Owensboro Municipal Utilities is preparing now for a responsibility more than a half-century away — the eventual shutdown and dismantling of the state-of-the-art Cavin Water Treatment Plant.
In a recent presentation to OMU leadership, officials outlined a new funding plan that sets aside more than $122,000 annually in a dedicated reserve account to pay for the plant’s eventual decommissioning. The target year for the project is 2084, based on the expected 90-year lifespan of the original treatment facility that opened in 1994.
“When you have a massive facility or massive asset like that, you do have to plan for decommissioning,” said Sonya Dixon, OMU’s public relations and communications manager. “We’ve already been through this with the Elmer Smith Station and Plan A. You don’t want to get to the end of the life of that asset and not be able to pay to decommission it.”
The reserve plan aligns with Governmental Accounting Standards Board (GASB) Statement 83, which requires public utilities to disclose how they will fund retirement obligations for major assets. Although no current legal or EPA mandate requires Cavin Plant’s removal, OMU is proactively funding the obligation.
Because no legally enforceable retirement obligation exists, OMU’s commitment is classified as a “rate making obligation” — a budgeting decision rather than a liability. To determine estimated future costs, OMU partnered with UFS Financial Solutions, LLC to analyze projected shutdown needs and cost escalations over time.
Those shutdown needs are expected to include building demolition, site restoration, permitting, legal, and regulatory compliance, labor and project management (estimated at 20% of cost), and contingency funding (estimated at 15%).
Officials said the current decommissioning cost is estimated at $3.8 million, but when factoring in 3% annual inflation and interest, the future estimated cost by 2084 is projected to be $55 million.
OMU’s adopted funding plan requires $122,271 in annual contributions starting in FY 2026. Those funds are classified under Cavin Maintenance and Expanded Maintenance Structures and are sourced from cash transfers from the general fund into a facilities account that is restricted from operational use.
“It might sound odd to people that we’re already planning to shut down a brand-new facility,” Dixon said, “but it’s really just a smart, forward-looking move. It’s something we’re doing today for our tomorrow selves.”
In addition to long-range planning, Dixon said OMU continues to support customers in the short term — especially those affected by economic hardship.
OMU contributes $62,000 annually to the Salvation Army, which helps distribute utility assistance to qualifying customers. That number will increase by $10,000 this year. Additionally, OMU is organizing a post-holiday food drive to support the Help Office, running Dec. 1-12.
“We encourage customers to reach out early if they’re struggling,” Dixon said. “It’s easier to help when folks are proactive, and we want to work with them to spread out their payments in a manageable way.”
