EPCOR Utilities investing $600M in Arizona water infrastructure in next 10 years

EPCOR, the largest private, regulated water company in Arizona, plans to invest $600 million in state water infrastructure over the next 10 years.

“A big part of our capital has been towards growth, but in the regular year we probably spend about $45 to $50 million a year just on maintenance and upgrades — aging systems, all that kind of stuff,” said Joe Gysel, president and CEO of EPCOR.

The Canadian utility and infrastructure company has invested more than $741 million in Arizona since 2011. EPCOR serves about 360,000 customers in Arizona and is one of the largest utilities in the southwestern U.S., also serving customers in New Mexico and Texas.

Gysel said system improvements are often the most important aspects of water infrastructure spending, because despite being “out of sight, out of mind,” the underlying system is what keeps the water running day to day.

“Water utilities — water and wastewater infrastructure — kind of lies beneath,” Gysel said. “The only time you think about it is when it’s broken, or not working, or you have a major flood or line break.”

Gysel said EPCOR primarily spends its capital in two ways. First, maintenance can include new water mains, enhanced water treatment and other improvements, allowing existing systems to continue delivering safe, reliable water service, he said. Second, growth capital builds new infrastructure and treatment plants to serve a growing population.

EPCOR recently constructed Luke 303, a water reclamation and wastewater treatment facility along the Loop 303 freeway near Luke Air Force Base in the West Valley.

“A lot of it is farm fields, but that will all start to convert to rooftops, businesses, commercial-industrial projects,” Gysel said. “That whole franchise is probably going to be about $95 million by the time we’re built out. Next year, we’re planning another $15 million of infrastructure to build more collection systems, wastewater trunk lines, and expand the plant again as it starts to build up its capacity.”

EPCOR is now planning a large interconnection, or trunk line, from central Phoenix to Paradise Valley to serve new developments such as the Ritz-Carlton mixed-use residential and hotel site near Scottsdale Road and Lincoln Drive.

Gysel said the project is expected to cost about $7 million, and construction will begin after Memorial Day weekend to avoid interrupting tourist season for the nearby resorts.

“We are partnering with the City of Phoenix on that,” Gysel said. “They have excess capacity in their 24th Street Water [Treatment] Plant, and… we will wheel our CAP (Central Arizona Project) water allocation off the canal through their plant, they’ll treat it for us, and then we’ll ship it through our pipe to Paradise Valley.”

Gysel said EPCOR and its partners do a lot of community outreach to inform the public about new projects.

“You’ll see that if you drive by where we’re building in the community,” he said. “We like to put up billboards or signage to explain what’s happening, how long you’re going to be inconvenienced — like a road closure or something of that nature — and why it’s being done.”

He said EPCOR holds “open houses” for community feedback; Paradise Valley residents and businesses had an opportunity to contribute feedback on the best time for EPCOR to tear up Lincoln Drive.

“In that stretch there’s a lot of resorts, and you don’t want to be ripping up the major thoroughfares in high tourist season, because that’ll negatively impact them,” Gysel said. “The amount of people visiting post-May long weekend starts to drop dramatically, and their hotel business starts to fall off. We’re not inconveniencing them, we’re not hurting their business, and we’ll get in and get done before the fall arrives.”

EPCOR is regulated by the Arizona Corporation Commission, which requires utility companies to hold town hall meetings to explain project budgets, rate changes and other pertinent information related to new development, Gysel said.

He said water efficiency is a top priority, because “we’re in a drought in a water-scarce state,” and many municipal utilities across the nation have water losses as high as 25 to 30 percent.

“If I’m losing 25 to 30 percent of the water into the ground, that’s a waste,” he said. “Also, with decaying infrastructure, you can have complaints on taste, odor and quality of water… of course, the quality of water — that’s our whole brand.”

The public trusts utilities to bring them clean water free of lead, nitrates and other contaminants, Gysel said. The better the infrastructure, the lower the probability that contaminants get into the system.

“The other part is just pure efficiency,” he said. “We have high-efficiency motors on our pumps, so those motors — not only are they more efficient, but we also link them with SCADA to dispatch them at the optimal time… so we can optimize the operations through new technologies and equipment that we put into our plants to drive down costs.”

Gysel said it was “very important” that the Drought Contingency Plan (DCP) passed in April. He said he did not think people realized how important it was.

“But, you know, it’s a stop-gap to protect Lake Mead, and now we’ve got to get on with the other part of it, which is water conservation, enhanced resources,” he said. “There’s more people coming here, there’s more water required, and we’ve got to make sure we get the best value for that water.”

Graham Bosch

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