DESIGN CHALLENGES AND RATE SETTING FOR THEDESIGN CHALLENGES AND RATE SETTING FOR THE MIDLAND MBR RECLAIMED WATER PRODUCTION

FACILITY

Samir Mathur, PE -Associate

Texas Reuse Conference

Diane Kemp -Principal

July 20, 2012

Fort Worth, Texas

Presentation Overview

• Project Background and Current Status

h ll• Design Challenges

• Rate Setting• Rate Setting

• Recommended Reclaimed Water Rates

• Reclaimed Water Cash Flow

Project Background

• First RWPF to be designed under TCEQ Chapter 321 P Regulationsg Q p g

– City of Midland petitioned TCEQ in May 2007

– TCEQ Board approved Rule notice June 4, 2008pp ,

– Texas Register publication June 20, 2008

– Effective date of new Chapter 321 P – November 27, 2008

– Bids Open - April 17, 2012

– Scheduled completion – May 2013

TCEQ Chapter 321 P Requirements

• Applicant must have existing WWTP and authorized discharge permit at downstream end of collection system

• 210 Authorization to use reclaimed water

• 321 P authorization does not change WWTP discharge permit• 321 P authorization does not change WWTP discharge permit– No increase in WWTP permitted flow

– No discharge to waters of the stateg

• No sludge treatment onsite – it all goes back in the sewer

• Authorized by ED without new public hearing if plans approved by TCEQ and applicant uses enhanced buffer zone

• Comply with Chapter 217 design criteria

• Convey all wastewater to downstream permitted WWTP when• Convey all wastewater to downstream permitted WWTP when RWPF is not in operation

Facility Location

• Lift station on 33-in f ll i Wi dl doutfall in Windlands

Park

• Force main to RWPFForce main to RWPF

• Discharge sludge back into sewer

• Reclaimed water storage tank and irrigation system at Midland

Tank

system at Midland College by others

LS

RWPF

Facility Components

• Triplex lift station in new wet-wellTriplex lift station in new wet well• Coarse screen at LS, dual fine screens (2 mm) at RWPF • Membrane Bioreactor (MBR) treatment process• 200,000 gpd average flow• Nutrient removal not required for this RWPF

M b ildi f MBR b ildi ll LS f iliti• Masonry building for MBR building, all LS facilities below grade in park

• Building includes two RWPF trains office/controlBuilding includes two RWPF trains, office/control, electrical, chemical and blower rooms.

Process Schematic

Capacity and Redundancy

• Goals– Match reclaimed water demand

– Provide redundancy and eliminate single point of failuressingle point of failures

• Two trains provided– Minimum capacity of each train:

100,000 gpd

– Facility expandable by 20% byFacility expandable by 20% by providing additional membrane units

Influent Pumping and Screening

• 2 mm inclined drum screen upstream of MBR

• Three 120 gpm Influent Pumps

• Solids passing capacity: 2 inches

d f ( )• Coarse screening required upstream of pumps (6 mm)– Discharge screenings back into the sewer

– Allow removal for maintenance without affecting flow in sewerAllow removal for maintenance without affecting flow in sewer

Facility Location

• Facility located inside a City park– Surrounded by soccer and baseball fields

– Entire facility located inside a building

Facility Classification

• Locating screening facilities and aeration basins inside building requires entire area to be classified!

• Mitigation Measures– Provide ventilation to

d l freduce classification to Class 1 Division 2

– No direct access provided between office areas and process areas of the building g

Odor and Noise Abatement

• Due to park location, odor and noise need to be addressed

• Odor Mitigation– All treatment units covered

T k h d t t d t l t– Tank headspace sent to an odor control system

Odor and Noise Abatement

• Noise Mitigation– Aeration blowers provided with individual enclosures

– Insulate blower room walls

Provide plenum to prevent noise from leaving blower room– Provide plenum to prevent noise from leaving blower room

Approach to Reclaimed Water Rates

• Define the Goal Does Reclaimed

– Decrease Potable Water Demand– Self-Supporting Rates

C titi ith P t bl W t R t

Water Replace Potable Demand ?

– Competitive with Potable Water Rates– Ease of Billing

• Define the Support

What Costs BenefitReclaimed Water ?

M t NDefine the Support– Identify Cost/Benefit Criteria– Rationale for Water Support

Meters or No Meters for

Reclaimed Water ?

– Impact on Potable Water Sales Does ReclaimedWater Replace

Potable Demand ?

Link Between Goals and Rate

S iSetting

Potable Water Support – Increased Water Supply for Non-Potable Use

Potable Water Support – Delay Construction of More Expensive Water Treatment Processp

Wastewater Support – Provide Funds for Project CostsNot Benefiting Reclaimed WaterNot Benefiting Reclaimed Water

Green Project Initiatives – Useful for Funding Qualifications

Developing the Reuse Rates

Gather Reclaimed CostsReclaimed Costs

– Treatment, TransmissionAnd O & M

Identify Potential

Reclaimed Demand

Decreasing Potable Water

Decreasing Planned Water Potable Water

SalesPlanned Water Capital Costs

Cost Recovery Options

Cost Recovery Options

MBR Facility Capital CostsMBR Facility Capital Costs

6”

Capital Items

Influent Force Main MBR

Influent PS

Effluent PS

Chemical Systems

Effluent Pipeline Total Cost

All Costs – 200,000 GPD Facility $63,000 $6,394,000 $493,000 $150,000 $123,000 $313,000 $7,536,000

Wastewater CostsWastewater Costs – Required w/o

Reclaimed$63,000 $6,394,000 $493,000

$6,950,000

Costs of Benefit to Reclaimed

$150,000 $123,000 $313,000$586,000

Annualized Reclaimed CostsReclaimed Costs (20 years, 5% Interest, 1.5% Issuance Costs) $47,388

Identify O&M Specific to ReuseIdentify O&M Specific to Reuse

Pumping Power Costs

Sodium Hypochlorite

Distribution System Maintenance

Customer ServiceCustomer Service

Reclaimed Water O & M Costs

DESCRIPTION Year 5 Year 10Year 1

Reclaimed Projected Demand (mgd) 0.15 0.15 0.15A l S di

Chemical CostsAnnual Sodium Hypochlorite 4,015 4,643 5,387

Pumping Power CostsAnnual Pumping Power Cost 10 456 12 121 14 052Pumping Power Costs Cost 10,456 12,121 14,052

Renewal & ReplacementEffluent Pump Station 0 0 18,500 Ch i l S t 0 0 15 250Chemical System 0 0 15,250 Pipeline 6,260 6,260 6,260

Customer Service 60,000 69,556 80,635

Annual Totals ($) 80,731 92,581 140,084

Unadjusted Reclaimed Water Rate Calculation

Years 1 Through Year 10 Year 1 Year 5 Year 10

Annual mgd 0.15 0.15 0.15

Annual billable sales (1,000 gal.) 54,787 54,787 54,787

Operating Expenses $80,731 $92,581 $140,084

Less: R&R Expenses (6,260) (6,260) (40,010)

Annual Debt Service 47 388 47 388 47 388Annual Debt Service 47,388 47,388 47,388

Annual Debt Service Coverage (50%) 23,694 23,694 23,694

Total Annual Expenses $145,553 $157,403 $171,156

Reuse Water System Cost/1,000 gal. $2.66 $2.87 $3.12

Potable Water Capital ImpactPotable Water Capital Impactp pp p

Without Reclaimed Water: With Reclaimed Water :

21.34 21.34 mgdmgd (Max Day)(Max Day)

21.14 21.14 mgdmgd (Max Day)(Max Day)N d d bN d d b 20212021

Without Reclaimed Water:

Needed by Needed by 202020202013$ 2013$ at at $4.25/gal $4.25/gal = = $90.7 $90.7 MM2020$ 2020$ at at $5.74/gal $5.74/gal = = $122.5 M$122.5 MPresent WorthPresent Worth 5 468%5 468%

Needed by Needed by 202120212013$ 2013$ at at $4.25/gal $4.25/gal = = $89.8 $89.8 MM2021$ 2021$ at at $5.94/gal $5.94/gal = = $125.6 $125.6 MMPresent WorthPresent Worth 5 468%5 468%Present Worth Present Worth –– 5.468%5.468%

Present Worth = Present Worth = $75.9 $75.9 MMPresent Worth Present Worth –– 5.468%5.468%Present Worth = Present Worth = $73.7 $73.7 MM

Difference =Difference = $2 2$2 2 MMDifference = Difference = $2.2 $2.2 MM

Identify Decreased Potable Water Sales with Reuse

R f P t bl W t UReuse for Potable Water Use

User Rate per 1,000 gal. of Potable Water = $3.66

Variable Cost per 1,000 gal. of Potable Water = $1.85

Contribution of User Rate to Fixed Costs = $1.81

Sales Revenue for 20 years with and without reclaimed

Calculate Present Value for with and without reclaimedCa cu a e ese a ue o a d ou ec a ed

Difference in Present Value = Impact of Reclaimed Water

on Potable Water Revenueon Potable Water Revenue

Impact of Reclaimed on Potable Water RevenueImpact of Reclaimed on Potable Water RevenueImpact of Reclaimed on Potable Water RevenueImpact of Reclaimed on Potable Water Revenue

Without Reclaimed Water: With Reclaimed Water:

Annual Sales Volume Annual Sales Volume 201020108 329 6658 329 665 (1 000 l)(1 000 l)

Annual Sales Volume Annual Sales Volume 20102010 8 329 6658 329 665 (1 000 l)(1 000 l)

Without Reclaimed Water:

= = 8,329,665 8,329,665 (1,000 gal)(1,000 gal)Annual Sales Volume Annual Sales Volume 2032 2032

= = 12,877,493(1,000 12,877,493(1,000 gal)gal)Annual Sales Revenue NetAnnual Sales Revenue Net

= = 8,329,665 8,329,665 (1,000 gal)(1,000 gal)Annual Sales Volume Annual Sales Volume 20322032

= = 12,822,706 12,822,706 (1,000 gal)(1,000 gal)Annual Sales Revenue NetAnnual Sales Revenue Net

\\

Annual Sales Revenue Net Annual Sales Revenue Net of Variable Cost = of Variable Cost = $44.66 $44.66 M M 2032203220 Year Present Value = 20 Year Present Value =

$329 66 M$329 66 M

Annual Sales Revenue NetAnnual Sales Revenue Netof Variable Cost = of Variable Cost = $44.47 $44.47 M M 20322032

•• 20 Year Present Value =20 Year Present Value =$327 96$327 96 MM$329.66 M$329.66 M $327.96 $327.96 MM

Difference = Difference = ($1.70) ($1.70) MM

Net Result of Impact of Reclaimed Water on Potable WaterWater

• Present Worth:– Net Difference in Present Worth Capital Costs - $2.2 M

– Net Difference in Present Worth of Potable Water Sales – ($1.7) M

– Combined Impact – Capital + Potable Water Sales = $0.5 M

– Annualized Impact = $34,492

Base Reclaimed Water Rates on Percent of Potable

Water Rates vs. Annualized Impact on Potable Water

User Rate per 1,000 gal. of Potable Water = $3.66

Common Percent - 75% of Potable for Reuse = $2 75Common Percent - 75% of Potable for Reuse = $2.75

Potable Water Capital Impact Present Value of $0.5 M A li d t 5%/20 $34 492 C l l t d S tAnnualized at 5%/20 years = $34,492 Calculated Support

Annual Subsidy Needed Based on Net Loss of PotableyWater Revenue, Subsidy Reduced with Rate Based on Percent of Potable Water Rates

Reclaimed Water Cash Flow

Years 1 Through Year 10 Year 1 Year 5 Year 10

Annual billable sales (1,000 gal.) 54,787 54,787 54,787

Rate per 1,000 gallons $2.75 $3.11 $3.98

Annual Sales $150,389 $170,151 $218,179

Operating Expenses $80,731 $92,581 $140,084

Annual Debt Service 47,388 47,388 47,388, , ,

Annual Net Revenue $22,270 $30,182 $30,787 Annual Impact of Reclaimed Water on pPotable Water Sales ($97,520) ($123,870) ($153,682)

Net Impact Surplus (Deficit) ($75,250) ($93,688) ($122,895)

Questions/Author Contacts

Samir Mathur, PE, BCEEmathurss@cdmsmith.com @214-346-2800

Diane KempDiane Kempkempdc@cdmsmith.com813-262-8828