Economic costs of conventional surface-water treatment: A case study of the Mcallen northwest facility

Conventional water treatment facilities are the norm for producing potable water for U.S. metropolitan areas. Rapidly-growing urban populations, competing demands for water, imperfect water markets, and uncertainty of future water supplies contribute to high interests in alternative sources of potable water for many U.S. municipalities. In situations where multiple supply alternatives exist, properly analyzing which alternative is the most-economically efficient over the course of its useful life requires a sound economic and financial analysis of each alternative using consistent methodology. This thesis discusses such methodology and provides an assessment of the life-cycle costs of conventional water treatment using actual data from an operating surface-water treatment facility located in McAllen, Texas: the McAllen Northwest facility. This facility has a maximum-designed operating capacity of 8.25 million gallons per day (mgd), but due to required shutdown time and other limitations, it is currently operating at 78% of the designed capacity (6.44 mgd). The economic and financial life-cycle costs associated with constructing and operating the McAllen Northwest facility are analyzed using a newly-developed Excel 2 spreadsheet model, CITY H O ECONOMICS . Although specific results are applicable only to the McAllen Northwest facility, the baseline results of $771.67/acre-foot (acft)/ yr {$2.37/1,000 gallons/yr} for this analysis provide insight regarding the life-cycle costs for conventional surface-water treatment. The baseline results are deterministic (i.e., noninclusive of risk/uncertainty about datainput values), but are expanded to include sensitivity analyses with respect to several critical factors including the facility?s useful life, water rights costs, initial construction costs, and annual operations and maintenance, chemical, and energy costs. For example, alternative costs for water rights associated with sourcing water for conventional treatment facilities are considered relative to the assumed baseline cost of $2,300/ac-ft, with results ranging from a low of $653.34/ac-ft/yr (when water rights are $2,000/ac-ft) to a high of $1,061.83/ac-ft/yr (when water rights are $2,600/ac-ft). Furthermore, modifications to key data-input parameters and results are included for a more consistent basis of comparison to enable comparisons across facilities and/or technologies. The modified results, which are considered appropriate to compare to other similarly calculated values, are $667.74/ac-ft/yr {2.05/1,000 gallons/yr}.