Source: So water banks will be a strategy for
dealing with climate change effects?
Mulroy: There are two prongs to climate
change. One is mitigation, which is all
about energy and energy production and air
quality. The other is adaptation. We need to
do a complete rethink about flooding and
drought events. We’ve always considered
flood events as a nuisance. We need to be
more thoughtful about developing opportunities
to capture and store that water and
prevent it from becoming lost. We have to
rethink our infrastructure—how do we
put the surge protections in place; how do
we buffer against drought that could shut
down huge parts of the economy? In the
Colorado River Basin, we have Lake Mead
and Lake Powell as flood capturers. But we
have to look at these flood-dry spell events
differently in non-connected parts of the
system that don’t feed into Lake Powell
but are still dependent on Colorado River
water. This would be a huge advantage to
the overall mosaic that has to be assembled
to solve this problem.
Source: You’re suggesting additional infrastructure.
Are rate hikes inevitable?
Mulroy: It’s unrealistic to expect water rates
to stay where they are. Those of us who
embraced conservation and put in tiered
rate structures have learned a valuable
lesson, which is that there are some fundamental
infrastructure costs that shouldn’t
be loaded into those tiers. As your debt
payments increase and you have to make
that debt service, suddenly you’re finding
yourself rewarding your customers with
ever-increasing rates. Every community
has to examine the balance between fixed
pricing and tiered pricing carefully. And
whatever the structure is, it has to match
the fixed costs they’re responsible for no
matter how little water their customers use.
Source: What about private investment in
the water industry?
Mulroy: I would love to see a way for private
capital to come in, but my bottom line is
that whatever it is it has to lower the cost to
the rate-payer. For those agencies that may
have credit problems or financial issues,
the private sector provides an opportunity.
When you have a solid credit rating and you
can still get money at three percent or better,
it’s tough for the private sector to beat that,
unless they can go out longer in time. Where
I think the private sector can probably have a
16 SOURCE spring 2013
meaningful input is in boutique applications
like desalters. But from a resource planning
perspective you’d better make sure what you
develop is part of your base load. This is not
a drought standby tool.
Source: What’s the role of associations like
AWWA in the challenges confronting the water
industry? Do they have a role with the general
Mulroy: There’s a real opportunity for the
associations to become champions of change
at the foundational level, getting those pieces
of conservation and resource management in
place. This is fundamental. AWWA is critical
in educating its water agency membership
about long-term planning and reviewing
their water resources. It can also be helpful
to water agencies in reaching the public in
the role of outside validator. But it’s got to
become known to the public and it has to
establish a recognizable brand.
Source: Public outreach has sometimes been
a stepchild in the water industry. You’ve done a
lot in southern Nevada. Suggestions or insights?
Mulroy: The public process is critical. And
it can’t just be advertising. Advertising has
to be a piece of it, because that’s the only
way you’re going to reach parts of the
community. But it has to go beyond that.
We’re in our third integrated resource planning
process right now, and we have a large
citizens advisory committee that represents
every facet of the community and makes
recommendations to the Board of Directors
regarding future resources, conservation
and facilities and how we pay for it. There’s
also a public comment period. You’re never
going to make everybody happy, but the
public will have had its day in court and the
general consensus of the community will
have been established. The board appoints
individuals within specific categories. We
staff the committee and we hire an independent
facilitator to manage the process.
Source: The public can sometime have an
outsized idea of what’s practical. How do you
Mulroy: When you put diverse members
of the community together, the businesses
large and small, the developers, large and
small, environmental activists, any outlier
ideas get quickly shot down. Consensus
doesn’t mean unanimous. Consensus
means the majority. There might be a
minority report that comes of the process
but it’s identified as being from a minority.
Source: Dissidents have been known to hijack
the public process.
Mulroy: The only reason dissidents have
that level of influence is that they feed into
the general distrust around government.
And because you’ve done your planning in
a closed way, with your staff or within the
organization and only talking to your board.
We’re building our third intake at a cost of
$800 million. That project is not growth
driven so the existing customer base has to
pay for it. We were forced to raise rates in
order to sell the last $350 million. We had a
limited public process and I’ll tell you, I’ve
been paying the price for that for the last
Source: Developing additional infrastructure
will trigger environmental review. How do you
make that process constructive?
Mulroy: The environmental community is
not monolithic. You’re always going to have
the extreme faction, which usually has a
different motivation, like growth, and uses
environmental issues as a tool. But then
you have what I call the credible, reasoned,
environmental groups that understand that
it’s all about finding a balance. The big challenge
in the environmental community is
going to be differentiating between changes
in species that are caused by climate change
and have nothing to do with whether a
project is built or not—species migrating
and disappearing, changes in how species
evolve—and genuine effects from construction
that need to mitigated. I have a
tremendous respect for the environmental
advocates who are really there to make sure
there is sufficient mitigation around environmental
impacts that result from building
projects to meet human demand. I agree
with them wholeheartedly. Concentrating
your efforts on the reasoned ones mutes the
voices of the more extreme factions.
Source: You’ve partnered with businesses in
your conservation programs. Is this an effective
mode of public outreach?
Mulroy: The partnership with the business
community has been a godsend here in
The public process
is critical. And it can’t
be just be advertising. It
has to go beyond that.
Pat Mulroy, continued from page 15