distribution of ocean desalinated water...higher bpp issues • fy 2007-08 maximum pumping year from...

Distribution of Ocean Desalinated Water

Board of Directors February 3, 2016

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Updated

Background • May 2015 – OCWD approved Term Sheet with

Poseidon Resources – Poseidon construct treatment plant – OCWD construct necessary distribution infrastructure

• OCWD staff asked to review option of recharging Poseidon water into the groundwater basin

• Report attached (Options 1A, 1B, 1C) • Other options also reviewed

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Presentation Topics I. Distribution Options II. Financial Impacts III. Schedule IV. Total Water Demands V. Future Water Supply Portfolio VI. Using GAP System to distribute Poseidon water VII. Water Chemistry/Integration

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First Workshop(s)

Poseidon Distribution Options Option Description Capital

Cost

1A 26 New Injection Wells, Talbert Barrier, and necessary pipelines $305 M

1B 16 New Injection Wells, Talbert Barrier, and new pipeline off GWRS pipeline to Kraemer Basin $316 M

1C Zero New Injection Wells, Talbert Barrier, and new pipeline from FV to new 20 acre recharge basin $325 M

1D* Four New Injection Wells, Talbert Barrier, Burris Booster PS, Burris Outlet, and necessary pipelines $160 M

2A* Zero New Injection Wells, Talbert Barrier, Burris Booster PS, Burris Outlet, and pipelines/turnouts to sell directly to NB & HB $131 M

2B Zero New Injection Wells, Talbert Barrier, and pipelines/turnouts to sell directly to NB, HB, SB, FV, GG, GSW $97 M

3 Zero New Injection Wells, Talbert Barrier, and pipelines/turnouts to sell directly to NB, HB, SB, FV, GG, GSW, and South County Agencies $161 M

4 All water distributed to Producers (no recharge) $107 M 4

OCWD Existing Facilities

• GWRS • Talbert Seawater Barrier • GAP • GWRS Pipeline • MBI • Recharge Basins

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Desal Option 1A

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54-inch Desal Distribution Pipe

Southeast Talbert Inj. Wells

SAR Injection Wells

Dyer Wellfield Inj. Wells

Campesino Park Inj. Wells

ARTIC Inj. Well

Desal Distribution Pump Station

Ball Road Basin Inj. Wells Facility Flow

(MGD) Capital

Cost ($M)

Burris Outlet - $1

Ball Road Basin Inj. Wells 4.5 $19

ARTIC Inj. Well 2 $6

Campesino Park Inj. Wells 4.5 $19

Dyer Wellfield Inj. Wells 12 $79

SAR Injection Wells 6 $24

Talbert Seawater Barrier 15 -

Southeast Talbert Inj. Wells 6 $35

Desal Dist. Pipeline - $41

Desal Dist. Booster PS - $6

Property Acquisition - $5

Contingency (30%) - $70

TOTAL 50 $305

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30-inch Desal Kraemer Distribution Pipeline

Dyer Wellfield Inj. Wells

Facility Flow (MGD)

Capital Cost ($M)

Kraemer Basin Recharge 15 -

Desal Kraemer Dist. Pipeline - $68

Burris Outlet - $1

ARTIC Inj. Well 2 $6

Desal Kraemer Booster PS - $6

Dyer Wellfield Inj. Wells 12 $79


Southeast Talbert Inj. Wells 6 $35





TOTAL 50 $316

Desal Option 1B


ARTIC Inj. Well

Southeast Talbert Inj. Wells

Desal Kraemer Booster Pump Station

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42-inch Desal Recharge Basin Distribution Pipeline

42-inch Desal Barrier Distribution Pipeline

New Recharge Basin Facility Flow

(MGD) Capital

Cost ($M)

New Recharge Basin 35 $9

Burris Basin Outlet - $1


Desal Distr. Pipeline (Barrier) - $33

New Desal Distr. Pipeline (Recharge Basin)

- $156

New Desal Booster PS - $16



TOTAL 50 $325

Desal Option 1C

New Desal Booster Pump Station

GWRS Final Expansion

(30 mgd of new water)

72”

78”

66”

60”

Edinger

Willowick Golf Course

Burris

Kraemer Miller

Miraloma

La Palma

Five Mid Basin Injection Wells at Centennial Park - ~8 mgd

7 mgd

Booster Pump Station to send additional 15 mgd to recharge basins

GWRS Pipeline (not to scale)

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Desal Option 1D

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Centennial Park Inj. Wells


Burris Booster Pump Station & Outlet

Facility Flow (MGD)

Capital Cost ($M)

Burris Booster Pump Station* 15 $25

Burris Basin Outlet* 12 $1

Centennial Park Inj. Wells* 6.5 $25

MBI Inj. Well* 1.5 -




GWRS IE – SAR Inj Wells - $24

GWRS IE – ARTIC Inj Well - $6


TOTAL 50 $160

*Projects Planned for GWRS Final Expansion

Desal Option 2A

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Burris Booster Pump Station & Outlet

*Projects Planned for GWRS Final Expansion

Turnouts

Facility Flow (MGD)

Capital Cost ($M)

Burris Booster Pump Station* 15 $25

Burris Basin Outlet* 12 $1




Turnouts & Pipeline for NB & HB 8 $3

GWRS IE – Centennial Park Inj Wells - $25


TOTAL 50 $131

Comparison of Desal vs GWRS Final Expansion Distribution Cost for Options 1D & 2A

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• Total capital cost for GWRS Final Expansion Distribution Facilities is approximately $70 M

– MBI & Centennial Park Inj Wells – Burris Booster PS at Burris – Burris Outlet

• If the above facilities are designated for desalinated water – then additional injection wells will have to be constructed for GWRS Final Expansion

• The total capital cost for the new injection wells required to recharge GWRS Final Expansion water is estimated to be ~ $200 M

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42-inch Desal Producer Distribution Pipe via

WOCWBF

Desal Option 2B Facility Flow

(MGD) Capital Cost

($M)

Burris Outlet - $1

Desal Producer Dist. Pipeline and WOCWBF Turnouts

27 $40

Desal Distr. Pipeline and Adams Turnouts

8 $2


Desal Distr. Pipe - $33


TOTAL 50 $97

24-inch Desal Producer Distribution Pipe via Adams

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Desal Option 3


42-inch Desal Producer Distribution Pipe via WOCWBF

36-inch OC-44 Pipe Improvements

36-inch South County Desal

Distribution Pipe HB Desal Facility

Facility Flow (MGD)

Capital Cost ($M)

Burris Outlet - $1


25 $40


Desal Distr. Pipeline - $33

Improvements to OC-44 - $12

South County Desal Pipeline 10 $39


TOTAL 50 $161

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48-inch Desal Producer Distribution Pipe via

WOCWBF

Desal Option 4

36-inch OC-44 Pipe Improvements

Facility Flow (MGD)

Capital Cost ($M)

Burris Outlet - $1


29 $44

Desal Distr. Pipeline - $27

Improvements to OC-44 w/Turnouts 21 $12


TOTAL 50 $107

Preliminary Permitting Assessment

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Permit Desal Option

1A 1B 1C 1D 2A 2B 3 4

CRWQCB – 401 Water Quality x x x x x

Dept. of Fish and Game – 1602 Streambed Alteration x x x x x

US Army Corps – 404 Permit x x x x x

County of Orange – Encroachment Permit x

Storm Water and City Encroachment Permits will apply to all Options.

Selling Poseidon Water To Local Groundwater Producers

• Generally less expensive option - Requires less infrastructure • Poseidon water integration / chemistry concerns • Need to formally approach agencies to determine interest

– Sell water at MWD rate – SWRCB recent actions will limit purchase amounts – Draft agreement

• Requires City Council approval • Option 2B, 3, and 4 requires West O.C. Water Board approval

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Recharging Poseidon Water Into the Groundwater Basin

• Institutionally easier approach • Less parties involved - OCWD is the only customer • Could require more extensive CEQA/EIR • Constructing new injection wells can be riskier and take

longer • Raises the Basin Production Percentage • All Producers theoretically benefit

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Recharging Poseidon Water • Increases the BPP by approximately 12-13% • Future BPP percentage could be in the 90’s • Automatically adds approximately $80/af to the

project’s unit cost – well extraction cost • Not aware of anyone recharging ocean desalinated

water into a groundwater basin • Total future OCWD recharge into the groundwater

basin could exceed 400,000 afy 19

Future Possible Basin Recharge Sources (afy)

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357,000 Total Water Demands

84% BPP

AFY

#1 No

Poseidon


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97% BPP

AFY

#2 With

Poseidon


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90% BPP

AFY

#3 No

GWRSFE


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81% BPP

AFY

#4 No MWD Untreated

Higher BPP Issues • FY 2007-08 maximum pumping year from the GW Basin

– 366,000 afy of groundwater pumping - BPP was set at 80.2% – 8 of 19 Producers achieved the BPP

• Producers will have to construct additional wells, pipelines & pump stations

• Each Producers water distribution system is unique with different capabilities

• Some Producers will likely not be able to achieve the higher BPP • Producers with BEA waived water quality projects pumping above

the BPP (IRWD & MCWD) may not recover their capital investment 24

Estimated Financial Impacts

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Financial Impacts • Slightly more complicated when recharging Poseidon Water

vs original Poseidon proposal • Eight different options • RA and BPP are increasing • OCWD is taking on long-term debt

– Need to maintain minimum 2.0 debt coverage ratio • OCWD operating budget increases

– Need to increase operating reserves • Requires different financial metric to evaluate the distribution

options and their total impact to the Producers water supply cost

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Producers Variable Water Supply Cost

Component Amount Replenishment Assessment $322/af Well Pumping Cost $80/af Treated Imported Water (Includes $80/af for RTS and CC)

$1022/af

Basin Production Percentage 75% Water Supply Cost Total $557/af

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Summary of Options Option # 1A 1B 1C 1D 2A 2B 3 4

Capital Cost $305 M $316 M $325 M $160 M $131 M $97 M $161 M $107 M

Annual O&M $5 M $5 M $4 M $2.7M $3 M $2.5 M $2.5 M $2.5 M

Unit Cost $469/af $482/af $475/af $247/af $217/af $166/af $245/af $179/af

RA Increase $248/af $252/af $253/af $191/af $171/af $110/af $135/af $85/af

BPP Increase 12% 12% 12% 12% 10% 4% 4% N/A

Producers Increase

$141/af $144/af $145/af $91/af $82/af $64/af $83/af $64/af

Monthly Water Bill

$6.30 $6.50 $6.50 $4.00 $3.70 $3.00 $3.70 $3.00

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New Recharge GWRSFE WOCWB

OCWD Recharges All Poseidon Water Combination Original

Receiving Outside Grant Funding

• For every $10 million in grant funding received – Lowers project unit cost by ~ $12/af – Lowers impact to OCWD RA by ~ $4/af – Lowers impact to Producers water supply cost by ~

$3/af

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Final Water Purchase Agreement Negotiation

Coastal Commission

Study Distribution

Options

Poseidon Financial

Close

Prepare CEQA

OCWD Board Action for consideration – “Go No-Go” decision 1. Water Purchase

Agreement 2. Other Possible

Agreements 3. CEQA

Possible Producer Agreements

Possible Distribution Agreements

Preliminary Design

May/June 2016 OCWD Board Action for consideration 1. Select Distribution Option 2. Initiate Prelim. Design 3. Initiate CEQA 4. Initiate Final Poseidon

Negotiations

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Poseidon Schedule Overview

MWD LRP

Prop $ & State Loans

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9-12 Month Process

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Going Forward • Receive Board comments and questions • Receive public comments • Receive Producer comments – February 10th

Producers meeting • Schedule second workshop • Work towards deciding optimum distribution plan by

May/June.

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End of Presentation

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Additional Project Information

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Term Sheet

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Term Sheet Details

• Poseidon owns, permits, designs, finances, constructs and operates the desalination treatment plant

• OCWD would purchase the plant water • OCWD owns, permits, designs, finances, constructs and

operates the necessary distribution facilities to transmit the water to the end users

• OCWD would find end users for water and/or use water to recharge the groundwater basin

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OCWD Payments to Poseidon Resources

Years OCWD Payment to Poseidon

1 - 10 MWD rate plus a premium of up to 20% of the MWD rate

11-20 MWD rate plus a premium of up to 15% of the MWD rate




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• Initial ten year premium amounts to be negotiated based upon Poseidon’s actual and expected cost and an agreed upon return on investment

• In later years of contract the premium amount may be less than zero • Poseidon will be guaranteed a minimum annual escalation rate to be negotiated which is shown at 3% in

the Term Sheet • Beginning in year 15 and every 5 years thereafter the premium will be reviewed and lowered if Poseidon is

receiving an economic return above an agreed upon amount

Term Sheet Details

• MWD LRP subsidy must be obtained • OCWD can take possession of the treatment plant at the end

of the contract for $1 • Poseidon would provide water at an agreed to quality • The Term Sheet is not definitive • Does not legally commit either party to any future actions. • Practically commits the District to fully consider the project and

work towards developing a Water Purchase Contract

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City of Huntington Beach at a 75% BPP (afy)

Previous Typical SWRCB Reduction Total Water Demands 33,000 24,800

BPP 70% 75% Groundwater 23,100 18,600 MWD Water 9,900 6,200

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GWRS Final Expansion

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Facility Flow (MGD)

Capital Cost ($M)

Talbert Seawater Barrier

15 -

Mid-Basin & Centennial Park Injection Wells

8 $25

Burris Basin Outlet 7 $1

Burris Booster Pump Station to Recharge Basins

100 $25


TOTAL 130 $70

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West Orange County Water Board Pipelines

(HB, West., GG, SB)

Feeder #1 Feeder #2

Water Supply Reliability Policy

• May 2013 • District policy to consider and develop a

variety of local water resources to ensure sufficient water supplies are always available to the residents and business within OCWD

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Basin Production Percentage Goal

• January 2013 • District goal to achieve and sustain a 75% Basin

Production Percentage • If additional economical projects and programs can

be implemented that support a Basin Production Percentage above 75%, the District will undertake such projects and programs.

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Long-Term Facilities Plan

• November 2014 • Identified 17 “Focused Study Projects” projects • District staff to “prioritize” these 17 projects for

evaluation • LTFP Water Supply Projects

– GWRS Final Expansion – GWRS Urban runoff diversion to Plant 1 – Poseidon – SARI flow treatment at Ball Road Basin – Purchase upper watershed wastewater – Recovery of evapotranspiration at Prado Basin

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distribution of ocean desalinated water...higher bpp issues • fy 2007-08 maximum pumping year from...

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