Water Authority Overview October 2010

San Diego County Water Authority y

2010 Update

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Presentation Overview

Water Authority background

Presentation Overview

Water Authority backgroundWater reliability strategy

Supply diversificationCapital Improvement Program

Budget and ratesKey water issuesKey water issues

Supply challengesMWD ratesQSA liti tiQSA litigation

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What Is the Water Authority?

Wholesale water agency g ycreated by State Legislature in 1944

24 membe agencies24 member agencies36-member board of directorsServes 3.2 million people and Se es 3 o peop e a dregion’s $174 billion economy

Service area950,000 acres97% of county’s population

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Who Provides Your Water?Who Provides Your Water? Individual customers served by local retail Local Water Agenciesserved by local retail water agencyWater Authority

Local Water AgenciesCamp Pendleton

Lakeside WD City of Poway

Santa Fe ID

Carlsbad MWD

National City* Rainbow MWD

South Bay Irrigation

secures supplies from outside the region for 24 local agencies

MWD MWD Irrigation District*

City of Del Mar

City of Oceanside

Ramona MWD

Vallecitos WD

24 local agencies6 cities14 water/utility districts3 irrigation districts

City of Escondido

Olivenhain MWD

Rincon Del Diablo MWD

Valley Center MWD

Fallbrook Otay Water City of San Vista ID3 irrigation districts1 military base

PUD District Diego

Helix WD Padre Dam MWD

San Dieguito WD

Yuima MWD

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* Member of the Sweetwater Authority

Sources of San Diego County’s Water Supply

LAKELAKESHASTA

LAKEOROVILLE

San Diego County imports ~80% of its water supply

State Water Project(Bay-Delta)

30%

water supply

30%Colorado River

50%

Local Supplies and Conservation

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and Conservation 20%

C l d Ri S li

Imported Water SourcesImported Water Sources

Department of Interior Bureau of Reclamation

California Department of Water Resources

Colorado River Supplies State Water Project Supplies

All-American and Coachella Canal Lining Projects

Priority 1: Palo Verde State Water Project

Contractors (27)Metropolitan Water District of

Southern California

Irrigation District

Priority 2: Yuma Project

P i it 3 I i l Southern California

26 Other Contractors

Priority 3:a Imperial Irrigation District

Priority 4 and 5a: Metropolitan Water DistrictMetropolitan Water District

of Southern California

San Diego County Water AuthoritySan Diego County Water Authority

24 Local Retail Agencies and cities

Supply DiversificationSupply DiversificationCapital Improvement Program

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Drought Headlines from 1990-91

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Response to Crisis: Long-Term Strategy to Improve ReliabilityStrategy to Improve Reliability

Diversify supply sourcesDiversify supply sourcesImported (transfers, canal lining projects)

l ( d d li iLocal (groundwater, seawater desalination, conservation, recycling)

$3 8 billi it l i t$3.8 billion capital improvement programImprove regional water delivery, storage and water treatmenttreatment

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Regional Water Supply Diversificationg pp y

2010 20201991

95%

6%7%

6%

10%

11%

5%

16% 3%3%

4%4%

10%6%

23%

9%

10%10%

Metropolitan Water District Conservation (2005 UWMP Goal)

23%

22%50%

Imperial Irrigation District Transfer

All American & Coachella Canal Lining Seawater Desalination

Local Surface WaterDry-Year Water Transfers

SBX 7-7 Additional Conservation Increment

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Local Surface Water

Recycled Water

Groundwater

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Quantification Settlement Agreement Q g

Colorado River QSA SuppliesQ ppImperial Irrigation District transfer

200,000 acre-feet*/year for 45 to 75 years

C l li i j tCanal-lining projects80,000 acre-feet**/year for 110 years

Key to supply diversification strategy C l li i j tstrategy

Provide 165,000 acre-feet in 2010, help mitigate current shortage

By 2021 will provide 30% of

Canal-lining project

By 2021, will provide 30% of region’s supply

Lining the Coachella Canal

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*At full implementation in 2021** Acre-foot = 325,900 gallons

Groundwater and Recycled Water

Recycled Water 28 000 af/year today growing to

Groundwater and Recycled Water

28,000 af/year today, growing to 52,000 af/year by 2020High-quality, drought-proof water supply17 agencies in San Diego produce17 agencies in San Diego produce recycled waterPrimarily used for landscaping irrigation

Groundwater 13 000 f/ t d i t13,000 af/year today, growing to 53,000 af/year by 2020San Diego does not have significant underground storage basinsBrackish groundwater must beBrackish groundwater must be desalinatedSix local agencies have groundwater projects

Sweetwater Authority’s groundwater desalination plant

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ConservationComprehensive waterconservation programs

Conservation

conservation programs, incentives and school programs since 1990s65 000 af/year today65,000 af/year today, growing to 94,000+ by 2020C l ti iCumulative savings: more than 600,000 AF Shifting emphasis

Water efficient planting and rotating nozzleg p

from indoor tooutdoor conservation

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Seawater Desalination

Carlsbad Desalination ProjectCarlsbad Desalination ProjectProduce up to 56,000 acre-feet annuallyApproved term sheet that will lead to water purchase agreement to buy output p g y pof plant

Camp Pendleton Project56 000 to 168 000 af/year56,000 to 168,000 af/year Feasibility studies under way

Bi-national Desalination Projecth dIn conjunction with agencies in Nevada,

Arizona and MexicoStudying site in Baja California

Encina Power Station, Carlsbad

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Capital Improvement ProgramCapital Improvement Program$3.8 billion CIP (1989 – 2030)

$1.5 billion Emergency Storage Program (ESP)

Dozens of major projects – completed or under constructionconstruction2010 debt issuance of $627 million to continue funding CIPfunding CIP

Olivenhain Reservoir and Lake Hodges 16

Water Treatment PlantWater Treatment Plant

Located in Twin Oaks Valleyy

Treat 100 million gallons per day

Meet needs for up to 220,000 households

E bl di t ib ti d iEnables distribution during emergencies

Completed 2008p

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Olivenhain Dam and Reservoir

Completed in 2003Olivenhain Dam, Reservoir and Pump Station p

Region’s first major new dam in 50 years

24,000 AF of storage

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Lake Hodges ProjectsConnects Hodges to i t d t t

Lake Hodges Projects

imported water systemProvide 20,000 AF of water storage forwater storage for emergency useGenerate up to 40 MWGenerate up to 40 MW of electricity

Enough for 26,000 homes

Completion Date: Late-2010/Early 2011

Lake Hodges Pump Station

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San Vicente Pipeline

11-mile pipeline

San Vicente Pipeline

8.5-foot diameter pipelinep p

Connects San Vicente Reservoir to regional aqueduct system

Complete late-2010

20Tunnel entrance preparation for pipe installation

San Vicente Dam RaiseRaise dam height by 117 feet

Increase reservoir capacity by 152,000 acre-feetacre feet

Largest dam raise in United States

Complete early 2013

Total project cost:Total project cost: $568 million

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Artist’s rendering: San Vicente Dam Raise

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Water RatesWater Rates

$ $$ $$$ $$$$$ $$ $$$ $$$$Colorado River State Water Spot Water Loss of Sales

Water ProjectpTransfers (Shortage)

<2003 2003-2007 2008> Now

Supply challenges make securing water more expensiveShift to more-expensive supplies is driving up the cost of water from MWD, the Water Authority’s largest supplierWater Authority passes increased costs to member agenciesMember (retail) agencies pass costs to ratepayers

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Member (retail) agencies pass costs to ratepayersLower sales increasing unit cost ($/af) of water

Water Authority Rates 2011Water Authority Rates 2011

W t A th it B d d t d CY 2011 tWater Authority Board adopted CY 2011 rates following public hearing in June

Treated water rate – up 11 3% ($1 026/AF)Treated water rate up 11.3% ($1,026/AF)Untreated water rate – up 14.7% ($811/AF)

Primary drivers of rate increases:yCosts to purchase, deliver imported waterCosts for operating, maintaining and financing regional

t twater system

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Cost of Water Drives Treated Water Rate* IncreasesWater Rate* Increases

“All-in” Increase Water Authority Melded Supply

MWD 75%

All-in Increase Distribution

$104/AF

Water Authority Melded Supply Rate Increase

$65/AFTransportation 75%

($49)

Storage

p8%($8)

21%($22)

Supply62%($65)

Customer Service9%($9)

Water Authority 25%($16)

26*Municipal and Industrial Rate

Wholesale Monthly Cost of Water to Households

Cost of water purchases isEstimated CY 2011

Wholesale Costs per Household *

to Households

Cost of water purchases is 62.7% of the wholesale cost of water

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$23 70MWD Costsh For an estimated $16.04/month

the Water Authority:

Delivering water and maintaining$3.26

$23.70

IID/QSA Costs

62.7% is the Cost of Water

Delivering water and maintaining the system

Rapidly diversifying the region’s water supplies

$3.26

Water Authority Operating  Costs

$4.09

Water Authority  37.3% is Water  water supplies

Providing in-region emergency water storage

D l i i i t t

$11.95Water Authority 

Capital Costs Authority Costs

TOTAL: $43/monthDeveloping in-region water storage capacity

* Based upon 0.5 AF of consumption a year

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Mitigating Rate Impacts –Water Authority ActionsWater Authority Actions

Current budget eliminated more than a dozen positions$2.4M reduction made mid-year in FY 2010 & 20112011Reduction in spot water purchasesRate stabilization draw – up to $10 7MRate stabilization draw up to $10.7MMWD rate challenge

Lawsuit challenging MWD’s rates and how they’re allocated

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Supply ChallengesMWD RatesMWD Rates

QSA Litigation

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Supply Challengespp y g

Regulatory restrictionsRegulatory restrictionsFish protections limit State Water Project deliveriesj

Lingering effects of droughtdroughtStorage still recovering Lake Oroville – April 2010

Effects of climate change

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Bay-Delta Pumping Restrictionsy p g

Central Valley steelhead

Delta smelt

Longfin smelt

Banks Pumping PlantState Water Project Chinook salmonGreen sturgeon

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State Water Project

How Restrictions Limit Deliveries from the Bay Deltathe Bay-Delta

Regulatory Pumping RestrictionsJAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

S l

Regulatory Pumping Restrictions

Salmon

Delta Smelt

Longfin Smelt

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Supply Challengespp y g

Regulatory restrictionsg yFish protections limit State Water Project deliveries

Lingering effects of droughtdroughtStorage still recoveringLake Oroville – April 2010

Heading into another dry winter? (La Niña?)

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Effects of climate change

Response to Supply Challengesp pp y g

Water Shortage andWater Shortage and Drought Response Plan ImplementationImplementation

8% regional target beginning July 1 2009beginning July 1, 2009

Target in effect through June 30 2011June 30, 2011

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Region Succeeding in Saving Water

September 2009 - August 2010 U b W t U *

600,000

Acre-feet

11%

Urban Water Use*18% below

FY 08/09600,000

550,000

11% below

FYs 09/10

FYs 08/09602,300

552 100500,000

450 000

552,100

493,100450,000

400,000 2009/102008/092007/08

*12-month periods overlap two fiscal years. 35

San Diego County: 1991 vs 2010San Diego County: 1991 vs. 2010

$174$174$1026

578 566$651.081.3

2.53.2

$323

1991 20101991 2010Water use (thousand acre-feet)

Jobs (millions)

Population (millions)

Cost of water per acre-foot (full

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Gross Domestic Product (billions)

( )p (service treated water rate)

MWD Rate ChallengeMWD Rate Challenge

W t A th it fil d it i J i t MWDWater Authority filed suit in June against MWD over its 2011-2012 ratesViolates California law standard practicesViolates California law, standard practicesMWD improperly overcharges for transporting water through its facilities gMWD improperly subsidizes the price of water it sells

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MWD Misallocating Its CostsMWD Misallocating Its Costs

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Impacts to Local RatepayersImpacts to Local Ratepayers

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*Based on 600,000 AF annual sales; 2021 figure includes $40B Delta fix share

Impacts on Supply ReliabilityImpacts on Supply ReliabilityBy disguising true cost f i t d tof imported water,

MWD discourages local supply development

Disincentive to pursuing conservation and local supply projectsDisincentive to transfers that require use of MWD’s facilities

These kinds of projects help protect region

Desalination membraneshelp protect region from supply shortages

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QSA LitigationQSA Litigation

January 2010: Superior Court ruling invalidated 13 y p gagreements

Includes IID transfer and canal-lining agreementsRuling based on single sentence in one agreementRuling based on single sentence in one agreement

State’s obligation to fundSalton Sea mitigation foundunconstitutional

Water Authority and otheragencies appealed ruling

Temporary stay allowingTemporary stay allowing transfers to continue

Decision expected in 2011

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p

All-American Canal

Continuing ChallengesCo t u g C a e ges

Achieving Bay-Delta fixesAchieving Bay Delta fixes that restore reliability

Rising water ratesg

Sustaining new water use ethic

Resolving MWD and QSA disputesp

Water bond timing/passage? Bay-Delta waterways

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SummaryRegion has significantly improved

Summary

water supply reliability over past two decadesSupply diversification is workingSupply diversification is working

Regional shortage level is lower because of diversified supply

Historic investments in major regional water infrastructure

$1.5 billion Emergency Storage Project protects region$1.5 billion Emergency Storage Project protects region following natural disaster

Long-term strategy and investment protects region for generations to comefor generations to come

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QuestionsQuestionsQuestionsQuestions

San Diego County Water AuthoritySan Diego County Water Authority Speakers Bureau Requests & Information

[email protected](858) 522-6708(858) 522 6708

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