Customer Conference Speedway, IN 46224

Transcription

1 Customer Conference Speedway, IN DigIndy and Citizens Capital Investment Plan Updates Mark C. Jacob Vice President Capital Programs & Engineering September 18, 2014

2 A Matter of Trust

3 Challenges Annually - 6 Billion gallons of sewage was flowing to the city s streams and rivers Combined Sewer Overflow (CSO) Consent Decree Aging infrastructure and expansion needs Capital investments are constantly needed Bring or keep our Water, Wastewater and Energy Utilities to an acceptable level of performance Large and diversified water system Significant septic tank elimination project (STEP) needs Future water supply

4 Citizens Energy Group Capital History $350 Capital Improvement Investments (In $ Million) $332M $300 $250 $200 $150 $100 Capital Improvements (Average number of capital projects ) $50 $30M $0 Historical Average Capex Current Average Capex Historical Average No. of Capital Projects Current Average No. of Capital Projects

5 Results & Solutions

6 Capital Investments 5-Year Capital Investment Plans ($ Million ) $1,800 $1,600 $1,400 $1,200 $1,000 $800 $600 $400 $200 $0 $1,691 Total Citizens Trust $1,113 $270 Total Citizens Trust Wastewater Wastewater Water Energy $119

7 Sanitary Sewer Rehabilitation Program Update 160, ,000 (Lineal Feet) 140, , ,000 80,000 60,000 40,000 Proactive Approach: Reduces project costs by almost 50% Greater long-term savings Improved customer service levels Increased public safety Reduced environmental impacts 75,000 20,000 10,000 - City's Traditional Annual Rehab Capex Citizens' 2013 Rehab Capex Citizens' 2014 Projected Rehab Capex

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9 Deep Rock Tunnel Connector Update

10 Deep Rock Tunnel Connector Pump Station Update DRTC Tunnel Launch Shaft 39 Diameter 18 Diameter 60 W x 100 L X 66 H DRT Pump Station: Contractor: Oscar Renda Southland JV Bid Price: $71,407, Notice To Proceed Issued: April 2, 2014 Notes: Project is $5 Million Under Budget Project is Ahead of Schedule

11 Southport Advanced Wastewater Treatment Plant Update - New screening and grit Headworks - Evaluate need for pump station upgrades Headworks DRTC Pump Station Secondary - Convert ANS tanks to reverse flow - New mixed liquor channel to convey flow to ONS - Increase ONS capacity and rehab clarifiers Secondary Treatment Primary Clarifiers - Rehab north Primary Clarifiers wet weather flow - Convert south primary clarifiers dry weather flow Disinfection Projects: 1) Headworks 2) Secondary Expansion 3) Primary Clarifiers and 4) Wet Weather (UV) Disinfection Contractor: Bowen Engineering Corporation Bid Price: $87,584, Notice To Proceed Issued: March 27, 2014 Notes: Project is $10 Million Under Budget Project is on Schedule - Add UV Disinfection for 150 MGD - Rehab existing 60 ANS effluent line

12 Eagle Creek CSO 033 Project Update Challenge: CSO 033 was a stranded CSO Green solution identified a vegetation solution rather than Interceptor construction Green solution saved approximately $16 Million over original CD plan Partnering with Keep Indianapolis Beautiful on youth and neighborhood participation Current project cost saves another $1 Million over updated budget of $2.3 Million Project is also on schedule for completion in 2014

13 Perry K Gas Conversion Update Perry K produces steam for many large customers in Downtown Indianapolis This steam utility is the second largest system in the U.S. Convert Citizens Perry K Steam Plant from coal to natural gas In 2006, Citizens invested $12 million at Perry K to comply with new air emission standards from U.S. EPA Faced with implementing a second set of air emission standards in 2014, Citizens decided to switch to natural gas - Lowered future capital costs by $15 million By July 2014, all boilers now have the ability to burn natural gas rather than coal Sustainability benefits: Provides benefits to the environment Reduces Citizens operating expenses Provides cleaner, safer working environment for our employees Not only is burning natural gas cleaner, but thanks to the growing natural gas production from shale formations, it is an affordable and stable fuel source. Carey Lykins

14 Gas System Pipeline Safety Update September 4, 2014 Dear Community Leader: Recently Citizens Energy Group participated in a first of its kind study of natural gas (methane) emissions from utility distribution systems. Utilizing the latest technology, the Environmental Defense Fund and Google Maps surveyed thousands of miles of natural gas pipelines beneath the streets of New York, Boston and Indianapolis to detect methane emissions that may be contributing to global warming. In most cases, methane emissions along pipeline systems are from tiny leaks that pose no safety threat to the public. While thousands of methane leaks were found in New York and Boston, only five leaks were found along Citizens pipeline systems. These results were not surprising to us because Citizens has invested more than $550 million in our gas system since 1984 to improve safety and reliability. As a result, more than 98 percent of our gas system is now comprised of safer steel and plastic pipe. By contrast, short-term pressures at other utilities can mean system investments are deferred. As a result, many gas utilities across the nation now face huge system investment programs over the next 10 years to meet new federal pipeline safety standards. Citizen structure as a Public Trust allows it to focus on the long-term integrity and reliability of our pipelines and other utility infrastructure. By making steady investments over the past 30 years, Citizens is now positioned to meet the new federal safety standards without sharp rate increases to pay for upgraded gas infrastructure. Citizens is now in the early stages of a decade-long effort to catch up on years of under investment in the community's water and wastewater systems, which we acquired in These investments, which will raise rates, will allow us to comply with federal mandates related to water quality and nearly eliminating sewer overflows into area streams. Like our gas system upgrades, our water and wastewater investments are in keeping with the fundamental mission of the Citizens Public Trust Improving quality of life and enhancing economic development across Indianapolis. Carey Lykins

15 Jobs Creation (Through 2025) Water / Wastewater Investments (Capital and Operations) $1.63 $2.36 Construction Operations & Maintenance $3.99 Citizens Investments Investment $ s ($ Billions) $1.97 Indirect Investments $3.64 Induced Investments $9.60 Total Investments Tax Revenues Generated from Indiana $0.35 $0.24 Total $0.59 Billion Sales/Local Taxes Federal Taxes Tax Revenues Generated Outside of Indiana $0.31 ocitizens Investment Citizens to Business Purchases oindirect Investment Business to Business Purchases oinduced Investment Workers Goods & Services Purchases (e.g. cars, college, clothing, etc.) $0.20 Sales/Local Taxes Total Tax Revenues Generated $0.44 $0.66 Sales/Local Taxes

16 Jobs Creation (Through 2025) Jobs 27,691 39,943 Jobs Indiana Jobs Rest of US Jobs 70,000 60,000 50,000 40,000 30,000 20,000 10, ,943 Indiana Jobs Notes: ojobs Created or Sustained o1 Job A job is the annual average of monthly jobs in that industry o1 Job A job can be 1 job lasting 12 months, 2 jobs lasting 6 months, or 3 jobs lasting 4 months 27,691 Outside of Indiana Jobs 67,633 Total Jobs

17 Synergies & Savings Vendor Management / Master Services Agreements / Bulk Pre- Procurement / Design-Build Tunnel Sequencing Phases I & II $70M STEP Implementation Strategies $31M Harbour Groundwater Treatment Plant $2M Citizens Customer Savings Professional Fees Guidelines $30M Fall Creek / White River Tunnels Value Engineering $20M Pleasant Run Tunnel Value Engineering $30M Lower Pogues Run Tunnel Value Engineering $20M Southport Expansion Value Engineering $26M

18 Strategies for Long Term Success Peer City Collaboration Share our experiences with other cities so that they also create a learning culture, visit their programs, ask questions, learn from the successes and mistakes, attend conference; continue that process. Failsafe the implementation and performance of the Consent Decree to find optimum balance between cost and performance ( float, over perform, etc). Evaluate truly innovative and nationally unique ideas on tunnel sequencing that might reduce costs another 10% ($100 M +/-). Incorporate sustainability concepts that truly recognizes environmental benefits, while reducing operational costs (less pumping, less infrastructure, more green,?). Create a Partnership for Excellence and Learning with partners such as Purdue, IUPUI, Rose-Hulman. Implement these programs in a way that saves money, creates more environmental benefit, while spurring economic desires to be in Indianapolis area; remain competitive with other CSO and Non-CSO Communities. Constantly challenge our costs

19 For Citizens Customers Quality of Life in our Communities Safe Reliable Services Low Rates and Sound Financial Management Build and Renew the Trust Good Stewards of the Environment

20 Thank You DISCUSSION / QUESTIONS?