Frequently Asked Questions
What is Century II?
Century II is KUB’s proactive long-range program to improve and maintain the electric, gas, and water systems for our customers. KUB currently manages the wastewater system under the PACE 10 program, which includes requirements from a 2005 federal Consent Decree (CD). After KUB completes CD requirements in 2021, we will roll the wastewater system under Century II.
Century II will help move KUB into our second century of service through sound planning, resource allocation, and continued or accelerated investment.
Why is Century II focusing on the electric and water systems?
We need to accelerate replacements in electric and water because some system components are reaching the end of their lifecycle. Some water pipes are 100 years old, for example, and KUB plans to initiate a replacement level of 1 percent a year to put us on target with installing newer pipe that has an average life of 100 years. KUB also plans to double the rate of wooden pole replacement to allow us to replace all poles within a 50-year cycle.
What about natural gas and wastewater systems?
The natural gas and wastewater systems are currently on target with their replacement schedules. Gas is our newest system, with most pipes less than 20 years into their 100-year lifecycle, which has helped keep it on track with replacements. Under the PACE 10 program, wastewater replacement projects are on time and on budget.
Isn't the water system in the same situation the wastewater system was in 2004?
There are similarities—in part because both systems are aging—and because the need to upgrade both water and wastewater systems is a nationwide issue.
The main difference is that KUB is starting water [and electric] system upgrades before the need becomes critical and without the government mandating the upgrade.
Hasn't KUB been maintaining its systems? Wasn't that enough?
We have been maintaining the systems, but eventually system components reach the end of their lifecycle and must be replaced. It’s like maintaining a car. With proper maintenance and timely repairs, you can extend the life of your vehicle. Eventually, though, even a well-maintained car reaches the point where it is better to replace it than to keep putting money into repairs. Some system components have reached that point.
Some water pipes in our system are 100 years old, for example. Century II will accelerate replacements for older pipes, which have the highest repair rates. KUB plans to initiate a replacement rate of 1 percent per year. That will put us on target with installing newer pipe that has an average life of 100 years.
Why does KUB need rate increases to fund electric and water system replacements?
When the systems were new, rates supported the cost of providing service and maintaining each system, and KUB did not have to fund ongoing replacement programs. Now, KUB must replace pipes, poles, transformers, etc., that are nearing the end of their useful life.
Funding for KUB’s systems comes from local ratepayers and the use of debt to spread costs out long-term for both current and future ratepayers. Before Century II, rates did not reflect the true cost of providing service plus the comprehensive upgrades that are needed.
How much will rates go up to fund electric and water replacements?
In September 2011, the KUB Board approved on final reading rate increases that will add $1 a month to the customer charge on both residential electric and water bills each year for the next three years. So, a customer with both services would see a $2 a month increase. (The impact on commercial and industrial customers will vary.)
The increase in electric bills to fund Century II will occur in October 2011, October 2012, and October 2013. The increase in water bills will occur in January 2012, January 2013, and January 2014. The ten-year funding plan calls for small electric and water rate increases each year to support the higher levels of investment in Century II programs. KUB will also use increased debt levels to help fund Century II.
Wasn't there any way to avoid rate increases?
No. KUB’s water system capital budget needed to increase by $3.7 million per year to fund comprehensive replacements. The electric system capital budget needed to increase by $8.3 million per year. There was no way to fund that without rate increases.
Couldn’t you find ways to lower costs instead of raising rates?
KUB is always looking for ways to perform better with fewer resources, and we have found ways to lower costs. For example, thanks to cost-management efforts, KUB as a whole (electric, gas, water, wastewater) has eliminated 75 full-time employees (through attrition) since January 2009. We have also found efficiencies that helped us reduce average overtime by 30 percent per year and miles driven and fuel consumed by 14 percent. Even with those measures, however, we can’t save our way out of this problem given the magnitude of replacements needed.
Is KUB's problem unique?
No, aging pipes and wires are an issue for utilities across the nation. KUB’s systems are no different, and it was important that we increase our replacement work so we can continue to provide reliable service to our customers now and in the future.
The American Society of Civil Engineers (ASCE) 2009 Report Card gave the overall condition of the nation’s infrastructure a “D.” The report card graded all types of public infrastructure, including roads, bridges, levees, aviation, and utility systems.
The ASCE estimated that electric systems nationwide need to spend a total of $75 billion over five years. It projects that water systems face an annual shortfall of at least $11 billion to replace aging facilities that are near the end of their useful lives and to comply with existing and future federal water regulations.
What can I do to lower my bill?
You can find ways to reduce your energy and water usage and lower your bill in the
Money-Saving Tips section on www.kub.org. Remember: If you are a KUB wastewater customer, using less water also lowers your wastewater bill. And conserving energy helps lower your overall bill.
You may also want to take a
free online energy audit to help you find areas where you can save on utilities. You can find a link to the free audit and information about TVA’s $150 In-Home Energy Evaluation on the KUB home page under Tools and Tips, In-Home Energy Evaluation. (The $150 fee is refunded if you make at least $150 in qualifying improvements—and you can get up to $500 back on the cost of qualifying improvements.)
What if I can’t afford the increases in my bill?
As always, customers who need assistance will be directed to area social service agencies and other organizations. You also can conserve both energy and water to lower your overall utility bill (see question above). Also, sign up for the
BalancedPay Plan. It won’t make your bill any less, but it spreads payments out evenly over the year and makes budgeting easier.
How disruptive will the work be to streets/traffic, neighborhoods, and homes?
KUB works to keep disruption to a minimum by filing traffic plans, issuing traffic advisories, working in off-peak hours, etc. You will hear from KUB before any major construction in your neighborhood, as you currently do for PACE 10 wastewater projects. If your service will be interrupted, KUB will give you advance notice.
Are you going to repair my street after work is finished?
Yes, but a temporary patch may be applied before final paving. Remember: Final paving cannot be completed during cold weather.
