City And SaskWater Strike A Deal

The City did a bit of horse trading or rather water trading with SaskWater to get an important tourist attraction up and flowing after well over a year of non-operation but their rural customers using water from the City getting a rate reduction in exchange.

Speaking to Council city manager Jim Puffalt said the deal was reached with SaskWater because the geo-thermal wells required work overs and SaskWater was not in agreement with the water rates the City was charging them for potable water. The water was distributed to rural customers serviced by SaskWater.

“They (the geo thermal wells) were coming to the end of their useful life and in the meantime in 2019 we also talked about increasing the rates to rural water users,” Puffalt said, adding “and so part of our discussions came through to work together with SaskWater to provide a means to provide a reasonable increase they were able to pass on to their consumers.”

The 2019 water rate increase came about because of how the City was financing the water rates to customers in Moose Jaw.

Council had decided - in a 2018 in-camera meeting - to reduce the water rate hike by increasing property taxes to subsidize the price of water. The move however created a situation whereby City property owners ended up subsidizing rural water users who paid nothing towards the capital improvements to the system. To rectify the problem Council raised the rates from 1.25 times to 2.25 times the volumetric rate charged to City consumers.

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The increase is something SaskWater was opposed to passing on to their customers.

Puffalt said that linking the two issues together cleared a lot of items off of the table and helped continue the positive relationship between the City and SaskWater as well as ensured the mineral water was restored to the Temple Gardens Mineral Spa.

Addressing Council over the Internet director of public works and utilities Darrin Stephanson said the mineral water system was designed with a supply and a disposal well. Water would come from the supply well and then the used water re-injected by the disposal well back into the formation.

According to Ministry of Energy and Resources (MER) the reason for a disposal well is the pure mineral water is viewed as an environmental pollutant and and needs to be disposed of in a way so as not to harm the environment.

“That (the disposal well) was never really commissioned per say and the used water has been going into the waste water stream since the Nineties. The supply well itself had to be decommissioned. It couldn’t be restored, it couldn’t be re-habbed. So that well has been capped and done and the injection well has been turned into a supply well,” Stephanson said.

“And that has now been set up to supply the spa with geo-thermal water,” he said.

There is still work that needs to be done with berms and containment installed to prevent the water from entering the environment in the event of a spill.

The work on the former supply well would entail closing of the perforations in the well casing with specialized cement to prevent further inflow from the formation into the well bore. The entire casing is bonded into the bedrock with cement to prevent what is called “communication” or water from one formation getting into another and potentially allowing salt and minerals from lower levels to enter a fresh water aquifer. Non-used wells are suppose to be properly abandoned.

As part of the deal the City reached with SaskWater, the Crown Corporation would pay the lion’s share of the remediation and workover costs and acquire ownership of the well. SaskWater would pay $368,632 and the City would pay $133,087 of the estimated $501,719 abandonment and workover cost. SaskWater would assume ownership, plus any responsibilities regarding the wells and also supply the Temple Garden Mineral Spa with the geo-thermal mineral water.

If SaskWater decides they do not want the wells any longer the City has the option to purchase them back from SaskWater.

“If SaskWater does not want the wells anymore then the City would get the first right to purchase it back because it is important to look after Temple Gardens,” Puffalt said. “It’s a huge tourism feature of the City.”

In exchange the City would supply SaskWater with potable water at 1.875 times the rate charged to City customers instead of the 2.25 times non-SaskWater rural customers are paying. The City would also agree to dismiss any penalties and interest that had accumulated and not paid during the rate dispute with SaskWater.

The reduced rural rates for SaskWater will be honoured until November 2021 when the ten year supply agreement with SaskWater expires. The City and SaskWater can then negotiate new rates.

“SaskWater believes they have ample opportunity to give sufficient notice to their rural users rates will be increasing,” he said.

In a 6 - 0 unanimous vote with Councillor Crystal Froese absent the deal between the City and SaskWater was approved.