Hist and Proj Operating Receipts FY 2011 2 17 2010 - DC Water

Long-Term Operational and Financial lssues
Currently, there are a number of important emerging issues that we are closely monitoring to ensure reliable and efficient service to
our customers. We continue to broaden our planning horizon for projects or operational changes that may be necessary to address
regulatory as well as other emerging issues.
Capital lmprovement Program lnflationary lncreases
The economic recession that has been and continues to be experienced by all industries has had an impact on all aspects of
construction. Energy costs have materially retreated from there highs of only a few years ago. Major development projects have also
fallen to records lows due to lack of available financing. Unemployment is at records highs. How all of this will impact the future costs
of our CIP is yet to be determined. While these are challenging times, we recognize the magnitude of the multiple challenges facing
us and our customers as we attempt to maintain our infrastructure and meet the requirements of the regulatory and government
mandates. We will continue to monitor the complex environment we are operating in and assess its impact on our CIP planning and
budget.
Funding for Chesapeake Bay Restoration lnitiatives
The Virginia and Maryland Legislatures have provided revenues to support nutrient removal. ln the State of Maryland, the Bay
Restoration Fund was established through a tax on each water, sewer and septic bill which raises approximately $66 million a year.
The General Assembly of Commonwealth of Virginia provide grants through a State Water Quality lmprovement Fund to support
environmental projects for nutrient control costs, and has dedicated $50 million a year for the fund. The General Assembly of the
Commonwealth of Pennsylvania recently passed a bond referendum which provides $400 million in bond issuance to support various
water, sewer and wastewater investments throughout the Commonwealth. Several environmental, Fairfax, Virginia, Montgomery and
Prince George's Counties of Maryland, as well as other organizations have supported federal funding for Blue Plains Nitrogen
Removal project. DC WSA will continue to work with these groups to get additional federal funding for BIue Plains for FY 201 1. We
will also continue to support and urge the District of Columbia Government to provide similar local mechanisms as our neighboring
states to assist the DC retail ratepayers in keeping their rates down.
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