Water cooperatives merge to improve cost
In September the members of Lincoln Prairie Water Company of Shelbyville agreed to merge with EJ Water Cooperative. The merger helps Lincoln Prairie members avoid a pending 9 percent rate increase plus 3 percent rate increases over the next two years. “They will actually have a slight rate decrease to match the water rate of EJ’s,” says EJ Water CEO Bill Teichmiller.
Teichmiller says mergers are likely to increase for smaller water cooperatives and districts because of the economics. He says many small water cooperatives, districts and towns cannot economically have full-time office and staff to cover maintenance and other services. By merging, water organizations can leverage professional management and operating staff and resources.
“As these systems continue to mature, they will be all about operations and maintenance management of costs and will not have growth opportunities to keep rates affordable,” says Teichmiller. “Downstate, the population is decreasing and an 8 percent drop in population over the past 10 years means less revenue for many areas, counties and towns. Everyone will need to deliver services in a different business model, probably more regionalized, to keep rates and costs affordable and to leverage ever enabling technologies such as mobile dispatch, geographic information systems, automated meter reading technologies, SCADA technology, etc.”
Teichmiller adds that shrinking federal and state funding will not help. He says, “I don’t see that changing, so regionalization will continue to be looked at and we will start to figure out different ownership and delivery methodologies to meet these challenges.”