Portland’s wholesale agreement, defining the terms and conditions of service for 19 separate water providers, will expire in 2026. After 20 years of experience with the existing agreement, Portland and many wholesale providers wanted to make key changes to redefine certain aspects of the service provided, the allocation of costs, and sharing of regional risks. Our team’s engagement started as an advisor to help facilitate consensus selection of new features for the upcoming agreement and later to assist Portland directly with implementing those features, including preparing the draft agreement itself and developing an entirely new wholesale rate model.
Portland and the wholesale users had already agreed to a list of guiding principles to aid in evaluating new contract features; these were their criteria. We assisted the group by developing a weighting system for the criteria using pairwise techniques. We then developed issue papers for 28 different contract features; many of these were alternative approaches for achieving the same desired outcome. Topics included cost allocation, capital recovery methods, new service offerings, simplification of the rate model, risk mitigation and others. We walked the participants through ranking each of the 28 topics based on their weighted criteria, resulting in a prioritized list of features that are now being implementing in the draft agreement.
The new rate model will incorporate dozens of new features agreed to collaboratively with Portland and the wholesale users. The model includes processes for updating annual budgets, fixed assets, and customer demands. It also includes simplified reports for individual wholesale customers and one-page documents they can share with their boards/councils that show exactly how Portland calculates its rates.