This feature interview is part of Singapore International Water Week’s (SIWW) series of one-on-one interviews with global water industry leaders, Conversations with Water Leaders. In this edition, Sue Murphy, chairman of the Water Services Association of Australia, shares with Ooskanews correspondent, Renee Martin-Nagle, on the water utility operations and challenges faced in the water service provider industry in Perth’s drying climate.
With an outstanding track record in the engineering field and 9 years of experience in the water industry, Sue Murphy shares innovative solutions for supplying water in a drying climate and touches on the importance of public-private partnership and engaging customer relationship.
Conversations also shines the spotlight on the importance of continued dialogue and knowledge exchange between water utility leaders to co-create solutions for water utility operations. This is in line with the SIWW Water Utilities Leaders Forum, to be held in Singapore from 18 - 19 September 2013. Finally, do log in to visit the recently launched Virtual Water Expo, that showcases innovative water technologies, products and services from exhibitors around the globe.
Good morning, Sue. Thanks for taking the time to talk. Can I ask you to start by telling our readers a bit about the environment in which you provide water service in Western Australia?
Our operating area is one of the world’s largest for a single water utility and is thinly populated with a diverse environment, from forests in the south to deserts in the east and tropical conditions in the north. Our infrastructure needs are immense and expensive. For instance, we operate more than 33,000 kilometers of main water pipelines and more than 15,000 kilometers of sewer mains along with about 400 water pumping stations and almost 400 water and wastewater treatment plants. Our total assets have a replacement value of more than $A20 billion, and capital investment has been running at around $A1 billion per year in recent times. Our two million or so customers are also diverse, including huge mining companies in the northwest, farmers in the sprawling wheat belt, and families in a wide scattering of small settlements, towns and a few modest cities.
With such a diverse operating system, what is the biggest challenge you face?
The biggest single issue is the fact that in the southern part of Western Australia, where the bulk of our population is, we’ve experienced drying climate change, much harder and faster than almost anywhere else on the planet. For 100 years the average runoff into the dams that service the Perth area was about 350 gigaliters per annum. Last year we got 21, the year before 17, and Perth uses about 300 gigaliters per annum. So we’ve basically lost our entire water supply in terms of cheap water from the sky.
How has the drying climate affected how you provide water?
While we previously relied heavily on dams, they are now relegated to “back up” status. We’ve had to look for other sources, which was our move into seawater desalination. We’ve had to use groundwater more innovatively and look at long-term sustainable yields from very deep aquifers. We’re looking at groundwater replenishment, which involves treating wastewater to a very high level and then injecting it into aquifers for future years. By mixing them all up, we have a portfolio of options. If we ever do get rain, we can use that water preferentially.
Last year about half of your water was sourced from groundwater.
That’s dropped off. The very shallow aquifer under Perth is linked to a lot of environmental wetlands, so we have quite a lot of concerns about taking water from that aquifer. We believe that we have a long-term sustainable yield that we can take from the very deep aquifers, and our aim is only to take that in future years.
You have been experimenting with groundwater injection.
We’ve done a trial for the last few years of taking treated wastewater and injecting it into the aquifer, and our plan will be to upscale that gradually. Our long-term strategy is to take no more than 120 gigaliters per year of groundwater from the very deep aquifers, and other than that take only what we put in.
How is the wastewater treated before it’s injected into the aquifer?
It goes through the full treatment in the wastewater treatment plant, then it goes through ultra-filtration, reverse osmosis, and UV before it’s injected into the aquifer. When the water is drawn from the aquifer, it’s treated through the same filtration and chlorination process as all the other groundwater. The programme has bipartisan support politically, and at the moment we’re running about 85 per cent support in our customer base.
Why don’t you just use the recycled water directly for your customers?
A couple of reasons. One is the emotional, social “yuck” factor, and the second is our energy use. We wouldn’t put it straight into a pipe, and pumping it up into the dams uses quite a lot of energy. Pumping it into the aquifer is very energy-efficient because the aquifer is nearly a kilometer deep, so the water actually pumps itself. We achieve a lower capital cost and a lower operating cost. Over the past 10 years, the volume of recycled wastewater increased by almost 75 per cent across the state.
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Ninety-five per cent of our customers talk about using less water. They’re not doing it to save money — they’re doing it because it’s the right thing to do.
Sue Murphy
You’re assuming that the worst may happen and that it’s just not going to rain anymore. How are you addressing population growth?
We have a new plan called “Water Forever, Whatever the Weather”, which basically drought-proofs Perth. At the moment, we assume that if we get no rain at all, we can still supply Perth. With the base groundwater, the groundwater replenishment, and desalination, we can supply Perth without any runoff at all, but if we get rain, we’ll use that preferentially. With this design, if it doesn’t rain, we’re still OK. We can have a great lifestyle but use less water.
Water Corp is owned by the Australian government. Does Water Corp own all of its capital assets?
We do with the exception of the Mundaring treatment plant, which is under construction. It’s a PPP [public-private partnership], so we’ll just be paying for the service of treating water. That’s our first toe in the water for a PPP.
Why did you decide to do a PPP at this stage of the game?
Well, because the actual unit cost of treating the water is lower, so it’s a lower cost to our customers, partly because of some tax arrangements that were available to the private sector, and partly because of the way they structured their investment. There are three things we weighed – cost to our customers, total debt, and dividend.
Let’s talk about pricing.
Pricing’s been a real issue for us. We’ve gone from using largely surface water to a scheme that’s now 50 per cent desalination, so obviously the cost of water has gone up. However, we’ve tried to keep price increases as modest as we can and smooth that increase. We have a fixed component of our price and a variable component. The variable component starts quite modestly, and the more you use, the more expensive it gets. Our wastewater pricing is a more fixed pricing, but our water pricing is variable, depending on the volume.
Tell us about your desalination operations.
Our desalination plants are very energy effective, and they’re also environmentally amazing with the amount of monitoring we do. Our ocean monitoring is incredible. Our larger plant in the south has minimal area cleared. In fact we’re reforesting an area around it that had been quite degraded. According to our environmental license requirements, our discharge must be within 1 per cent of background salinity within 50 meters of our ocean outfall. Our plants are virtually invisible environmentally.
Who are your biggest volume users?
It’s interesting. Eighty-five per cent of our water goes to residential customers, so by total volume, by far the biggest customers are our moms and dads. However, the huge iron ore ports in Pilbara are also very big customers. Agriculture tends to self-supply from on-farm dams or the shallow aquifers. In Australia, most industry self-supplies from its own groundwater schemes. Our large industrial customers are breweries, bottlers, big hotels and resorts, and big water leisure centres.
You say that 85 per cent of the water use is for residential use. Are people using the water for showers and cooking and also for their lawns?
About 40 per cent of the water that goes to the house is used outside the house, so a lot of it is going on gardens. Our early settlers wanted to have lawns and rolling green just like England. Now we have permanent water efficiency measures. You’re only allowed to water outdoors two nights a week and never in the daylight hours, when it just evaporates. We’ve worked very closely with the garden industry about different plants that give the look that people want but actually use a lot less water.
It takes a lot of education to get people to change their habits.
It does. In the focus groups we do with our customers, we ask, “What are you personally doing about the environment?” Ninety-five per cent of our customers talk about using less water. They’re not doing it to save money — they’re doing it because it’s the right thing to do. People’s relationship with water is far more than about money.
Have you been involved with water for a long time?
I worked for an engineering and construction company for many years, and I’ve been immersed in water, so to speak, for the last eight or nine years, so I’m sort of new to the industry. It’s a fabulous business. I love the water industry. There are great people — people who want to make a difference. The people in the water industry are focused on sustainability and are looking at a long-term approach to the business.
What would you say is Water Corp’s cutting edge contribution to the water industry?
We’d like it to be the relationship with our customers. Our customers are aware that they’re in a partnership with us. We supply them water but they work with us to use less water. Between us we can keep the lifestyle they want but also defer major capital expenditure and hence cost to them. Sure, we’re banking water in the aquifers and recycling wastewater and all that, but to me our contribution is not the technical breakthrough — it’s the customer relationship.
If I were to ask you for one parting message to the readers, what would that message be?
My parting message would be about working in partnership with your customers. At the end of the day, the whole reason that we do what we do is for our customers, so that they can have the lifestyle that they want. If you work in partnership with your customers, you can achieve almost anything.
