San Diego County Water Issues 2010 Update

A i B i A i ti Ri Cl b L hAsian Business Association Rice Club LuncheonSeptember 28, 2010

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What Is the Water Authority?

Wholesale water agency g ycreated by State Legislature in 1944

24 membe agencies24 member agencies36-member board of directorsServes 3.2 million people and Se es 3 o peop e a dregion’s $174 billion economy

Service area950,000 acres97% of county’s population

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Sources of San Diego County’s Water Supply

LAKELAKESHASTA

LAKEOROVILLE

San Diego County imports ~80% of its water supply

State Water Project(Bay-Delta)

30%

water supply

30%Colorado River

50%

Local Supplies and Conservation

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and Conservation 20%

Regional Water Supply Diversification

2010 20201991

95%

6%

7%

6%

10%

11%

5%

16% 3%3%

4%4%

10%

29%

6%

9%

10%10%

Metropolitan Water District Seawater Desalination

22%50%

Imperial Irrigation District Transfer

All American & Coachella Canal Lining

Conservation

Local Surface Water

Recycled Water

Groundwater

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Conservation Groundwater

Dry-Year Water Transfers

Quantification Settlement Agreement Q g

Colorado River QSA SuppliesQ ppImperial Irrigation District transfer

200,000 acre-feet*/year for 45 to 75 years

C l li i j tCanal-lining projects80,000 acre-feet**/year for 110 years

Key to supply diversification strategy C l li i j tstrategy

Provides 165,000 acre-feet in 2010; helps mitigate current shortage

By 2021 will provide 30% of

Canal-lining project

By 2021, will provide 30% of region’s supply

Lining the Coachella Canal

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*At full implementation in 2021** Acre-foot = 325,900 gallons

Groundwater and Recycled Water

Recycled Water 28 000 af/year today growing to

Groundwater and Recycled Water

28,000 af/year today, growing to 52,000 af/year by 2020High-quality, drought-proof water supply17 agencies in San Diego produce17 agencies in San Diego produce recycled waterPrimarily used for landscaping irrigation

Groundwater 13 000 f/ t d i t13,000 af/year today, growing to 53,000 af/year by 2020San Diego does not have significant underground storage basinsBrackish groundwater must beBrackish groundwater must be desalinatedSix local agencies have groundwater projects

Sweetwater Authority’s groundwater desalination plant

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ConservationComprehensive waterconservation programs

Conservation

conservation programs, incentives and school programs since 1990s65 000 af/year today65,000 af/year today, growing to 94,000+ by 2020C l ti iCumulative savings: more than 600,000 AF Shifting emphasis

Water efficient planting and rotating nozzleg p

from indoor tooutdoor conservation

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Seawater Desalination

Carlsbad Desalination ProjectCarlsbad Desalination ProjectProduce up to 56,000 acre-feet annuallyApproved term sheet that will lead to water purchase agreement to buy output p g y pof plant

Camp Pendleton Project56 000 to 168 000 af/year56,000 to 168,000 af/year Feasibility studies under way

Bi-national Desalination Projecth dIn conjunction with agencies in Nevada,

Arizona and MexicoStudying site in Baja California

Encina Power Station, Carlsbad

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Capital Improvement ProgramCapital Improvement Program$3.8 billion CIP (1989 – 2030)

$1.5 billion Emergency Storage Program (ESP)

Dozens of major projects – completed or under constructionconstruction2010 debt issuance of $627 million to continue funding CIPfunding CIP

Olivenhain Reservoir and Lake Hodges 9

Water Authority Rates 2011Water Authority Rates 2011

W t A th it B d d t d CY 2011 tWater Authority Board adopted CY 2011 rates following public hearing in June

Treated water rate – up 11 3% ($1 026/AF)Treated water rate up 11.3% ($1,026/AF)Untreated water rate – up 14.7% ($811/AF)

Primary drivers of rate increases:yCosts to purchase, deliver imported waterCosts for operating, maintaining and financing regional

t twater system

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Cost of Water Drives Treated Water Rate* IncreasesWater Rate* Increases

“All-in” Increase Water Authority Melded Supply

MWD 

All-in Increase Distribution

Water Authority Melded Supply Rate Increase

Transportation75%

S

Transportation8%

Storage21%

Supply62%

Customer Service9%

Water Authority 25%

11*Municipal and Industrial Rate

Wholesale Monthly Cost of Water to Households

Cost of water purchases isEstimated CY 2011

Wholesale Costs per Household *

to Households

Cost of water purchases is 62.7% of the wholesale cost of water

p

$23 70MWD Costsh For an estimated $16.04/month

the Water Authority:

Delivering water and maintaining$3.26

$23.70

IID/QSA Costs

62.7% is the Cost of Water

Delivering water and maintaining the system

Rapidly diversifying the region’s water supplies

$3.26

Water Authority Operating  Costs

$4.09

Water Authority  37.3% is Water  water supplies

Providing in-region emergency water storage

D l i i i t t

$11.95Water Authority 

Capital Costs Authority Costs

TOTAL: $43/monthDeveloping in-region water storage capacity

* Based upon 0.5 AF of consumption a year

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Mitigating Rate Impacts –Water Authority ActionsWater Authority Actions

Current budget eliminated more than a dozen positions$2.4M reduction made mid-year in FY 2010 & 20112011Reduction in spot water purchasesRate stabilization draw – up to $10 7MRate stabilization draw up to $10.7MMWD rate challenge

Lawsuit challenging MWD’s rates and how they’re allocated

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Supply Challengespp y g

Regulatory restrictionsg yFish protections limit State Water Project deliveries

Lingering effects of droughtdroughtStorage still recoveringLake Oroville – April 2010

Heading into another dry winter? (La Niña?)

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Effects of climate change

Response to Supply Challengesp pp y g

Water Shortage andWater Shortage and Drought Response Plan ImplementationImplementation

8% regional target beginning July 1 2009beginning July 1, 2009

Target in effect through June 30 2011June 30, 2011

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Region Succeeding in Saving Water

September 2009 - August 2010 U b W t U *

600,000

Acre-feet

11%

Urban Water Use*18% below

FY 08/09600,000

550,000

11% below

FYs 09/10

FYs 08/09602,300

552 100500,000

450 000

552,100

493,100450,000

400,000 FYs 2010/2011

FYs 2009/2010

FYs 2008/2009 201120102009

*12-month periods overlap two fiscal years. 16

San Diego County: 1991 vs 2010San Diego County: 1991 vs. 2010

$174$174$1026

578 566$651.081.3

2.53.2

$323

1991 20101991 2010Water use (thousand acre-feet)

Jobs (millions)

Population (millions)

Cost of water per acre-foot (full

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Gross Domestic Product (billions)

( )p (service treated water rate)

MWD Rate ChallengeMWD Rate Challenge

W t A th it fil d it i J i t MWDWater Authority filed suit in June against MWD over its 2011-2012 ratesViolates California law standard practicesViolates California law, standard practicesMWD improperly overcharges for transporting water through its facilities gMWD improperly subsidizes the price of water it sells

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Impacts to Local RatepayersImpacts to Local Ratepayers

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*Based on 600,000 AF annual sales; 2021 figure includes $40B Delta fix share

QSA LitigationQSA LitigationJanuary 2010: Superior Court ruling invalidated 13 agreementsagreements

Includes IID transfer and canal-lining agreementsRuling based on single sentence in one agreement

St t ’ bli ti t f dState’s obligation to fundSalton Sea mitigation foundunconstitutional

Water Authority and otherWater Authority and otheragencies appealed ruling

Temporary stay allowing transfers to continue

Appellate Court decision expected in 2011

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expected in 2011

All-American Canal

Continuing ChallengesCo t u g C a e ges

Achieving Bay-Delta fixesAchieving Bay Delta fixes that restore reliability

Rising water ratesg

Sustaining new water use ethic

Resolving MWD and QSA legal disputesg p

Water bond passage in 2012?

Bay-Delta waterways

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QuestionsQuestionsQuestionsQuestions

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