San Diego County
     Water Issues
     2010 Update




San Di
S   Diego R i
          Regional Economic Development Corpo...
Today s
   Today’s Presentation
Dennis Cushman – San Diego County Water Authority
 Water Authority background
           h...
3
What Is the Water Authority?

Wholesale water agency
                  g    y
created by State Legislature in
1944
 24 mem...
Sources of San Diego County’s Water Supply


                       LAKE
                      SHASTA
                    ...
Imported Water Sources
Colorado River Supplies                                     State Water Project Supplies

  Departm...
Supply Diversification




                         7
Regional Water Supply Diversification

1991                           2010                                     2020
 5%   ...
Q
  Quantification Settlement Agreement
                             g

Colorado River QSA Supplies
               Q     p...
Groundwater and Recycled Water
                                     Recycled Water
                                       ...
Conservation
Comprehensive water
conservation programs
              programs,
incentives and school
programs since 1990s
...
Seawater Desalination

                                 Carlsbad Desalination Project
                                    ...
13
Water Authority Rates 2011

Water Authority Board d t d
W t A th it B d adopted CY 2011 rates
                            ...
Cost of Water Drives Treated
              Water Rate* Increases
             “All-in” Increase
              All-in      ...
Mitigating Rate Impacts –
    Water Authority Actions
Current budget eliminated more than a dozen
positions
$2.4M reductio...
Supply Challenges
      MWD Rates
   QSA Litigation
      Water Bond




                    17
Supply Challenges
           pp y        g
                             Regulatory restrictions
                          ...
Response to Supply Challenges
    p          pp y        g

Water Shortage and
Drought Response Plan
Implementation
8% reg...
Region Succeeding in Saving Water

            August ‘09 – July ’10 Urban Water Use
Acre-feet

600,000                   ...
San Diego County: 1991 vs 2010
                       vs.

                                                     $174




 ...
MWD Rate Challenge

Water Authority filed it i J
W t A th it fil d suit in June against MWD
                              ...
MWD Misallocating Its Costs




                              23
Impacts to Local Ratepayers




         *Based on 600,000 AF annual sales; 2021 figure includes
         $40B Delta fix s...
Impacts on Supply Reliability
                          By disguising true cost
                          of i
           ...
QSA Litigation
January 2010: Superior Court ruling invalidated 13
agreements
   Includes IID transfer and canal-lining agr...
2012 Water Bond Summary
 $11.14 billion bond on Nov. 2012 ballot
 $2.25 billion for Bay-Delta ecosystem restoration
 $3 bi...
2012 Water Bond Highlights for San Diego

                     $227 million in dedicated
                     funding
    ...
2012 Water Bond Fund Categories and
    San Diego Co nt ’s 2020 Supply Di e sification
              County’s      S ppl D...
Co t u g Challenges
       Continuing C a e ges

Achieving Bay Delta fixes
           Bay-Delta
that restore reliability
R...
Recycled Water
 ecyc ed ate




                 31
Carlsbad
Desalination Project
Carlsbad Desalination Project




                           33
Site Configuration
Delivery System
Project Benefits

Provide 56,000 AFY of high quality drinking water
                          g q    y        g
Offset the...
Status and Timeline

Permitting and entitlements complete
Initial phase of construction underway
Finalizing engineering, p...
Construction Commenced - November 2009
Questions




            39
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San Diego County's Water Supply - SD Regional EDC Presentation Sept. 21

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On September 21, Dennis Cushman, Assistant General Manager , along with Peter MacLaggan of Poseidon Resources, provided a presentation at the San Diego Regional Economic Development Corporation's Investor Breakfast. Topics included water supply and reliability, water rates, and seawater desalination.

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San Diego County's Water Supply - SD Regional EDC Presentation Sept. 21

  1. 1. San Diego County Water Issues 2010 Update San Di S Diego R i Regional Economic Development Corporation lE i D l tC ti September 21, 2010 1
  2. 2. Today s Today’s Presentation Dennis Cushman – San Diego County Water Authority Water Authority background h b k d Water reliability strategy Supply diversification Rates Key water issues Supply challenges MWD rates QSA litigation Water bond Andrew Poat – San Diego Regional EDC Recycled water Peter MacLaggan – Poseidon Resources Carlsbad Desalination Facility 2
  3. 3. 3
  4. 4. 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 4
  5. 5. 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% 5
  6. 6. Imported Water Sources Colorado River Supplies State Water Project Supplies Department of Interior California Department of C lif i D t t f Bureau of Reclamation Water Resources All American and Coachella Canal C h ll C l Priority 1: Palo Verde Irrigation District Lining Projects State Water Project Priority 2: Yuma Project Contractors (27) Metropolitan Water District of Southern California Priority 3a: Imperial Irrigation District 26 Other Contractors Priority 4 and 5a: Metropolitan Water District of Southern California San Diego County Water Authority 24 Local Retail Agencies and cities 6
  7. 7. Supply Diversification 7
  8. 8. 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 8
  9. 9. 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 9
  10. 10. 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 10
  11. 11. 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 11
  12. 12. 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 12
  13. 13. 13
  14. 14. 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 14
  15. 15. Cost of Water Drives Treated Water Rate* Increases “All-in” Increase All-in Water Authority Melded Supply Distribution Rate Increase $104/AF $65/AF MWD  Transportation p 75% 8% ($49) ($8) Storage 21% ($22) Customer  Service Supply 9% 62% ($9) ($65) Water Authority  25% ($16) *Municipal and Industrial Rate 15
  16. 16. 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 16
  17. 17. Supply Challenges MWD Rates QSA Litigation Water Bond 17
  18. 18. 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 18
  19. 19. 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 19
  20. 20. Region Succeeding in Saving Water August ‘09 – July ’10 Urban Water Use Acre-feet 600,000 18% 606,400 606 400 below 550,000 ’07/08 12% below 561,300 ’08/09 500,000 500 000 495,100 450,000 400,000 2007/08 2008/09 2009/10 350,000
  21. 21. San Diego County: 1991 vs 2010 vs. $174 3.2 1.3 578 2.5 1.08 $65 566 1991 2010 Water use (thousand acre-feet) Jobs (millions) Population (millions) Gross Domestic Product (billions) 21
  22. 22. 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 22
  23. 23. MWD Misallocating Its Costs 23
  24. 24. Impacts to Local Ratepayers *Based on 600,000 AF annual sales; 2021 figure includes $40B Delta fix share 24
  25. 25. Impacts on Supply Reliability By disguising true cost of i f imported water, t d t MWD discourages local supply development Disincentive to pursuing conservation and local supply projects Disincentive to transfers that require use of MWD’s facilities Desalination membranes These kinds of projects help protect region from supply shortages 25
  26. 26. 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 26
  27. 27. 2012 Water Bond Summary $11.14 billion bond on Nov. 2012 ballot $2.25 billion for Bay-Delta ecosystem restoration $3 billion for statewide surface storage $1.4 billi f W $1 4 billion for Water Supply Reliability S l R li bili $455 million for drought relief $1.785 $1 785 billion for watersheds $1 billion for groundwater clean-up $1.25 billion for conservation, recycling and desalination 27
  28. 28. 2012 Water Bond Highlights for San Diego $227 million in dedicated funding $100 million for regional storage and supply reliability projects $87 million in funding for local supply reliability projects $40 million in funding for local watershed projects t h d j t Competitive grants for: Drought relief projects Conservation, recycling, desalination Environmental protection and restoration Climate change adaptation 28
  29. 29. 2012 Water Bond Fund Categories and San Diego Co nt ’s 2020 Supply Di e sification County’s S ppl Diversification $100 million for regional storage $ $40 million for San Diego g watersheds $1 billion for groundwater clean-up $1 billion for recycling and seawater desalination Other Bond Funding: g $265 million for drought $250 million for relief projects conservation $2.25 Billion for Bay Delta Ecosystem Improvements $3 billion for new statewide surface storage 29
  30. 30. 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? Bay-Delta waterways 30
  31. 31. Recycled Water ecyc ed ate 31
  32. 32. Carlsbad Desalination Project
  33. 33. Carlsbad Desalination Project 33
  34. 34. Site Configuration
  35. 35. Delivery System
  36. 36. Project Benefits Provide 56,000 AFY of high quality drinking water g q y g Offset the need for an equivalent amount of imported water Improve local water supply reliability Provide for long-term stewardship of Agua Hedionda Lagoon Restore and enhance of 66 acres of marine wetlands Fully mitigate increase in GHG emissions over baseline 36
  37. 37. Status and Timeline Permitting and entitlements complete Initial phase of construction underway Finalizing engineering, procurement and g g g, p construction contact, water purchase arrangements, and project financing Project will be fully operational 30 months after start of next phase of construction p 37
  38. 38. Construction Commenced - November 2009
  39. 39. Questions 39
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