Asian Business Association Sept. 28 Rice Club Luncheon - Maureen Stapleton

San Diego County Water Issues 2010 Update Asian Business Association Rice Club Luncheon A i B i A i ti Ri Cl b L h September 28, 2010 1

What Is the Water Authority? Wholesale water agency g y created by State Legislature in 1944 24 member agencies membe 36-member board of directors Se es 3.2 Serves 3 million peop e a d o people and region’s $174 billion economy Service area 950,000 acres 97% of county’s population 2

Sources of San Diego County’s Water Supply LAKE SHASTA San Diego County LAKE imports ~80% of its OROVILLE water supply State Water Project (Bay-Delta) 30% Colorado River 50% Local Supplies and Conservation 20% 3

Regional Water Supply Diversification 1991 2010 2020 5% 10% 6% 3% 4% 11% 16% 3% 7% 4% 95% 10% 6% 10% 9% 29% 50% 22% Metropolitan Water District Seawater Desalination Imperial Irrigation District Transfer Local Surface Water All American & Coachella Canal Lining Recycled Water Conservation Groundwater Dry-Year Water Transfers 4

Q Quantification Settlement Agreement g Colorado River QSA Supplies Q pp Imperial Irrigation District transfer 200,000 acre-feet*/year for 45 to 75 years Canal-lining projects C l li i j t 80,000 acre-feet**/year for 110 years Key to supply diversification strategy Canal-lining project C l li i j t Provides 165,000 acre-feet in 2010; helps mitigate current shortage By 2021 will provide 30% of 2021, region’s supply Lining the Coachella Canal *At full implementation in 2021 ** Acre-foot = 325,900 gallons 5

Groundwater and Recycled Water Recycled Water 28,000 28 000 af/year today growing to today, 52,000 af/year by 2020 High-quality, drought-proof water supply 17 agencies in San Diego produce recycled water Primarily used for landscaping irrigation Groundwater 13,000 f/ 13 000 af/year t d today, growing t i to 53,000 af/year by 2020 San Diego does not have significant underground storage basins Brackish groundwater must be Sweetwater Authority’s groundwater desalinated desalination plant Six local agencies have groundwater projects 6

Conservation Comprehensive water conservation programs programs, incentives and school programs since 1990s 65,000 65 000 af/year today today, growing to 94,000+ by 2020 Cumulative savings: more C l ti i than 600,000 AF Water efficient planting and rotating nozzle Shifting emphasis g p from indoor to outdoor conservation 7

Seawater Desalination Carlsbad Desalination Project Produce up to 56,000 acre-feet annually Approved term sheet that will lead to water purchase agreement to buy output p g y p of plant Camp Pendleton Project 56,000 56 000 to 168,000 af/year 168 000 Feasibility studies under way Bi-national Desalination Project Encina Power Station, Carlsbad h d In conjunction with agencies in Nevada, Arizona and Mexico Studying site in Baja California 8

Capital Improvement Program $3.8 billion CIP (1989 – 2030) $1.5 billion Emergency Storage Program (ESP) Dozens of major projects – completed or under construction 2010 debt issuance of $627 million to continue funding CIP Olivenhain Reservoir and Lake Hodges 9

Water Authority Rates 2011 Water Authority Board d t d W t A th it B d adopted CY 2011 rates t following public hearing in June Treated water rate – up 11.3% ($1,026/AF) 11 3% ($1 026/AF) Untreated water rate – up 14.7% ($811/AF) Primary drivers of rate increases: y Costs to purchase, deliver imported water Costs for operating, maintaining and financing regional water system t t 10

Cost of Water Drives Treated Water Rate* Increases “All-in” Increase All-in Water Authority Melded Supply Distribution Rate Increase Transportation MWD 8% 75% Storage S 21% Customer Service Supply 9% 62% Water Authority 25% *Municipal and Industrial Rate 11

Wholesale Monthly Cost of Water to Households Estimated CY 2011 Wholesale Costs per Household * p Cost of water purchases is 62.7% of the wholesale cost of water MWD Costs $23.70 $23 70 62.7% is the h Cost of Water For an estimated $16.04/month the Water Authority: IID/QSA Costs $3.26 Delivering water and maintaining Water Authority the system $4.09 Operating Costs Rapidly diversifying the region’s Water Authority 37.3% is Water water supplies $11.95 Authority Costs Capital Costs Providing in-region emergency water storage TOTAL: $43/month * Based upon 0.5 AF of consumption a year Developing in-region water storage D l i i i t t capacity 12

Mitigating Rate Impacts – Water Authority Actions Current budget eliminated more than a dozen positions $2.4M reduction made mid-year in FY 2010 & 2011 Reduction in spot water purchases Rate stabilization draw – up to $10.7M $10 7M MWD rate challenge Lawsuit challenging MWD’s rates and how they’re allocated 13

Supply Challenges pp y g Regulatory restrictions g y Fish protections limit State Water Project deliveries Lingering effects of drought Lake Oroville – April 2010 Storage still recovering Heading into another dry winter? (La Niña?) Effects of climate change 14

Response to Supply Challenges p pp y g Water Shortage and Drought Response Plan Implementation 8% regional target beginning July 1, 2009 1 Target in effect through June 30, 2011 30 15

Region Succeeding in Saving Water September 2009 - August 2010 Acre-feet Urban W t U * U b Water Use* 18% below 600,000 FYs FY 08/09 602,300 11% below 550,000 FYs 09/10 552,100 552 100 500,000 493,100 450 000 450,000 400,000 FYs 2008/ FYs 2009/ FYs 2010/ 2009 2010 2011 *12-month periods overlap two fiscal years. 16

San Diego County: 1991 vs 2010 vs. $174 $1026 3.2 1.3 578 $323 2.5 1.08 $65 566 1991 2010 Water use (thousand acre-feet) Population (millions) Cost of water per acre-foot (full p ( Jobs (millions) ( ) service treated water rate) Gross Domestic Product (billions) 17

MWD Rate Challenge Water Authority filed it i J W t A th it fil d suit in June against MWD i t over its 2011-2012 rates Violates California law, standard practices law MWD improperly overcharges for transporting water through its facilities g MWD improperly subsidizes the price of water it sells 18

Impacts to Local Ratepayers *Based on 600,000 AF annual sales; 2021 figure includes $40B Delta fix share 19

QSA Litigation January 2010: Superior Court ruling invalidated 13 agreements Includes IID transfer and canal-lining agreements Ruling based on single sentence in one agreement State’s bli ti t fund St t ’ obligation to f d Salton Sea mitigation found unconstitutional Water Authority and other agencies appealed ruling Temporary stay allowing transfers to continue Appellate Court decision expected in 2011 All-American Canal 20

Co t u g Challenges Continuing C a e ges Achieving Bay Delta fixes Bay-Delta that restore reliability Rising water rates g Sustaining new water use ethic Resolving MWD and QSA legal disputes g p Water bond passage in Bay-Delta waterways 2012? 21

Questions 22

Asian Business Association Sept. 28 Rice Club Luncheon - Maureen Stapleton

by San Diego County Water Authority

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