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Published Sunday, November 16, 2008 in Local

Saving water costing Coweta

By Sarah Fay Campbell

The Times-Herald

Conserving water is a good thing. No doubt about it.

But it sure can hurt a water system's bottom line.

The Coweta County Water and Sewerage Authority has been told to expect a 25 percent rate increase on the water it buys from Griffin, because of decreased water use.

Under a contract signed in 1999, Coweta is obligated to buy a certain amount of water from Griffin each day. That amount increases each year through 2025. General Manager Ellis Cadenhead was recently informed that a major rate increase would be coming. Griffin must submit an itemized list outlining the justification for the following year's rate by Dec. 1.

Under the contract, Coweta pays Griffin its actual cost for producing the water, including operation of its system, debt service on the reservoir, payroll and the like, plus a 20 percent markup.

Griffin, like Coweta and Newnan, was mandated to cut its water use by 10 percent because of the drought. The Georgia Environmental Protection Division put out that mandate last spring in an effort to cope with a historic drought. The EPD also imposed severe water restrictions on water systems throughout north Georgia.

But the 10 percent mandate and the water restrictions weren't based on whether or not a particular system had a water shortage.

And none of the three did.

So far, Cadenhead said, the authority has lost about $80 million worth of water sales because of the watering restrictions.

In essence, systems that have plenty of water are being punished because Atlanta and other north-metro counties were facing the possibility of running out of water.

When the EPD announced a few months ago that it would consider relaxing water restrictions for systems that don't depend on Lake Lanier, "we were the first county to file," Cadenhead said. "We had ours up there on the desk waiting for them."

The Coweta system is self-sufficient -- it receives no funding other than the bills that customers pay.

Though water usage is down, the cost to produce water has gone up. In the past year, the cost of treatment chemicals has skyrocketed. Alum is up 50 percent over last year, Cadenhead said. Lime is up 10.5 percent, potassium permanganate is up 24.5 percent, salt -- which is used to make chlorine -- is up 25.6 percent, and phosphate is up 60 percent.

In addition, many of the costs to run a water system are fixed and don't depend on the number of gallons sold.

The authority has tried to cut costs as much as possible, Cadenhead said. "We're always looking at different ways to conserve," he said.

The authority has worked very hard to replace faulty pipes and reduce the amount of water lost to leaks. That has certainly reduced costs. "Had we not done that, we would be in the red," Cadenhead said.

But the reduction in water usage doesn't translate into smaller work crews or fewer people in the billing department.

When authority members were first informed about the proposed increase, they asked if the authority could somehow reduce the amount of water it buys from Griffin.

The 50-year contract lays out exact daily amounts that are required. In a few years, both Coweta and Griffin will have to make infrastructure upgrades to allow the required amount of water to flow.

On Nov. 5, Cadenhead sent a letter to Griffin offering a possible solution.

In the letter, Cadenhead said that Griffin could save $9 million by not having to do the upgrades. Coweta would agree to purchase 3 million gallons per day of "permanent water capacity" at $1.25 per gallon, and the county would agree to purchase a minimum of 2 MGD for the duration of the contract, thereby saving Griffin $9 million and paying $3.75 million.

Griffin said no to the agreement.

In a letter dated Nov. 13, Public Works and Utilities Director Brant Keller said that the management team reviewed the county's proposal but that, after careful consideration, they decided that "the existing contract best serves the regional water system for the long-term goals and objectives in the region."

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