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ITEM: |
ACTION
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13. |
RECEIVE WATER SUPPLY ALTERNATIVES COMPARATIVE MATRIX UPDATE FOR 2006 |
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Meeting
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October 16,
2006
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Budgeted: |
N/A |
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From: |
David A.
Berger, |
Program/ |
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General
Manager |
Line Item No.: |
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Prepared
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Henrietta
Stern, |
Cost Estimate: |
N/A |
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Andrew
Bell |
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General Counsel Approval:
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Committee Recommendation:
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CEQA Compliance: N/A |
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SUMMARY: The Monterey Peninsula Water Management District (MPWMD) Board will receive a staff presentation on an updated matrix (Exhibits 13-A, 13-B, and 13-C) that compares information provided by the sponsors of six water supply projects. The matrix purpose is to:
Ø summarize and consolidate 2006 information provided by proponents about current water supply project proposals in a single format; and
Ø facilitate Board discussion of next steps regarding water project implementation as it relates to use of MPWMD resources (staff, consultants, budget) in the coming year.
The seven projects in the 2006 matrix include:
1. Coastal Water Project (CWP) sponsored by California American Water (Cal-Am).
2. North Monterey County Desalination Project (NMCDP) sponsored by the Pajaro/Sunny Mesa Community Services District (P/SM).
3. Long-Term Water Supply Project/Desalination (WSP) sponsored by MPWMD.
4. Seawater conversion vessels, proposed by Water Standard Company
5. Aquifer Storage and Recovery in Seaside Basin (ASR) sponsored by MPWMD.
6. Regional Urban Water Augmentation Project (RUWAP) sponsored by Marina Coast Water District (MCWD) and Monterey Regional Water Pollution Control Agency (MRWPCA).
7. Groundwater Replenishment Project (GRP) sponsored by MRWPCA.
The fourth project in the list, seawater conversion vessels, was added to the matrix at the direction of the Board, following a presentation of the concept by the project proponents at an August 31, 2006 Board workshop.
As with the 2005 matrix, the 2006 matrix is divided into
two parts. Part I (Exhibits 13-A and 13-B) summarizes four
relatively large desalination projects that would, at a minimum, comply with
State Water Resources Control Board (SWRCB) Order 95-10 with existing water
demand on the
Please refer to the “Discussion” section below for an overview of each project, with an emphasis on new or updated information. It is notable that all projects would require upgrades to the existing Cal-Am distribution system in order to receive the water.
RECOMMENDATION: The Board should receive the updated 2006 matrix information, ask questions, indicate whether follow-up work is needed by staff, and indicate whether a specific agenda item should be prepared for future consideration. The Board may wish to defer this discussion to the Strategic Plan Workshop scheduled for September 25, 2006, which will include water augmentation issues.
BACKGROUND: At its July 19 and 29, 2004 meetings, the Board heard presentations by and posed questions to project proponents, with emphasis on water production capacity, cost, timeline and opportunities for MPWMD participation. The Board directed staff to prepare a matrix summarizing information provided by project proponents related to these questions, and obtain and summarize regulatory process information for discussion on September 29, 2004. The matrix was first presented on September 29, 2004 at the MPWMD Strategic Planning Session. Refer to the following web address for the 2004 matrix and supporting information:
http://www.mpwmd.dst.ca.us/asd/board/boardpacket/2004/20040929/07/item07.htm
On March 21, 2005, project update presentations were made by Cal-Am, Monterey County Water Resources Agency (MCWRA), MPWMD, MRWPCA and P/SM. At a special meeting on June 16, 2005, the Board determined that it would host an August 25, 2005 Town Hall Meeting with emphasis on public education about different water supply options. The well-attended August 25, 2005 event featured four displays staffed by project sponsors, eight presentations to an audience of over 100 people, and a lively question/answer session. Sponsor presentation materials may be found on the District website at:
www.mpwmd.dst.ca.us/asd/board/boardpacket/2005/20050825/0825ag_notice.htm.
The 2005 update to the matrix was presented at the September 8, 2005 Strategic Planning Session. Refer to the following web address for the 2005 matrix and supporting information:
http://www.mpwmd.dst.ca.us/asd/board/boardpacket/2005/20050908/04/item4.htm
In previous years, all matrix information was submitted by the project sponsors with no independent analysis by MPWMD to assess the completeness or accuracy of the information. Earlier in 2006, the District Board commissioned an independent review of the three desalination projects (Projects 1, 2 and 3 listed above). At the June 29, 2006 Board Special Workshop, Bookman-Edmonston/GEI Consultants (B-E/GEI) presented their June 26, 2006 report titled “Seawater Desalination Projects Evaluation.” Copies of the full report are available at the District office, and presentation materials are provided at the following website location:
http://www.mpwmd.dst.ca.us/asd/board/boardpacket/2006/20060629/0629agenda.htm.
During
the workshop, B-E/GEI representatives responded to a number of questions and
comments by the Board and public.
At the end of the workshop, the Board asked for the cost for additional
work by B-E/GEI to revise the final report by including responses to comments
and questions during the workshop. At its July 17, 2006 meeting, the Board determined
that additional funds should not be expended to revise the report at this time. Staff was directed to solicit written
comments from Cal-Am and Pajaro/Sunny Mesa Community Services representatives and
to prepare a summary of oral and written comments. A summary of comments by the Board, the
public, and project proponents, including copies of written comments received, included
in this packet under Item 14, Exhibit
14-B.
The City of Sand City is pursuing a 300 acre-foot per year
(AFY) desalination project designed solely to meet the City needs. In 2006, an Environmental Impact Report (EIR)
was certified and California Coastal Commission approval was obtained. The project could not be expanded to meet
broader community water needs without jeopardizing the “benign by design”
criteria; a larger project would result in brine salinity levels above ambient
seawater levels. Thus, the
The District Board held
a special workshop on August 31, 2006 to hear a presentation on seawater
conversion vessels (SCV) to provide an ocean-based (rather than land-based)
source of desalinated water. The
presentation was made by representatives of PBS&J Inc., one of the
country’s largest engineering design firms, Water Standard Company, and GE
Energy, part of a team assembled to market this concept internationally. MPWMD has neither analyzed nor endorsed the
SCV project concept. Pursuant to Board
direction at the September 18, 2006, information on this project was solicited
from the project proponents, and the information provided to staff is included
in the 2006 matrix as Exhibit 13-B.
The Monterey County Water
Resources Agency, as directed by the Monterey County Board of Supervisors, has
led an interagency effort involving city managers and general managers of water
and wastewater agencies, including MPWMD.
This effort has resulted in concept proposals for forming an
inter-agency governance structure to evaluate water supply alternatives and
create an integrated strategy for implementing a publicly-owned water supply
project (or projects) that could serve regional needs on the
DISCUSSION: The October 16, 2006 updated matrix serves as a “snapshot in time” to help track progress on the six water supply projects. The discussion below: (1) describes the matrix organization; (2) highlights each project with emphasis on what is new or different in 2006 as compared to 2005; and (3) describes next steps.
As part of the process of updating the matrix, District
staff contacted proponents of each of the projects listed in Exhibits 13-A, 13-B, and 13-C and requested that
updated information be provided not later than August 30, 2006. Updated information in the form of e-mails
and mark-ups of the 2005 matrix were received from MCWD and its consultant and
MRWPCA. Skip Griffin of PBS&J
provided the matrix information shown in Exhibit 13-B and the
PowerPoint presentation contained in Exhibit 13-D. No response to staff’s request was received
from Cal-Am or from Pajaro/Sunny Mesa.
As a result, staff used information previously obtained from Cal-Am and
Pajaro/Sunny Mesa to update those portions of the matrix. Those sources include information obtained by
Bookman-Edmonston/GEI Consultants for preparation of their June 26, 2006 report
titled “Seawater Desalination Projects Evaluation,” and information available
to the District through its participation in the process for Cal-Am’s application
to the CPUC for the Coastal Water Project.
Throughout the matrix, numbered rows provide the information requested for the matrix. The following lettered columns are used in 2006:
Part I-A Desalination
Projects (Exhibit 13-A)
Column A - Decision Element (topic)
Column B - Coastal Water Project (Cal-Am)
Column C -
Column D - Long-Term Water Supply Project/Desalination
at
Part I-B Desalination
Projects (Exhibit 13-B)
Column A - Decision Element (topic)
Column B - Seawater Conversion Vessel (Water Standard Company)
Part II Projects
Other Than Desalination (Exhibit 13-C)
Column A - Decision Element (topic)
Column B - Aquifer Storage and Recovery in
Column C - Regional Urban Water Augmentation Project (MCWD and MRWPCA)
Column D - Groundwater Replenishment Project (MRWPCA)
As noted in the “Background” section above, proponent information provided for three of the four desalination projects was subject to independent review by Bookman-Edmonston/GEI Consultants (B-E/GEI) and its subconsultants as presented in their June 26, 2006 report titled “Seawater Desalination Projects Evaluation.” Thus, numerical cost data and certain other technical information submitted by the project proponents may differ from results of the evaluation by the consultant. In cells of Part I of the matrix where information differs, the proponent’s information is shown in regular font and the conclusion by the B-E/GEI team is shown in bold italics.
The primary matrix topics (“Decision Elements”) remain:
Ø Project description,
Ø Water yield, including recipients and phasing,
Ø Project cost to customers, including detailed cost breakout,
Ø Financing and assumptions,
Ø Timeline and key milestones,
Ø Permits needed and regulatory agencies involved,
Ø Site control,
Ø Project operations and proponent capabilities,
Ø Project participants including MPWMD opportunities,
Ø Public involvement,
Ø List of acronyms found in the matrix.
SEAWATER DESALINATION PROJECTS
Coastal Water Project (Sponsor: Cal-Am – Exhibit 13-A, Column B)
The major components of the
proposed Coastal Water Project (CWP) are a seawater desalination plant in Moss
Landing at the “Duke East” site on Dolan Road about one-half mile east of
Highway 1; use of the intake and outfall for LS Power Group’s Moss Landing
Power Plant (MLPP), formerly owned by Duke Energy.; a desalinated water
conveyance system to the Monterey Peninsula, including a transmission pipeline,
terminal reservoir and pumping stations; and an ASR project in the Seaside Groundwater
Basin. Cal-Am plans to use a site on the
MLPP property for a one-year pilot project, but does not yet have a long-term
lease agreement for the proposed CWP facilities. The yield goal for the “basic project” is
defined as 11,730 AFY to: (a) provide 10,730 AFY to replace Cal-Am’s
New and Changed Information in 2006: On July 14, 2005, Cal-Am announced completion of the 1,700-page Proponent’s Environmental Assessment (PEA), a comprehensive environmental review document required by the California Public Utilities Commission (CPUC) before the CPUC will consider Cal-Am’s application for a Certificate of Public Convenience and Necessity (CPCN) to allow rate increases to fund the CWP. The September 2004 CPCN application was also amended in July 2005 to reflect information provided in the PEA for the 11,730 AFY Proposed Project.
The PEA also analyzed five alternatives in detail, four of which could potentially be approved by the CPUC as a new water project. The five alternatives are listed below. More complete descriptions are provided in the 2005 matrix materials:
Ø Alternative 1 (Regional Alternative) -- would provide 20,272 AFY of water for both Cal-Am and the neighboring communities.
Ø Alternative 2 (Over-sized Pipeline Alternative) – would include the same features as the proposed CWP, except that all pipelines would be larger to facilitate increased production to meet future needs.
Ø Alternative 3 (MLPP HDD Intake Alternative) -- would utilize Horizontal Directional Drilling (HDD) intake wells as feedwater supply.
Ø
Alternative
4 (North Marina Site Alternative) – would locate the seawater
desalination facility in the City of
Ø Alternative 5 (No Project Alternative) – would entail existing programs to conserve and recycle water.
Cal-Am consultants performed extensive engineering analyses to prepare cost estimates in 2005 for the proposed CWP. The June 2006 report by MPWMD consultants evaluated project facilities and estimated costs for the desalination portion of the CWP only and did not review or evaluate the ASR component.
With the submittal of the PEA, the CPUC staff began its formal environmental review as lead agency under the California Environmental Quality Act (CEQA). In 2006, the CPUC retained the firm of ESA Water to prepare the Draft EIR for the CWP. The ESA Water consulting team and CPUC staff met with MWMD staff on two occasions (June 28 and August 3, 2006) to better understand the water supply setting and to ask questions about potential CPUC-developed alternatives that may be included in the EIR. The current schedule calls for the Draft EIR to be prepared in Spring 2007 and the Final EIR to be completed in Summer 2007. This is roughly one year later than projected in September 2005.
The California Department of Health Services (CDHS)
requires a pilot project for a desalination facility to demonstrate reliable
water quality and quantity. In early
2005, Cal-Am submitted an application to the California Coastal Commission
(CCC) for a waiver of a Coastal Development Permit to construct a 200,000
gallon-per-day (gpd) pilot project at the MLPP.
In 2005, Cal-Am anticipated that permits for the pilot project would be
issued in September 2005 by the CCC, Regional Water Quality Control Board
(RWQCB) and
Other Related Events in 2006:
Ø Cal-Am and MPWMD entered into a Management an Operations Agreement as of April 1, 2006 for Phase 1 of MPWMD’s Aquifer Storage and Recovery Project. In accordance with this agreement, Cal-Am and MPWMD representatives have coordinated planning, permitting, and construction of facilities that will comprise the Phase 1 ASR Project.
Ø
The Decision on the
Ø The Moss Landing Power Plant, previously owned by Duke Energy, was purchased by LS Power Systems in 2006.
Ø In May 2006, Cal-Am and its parent entities filed application with the CPUC for authority to sell up to 100% of the stock of American Water Works Company, Cal-Am’s parent company, through public stock offerings. CPUC Public Participation Hearings are scheduled in September 2006. It is not known if this potential change will affect the CWP.
Information about the North Monterey County Desalination
Project (NMCDP) is very similar to that provided in 2005. Project components include a seawater
desalination plant in Moss Landing, transmission pipeline to the
New and Changed Information in 2006: Pajaro/Sunny Mesa partner Peter MacLaggan of Poseidon Resources provided refined project description, cost and timeline information to MPWMD consultants for the 2006 evaluation of desalination projects, but no updated information was provided in response to MPWMD staff’s request to update information presented in the 2005 matrix. The total estimated capital cost provided by Poseidon was reduced from $175,831,000 in the 2005 matrix to $132,000,000. The total estimated O&M cost provided by Poseidon was increased from $13,360,000 in the 2005 matrix to $16,900,000 per year. Although the total estimated costs were disclosed by Poseidon, the breakdown of capital and O&M costs were provided to MPWMD’s consultants on a confidential basis. Therefore the costs by category (e.g., desalination plant, intake and outfall, transmission pipelines, etc. for capital costs, and energy and facilities costs for O&M costs) are not available to be presented in the matrix.
The
P/SM intends to be the lead
agency for CEQA review of its desalination project. The target completion date for environmental
review and permitting is June 2008, as compared with a date of December 2006
for certifying the Final EIR in the 2005 matrix. The target completion date for beginning
water delivery is July 2010, as compared with a date of 2009 in the 2005
matrix.
Long-Term Water Supply
Project/Desalination in
The MPWMD Water Supply Project (WSP) is comprised of a seawater desalination plant in the Sand City area with new seawater intake/brine discharge facilities at Seaside State Beach, Sand City and/or former Fort Ord. The project design envisioned HDD wells for intake/discharge, but the geology of the former Fort Ord coastal area requires use of the existing MRWPCA outfall for large volumes of brine discharge. The basic yield goal set in 2003 is 8,400 AFY to legalize existing community demand. Specifically, the project goal is to meet local, near-term needs, including compliance with Order 95-10, assuming Cal-Am diversions from the Carmel River do not exceed 11,285 AFY and total Cal-Am production remains under 15,285 AFY. Production up to 11,000 AFY may be possible, depending on the outcome of hydrogeologic and engineering investigations that must first be performed.
An administrative “Board Review Draft EIR” for the MPWMD Water Supply Project was received at the December 15, 2003 meeting. To date, it has not been authorized to be refined to a formal Draft EIR to be circulated to the public pursuant to CEQA. The MPWMD Board continues to place this project “on hold” pending evaluation of regional projects.
New and Changed Information in 2006: There has been no Board action to pursue the WSP since it was tabled in October 2004. District efforts have focused on ASR and participation in interagency discussions about governance structure for regional water supply projects. However, the WSP was one of the three desalination projects subject to independent consultant review in June 2006. The MPWMD consultants determined that the estimated capital costs, including the 25% contingency amount, are reasonable. The MPWMD consultants determined that the estimated energy use should be reduced by 33% due to the higher energy efficiency of currently-available reverse osmosis equipment. This would reduce annual O&M costs by about $2 million per year.
Seawater Conversion Vessel (Proponent: Standard Water Company – Exhibit 13-B, Column B)
New and Changed Information in 2006: This project was not included in prior years’ matrices. Representatives of three firms participating in the project, Standard Water Company, PBS&J, and GE Energy, presented the concept to the Board at a workshop on August 31, 2006. The seawater conversion vessel project, proposed by Standard Water Company, is based upon an offshore “mother ship” containing a seawater desalination plant using reverse osmosis technology and one or more gas turbine engines to provide energy for the desalination process and associated shipboard facilities. Treated water would be delivered to an onshore water distribution system such as Cal-Am’s using either a pipeline placed on the seabed or a “shuttle ship” tanker to deliver water to a shoreside facility for unloading. At the September 18, 2006 regular Board meeting, the Board directed that the project be added to the matrix. The information shown in Exhibit 14-B, Column B, was provided by Skip Griffin of PBS&J. Mr. Griffin also provided a PowerPoint presentation on the project that is a revised version of the presentation made at the August 31, 2006 Board workshop. This document, titled “The Benefits of a Seawater Conversion Vessel” and dated September 27, 2006, is attached as Exhibit 13-D.
PROJECTS OTHER THAN SEAWATER
DESALINATION
Aquifer Storage and
Recovery in
The MPWMD Aquifer Storage and
Recovery Project would divert “excess” flow from the
The Phase 1 ASR Project assumes use of a primarily above-ground,
near-term Cal-Am pipeline to more efficiently deliver water to the Santa
Margarita injection well site than the existing temporary pipeline. The pipeline was approved by the City of
The MPWMD Phase 1 ASR is similar to, but not the same ASR project described for Cal-Am’s CWP proposal. The District and Cal-Am signed a Management and Operations Agreement (M&OA) regarding near-term and long-term ASR projects. Cal-Am and MPWMD technical staff continue to coordinate on means to engineer the Cal-Am’s system to facilitate ASR.
New and
Changed Information in 2006: On
August 21, 2006, the MPWMD Board certified the EIR/EA for the MPWMD Phase 1 ASR
Project. This completion date matched
the completion estimate provided in the September 2005 matrix. Permits from the U.S. Army and City of
The importance of ASR in the
management and stewardship of the Seaside Basin gained importance as it is a
key component of the “physical solution” described by the Monterey County
Superior Court’s March 2006 Final Decision on the Seaside Basin water rights
adjudication. Notably, the Phase 1 ASR
Project purpose is solely geared toward improved environmental protection of
the
Regional Urban Water Augmentation Project (Sponsors: MCWD and MRWPCA – Exhibit 13-C, Column C)
The Regional Urban Water Augmentation Project (RUWAP) involves two major water augmentation supply projects: seawater desalination and recycled water. In the 2004 matrix, a previous variation was referred to as the Regional Urban Recycled Water Project, and focused solely on the use of reclaimed water. Only 300 AFY is designated for use by Cal-Am customers for non-potable uses such as golf courses, cemeteries, parks and other landscape open space. The RUWAP could be combined with ASR or the other desalination projects described in the matrix.
New and
Changed Information in 2006: The
RUWAP project goal is to provide 2,400 AFY of water to the former
Ø “Seawater Desalination Alternative” -- a new 3,000 AFY desalination facility in the area currently occupied by the MCWD’s existing desalination plant. The proposed replacement desalination project meets the project objective of 2,400 AFY, replaces the District’s existing 300 AFY desalination plant, and also provides 300 AFY for use within or outside of the District service areas, e.g., on the Monterey Peninsula.
Ø “Recycled Water Alternative” -- provides 3,000 AFY of recycled water, which meets the project objective of 2,400 AFY, but would also provide 300 AFY of recycled water to the Monterey Peninsula and an additional 300 AFY for use within or outside District service areas.
Ø “Hybrid Alternative” -- includes a water supply of up to 1,500 AFY from an expansion of MCWD’s seawater desalination plant (including replacement of the existing 300 AFY capacity plant) and the production and distribution of up to 1,500 AFY of recycled water for landscape irrigation. The EIR concluded that depending upon the recycled water needs at the former Fort Ord, the remainder would be used for MCWD’s other service areas and potentially, the Monterey Peninsula, via a new recycled water distribution system.
In the 2005 matrix, the project yield for the desalination component was listed as “amount to be determined.” In information provided by MCWD in 2006, the yield of the desalination component is stated to be 1,500 AFY, with 1,200 AFY of this amount to be available for the Ord Community and 300 AFY to replace MCWD’s existing desalination plant. The reclaimed water project yields in 2005 were stated to be 1,700 AFY in Phase 1 and 3,100 AFY in Phase 2. The 2006 information provided by MCWD states the yields to be 1,500 AFY in Phase 1 and 3,300 in Phase 2.
New cost information provided by MCWD’s consultant RMC Water and Environment indicates that the capital cost of the Phase 1 reclaimed water project is estimated to be $54 million, up from $19 million in the 2005 matrix. No new capital cost information was provided for the Phase 2 reclaimed water project or the desalination project, and no updated annual operation and maintenance cost estimates for either project were provided.
Groundwater Replenishment
Project (Sponsor: MRWPCA – Exhibit 13-C,
Column D)
A second, related concept known
as the Groundwater Replenishment Project (GRP) is currently being evaluated by
MRWPCA. The GRP concept was not included
in the 2004 matrix because little information was available, and MRWPCA was
determining if the concept has merit to warrant further study. The concept envisions treatment of recycled
water to near-potable condition for groundwater percolation or injection into
the
New and Changed Information in 2006: In 2005 MRWPCA retained an expert consultant from the Water Factory 21 facility to help the agency assess and pursue the GRP locally. In the 2005 matrix, the GRP was stated to initially produce 2,800 AFY, with possible expansion in the future, and that a pilot project was anticipated in 2006. New information provided by MRWPCA in August 2006 states that the initial project would produce 2,400 AFY, and that a pilot project is anticipated in 2007. In the 2005 matrix the estimated capital cost is stated to be $26.9 million, and no annual operation and maintenance cost estimate was provided. New information provided by MRWPCA indicates an estimated capital cost of $37.9 million, and annual operation and maintenance costs are estimated to total $1,325,000 per year (August 2006 dollars). The new information states that the goal for the unit cost of water remains at $1,200 per acre-foot, the same as stated in 2005. The agency states that it is continuing to pursuing Proposition 50 and other funding sources. The agency has coordinated with MPWMD, DHS and other regulatory agencies regarding hydrogeology, health issues and engineering.
The 2006 comparative matrix continues to refine water supply project information, but many information gaps still exist. Except for the MPWMD Phase 1 ASR Project and MCWD’s RUWAP, major environmental review must be completed for each of the water supply proposals. Also, the county-initiated Monterey Bay Regional Water Authority governance structure is still evolving and consensus has not yet been obtained on its specific function and authority.
The MPWMD Board should consider various options of how the 2006 matrix should be used. These options may include, but are not limited to:
Ø Use the matrix solely as an informational snapshot in time. Update the matrix in six or 12 months, when more information is available.
Ø Use the September 2006 matrix to make a policy decision on what project(s) to support now.
Ø Defer a policy decision on water project alternatives described in the matrix (other than ASR Phase 1), and the role the District should assume in pursuing supply solutions, until more definitive information is available.
Ø Consider other policy choices that may be identified by the Board during the September 25, 2006 Strategic Planning Workshop.
EXHIBITS
13-A MPWMD Comparative Matrix, Part I-A, Desalination Projects
13-B MPWMD Comparative Matrix, Part I-B, Desalination Projects
13-C MPWMD Comparative Matrix, Part II, Projects Other than Desalination
13-D September 27, 2006 PowerPoint presentation by PBS&J for Water Standard Company, “The Benefits of a Seawater Conversion Vessel”
U:\staff\word\boardpacket\2006\2006boardpackets\20061016\ActionItems\13\item13.doc