What is Century II?
Century II is KUB’s proactive long-range program to improve and maintain the electric, natural gas, water, and wastewater systems for our customers. [KUB formerly managed the wastewater system under the PACE 10 program, which included requirements from a 2005 federal Consent Decree (CD). After KUB completed CD collection system requirements in 2014, we rolled the wastewater system replacement and maintenance 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 did Century II begin with the electric and water systems?
The wastewater system was already managed under PACE 10 when we decided to consolidate the other systems’ replacement and maintenance programs under the new Century II program. With wastewater covered, we needed to accelerate replacements in electric and water because some system components were reaching the end of their lifecycle. Some water pipes were 100 years old, for example, and KUB initiated 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 has also doubled the rate of wooden pole replacement to allow us to replace all poles within a 50-year cycle.
KUB also continues to look at the need to replace older natural gas pipe types and extend service to provide a safe, reliable system to serve current and future customers. We have had numerous natural gas asset replacement programs for decades, which we rolled into Century II.
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.
Why does KUB need rate increases to fund 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 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 infrastructure replacements?
Under Century II, we plan a minimum of 10 years ahead. The KUB Board’s ongoing commitment to funding Century II allows us to make and—most important—implement those plans. Periodic small increases to each system’s rates, along with prudent use of debt, help distribute costs fairly between current and future customers.
That enables us to support sustainable lifecycles for all our systems without large increases. Increases in the current 10-year plan, for example, range from $1 to $3 a month.
Couldn’t you find ways to lower costs instead of raising rates?
No, current rates are not sufficient to fund replacement programs. Our long-range funding plans include modest rate increases in each system over time, but they also reflect cost-management initiatives that have helped to keep rates affordable. In fact, since 1993, KUB efforts have saved customers $386M by changing processes and managing work with fewer employees. These savings will continue into the future, helping to offset the need for larger rate increases.
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) 2013 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 report card estimates it would take $3.6 trillion by the year 2020 to bring our national infrastructure up to a grade of “B,” or “in good repair.”
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 eScore™ program on the KUB home page under Tools and Tips.
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 Levelized Billing Plan. It won’t make your bill any less, but it averages your payments over the year to help you avoid seasonal high bills.
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. 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.