WENDY L. ILLINGWORTH

Consulting Economist

Energy and Water Economics

810 Walker Street

Columbia TN 38401

Wendy Illingworth specializes in utility planning and regional economics, with expertise in the economics of water supply and pricing issues. She has had approximately twenty years’ experience in planning, rate and economic impact issues for water and electric utilities. Her work has concentrated in the areas of estimation of economic impacts of proposed regulations, rate design and financial impacts of alternative supply strategies, and utility planning issues. She has prepared and presented testimony in regulatory hearings, and developed comments in response to draft regulatory decisions.

Selected Project Experience ¾ Water:

· Investigated the financial and organizational options related to a potential joint water supply project for Santa Clara Valley Water District and nearby agencies. The proposed project capitalized on the disparate needs of adjoining water supply agencies: the District needed additional dry-year supplies, while its neighbor was under regulatory pressure to recharge its aquifer. Developed a proposal to invest in a joint water supply that was used to recharge the aquifer in wet years, and was diverted to municipal supplies during dry years. The dual uses of the supply allowed for cost sharing that led a low-cost solution to the aquifer recharge requirement. The report also explored an arrangement that could lead to water banking in the depleted aquifer, further reducing the constraints on both agencies. Possible institutional arrangements were explored, including establishment of a Joint Powers Authority.

· Reviewed approaches proposed by MWD of Southern California to use in evaluating water management options under supply and regulatory uncertainty, and suggested modifications to these approaches.

· Provided analytical and strategic support to Santa Clara Valley Water District staff in negotiations relating to allocation of cost of a water reclamation facility. Reviewed the District’s incentive programs and suggested ways to revise them. Forecasted the effects of proposed reclamation programs on water and wastewater rates.

· Investigated the development of a price index for water rights transfers that could be included in negotiated water transfer contracts. Developed an econometric model to investigate what aspects of a water transfer influenced the price of that transfer, and how prices for actual transfers could be “normalized” to allow value comparisons between transfers. Developed two alternative price index mechanisms and discussed advantages and disadvantages of each.

· Evaluated financial and non-financial costs and benefits associated with water recycling programs in the Santa Clara Valley Water District’s service territory. Particular attention was paid the problems posed by subsidized agricultural water rates and the effect this has on discouraging the use of recycled water.

· Evaluated selected agencies’ compliance with the Best Management Practices of California’s Memorandum of Understanding for Urban Water Conservation.

· Managed MWD of Southern California’s Urban Water Management Plan to comply with the requirements of the California Department of Water Resources.

· Developed an evaluation modeling tool assist regional planning efforts for water recycling. The evaluation tool included benefit/cost analyses from multiple agency perspectives, and consideration of environmental, water supply, water discharge and economic impact evaluations. The projects under consideration included several with impacts on multiple jurisdictions, and the evaluation tool needed to develop an approach to cost allocation that would encourage collaboration between these disparate agencies.

· Estimated the financial and rate impact of a proposed water recycling project. The analysis considered multiple financing and cost-sharing options and investigated the effect on water and sewage rates under each of these possibilities with two ratemaking options.

· Analyzed likely extent of demand "hardening" resulting from indoor water conservation programs in the MWD of Southern California. Developed a procedure for incorporating this result into estimates of residential customers' preferences for reliable water supply. This was used within the IRP process to estimate the value to MWD customers of increased levels of supply.

· Contributed to handbook on conservation program and process evaluation produced for California Urban Water Agencies.

· Developed avoided cost forecasts for Bay Area water supply agencies to be used to evaluate a regional water recycling master plan. Similar data were developed for use in evaluating state-wide water conservation programs.

· Assisted in the development of MWD of Southern California’s Water Supply and Drought Management Plan. The plan developed guidelines for the operation of storage and banking programs, supply interruptions during drought and methods to allocate water to member agencies at times of scarcity.

· Represented urban water agencies on CALFED’s stakeholder working group for the economic evaluation of water management alternatives. This group reviewed CALFED staff assumptions and approaches to resource evaluation, and coordinated data information from specific knowledgeable water agency staff. CALFED is a consortium of federal and state resource agencies working to resolve water supply and environmental issues of California’s major water supply systems.

· Worked with State Water Resources Control Board consultant and urban water agencies' staff to develop an estimate of the economic impact of water quality regulations for the Bay/Delta region of California.

· Reviewed the estimation of the economic effects of implementation of the Central Valley Project Improvement Act as presented in the Programmatic Environmental Impact Statement. Identified weaknesses and suggested alternative approaches.

· Reviewed economic aspects and provided comments on EPA "Draft Regulatory Impact Assessment of the Proposed Water Quality Standards for the San Francisco Bay/Delta and Critical Habitat Requirements for the Delta Smelt."

· Developed estimates of the current valuation of water supply assets for use in regulatory hearings to review acquisitions of private water distribution companies. These assets included water rights, catchment, storage, treatment and distribution assets.

· Reviewed USFWS “Draft Economic Analysis of Proposed Critical Habitat Designation in the Colorado River Basin for Razorback Sucker, Humpback Chub, Colorado Squawfish and Bonytail." for the Six Agencies Committee of the Colorado River Board. Provided critiques and alternate analyses used by the six agencies as a basis for their filed comments.

· Wrote and made presentations outlining a reliability planning approach which could be used by water utilities. This stressed a cost-benefit approach to new facilities, conservation, and the reliability standard to be achieved.

· Investigated the applicability of MWD of Southern California's subsidies to a groundwater recovery program, and developed alternative cost allocation approaches for the remaining investments.

· Acted as Water Supply representative on the State Water Resources Control Board's Economic Considerations Task Force. The task force was required to draw up a procedure for State Board analysts to follow to incorporate economic issues into the development and evaluation of water quality plans for enclosed bays and estuaries and inland surface waters.

· Reviewed relationships between water use, employment, and production levels for California industries. Investigated how these relationships change as a result of conservation.

· Investigated the likely effect of water rates on agricultural land-uses in Southern California. Selected the most significant agricultural land-uses, and estimated the impact of changes in water rates on farmer finances. Reviewed the trend in regional land uses and other pressures leading to the conversion of agricultural to urban land-uses.

· Reviewed the economic impact of unreliable water supplies for urban users. Concentration was on the effect on residential consumers and service employment.

· Investigated the economic impact on urban greenery in San Diego County that would result from a catastrophic outage of the aqueducts into the county. Investigated the probability of an earthquake causing such an outage over the life span of a proposed emergency storage dam.

· Testified before the California Public Utilities Commission regarding the use of forecasts in estimating financial effects of conservation, limited supply planning options available to retail water utilities, and expected decreases in future supply reliability.

· Developed water demand forecasts for use in financial forecasting and rate hearings. Interacted with public utilities commission staff to minimize the need for adversarial hearings on forecasting results and issues. Developed a standardized approach to water demand forecasts.

· With Richard Carson, reviewed the use of contingent valuation and related methodologies in electric utilities to estimate the value of service reliability.

· Reviewed institutions and methods used in the electric utility industry for setting and maintaining reliability standards, and discussed how these could be adapted to the California water situation.

Previous Positions:

Vice President, Foster Associates, Inc.

Research Analyst, National Economic Research Associates

Supervisor, Economic Forecasting & Production Costing, Tucson Electric Power Company

Economic Analyst, Pacific Gas and Electric Company

Education:

M.A., Economics, University of Arizona, with a concentration on money and price theory.

B.A., Economics, University of Arizona, wit a concentration on price theory and econometrics.