VOLUME 35 NUMBER 4 WINTER 1995 The Magazin e of the National Association of Water Companies OFFICERS STAFF CONTENTS CHAIRMAN OF THE BOARD James B. Groff President's Message. .. ...... 3 Annual Conference Wrap·Up 4 J. James Barr Executive Director Annual Conference Photos . ...... 7 American Water Works Company Sharon L. Gascon New Members . ................. 11 Deputy Executive Director 1995 Eastern/Midwestern PRESIDENT Customer Service Conference . ... 11 Jack E. McGregor Michael J. Horner 1994 Honorary Member Award . .... 12 Bridgeport Hydraulic Company Director of Administration and 1994 Management Innovation Award Contest ................ 14 Membership 1st VICE PRESIDENT NAWC History, 1895- 1920, Louis Jenny by T. Ward Welsh .............. 16 Ronald S. Dungan Remarks at the Deloitte & Touche Director of Congressional Relations General Waterworks Company Northeast Public Utility Conference, Mark D. Planning by J. Jam es Barr .............. 23 GENERAL VICE PRESIDENTS Director of Federal Agency Relations The Clean Water Industry: Change, Robert A. Luksa Customers, and Choice, Philadelphia Suburban Water Company Jean Lewis by Hampton D. Graham . ..... .. 26 Administrative Manager The Reauthorization of the SDWA: Ftoyd E. Wicks Costs and Ri sks, by The Bonita J. Hayden Honorable Diane K. Kiesling ..... 28 Southern California Water Company Finance Manager The Reauthorization of the SDWA: Costs Eugene H. Owen and Risks, by James B. Groff . ... 31 Audra Zellner NAWC Centennial, Baton Rouge Water Company Executive Assistant by Catherine D. Harri s ...... 33 Municipal Utility Val uation: From Robert A. Dotson Phaedra Jones the Municipality's Point of View, Continental Water Company Program Assistant by James S. Kelly ............... 34 Water/Wastewater Privatization, SECRETARY Laura Goodwin by Robert W. Poole . ............ 35 James B. Groff Secretary/ Federal and 1994 Water Utility Compensation Congressional Relations and Benefits Survey Re sulrs, TREASURER by Gerry Stoffel ........ .. 37 Sharon L. Gascon Safe Drinking Water: At What Price?, by Petcr R. vanDernoN, with Nancy Jorgenson . .............. 39 Executive Directo r' s Report . .... 43 Regulatory Relations Report ....- . 46 Recent Regulato ry Decisions . .. 49 Federal Agency Notes . ............ 51 Copyright 1989, National Association of Water Quorum Ca ll . ............... 53 Companies. Tax Adviser . .................... 54 The articles printed in this magazine do not necessar­ ily represent the position of the National Association Pipeline to Small Companies . ...... 55 afWater Companies. NAWC disclaims responsibilit y Gerald M. Hill 0941-1994) ....... 57 for all information provided by individual au thors or Company Profile: Bridgeport organizations and published in WATER magazine, About the Cover: Bridgeport Hydraulic Co.'s 12-bil­ Hyd raulic Company . ........... 58 including technical information which should be in­ lion-gallon Saugatuck Reservoir, completed in 1942, Corporate Changes . .............. 62 dependently verified by separate sources. is the company's largest supply source. Etceter a . ........................ 65 WATER- Published four times each year by the National Association of Water Companies, Suite 1212, 1725 K Street, N.W., Washington, DC 20006. NAWC is a-nonprofit trade associati on dedicated to serv ing the needs of the investor·owned state·regulated, public water supply industry. WATER is circulated to all Active and Associate Members of the Association, members and staff of public utility commissions, federal and state officials concerned with our industry and will be sent to qualified persons upon written request. Requests and changes of addtess should be sentto NAWC, Suite 1212, 1725 K Stteet, N.W., Washington, DC 20006 (202) 83l8383. The President's Message by Jack E. McGregor he rugged desert scenery provided a breathtak­ standard setting process. ing backd rop to NAWC's 1994 Annual Confe rence To accomplish this goal, however, we need to get more T in Scottsdale, Arizo na, held the first week of Octo­ involved. Developing sponsorship in Congress is vitally ber. Appropriately, in NAWC's 100th annive rsary yea r, our important, and nowhere is this mo re evident that here in theme was 21 st Century Excellence, focusing New Engla nd. One of my goa ls t his year is to on four components: legislative and regulatory conv ince the Connecticut congressional delega­ excellence, customer service excellence, em­ tion of the legitimacy of our position and the ployee excellence and financial excellence. need to sponsor this bill. I urge all of our mem­ As this is my first correspondence to you as bers to do the same in their home states and president of the association, I'd like to take this regions. Government relations is not a specta­ opportunity to express my sincere appreciation tor sport. to the over 400 members whose participation The new year means a fresh star t, w ith a new made the conference such a great success. A Congress and with its new legislators and their special note of t hanks should go to our speak­ staffs. We need to bring them up to speed on ers and the panel moderators, all of whom did our position and wo rk with them to develop slich an outstanding job in covering a broad the kind of relationships t hatwililead to their range of topics so concisely and informatively. active support. There are a number of ways to The overriding message of the co nference was that we do this: should do a better job of relating to all of our constituen­ Send congratulatory letters to the returning incom­ cies. In that regard, I'd like to suggest that we begin by ing members, and include a brief mention of the im­ focusing on the legislative arena. While the water utility portance of reforming the drinking water law. in dustry faces a number of issues, the most pressing re­ Visit your Congressio nal representatives in their lo­ mains reauthorization of the Safe Drinking Water Act. We cal offices. Travel to Washington and meet with them as an industry made significant progress in 1994 by forg­ there as well. ing a coalition of 12 leg islative, regulatory and trade as so­ Getto know you r legislators by inviting them and thei r ciations--each with its own set of issues and concerns-to key staff members to your filtration plants for a re­ propose significant changes in the SDWA that would en­ ception and tour. Impress upon them t he need for sure safe, reliable drinking water at a reasonable cost to practical solutions to the problems we face in meet· ollr customers. ing the current SDWA requirements. T hough political considerations killed the resulting com­ promise bill, HR 3392, sponsored by Congressmen Jim Get your employees involved in the process as wel l. Slattery and Tom Bliley, the new year presents a tremen­ As voters and constituents, they can be a strong force in advocating the company's posi tion to their repre­ dous opportunity to benefit all OUf var ious constituencies by advocating a new and improved version that will re­ sentatives in Washington. flect more effecti vely the water utility industry's position The new yea r promises to keep us all busy on other fronts on this issue, particularly as it relates to the "u nholy trin­ as we ll, such as the issues surrounding the pending adop­ ity" of relative risk assessment, the taking of private prop­ tion of the Information Collection Rule and our continu­ erty and unfunded mandates. The association's intentio n ing efforts to repeal the tax on contributions in aid of con­ is to work wit h the coalition to introduce, early in the 104th struction (CIAC). I look fo rward to reporting to you on Congress, a new version that returns to many of the origi­ these and other matters , and I am del ighted and honored nal positions advocated pr ior to the compromise bill, in­ to serve you as president as NAWC begins its next century cluding ensuring that risk is extensively considered in the of excellence . • WINTER 1995 0 Q 98th nual Conference Wrap-Up The Scottsdale Princess was the site of Innovative Ratemal(ing eliminate the need for traditional rate NAWC's 98th Annual Conference. The Monday afternoon general session cases. Performance standards would be Sunny, blue skies and picturesque was a panel on innovative ratemaking, fea" developed to measure customer satisfac­ stretches of desert provided the perfect turing as moderator the Honorable tion, safety and reliability. Revenue in­ backdrop for NAWC members and friends Reginald Smith from the Connecticut creases would be tied to CPI adjusted to gather and tackle the topics relating to Department of Public Utility Control and by productivity gains. Utilities would the Conference theme of "21st Century as panelists Jan Beecher, National Regula­ keep any profits from productivity gains Excellence." tory Research Institute; the Honorable P. above the benchmark. Commissioner The Conference got into full swing on Gregory Conlon, California Public Utili­ Conlon believes these changes in regula­ Sunday, with a full slate of tours, the ten­ ties Commissioner, and Al Pak, San Diego tion will lower the cost of service to the nis tournament and a Southwestern Gas and Electric Company. customer as they have in England and Celebration and Dinner. Guests at the din­ Commissioner Smith called on Jan Norway. ncr were quickly eased into the southwest­ Beecher to start off the session by saying Al Pak of San Diego Gas and Electric ern ellvironment, viewing works by South­ that there is government regulation of the stated that the electric industry became western artisans, listening to relaxing water industry at severallcvels- EPA, De­ too bloated under the traditional regula­ music, enjoying delicious food and, most partment of Health Services, Public Ser­ tion. He believes that utilities should be importantly, reuniting with old friends vices, Public Service Commission, etc. She rewarded for excellence with a higher rate and meeting new friends. said that regulation hinders regulatory of return rather than a lower rate of The program began on Monday morn­ oversight and that changes were needed return.