Pacheco Reservoir Expansion Unique Opportunity for Fisheries Recovery, Flood Risk Reduction and Emergency Water Supply

Application Scores and Commission DeterminationsJune 28, 2018

California Water Commission

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AgendaAgenda

1) Review of Component Scores

2) Review of Commission Staff Determinations

3) Determination of Cost Effectiveness

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Project Location and Partners

Pacheco Pass Water

District

San Benito County Water District

Pacheco Reservoir Expansion to

141,600 acre-feet

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Staff Preliminary Component Scores

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Public Benefit Ratio and Non-Monetized Benefits

Relative Environmental Value

Resiliency Implementation Risk

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Staff Preliminary Component ScoresComponent Sub-Component Score/Possible Points Comment

Public Benefit RatioPublic Benefit Ratio and 23/33

Non-Monetized Benefits Non-Monetized Benefit 4/4

Relative Environmental Value 21/27Integration and

Resiliency Flexibility 8/8

Uncertainty 15/15Technical FeasibilityFinancial FeasibilityImplementation RiskEconomic FeasibilityEnvironmental Feasibility

5/5

3/4

4/4

1/5

Focusing on Financial and Environmental Feasibility

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ComponentSub-Component Score/Possible PointsComment

Public Benefit Ratio and Non-Monetized BenefitsPublic Benefit Ratio23/33

Non-Monetized Benefit 4/4"project provides incidental flood benefits" for downstream disadvantaged communities.

Relative Environmental Value21/27The Pacheco Reservoir Expansion addresses the highest number of REVs of all evaluated projects.

ResiliencyIntegration and Flexibility 8/8"Application described a high level of integration...with the SWP and CVP... and regional, and local water agencies’.."

Uncertainty15/15"Ecosystem improvements...and emergency water supply increased while refuge water supply... maintained under...extreme climate conditions."

Implementation RiskTechnical Feasibility 5/5"..cost estimates, design drawings, and construction schedule indicated the project can be constructed."

Financial Feasibility 3/4"The financial analysis provided...indicates a medium risk of being unable to build or operate the project."

Economic Feasibility 4/4"..analysis of total costs relative to total public and non-public benefits...indicates a high certainty of being able to build or operate the project."

Environmental Feasibility 1/5"Because the project is in the early stages...increases the implementation risk of the proposed project."

ComponentSub-Component Score/Possible PointsComment

Public Benefit Ratio and Non-Monetized BenefitsPublic Benefit Ratio23/33

Non-Monetized Benefit 4/4

Relative Environmental Value21/27

ResiliencyIntegration and Flexibility 8/8

Uncertainty15/15

Implementation RiskTechnical Feasibility 5/5Focusing on Financial and Environmental Feasibility

Financial Feasibility 3/4

Economic Feasibility 4/4

Environmental Feasibility 1/5

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Focusing on Financial and Environmental Feasibility

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SCVWD’s Strong Financial Position Reduces Implementation Risk

SCVWD has full capability to finance the Project• High credit ratings of Aa1 Moody’s and

AA+ Fitch ensure relatively inexpensive access to long-term debt

• Strong customer base with long term take-or-pay contracts with water retailers

• Strong local economy o Median income $101K, 159% of CA state

median o Largest employers include Cisco, Apple,

Google and Intel

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With Full Funding, SCVWD Will be Able to Finance Remaining Capital CostsSeven member elected Board has full authority to set rates to meet future water supply needs Financing Plan for remaining $485M of $969M capital cost: • Fund with cash on hand from annual

rates/charges (30%)• Utilize existing Commercial Paper to pay

for project costs as incurred• Issue bonds with fixed-rate long term debt• Up to 10% cost share by San Benito

County Water District

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Nearly a Century of Successful Water Infrastructure Development

275 miles of jurisdictional streams1 advanced purification plant

393 acres of recharge ponds3 water treatment plants

142 miles of pipelines3 pump stations

10 reservoirs

22 fish ladders106 miles of levees2 miles of Gabian channels13 miles rock-lined channels188 miles of natural channels54 miles of natural modified channels

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SCVWD has the Experience and Resources to Deliver this Project

Building on Our Track Record:Implementation of over $1 billion in projects over last 10 years• 800 Employees serving 1.9 million people• Managing 10 existing dams/reservoirs,

constructed beginning in the 1930’s• Providing water supply, flood protection,

and stewardship of streams

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Lexington Reservoir

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Implementation Risk –Environmental Feasibility SCVWD has significant recent experience in implementing large capital programs• Completed 9 major EIRs in the past 10

years• Pacheco Reservoir Expansion EIR to build

upon San Luis Low Point Improvement Project efforts by Reclamation

• Over 30 environmental planners, biologists and water resource specialists on staff

• Augment staff team with specialized consulting services

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Existing Pacheco Reservoir

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The Nine Commission Determinations

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Request Affirmative Determination on Cost Effectiveness

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# Determination Staff Recommendation

SCVWD PositionJune 28, 2018

1 The proposed project remains cost effective -- Request affirmative determination

2 The proposed project improves the operations of the state water system Yes Concur3 The proposed project provides a net improvement in ecosystem and water quality conditions Yes Concur

4 The proposed project provides measurable improvement to the Delta ecosystem or to the tributaries to the Delta Yes Concur

5The proposed project’s program cost share is less than or equal to 50 percent of the proposed project’s total capital costs, with the exception of conjunctive use projects and reservoir reoperation projects.

Yes Concur

6 The proposed project’s program-funded ecosystem improvement benefits make up at least 50 percent of the total public benefits funded by WSIP. Yes Concur

7 The proposed project appears to be feasible Yes Concur

8 The proposed project will advance the long-term objectives of restoring ecological health and improving water management for beneficial uses of the Delta. Yes Concur

9 The proposed project is consistent with all applicable laws and regulations Yes Concur

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Pacheco Reservoir Expansion is Cost Effective

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Benefits Exceed Costs

1.12

Benefit/Cost Ratio

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Pacheco Reservoir Expansion ProjectRemains Cost Effective

“Proposed Project remains the least-cost feasible means of providing the same or greater amount of physical benefits” Regulation 6004 (a)(4)(E)

• CWC Staff Concurred with All Physical Benefits; No Changes to Any Physical Benefitso Ecosystem Improvement – Steelhead Habitato Ecosystem Improvement – Refuge Supplieso Emergency Response – Delta Outageo M&I Water Supplyo M&I Water Quality

• CWC staff reduced Total Project Costs (minor)

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Conclusions

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• SCVWD has Strong Financial and Delivery Capability

• SCVWD has Significant Project Environmental Experience

• Pacheco Reservoir Expansion is Cost Effective

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Slide Number 1AgendaSlide Number 3Slide Number 4Staff Preliminary Component ScoresSlide Number 6SCVWD’s Strong Financial Position Reduces Implementation RiskWith Full Funding, SCVWD Will be Able to Finance Remaining Capital CostsSlide Number 9SCVWD has the Experience and Resources to Deliver this ProjectImplementation Risk – Environmental Feasibility Slide Number 12Request Affirmative Determination on Cost EffectivenessPacheco Reservoir Expansion is Cost Effective�Slide Number 15Slide Number 16