Categories: Utility optimization
Drivers: The City of Fort Worth, Texas, issued a Request for Information (RFI) to explore options for optimizing utility operations, decreasing costs for ratepayers, and improving the level of service. The RFI gave respondents broad latitude to propose a range of partnership options including a full system lease, P3 for construction of new assets, or contract operations on all or a portion of the system. Over $750 million of CIP was planned over the subsequent five years and rate increases were expected to pay for the costs of infrastructure investment, rising raw water costs, and regulatory mandates.
Partnership Analysis: Table Rock and its partners proposed a comprehensive partnership approach with substantial benefits to the utility and ratepayers. The proposed solution fully funded the 5-year CIP in the amount of $720 million, produced a $50 million upfront payment, and an annual payment of $50 million over 30 years. This would have required annual 4%-6% rate increases over 5 years. The team proposed to provide a performance guarantee covering upgrades and operations of the utilities with compensation only if a defined set of Key Performance Indicators were met. The analysis showed clear potential to optimize operations, increase financing capacity for capital projects, and decrease costs for ratepayers.