20041201Wallace Direct.pdf

Dean 1. Miller
McDEVITT & MILLER LLP
420 West Bannock Street
O. Box 2564-83701
Boise, ID 83702
Tel: [phone]
Fax: [phone]
ioe(m,mcdevitt -miller. com
Idaho Public Utilities Commission
Office of the SecretaryRECEIVED
NOV 3 0 2004
Boise, Idaho
Attorneys for Applicant
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF UNITED WATER IDAHO INC. FOR
AUTHORITY TO INCREASE ITS RATES
AND CHARGES FOR W TERSERVICE IN
THE STATE OF IDAHO
Case No. UWI - W -04-
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
DIRECT TESTIMONY OF A.T. WALLACE
Please state your name.
My name is A. T. Wallace, Ph.D. P.
What is your business address?
Department of Civil Engineering, University of Idaho, Moscow, Idaho.
What is your occupation?
I am a Professor Emeritus of Civil Engineering.
Please describe your training and experience.
I have been a Civil Engineering teacher for over 40 years, specializing in
the fields of water and wastewater engineering and construction law.
qualifications are more fully explained in the vita attached to my
testimony as Exhibit No. 13.
What is the purpose of your testimony?
I have been asked by United Water Idaho ("United" or "Company ) to
express my professional opinion on certain matters relating to the
construction of the Columbia Water Treatment Plant(CWTP).
Specifically, my testimony addresses these topics:
1. The reasonableness of the company s decision to construct a
surface water treatment plant.
2. The reasonableness of the company s decision to employ a
design-build procurement process for the project.
3. The reasonableness of the company s decision to install
membrane technology.
A. T. Wallace, Di
United Water Idaho Inc.
Turning your attention to the company s decision to construct a surface
water treatment plant, have you reviewed the direct testimony of Scott
Rhead which discusses the Company s decision to construct a surface
water treatment plant?
Yes, and I have also independently reviewed the 1998 Water System
Master Plan, prepared for United Water Company by the firm of
Montgomery-Watson and the Treasure Valley Hydrologic Project Report.
Based on your training and experience and upon your investigation and
analysis, in your professional opinion, was the company s decision to
construct a surface water treatment facility reasonable in light of the
supply options and demands for water service existing at the time the
decision was made?
Yes. I believe the analysis contained in Mr. Rhead's testimony is based on
sound engineering principles and that it fully documents the need for a
surface water treatment plant.
Did your perform your own independent analysis of this decision?
Yes. I examined the issue from the perspective of Idaho Division of
Environmental Quality (DEQ), the primary regulatory agency. DEQ
certifies a water system s capacity as adequate if it is equal to or exceeds
the design maximum day demand with the largest producing well out of
service. This standard for system adequacy is based on, a recommendation
of the Great Lakes Upper Mississippi Board of State Public Health and
Environmental Managers in their Recommended Standards for Water
A. T. Wallace, Di 2
United Water Idaho Inc.
Works (2003). This document is incorporated by reference into Idaho
Design Standards for Public Drinking Water Systems at IDPA 58.01.08
(550.01). The Recommended Standards for Water Works also referred to
as "the 10 States Standards" is generally recognized as the authoritative
standard for public water system design. In applying this criterion to the
Gowen/Columbia service level, I am told by United Water engineers that
over 10 000 services and a population of over 20 000 people are expected
to be supplied by the year 2015. Historical data indicate a maximum day
demand at that time of about 16 mgd. The existing 'exceptional' quality
groundwater available in this service level is only 13 mgd and would be
only 10.2 mgd with the Company s Pleasant Valley well out of service. In
addition, lower elevation service levels, such as Barber and East Main, are
supported from the Gowen/Columbia water supplies, which further
exacerbates this water supply deficit As discussed in Mr. Rhead'
testimony, the supply deficit of slightly under 6 mgd cannot be imported
from other service levels. After consulting with Mr. Rhead and Dr.
Christian Petrich, the primary author of the Treasure Valley Hydrologic
Project Report, it is my opinion that, although potential for developing
additional wells in this area does exist in theory, many factors militating
against much additional groundwater development also exist.
I was also very much persuaded by the arguments over non-economic
benefits presented in Section 10 of the 1998 Master Plan. The benefits
which seemed most attractive were flexibility of system operation, the
A. T. Wallace, Di 3
United Water Idaho Inc.
high degree of public acceptance, the ability to respond to changing
regulations and most significant, the reduction in the uncertainty factor
with regard to supply. While groundwater will always be a major
component of United's supply, there are always reliability issues with
wells; their screens, pumps and other hardware. In a rapidly-growing area
such as the Boise Valley, there is particular concern over the status of
recharge areas for many of the existing wells. As one small dump of a
hazardous chemical onto the ground can put a given well out of service for
many years while remedial measures are being implemented, it is my
opinion that the Company should make decisions to try to reduce reliance
on groundwater supplies to the extent possible, particularly in the South
East Boise area.
Turning your attention to the decision to employ a design-build
procurement process, what investigation and analysis did you undertake?
First let me state that I have taught a course entitled "Engineering Law and
Contracts" at the University of Idaho annually since about 1986. Design-
Build, as a method of project delivery, is covered in this course, as are
several other methods, including the "traditional" Design-Bid-Build
method. This course focused on the essentials of each method and the
advantages and disadvantages associated with each. In addition to this
general background, I was supplied with several documents from United'
staff which dealt with this particular procurement. These included the
Request For Proposal (RFP) issued in April, 2002 , the list of invited
A. T. Wallace, Di 4
United Water Idaho Inc.
proposers and about a half-dozen pieces of correspondence between
United and the successful proposer dealing with clarifications, contract
conditions and projected costs, including a guaranteed maximum price.
Based on your training and experience and upon your investigation and
analysis, in your professional opinion, was the Company s decision to
employ a design-build procurement process consistent with prudent
business practice within the water industry?
Yes, it was.
Would your please explain the basis for your opinion.
As previously stated, there are many methods of project delivery, each
with its peculiar set of advantages and disadvantages. Design-Build is a
method which has seen increasing interest from all types of owners over
the past ten years or so.
As these owners have gained experience with the method and have
shared these experiences with others by reporting their case histories in
trade and professional publications, other owners have been more willing
to use this method of project delivery in order to take advantage of its
potential benefits. Some of the advantages of the Design-Build delivery
method, which have been well-documented on many past projects
include:
The owner only needs to deal contractually with a single
organization. This is significant as it increases efficiency, saves time and
reduces potential conflict.
A. T. Wallace, Di 5
United Water Idaho Inc.
The friction and finger-pointing which often occurs in the
traditional method of project delivery (Design-Bid-Build) when things go
wrong, is normally lacking and if it does occur, more easily resolved.
The close relationship between the design team and the
construction team leads to more efficient constructability of the design
concept because of the input of construction-savvy people during design
revIews.
This same relationship results in a more harmonious project
administration, especially with regard to interpretation of drawings and
specifications, as the design team and build team have less to "prove" to
one another.
Because the two teams are part of the same organization, many of
the scheduling and cost-saving advantages of fast-tracking (another
method of project delivery) become available to the owner.
Turning your attention to the question of the use of membrane technology,
what investigation and analysis did you undertake?
I have general background related to membrane processes, both pressure
and electrically driven, which comes from teaching a graduate-level
course in W ater/W astewater Unit Operations annually from 1965-67 at
Clemson University and 1967-2000 at the University of Idaho and
Washington State University. Course presentations focused on process
principles, process design and case histories related to applications of the
five major categories of this technology. In addition, I have evaluated the
A. T. Wallace, Di 6
United Water Idaho Inc.
use of micro- and ultra-filtration in connection with three past projects, all
involving wastewater, rather than water. However, two of these involved
reclamation and reuse of secondary effluents, an application quite similar
to treatment of water for potable use.
In connection with the Columbia Water Treatment Plant, the
primary references I used were the 1998 Water Supply Master Plan, for
general background, and the January, 2002 Basis of Design Report
prepared for United by a team of engineers from the firms of
Montgomery-Watson-Harza and Carollo Engineers. This report dealt
more specifically with the application of ultra- filtration at the proposed
Columbia facility and included the results of pilot-scale studies using
Boise River water.
Based on your training and experience and upon your investigation, in
your professional opinion, was the company s decision to install
membrane technology consistent with prudent engineering judgment
within the water industry?
Yes it was.
What is the basis of your opinion?
First, I need to remark that there is nothing wrong with conventional
technology, of the type incorporated into the Company s Marden plant.
Such treatment trains have served the public well, will continue to do so
and in some cases, may still be the proper choice among competing
alternatives.
A. T. Wallace, Di 7
United Water Idaho Inc.
However, for those higher quality source waters amenable to
membrane filtration, there are distinct advantages to using it, a few of
which I would like to discuss. A significant advantage relates to Federal
(USEP A) regulations with respect to finished water quality and their
prospect offuture change. A membrane filtration plant, especially one
employing the small pore sizes associated with ultra-filtration, and also
employing chemical coagulation and solids removal as pre-treatment, can
be easily adapted to remove almost any contaminant which may become
of future concern. Also, the product water is more amenable to rigorous
disinfection without the same degree of disinfection by-product formation
that normally occurs in connection with conventional water treatment
systems. This is because of the generally higher removals of high
molecular weight organic compounds which membrane treatment is
capable of during routine operation. Further, as lower coagulant dosages
can often be used with membrane processes, the problems and costs
associated with residuals handling are often reduced.Last, there is the
evolution of the technology to consider. Membrane materials and
manufacturing methods are constantly being improved in response to a
strongly competitive market. It is quite likely that any membrane filtration
plant being constructed today will have available to it replacement
membranes which can produce more water, of higher quality, and at a
lower cost within a 5 to 10 year time frame. This statement is consistent
with the past history of membrane technology. Pilot-scale studies
A. T. Wallace, Di 8
United Water Idaho Inc.
performed prior to the selection of membrane filtration as the main
process at the Columbia plant demonstrated its feasibility convincingly.
Although the testing period was only two months, August and
September, these are likely to be the critical months of operation because
of high algal concentrations in the Boise River during this period. The
study results provide a high level of confidence that the selected design
concept will perform as expected.
Does that conclude your testimony?
Yes, it does.
A. T. Wallace, Di 9
United Water Idaho Inc.