12.11.07

M.U.D. necessities
Omaha World-Herald editorial

Omaha is a city with a past, a past that is catching up to it in an expensive way. Residents face new but necessary costs in helping to pay for it.

The specific situation is this: More than a hundred years ago, cast-iron natural gas and water mains were the norm to provide service to customers. Those mains, many still in use, are sadly outdated — though, according to Metropolitan Utilities District officials, they remain safe.

The federal government is telling M.U.D. to replace the outdated water infrastructure, and gas is likely to be added to the mandate soon. Good sense is telling M.U.D. and its board of directors to get the work done while the City of Omaha is tearing up the streets anyway for its $1.5 billion sewer replacement project, also mandated by federal officials.

Coordinating utility work with the sewer project offers benefits to the community — cost, for one. Then, too, the streets would be torn up only once for both projects, meaning less disruption for residents. The utility also intends to install electronic meter reading devices as it goes, at no direct cost to residents.

The unfortunate side of the equation is the tremendous potential cost. In the short term, M.U.D. officials decided to impose an infrastructure replacement charge of $24 a year for residential customers. For an average water user, the total increase in water rates would be about $33.45 a year, including the 5 percent increase needed to pay for the Platte West water treatment plant.

Regarding natural gas, the utility will raise its rates by $3 a month for residential ratepayers. The board will collect $12.2 million for gas mains and $6.5 million for water mains so replacement can begin in 2008.

M.U.D. officials expect to have to replace all 580 miles of cast iron gas mains in the city, at the cost of about $1 million a mile. Some, but not all, of 1,280 miles of water mains will need replacement, also at $1 million a mile, officials said.

The M.U.D. board in the past set aside money in advance for the Platte West plant, a wise strategy to balance costs and keep rates stable. That didn’t happen in this instance, though the utility has known about the upcoming gas and water main projects for some time.

Utility President Tom Wurtz said that would have been difficult in the case of the gas and water main work, due to the additional charge already being collected for the water plant as well as the already high price of natural gas in recent years.

The increase in gas and water utility bills for the work doesn’t seem onerous for most Omahans, although there is no doubt that $24 more for water or $36 more for gas next year will pinch some low- and fixed-income residents.

At the same time, the utility and its board members have long worked hard to find help for low-income customers. Given the enormous cost of this project, M.U.D. will need to continue to explore options in minimizing the burden on customers of modest means.

The infrastructure fees regrettably stand as one more financial obligation placed on Omaha residents, but this project is necessary. The approach taken by M.U.D. is probably the best to be expected.

Gas and water mains in Omaha will require major work.

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