With over 1.5 million customers, Denver Water is the largest water utility provider in the Rocky Mountain region. No small supplier themselves, the City of Aurora services over 400,000 people adjacent to Denver. When the two entities envisioned a joint venture—called the Water Infrastructure Supply Efficiency project, or WISE—they embarked on a project that would combine their wastewater return flow, 34 miles of raw water conveyance and pumping, and a new advanced treatment facility.
To be feasible, the project had to provide a clear economic benefit over the region’s other supply alternatives. Our team developed a cost-sharing model that integrated issues of capacity surpluses and constraints, firm versus interruptible demands, and multiple layers of asset ownership into a single unit charge for the water.
By contextualizing these issues into an economic framework, we demonstrated that the wholesale rate for the suburbs would not only alleviate significant up-front investments, but would also produce the lowest present value option among the other alternatives.
On one hand, WISE allowed the partners to sell water to Denver’s southern suburbs. On the other hand, Denver’s existing 1.5 million customers now had a viable way to retrieve the city’s wastewater return flows during droughts. With this partnership—and the $650 million pipeline project supporting it—the water utility landscape of entire region was much improved.