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WATER
DEMAND COMMITTEE |
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ITEM: |
ACTION
ITEMS |
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3. |
CONTINUE REVIEW OF
CONTINGENCY IMPLEMENTATION PLAN FOR STAGES 4 THROUGH 7 OF THE EXPANDED WATER
CONSERVATION AND STANDBY RATIONING PLAN |
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Meeting Date: |
October 16, 2007 |
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From: |
David A. Berger, |
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General Manager |
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Prepared by: |
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SUMMARY: The Water Demand Committee has reviewed the
draft Contingency Implementation Plan for Stages 4-7 twice prior to this
meeting (see minutes of September 11, (attached as Exhibit 3-A) and September 18, 2007
(previous agenda item). A number of
policy questions have been addressed by the committee and will be recommended
to the Board. Based on input from the
Water Demand Committee, staff will be preparing a draft ordinance for Board
consideration.
Since the last Water Demand Committee meeting
on September 18, 2007, staff has continued to work with California American
Water (CAW) staff to refine the Contingency Plan. In consultation with CAW, staff has
identified two significant problems that must be resolved before implementation
of Stages 4-7. Staff has also identified
a potential increase in costs for rationing staff based on a change in CAW’s
billing cycles since the last local rationing program. CAW has also raised concern about the water
bank concept contained in the District’s program. Details about these matters are discussed
below.
DISCUSSION: The
Water Demand Committee should discuss and comment on the new information
relative to the following topics.
Data Access and Management
In order to effectively and efficiently
ration water use on the Monterey Peninsula as outlined in District Regulation
XV, the rationing office staff must have access to CAW’s customer consumption
records and contact information.
Rationing staff must be able to enforce rations, modify rations when
variances are warranted, and make notes about pending actions. Similarly, CAW must be able to advise
rationing staff about customers that exceed their rations and to notify
rationing staff when there is a change in account status (e.g. when an account
is closed). All actions occurring in the
local rationing office must be immediately available to CAW’s customer service
center in Alton, Illinois, and the operators must understand and be able to
communicate the District’s rationing program to any caller. Without real-time access into the CAW system
(to view and update information), the District ration office staff’s ability to
satisfy the customer service needs of Peninsula water users would be
compromised. CAW has indicated that
providing non-CAW staff with two-way data access may be problematic because of
its existing centralized database system.
The
Assuming the District is able to obtain
customer record access through CAW’s billing system in a way that facilitates
the existing remote customer service center, a computer program to manage the
rationing program must be developed.
During recent discussions with CAW, it was recognized that there may be
difficulty in arranging programming of the CAW’s billing system as billing is
outsourced by its parent company, American Water, to Orcom, which is based in
To respond to these data management concerns,
Tom Bunosky, Interim General Manager for CAW in
Rationing Program Funding
District staff prepared the Contingency Implementation Plan on the assumption that funding for a rationing program would be available through CAW Special Requests 6 and 9 (SR6 and SR9). Both are memorandum accounts authorized by the CPUC. SR6 is specific to Regulation XV activities whose costs are not budgeted nor covered in the conservation surcharge (Special Request #7). In theory, MPWMD bills CAW for the actual costs of the program and CAW recovers through a balancing account previously authorized. The account accrues actual charges from MPWMD for Regulation XV activities. CAW anticipates using this account for emergencies because of huge cost increases such as implementation of rationing. SR6 allows reimbursement by CAW for expenses up to $100,000 annually. Special Request 9 (SR9) is also a memorandum account specific to MPWMD emergency rationing costs. This memorandum account was also approved in the previous GRC (D.03-02-020, OP 5) and does not state an annual limit. SR9 allows the District to recoup its costs for expenses related to rationing.
Dave Stephenson, Rate Regulation Manager for CAW, has indicated that although SR6 and SR9 were authorized by the CPUC, there is no guarantee that recovery will be authorized. To facilitate the likelihood of recovery, Mr. Stephenson recommended that the District and CAW have a unified rationing plan, including specific dollar amounts. He also recommended that CAW approve its own rationing contingency plan to compliment the District’s, and that MPWMD and CAW secure CPUC approval to use SR6 and SR9 (with specific fiscal limits) prior to rationing. Finally, the District should enter into another reimbursement agreement with CAW related to rationing costs. Again, it appears that time is of the essence, particularly if CPUC approval to seek recovery from SR6 and SR9 needs to be secured before implementation of the plan.
As an alternative approach to recovering costs through SR6 and SR9, the District has the option of implementing a rationing surcharge on the CAW bill. Start up costs for the rationing program could initially be accommodated by using a portion of the District’s conservation reserve fund, currently at approximately $340,000 (July 2007).
Personnel
In previous reports to the Water Demand Committee, staffing needs for a rationing office were estimated at 14 employees consisting of a Water Rationing Administrator (one position), a Senior Water Rationing Specialist (one position), six Water Rationing Specialist I’s, two Water Rationing Specialists II’s, two Water Rationing Technicians and two Office Specialist II’s . This staffing level was based on the District’s previous rationing experience. However, during the previous rationing program, CAW billed its customers on a bi-monthly basis. Now, CAW bills monthly, which could as much as double the number of enforcement reviews and actions necessary to run a rationing program. Because of this, the Contingency Implementation Plan has been updated to increase support staffing by five positions, resulting in a projected personnel cost increase of approximately $171,000 per year. Actual personnel requirements will vary depending on how the data management and customer service issues are resolved.
Water Banks
District Rule 168 outlines a process for
carrying over unused portions of a customer’s ration during Stages 5-7 for use
at the discretion of the customer. The
water bank is available on a calendar year basis and resets on January 1. Ten percent of the remaining bank is credited
to the following year’s bank for the first three months to allow a customer to
establish a new water bank each year. On
April 1, each water bank is reduced by the amount of the carry over. The water bank allows customers with
anticipated future water needs (e.g. visitors or outdoor water needs) to budget
their water needs to avoid exceeding their ration.
CAW has expressed concerns about the water
banks for two reasons: First, CAW is
concerned that customers may all use their water banks during peak demand periods. This could result in unacceptable demand on
the system. Second, CAW currently has no
way to implement water
banking in its billing system. Although CAW was involved in development of the
rule, CAW’s outsourced billing system is an impediment to this component of the
plan.
RECOMMENDATION: The Water Demand Committee should continue discussion of the Implementation Plan and provide comments to staff for inclusion in the draft report for consideration by the Board.
BACKGROUND: The District’s Expanded Water Conservation
and Standby Rationing Plan encompasses lessons learned from past rationing on
the
1. Ensure that California American Water (CAW)
meets the
2. Prolong water supplies during times of drought; and
3. Provide a method to reduce water use immediately in an unexpected emergency situation.
The following is a summary of the seven stages of the Plan:
Stage 1 Stage 1 Water Conservation (Rule 161) unifies the District’s conservation program with CAW’s and applies only to water users of CAW that receive water from the MPWRS. Bishop, Hidden Hills and Ryan Ranch water distribution systems are exempt from the first three stages of the Plan as they receive water from sources outside the MPWRS. During Stage 1 Water Conservation, action is taken to prepare for more intensive conservation or rationing by undertaking a census of CAW customers and preparing landscape water budgets for specific outdoor water uses.
Stage 2 Stage 2 Water Conservation (Rule 162) requires large landscape irrigators and irrigators with separate landscape water meters to comply with landscape water budgets established in Stage 1 Water Conservation.
Stage 3 Stage 3 Water Conservation (Rule 163) adds excessive water use charges as an incentive to reduce demand. High water use is penalized by high rates. Excess use rates and/or water waste fees control water use to meet the SWRCB goal.
Stage 4 Stage 4 (Rule 164) is the initial implementation of water rationing. During Stage 4, water users outside the main California American Water water distribution system are notified by the District of imminent rationing and are asked to reduce water use by 15 percent. Non-CAW residential water users that will be affected are required to complete the residential survey indicating the number of full and part-time residents in the home. Non-residential water users must complete a survey that shows the size and type of any businesses. For dedicated irrigation uses, large residential uses and for irrigated areas over 3 acres, landscape water budgets must be developed and adhered to. Water use above the water budget is considered wasteful during Stage 4. Water users of the main California American Water system move to or remain in Stage 3 during this transition, and excess use rates are implemented if they are not already in place.
Stage 4 is designed to be implemented on June 1 or earlier after the May Board meeting if total usable storage in the MPWRS is less than 27,807 AF and greater than 21,802 AF. Emergency implementation may be made by resolution of the Board of Directors when there is an immediate water use reduction requirement in response to an unexpected water supply shortage.
Stage 5 Stage 5 Water Rationing (Rule 165) begins the per-capita rationing program and is implemented during a “medium risk” water supply condition. Stage 5 requires a 20 percent system-wide reduction. All customers are rationed equally by category, with every residential water user getting an equal portion of the water available to residential users. Also, during Stage 5, there is a moratorium on water permits that intensify water use capacity[1]. Water banking, which allows customers to plan for future water use, will become available to every customer.
Stage 6 Stage 6 Water Rationing (Rule 166) is the response to “high risk” water supply conditions and requires a 35 percent system-wide reduction. Stage 6 Water Rationing also enacts a moratorium on water permits that propose to use public or private water use credits. Restrictions on non-essential outdoor water use may occur during this stage. Restrictions implemented in previous Stages remain in force.
Stage 7 Stage 7 Water Rationing (Rule 167) is the response to “extreme” water supply conditions and requires a 50 percent system-wide reduction. Restrictions on non-essential outdoor water use may also occur during this stage. Stage 7 includes a moratorium on use of portable and hydrant water meters. Restrictions implemented in previous Stages remain in force.
EXHIBITS
3-A Final Minutes of the September 11, 2007 Water Demand Committee Meeting
U:\staff\word\committees\waterdemand\2007\20071016\03\item3.doc