Economic Analysis of Appomattox River Water Authority’s 10-Year Capital Planning Program
Hazen and Sawyer conducted engineering peer reviews and economic and financial analyses of Appomattox River Water Authority’s (ARWA) 10-Year Capital Planning Program (CPP) that will prioritize the Authority’s new infrastructure and replacement investments required to maintain a high level of service and comply with all regulatory requirements.
Hazen and Sawyer’s key tasks were to: (1) Develop and run a financial model for evaluating the 10-year CPP; (2) Identify “equitable and reasonable” principles for allocating CPP capital and O&M costs among the five shareholder jurisdictions and estimate wholesale price impacts to each of those jurisdictions; and (3) Evaluate alternative financing methods including establishing of a reserve fund to determine impact on wholesale water rates over the planning period.
Alan Karnovitz serves as Group Leader for Hazen’s Economic and Financial Services Group.
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Project Outcomes and Benefits
- Our financial evaluation allowed the Authority to fully consider the financial impacts of a broad array of CPP project configurations and alternative cost allocation methods to better optimize its decision process.
- Financial evaluation, based on recommendations of the engineering study, determined that the Authority would be better served by deferring the addition of a new transmission line for at least 10 years, reducing the net present value of debt service cost by about $3.5 million over the CPP planning period.
