Urban water & wastewater: fairbanks: privatized utility partnerships serve interior city well: part three in a series.

• Author: White, Rindi
• Position: SPECIAL SECTION: Architects & Engineers

Water and wastewater are some of the most expensive utilities to provide, and also the most vital to keeping a community healthy.

The American Council for an Energy-Efficient Economy says municipal water and wastewater treatment systems "are among the most energy-intensive facilities owned and operated by local governments, accounting for about 35 percent of energy used by municipalities."

In Alaska, costs can be even higher than those national averages, especially in rural and remote communities where groundwater is brackish or soils unsuitable for building wastewater treatment facilities.

But what's happening with water and wastewater in Alaska's urban areas? Are water utilities much different in Anchorage, Fairbanks, Juneau, and Mat-Su than Outside? What are the issues facing these utility providers? Over the course of several months, Alaska Business Monthly readers are learning about utilities in Alaska's major population centers and finding out how each community is preparing for the future.

How does tap water keep moving in a city where winter temperatures frequently dip to fifty or sixty degrees below zero Fahrenheit and the average winter lows are fifteen to twenty degrees below? Is it possible to process septic waste at those low temperatures?

Fairbanks, the second-largest city in Alaska, has to contend with these and other issues in providing water and wastewater treatment to the roughly fifty-five thousand people who live in the College Utilities and Golden Heart Utilities service area.

Fairbanks is also one of few municipalities in the state where water and sewer services are privatized. Fairbanks Sewer and Water owns Golden Heart, College Utilities, and the utilities' administrative arm, Utility Services of Alaska. Fairbanks Sewer and Water, in turn, is owned by Corix, a privately held corporation based in Vancouver, BC, Canada, and Wauwatosa, Wisconsin. Corix is principally owned by the British Columbia Investment Management Corporation.

Privately Managed, Public Minded

In the mid-1990s, the city of Fairbanks's utility system was in a tough situation. Former mayor Jerry Cleworth, a council member at the time, says the all-enclosed wastewater treatment plant was seeing problems related to heavy condensation. Electrical systems were rusting, he says, and other problems were creeping up. The city asked voters to approve a bond to cover the cost of repairs, but the bond failed.

"We were in a world of hurt," he says. The city had two options, Cleworth says: hike utility rates to cover the costs, making Fairbanks utilities the highest-priced in the state, or tap into profits from other city-owned utilities to cover the repairs. For the short term, city leaders chose to...