights on the Willamette River. They are priceless. And we should be putting them to use.

It has taken over two years to get through all of the environmental studies. And the reviews are, the DSL state permit has been issued. We have, our Army Corps permits have been conditionally approved based on the Department of Environmental Quality approving the 401 certification, which is dependent on land use. 

So we have been running through the land use process concurrently with this. We are almost through the development code and refinement plan amendments that were required in order to make our lot buildable. 

The City Council has taken action and approved it, and the county is taking action tomorrow to vote on our amendments. And then we’re currently working on the process to get through the next steps, and we anticipate that we’ll have approval for those before the end of the year. 

So we’ll have our permits in hand, ready to go to construction.

Presenter Commissioner John Brown:

John Brown (EWEB, commissioner) We don’t have water rights for Option 4, correct? So we would be building a plant that we don’t have a right to take—we can’t use that capacity until we get a water right. If we don’t get the water right, then we have built capacity that we can’t use. Correct? (That is correct.)

Presenter Commissioner Sonya Carlson:

Sonya Carlson (EWEB, commissioner) Well, I was here when we made the decision in 2017 to hold off. And over the last year or so, as we’ve looked at the costs escalate—a few years, we’ve looked at the costs escalate. It has been one of the greatest regrets of my time on the board that we held off on that. 

However, I appreciate your presentation tonight because it actually enlightened me a little bit more about what was presented that night versus what’s possible. And I think that this is a better plan. So I do appreciate having the option to look at the 19.4 that fully utilizes our water rights. 

I think we would have been in a situation—if we had voted on that then— of: How do we perfect the rest of our water rights? That to me is absolutely critical. We need to perfect our water rights and secure those. So I’m very comfortable supporting the 19.4 with all the reservations. 

That is a lot of money. It’s going to put great strain on our community, which I will never do lightly. And that’s part of the reason why we held off in 2017, because we were trying to partner with our other community partners to see if we could get a combined treatment plant, and at the same time make sure that we had some resiliency if the Cascadia Subduction Zone earthquake happened during that timeline, while we were trying to create a better partnership.

It’s clear to me that that is not possible, and we need to do what we need to do for our citizens that we serve and our customers that we serve.

Presenter Commissioner John Barofsky:

John Barofsky (EWEB, commissioner)  I would like you guys to consider Option 4, which is the 30-million-gallon one. And the reason that I want to consider that is for a couple of things that were brought up in the presentation. 

One was that back in 2009, it got put off because of rate pressure. It was at $120 million in 2009, and we put it off because of rate pressure. The other thing Laura brought up, the fact that phasing adds 50% to the cost of of doing it. 

So if we if that were the case, the extra $55 million that is proposed there would jump to $110 million if we phased it. The fact that we couldn’t take Hayden Bridge offline for a extended period of time gives me pause. 

Again, I am totally down with where we’re at, with our rate pressures. It might be an extra dollar a month, perhaps. I’m not sure. We’ll find out what those numbers are. But again, we still don’t lose our water rates at 19.4 million gallons. 

Those are there because we’re going to be building that thing and saying we’re going to take 19.4, and we’re going to do everything we can to get the extra 11 million gallons. 

There’s an opportunity at the federal level with stored water, right? We’ve got stored water right up above our intake at Dexter and Lookout Dam that aren’t counted as water rights that are available at this point.

But there has been an ongoing conversation about who can access that stored water that is only 15 miles up from where we’re at, and there’s billions of gallons of water between Lookout and Dexter reservoirs. 

So I believe that there is a path forward to the 30 million gallons, and I think it’s prudent for us to do it.

Presenter Commissioner John Brown:

John Brown (EWEB, commissioner) We have six reservoirs above our intake on the Willamette, including Hills Creek. But anyhow, there’s six up there and there’s billions of gallons of water that aren’t counted in this. 

And you look what’s going on right now. Junction City’s got a building moratorium because they can’t. Their effluent system is down and their body level is too high. Creswell’s got a moratorium. They can’t because of the Coast Fork. 

And so that’s coming to all these communities that discharge into these smaller streams and things. And so I still think we’re going to be a regional water supplier. I mean, I don’t know what it is, but look what we do for Veneta. 

You know, we give them 400,000 gallons a day, I think, isn’t it, plus or minus. And they love it. They built the water line and everything else, and we make money on it, because that’s why Medford’s rates are lower than everybody else’s. They’re a regional water supplier. 

And it’s a fixed-rate commodity that costs the same to deliver 15 million gallons a day as it does 25, minus five dollars worth of chemicals, a little bit of pumping. 

So I’m going to support the motion and know that we can pare it back if we have to. I know that the preliminary rate adjustments I’ve seen said we’re going to go to $85 from $40, to $85 without a second source and from $85 to $104 with the second source at 19.4. 

And so it’s not incremental money, but go look at that rate chart. Look what you pay for water in Coburg right now. You pay over $100 a month. Same thing with Creswell. And it’s going to happen all around. It’s going to get only worse, in my opinion.

Presenter The EWEB board thinks big and approves a 30 million-gallon-per-day water treatment plant, which will perfect the fifth-oldest water rights on the Willamette.