tac agenda packet 01-28-13

7/29/2019 TAC Agenda Packet 01-28-13

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AgendaMonterey Peninsula Regional Water Authority (MPRWA)

Technical Advisory Committee (TAC)Regular Meeting

2:00 PM, Monday, January 28, 2013Few Memorial Hall of Records

Council ChamberMonterey, California

CALL TO ORDER

ROLL CALL

PLEDGE OF ALLEGIANCE

REPORTS FROM TAC MEMBERS

PUBLIC COMMENTSPUBLIC COMMENTS allows you, the public, to speak for a maximum of three minutes on anysubject which is within the jurisdiction of the MPRWA TAC and which is not on the agenda. Anyperson or group desiring to bring an item to the attention of the Committee may do so byaddressing the Committee during Public Comments or by addressing a letter of explanation to:MPRWA TAC, Attn: Monterey City Clerk, 580 Pacific St, Monterey, CA 93940. The appropriatestaff person will contact the sender concerning the details.

APPROVAL OF MINUTES

1. January 7, 2013

AGENDA ITEMS

2. Discuss Cal Am Proposed Surcharge 2 and Provide Direction to Staff

3. Discuss Completed Desalination Project Decision Matrices

4. Discuss Supplement to Final Report: Evaluation of Seawater Desalination ProjectsPrepared by SPI Consultants

ADJOURNMENTThe Monterey Peninsula Regional Water Authority is committed to include the disabled in all of

its services, programs and activities. For disabled access, dial 711 to use the California RelayService (CRS) to speak to staff at the Monterey City Clerks Office, the Principal Office of theAuthority. CRS offers free text-to-speech, speech-to-speech, and Spanish-language services24 hours a day, 7 days a week. If you require a hearing amplification device to attend ameeting, dial 711 to use CRS to talk to staff at the Monterey City Clerks Office at(831) 646-3935 to coordinate use of a device or for information on an agenda.

Agenda related writings or documents provided to the MPRWA are available for publicinspection during the meeting or may be requested from the Monterey City Clerks Office at 580Pacific St, Room 6, Monterey, CA 93940. This agenda is posted in compliance with CaliforniaGovernment Code Section 54954.2(a) or Section 54956.


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M I N U T E SMONTEREY PENINSULA WATER AUTHORITY (MPRWA)

TECHNICAL ADVISORY COMMITTEE (TAC)Regular Meeting

2:00 PM, Monday, January 7, 2013FEW MEMORIAL HALL OF RECORDS

MONTEREY, CALIFORNIA

Members Present: Huss, Israel, Narigi, Riley, Riedl, Stoldt, Siegfried, Reichmuth, Burnett

Members Absent: None

Staff Present: Legal Counsel, Monterey Assistant City Manager, Clerk of theAuthority

CALL TO ORDER

ROLL CALLThe Authority Clerk issued the Oath of Office for the new TAC Members Huss, Reichmuth andSeigfried.

PLEDGE OF ALLEGIANCE

REPORTS FROM TAC MEMBERS

TAC Chair Burnett requested reports from TAC members including a brief introduction from thenew TAC members. Members Huss, Siegfried and Reichmuth gave brief descriptions of theirprofessional experience as it relates to local water issues. Member Narigi arrived at 2:05 p.m.

PUBLIC COMMENTS

Chair Burnett invited public comments for items not on the agenda. Libby Downey requestedmembers to speak louder. Tom Rowley spoke representing the Monterey Peninsula Taxpayersassociation requesting information about the presentation to be made to the CPUC by Cal Amon Wednesday January 9th, 2013. Nancy Isakson Government Affairs Consultant for theSalinas Valley Water Coalition commented about the agenda availability on the website andencouraged a more visible location to post the agenda. She then pointed out that Dale Huss'company received the largest amount of recycled water in the region and wants the Authority tounderstand this could be a conflict. Ron Cohen questioned information that Cal Am agreed tomake available prior to the January 9, 2013 presentation and asked if the MPRWA had accessto it. With no further requests to speak, Chair Burnett closed public comment asked a

representative of Cal Am to respond about how the January 9, 2013 meeting be facilitated andhow to locate the requested document.

A representative from Cal Am indicated that the Public Participation Hearing on January 9,2013 will entail a presentation and opportunity for the public to give input to the consultantspreparing the EIR. He said he would provide information about the format about the time andplace after the meeting. Information regarding follow up documentation from the CPUC Costworkshop was waiting for testimony to be completed then will upload to the websitewww.MPWSP.org which currently has three documents available under the "download" section


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MPRWA TAC Minutes Monday, January 7, 2013

2

but meeting notes need to be made available.

APPROVAL OF MINUTES

1. November 19, 2012Action: Approved

On motion, the MPRWA Technical Advisory Committee approved the minutes of November 19,2012.

AYES: 4 MEMBERS: Stoldt, Riedl, Israel, Narigi Riley, BurnettNOES: 0 MEMBERS: NoneABSENT: 0 MEMBERS: NoneABSTAIN: 3 MEMBERS: Huss, Seigfried, ReichmuthRECUSED: 0 MEMBERS: None

2. December 3, 2012Action: Approved

On motion, the MPRWA Technical Advisory Committee approved the minutes of December 3,2012:

AYES: 4 MEMBERS: Stoldt, Riedl, Israel, Narigi Riley, BurnettNOES: 0 MEMBERS: NoneABSENT: 0 MEMBERS: NoneABSTAIN: 3 MEMBERS: Huss, Seigfried, ReichmuthRECUSED: 0 MEMBERS: None

AGENDA ITEMS

3. Review and Provide Recommendation of State Water Board Memo Regarding Water RightsAction: Discussed

Chair Burnett introduced the item referencing documents included in the agenda packet thenopened the item for public comments. With no requests to speak, closed public comment andasked for comments from the members.

Member Huss noted that a certain amount will need to be returned back questioned if otherwater sources be made available between now and then. Member Stoldt identified the fact thatthe modeling has not been done simulating confined conditions and questioned if they used apast EIR for modeling or not and indicated he will reevaluate and determine if the EIR did or did

not do the model.

Member Huss identified that the MCWRA modeled the underground basin and the 180 is therefined aquifer. What needs to be discussed is taking water out of the 180 basin may causemore harm than benefit.Member Israel recognized that the report lists alternatives if it is not feasible to return it all butfound it encouraging that their recommendations allowed the generation of new model, thingscould change and it outlines a mechanism to deal with that. He identified that the Dana Pointfacility has pumped for a number of years and has never reached equilibrium. Concerned that


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could be an issue with developing a model.

Chair burnet opened the item for public comment. Tom Rowley representing the MontereyPeninsula Taxpayers Association spoke to the recent meetings and reports about the salt waterintrusion into the aquifer and recent reports indicate that a few test wells will not be sufficient todetermine if there will be impacts and he encouraged the TAC to study and obtain additional

information before making any recommendations or decisions.

Nancy Isakson spoke to Mr. Stoldts comments confined vs. unconfined modeling and spoke toa letter their hired hydrologist wrote to the State Water board discussing the inadequacy of themodel. She then questioned the timeline to receive results from the test wells and encouragedCal Am and the community to support targeting a water source outside of the Salinas Valley.With no further requests to speak, Chair Burnett closed public comment on the item andreturned the discussion to the members.

Burnett indicated that today the discussion is not seeking a conclusion but seeking to identifykey questions and asked the TAC if there are other questions to be answered. The TACidentified the following items to be addressed:

Modeling: was it confined to a previous EIR is the future will the water be usable due to the increased tolerance of certain plants. what is the fraction of freshwater over time, what if this continues to change as the test

well????? Number of alleged deficiencies of the model, noted in the TIM DURBIN memo observation that the MCWRA is in the process of engaging in a 5 years tudy and how

can we proceed while that study is under way

Member Reily questioned the purpose of the report as it relates to the TAC and Director Burnettresponded as the Authority gets closer to supporting a project conditionally, understanding thisin more detail will inform the authority's determination, and if so how, do we want to engagefurther in the project. Who ultimately is the decision maker here? It's ultimately the courts. If thisis challenged, what the State Water Board attempts to do, they will lay out the issues the courtwill look at. Member Riedl questioned if moving out of the 180 aquifer alleviated the water rightsissue and could Cal Am move out of the 180 aquifer.

The Cal Am representative responded that they are targeting the shallow well but if it does notwork, then they will look to the 180 which will present legal paths forward, however there areremedies available but it calls for more information and Cal Am is hoping the slant test wellsprovide that information.

Interim Director Meurer affirmed that the test wells will provide information however regardlessof the data set provided, as long as there is a pass fail set prior, you will have to continue to

look for information. He then expressed concern that unless the Cal Am project is just asaggressive at looking at an alternative intake system the region will run up against a solid wallagainst the timeline. A single test well, is not going to answer the questions the Salinas Valleypeople want which will end up in court, will last for years and our region will be lacking in water.

Member Huss responded that the Salinas Valley Water Coalition and other interests will needto be part of that process and that it should be clear that causing any harm the Salinas Valleywill not be tolerated. He encouraged the Regional Water Agency to be involved with oversight.


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Chair Burnett said Cal Am needs to have a robust contingency plan being pursued on a parallelbasis. Cal Am admitted that their contingency plan was not developed on the same level ofdetail. The Authority position is that is not advisable.

Member Stoldt indicated that the memo talks about the physical solution can be decided by thecourts without adjudication. Legal Counsel Freeman responded that it is possible but not

applicable to the entire region. Adjudication to the Salinas Basin would take many years.Member Reichmuth clarified that the TAC was discussing two separate issues; the technicalissue of can you get enough water out of either one of the water rights issue. Depending on thearea selected, there may be no issues relating to water rights. Member Reichmuth thenrequested agendizing a detailed description of the test wells and a possible presentation fromCal Am at a future meeting. With no further discussion on the item, Chair Burnett moved on tothe next agenda item.

4. Review and Provide Recommendation for Final Consultants Report: Evaluation of SeawaterDesalination ProjectsAction:

Chair Burnett introduced the item, presented a history of development of the report and saidSPI is in the process of providing an addendum to include information that would have amaterial impact over schedule or costs. The report should be completed by the end of January,2012. No action is necessary but he asked if the TAC to identify issues or concerns theAuthority should be aware of. Chair Burnett answered questions from the TAC.

TAC discussed sections in the report relating to financial comparisons and came to theconclusion, out of fairness to SPI consultants, the Authority did not request a financialcomparison in the scope of work and indicated they were looking forward to the possibility ofhiring a financial consultant that can address particular financial questions.

Member Narigi indicated he was still concerned about the cost differential between the threeprojects as well as the demonstrated ability of the other two projects to be financially capable ofcompleting the projects as proposed. He questioned any public private partnerships to date.Chair Burnett responded that financial capability is important and has been added to the projectdecision matrix.

Member Reichmuth agreed with Member Narigis concerns and requested Cal Am to providewritten documentation of their ability to qualify for public financing. He then expressed concernabout the ability of the Deep Water Desal project to obtain permits to pipe water across ElkhornSlough. Chair Burnett clarified that their site selection has changed and it no longer is an issue.

Chair Burnett opened the item for public comment. Ron Cohen said that the SPI cost

comparison was flawed in the comparison to other projects, because it compared each to theCal Am project. He also said the report failed to look at the cost of water to the consumer. Hethen commented on the success of the Poseidon project.

Bill Hood spoke that many of the questions presented should have been made at the draftstage and not the final report stage. He expressed concerns that the Authority is trying toaccommodate Cal Am with more concessions than demands. He encouraged the Authority tomaintain a relationship with all three at arm length. Dale Haikus questioned changes from aprevious version fo the report and requested an explanation about the revised page including


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why it was released and encouraged the Authority to write a memo about the Authority'sposition about this independent report. Tom Rowley spoke to the possibility of an addendum tothe SPI report and questioned if someone with financial expertise was intending to look at thefinancial issues at the December 27th meeting.

Jeff Lyon, Director of Finance for Cal Am spoke to their primary proposal to obtain funding from

three sources: 1) surcharge 2, the $99 million of funds during construction that would offset thecosts to ensure no financing of the plant, 2) SRF funds estimated at 2.5% interest rate and 3)the common equity invested by Cal Am who would provide up to $20 million of financing toreduce the total costs. The weighted average of the source of financing, size of the plant, etc.will be between 3% and 4%. He indicated challenges with the formula which makes it hard tomodel after.

Nelson Vega said that the only thing that the average consumer cared about was how muchtheir cost of water will be. He expressed concern over Cal Am being involved in both the waterowning and distribution business. Libby Downey questioned the status of the Cal Am project.

Director Burnett responded to questions posed during public comment and returned discussion

to the TAC and asked if there was a significant message or position that the TAC desired to bepassed onto the Authority to which the members responded no, therefore he closed thediscussion and due to time constraints, tabled the next two agenda items.

5. Discuss Framework for Decision Making Regarding Public Utilities Commission Testimony onDesalination Project for Testimony Due January 2013 and Provide Recommendation toAuthority BoardAction: Tabled

6. Discuss and Provide Recommendation of Options for Providing Source Water for Ground WaterReplenishment Project

Action: Tabled

ADJOURNMENTWith no more time to address the additional two agenda items, Chair Burnett adjourned themeeting.

Respectfully Submitted, Approved,

Lesley Milton, Clerk to the Authority TAC Chair MPRWA


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Monterey Peninsula Water Supply Project

Impact of Surcharge 2

On

Overall Lifecycle and NPV Costs

9kAFY Scenario

Prepared by MPWMD for MPRWA Technical Advisory Committee

Financial Measure Cal-Am

9kAFY

w/Surcharge 2

9kAFY

w/o Surcharge 2

Construction Proceeds $207.0 $207.0

O & M Cost (2012 $) $11.0 $11.0

First Year of Operations 2017 2017

Total Revenue Requirement over Lifecycle (40 Years) $1,331.3 $1,528.7

Net Present Value of Revenue Requirements (2012 $) $508.1 $560.7

Revenue Requirement in Common Year, 2019 $29.2 $43.4

Amount of Surcharge 2 Proceeds $99.15 $0

The net present value was calculated using a 5.0% discount rate. Our other assumptions are as follows:

Cal-Am Financing

47% debt / 53% equity

5.00% debt interest rate

9.99% post-tax equity rate of return40.75% Effective Tax Rate

35% Federal tax rate

8.84% California tax rate

1.05% Ad Valorem Tax Rate

0.2643% Uncollectibles

40 year depreciable life (2.50% factor)

25 year tax depreciable life (4.00% factor)

No SRF Loans

O&M escalation at 2.8% per year

Project operations begin 2017


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ATTACHMENT 2

Monterey Desal Project

Surcharge Scenarios

$MM Baseline +18Mo - Gradual +18Mo - Steep +12Mo - Gradual +12Mo - Steep

Month % $ % $ % $

Apr-14 30.0% 1.3

May-14 30.0% 1.3

Jun-14 30.0% 1.3Jul-14 30.0% 1.3

Aug-14 30.0% 1.3

Sep-14 30.0% 1.3

Oct-14 30.0% 1.3

Nov-14 45.0% 1.9

Dec-14 45.0% 1.9

Jan-15 45.0% 2.0

Feb-15 45.0% 2.0

Mar-15 45.0% 2.0

Apr-15 45.0% 2.0 30.0% 1.3 40.0% 1.8

May-15 60.0% 2.7 30.0% 1.3 40.0% 1.8

Jun-15 60.0% 2.7 30.0% 1.3 40.0% 1.8Jul-15 60.0% 2.7 30.0% 1.3 40.0% 1.8

Aug-15 60.0% 2.7 30.0% 1.3 40.0% 1.8

Sep-15 60.0% 2.7 30.0% 1.3 40.0% 1.8

Oct-15 60.0% 2.7 30.0% 1.3 40.0% 1.8 30.0% 1.3 40.0% 1.8

Nov-15 60.0% 2.7 30.0% 1.3 40.0% 1.8 45.0% 2.0 50.0% 2.2

Dec-15 60.0% 2.7 30.0% 1.3 40.0% 1.8 45.0% 2.0 50.0% 2.2

Jan-16 60.0% 2.7 30.0% 1.4 40.0% 1.8 45.0% 2.0 50.0% 2.3

Feb-16 60.0% 2.7 30.0% 1.4 40.0% 1.8 45.0% 2.0 50.0% 2.3

Mar-16 60.0% 2.7 30.0% 1.4 40.0% 1.8 45.0% 2.0 50.0% 2.3

Apr-16 60.0% 2.7 30.0% 1.4 40.0% 1.8 45.0% 2.0 50.0% 2.3

May-16 60.0% 2.7 45.0% 2.0 50.0% 2.3 60.0% 2.7 55.0% 2.5

Jun-16 60.0% 2.7 45.0% 2.0 50.0% 2.3 60.0% 2.7 55.0% 2.5

Jul-16 60.0% 2.7 45.0% 2.0 50.0% 2.3 60.0% 2.7 55.0% 2.5

Aug-16 60.0% 2.7 45.0% 2.0 50.0% 2.3 60.0% 2.7 55.0% 2.5

Sep-16 60.0% 2.7 45.0% 2.0 50.0% 2.3 60.0% 2.7 55.0% 2.5

Oct-16 60.0% 2.7 45.0% 2.0 50.0% 2.3 60.0% 2.7 55.0% 2.5

Nov-16 60.0% 2.7 60.0% 2.7 60.0% 2.7 65.0% 3.0 65.0% 3.0

Dec-16 60.0% 2.7 60.0% 2.7 60.0% 2.7 65.0% 3.0 65.0% 3.0

Jan-17 60.0% 2.8 60.0% 2.8 60.0% 2.8 65.0% 3.0 65.0% 3.0

Feb-17 60.0% 2.8 60.0% 2.8 60.0% 2.8 65.0% 3.0 65.0% 3.0

Mar-17 60.0% 2.8 60.0% 2.8 60.0% 2.8 65.0% 3.0 65.0% 3.0

Apr-17 60.0% 2.8 60.0% 2.8 60.0% 2.8 65.0% 3.0 65.0% 3.0

May-17 60.0% 2.8 75.0% 3.5 75.0% 3.5 65.0% 3.0 65.0% 3.0

Jun-17 60.0% 2.8 75.0% 3.5 75.0% 3.5 65.0% 3.0 65.0% 3.0

Jul-17 60.0% 2.8 75.0% 3.5 75.0% 3.5 65.0% 3.0 65.0% 3.0Aug-17 60.0% 2.8 75.0% 3.5 75.0% 3.5 65.0% 3.0 65.0% 3.0

Sep-17 60.0% 2.8 75.0% 3.5 75.0% 3.5 65.0% 3.0 65.0% 3.0

Oct-17 60.0% 2.8 75.0% 3.5 75.0% 3.5 65.0% 3.0 65.0% 3.0

Total $103.0 $59.6 $64.1 $74.2 $77.3

Yr 1 RR $32.5 $38.5 $37.8 $36.5 $36.0

Last 12 Mo $33.6 $37.8 $37.8 $36.4 $36.4


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Monterey Peninsula Regional Water Authority

Agenda Report

Date: January 28, 2013

Item No: 3.

08/12

FROM: Prepared By: Clerk to the Authority Milton

SUBJECT: Discuss Completed Project Decision Matrix (Discussion)

DISCUSSION:

There is no agenda report for this item. The TAC will discuss the two completed decision matrix,one from the TAC and one from SPI consultants. The purpose of the matrix is to provide a toolto assist the Authority with policy and decision making regarding selecting a desalination facilityto endorse.

The attached matrix were provided to the Authority at the January 24, 2013 meeting.


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SPI Consultants/Kris Helm Consulting

Desalination Project Matrix

Detailed Proposal Yes Yes; but partial No

The availability of technical information is summarized in Sectiosupplied very detailed information for this stage of project deve

good; but details of it's integratioin with the planned data cente

information it has developed, but it is still preliminary pending th

Organizational capacity Good Complex Unkown

Cal-Am is a large, proficient organization. DWD's team is com

Dynegy, its data center partner, and Salinas is still developing;

facility.

Deliverability

SPI Consultants/Kris Helm Consulting


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Agenda Report


Item No: 4.

08/12

FROM: Prepared By: Clerk to the Authority Milton

SUBJECT: Discuss Supplement to Final Report: Evaluation of Seawater Desalination

Projects Prepared by SPI Consultants (Discussion)

DISCUSSION:

At the December 10, 2012 MPRWA Authority meeting the directors voted to allocate additionalfunding to the SPI consultants to prepare a supplement to the final report: Evaluation ofSeawater Desalination Projects. The purpose of the supplement was to address areas notinitially outlined in the scope of work but deemed valuable for the decision and policymaking forthe Authority.

The TAC will review this document and provide feedback to the Authority at a future meeting.


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To: Jason Burnett

From: Alex Wesner

Subject: January 2013 Update to SPI-KHC ReportEvaluation of Seawater Desalination

Projects

In this update to the Final Report issued in December 2012, we have amended portions of thereport to address several changes among proponent projects as well as undertake additionalsensitivity analyses of evaluated costs for some projects. The principal changes can be describedas follows:

1. DWD has relocated their facility site from the Capurro Ranch property north of theElkhorn Slough to the Moss Landing Power Plant site. This relocation impacts theirproject cost model (mainly in regard to off-site pipelines) and permitting. The impacts ofthis relocation are assessed in the updated report.

2. The implementation schedule for Cal-Ams proposed test well has been delayed. Theschedule impact associated with this delay is assessed.

3. Members of the MPRWA board and TAC were interested in several areas of costsensitivity. The overall accuracy range of the costs included in the report was listed moreexplicitly, along with inclusion of a potential range of water production costs associatedwith the uncertainty. Cost sensitivity analyses were also prepared for both Cal-Am andDWD. Cal-Am costs were evaluated for the consequence of increased slant wellfailure/replacement; along with their potential acquisition of power at an annual averagerate of $0.087/kW-hr. DWDs revised base costs were further evaluated for potentiallower power rates of $0.06 and $0.04 per kW-hr.

To help clarify changes to the documents; deletions of inapplicable text were struck through(example), while additions/changes are shown in red text (example). The main exception is intable figures, which show only the revised numbers in red text in order to preserve overall tableformat and presentation. Similarly, new tables have their numbers and titles in red text; but theactual table content left standard.

Separation Processes, Inc.3156 Lionshead Ave., Suite 2

Carlsbad, CA 92010Tel: 760-400-3660Fax: 760-400-3661

www.spi-engineering.com


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Evaluation of Seawater Desalination Projects

Final Report

Update

January 2013

prepared for:


by:

Separation Processes, Inc.

and

Kris Helm Consulting


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MONTEREY PENINSULA REGIONAL WATER AUTHORITY TABLE OF CONTENTS

January 2013 Page i

CONTENTS

EXECUTIVE SUMMARY ...................................................................................................................................... ES-1

PROJECTSUMMARIES .......................................................................................................................................... ES-1

PROJECTFUNCTION ............................................................................................................................................. ES-2

PROJECTPERFORMANCE ..................................................................................................................................... ES-4ECONOMICS ......................................................................................................................................................... ES-5

IMPLEMENTATIONCONSIDERATIONS ................................................................................................................. ES-7

1 INTRODUCTION ......................................................................................................................................... 1-1

2 PROJECT SUMMARIES ................................................................................................................................ 2-1

2.1 CALIFORNIA AMERICAN WATER (CAL-AM) ............................................................................................................ 2-2

2.2 DEEPWATER DESAL (DWD) .............................................................................................................................. 2-4

2.3 PEOPLES MOSS LANDING (PML)......................................................................................................................... 2-6

3 PROJECT FUNCTION ................................................................................................................................... 3-1


3.1.1 Project Purpose .................................................................................................................................. 3-1

3.1.2 Customers Identified .......................................................................................................................... 3-1

3.1.3 Adequacy of Treatment Approach ..................................................................................................... 3-1

3.1.4 Residuals Handling ............................................................................................................................. 3-4

3.1.5 Feed Water Characterization ............................................................................................................. 3-4

3.1.6 Quality of Project Information ........................................................................................................... 3-4

3.1.7 Omissions or Fatal Flaws ................................................................................................................... 3-5


3.2.1 Project Purpose .................................................................................................................................. 3-6



3.2.4 Residuals Handling ............................................................................................................................. 3-8

3.2.5 Feed Water Characterization ............................................................................................................. 3-8

3.2.6 Quality of Project Information ........................................................................................................... 3-83.2.7 Omissions or Fatal Flaws ................................................................................................................... 3-9

3.3 PEOPLES MOSS LANDING (PML) ........................................................................................................................ 3-9

3.3.1 Project Purpose .................................................................................................................................. 3-9



3.3.4 Residuals Handling ........................................................................................................................... 3-11

3.3.5 Feed Water Characterization ........................................................................................................... 3-12

3.3.6 Quality of Project Information ......................................................................................................... 3-12

3.3.7 Omissions or Fatal Flaws ................................................................................................................. 3-12

4 PROJECTED PERFORMANCE ....................................................................................................................... 4-1


4.1.1 Plant Design Capacity ........................................................................................................................ 4-1

4.1.2 Targeted Product Water Quality ........................................................................................................ 4-2

4.1.3 Disinfection Strategy .......................................................................................................................... 4-3





4.3 PEOPLES MOSS LANDING (PML)......................................................................................................................... 4-5


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TABLE OF CONTENTS MONTEREY PENINSULA REGIONAL WATER AUTHORITY

January 2013 Page ii




5 ECONOMICS ............................................................................................................................................... 5-1

5.1 CALIFORNIA AMERICAN WATER (CAL-AM) ........................................................................................................... 5-5

5.2 DEEPWATER DESAL (DWD) .............................................................................................................................. 5-85.3 PEOPLES MOSS LANDING (PML)....................................................................................................................... 5-12

6 IMPLEMENTATION CONSIDERATIONS ....................................................................................................... 6-1


6.2 DEEPWATER DESAL (DWD) .............................................................................................................................. 6-76.3 PEOPLES MOSS LANDING (PML)....................................................................................................................... 6-10

6.3.1 Assessment of Impacts of Seawater Intake ..................................................................................... 6-10

6.3.2 Brine Discharge ................................................................................................................................ 6-11

7 REFERENCES .............................................................................................................................................. 7-1

APPENDIX A RESPONSES TO COMMENTS ON NOVEMBER DRAFT REPORT .......................................................A-1

LIST OF TABLES

TABLE ES-1-1SUMMARY OF PROPOSED PRODUCT WATER QUALITY .................................................................................... ES-4

TABLE ES-1-2-SUMMARY OF EVALUATED CAPITAL AND OPERATING COST ESTIMATES .............................................................. ES-6

TABLE 4-1SUMMARY OF PROJECTED PRODUCT QUALITY FROM CAL-AM FACILITY ................................................................... 4-3TABLE 4-2SUMMARY OF PROJECTED PATHOGEN CREDITS FOR CAL-AM PROJECT .................................................................... 4-3

TABLE 4-3SUMMARY OF PROJECTED PRODUCT QUALITY FROM DWDFACILITY ...................................................................... 4-4

TABLE 4-4-SUMMARY OF PROJECTED PATHOGEN CREDITS FOR DWDPROJECT ........................................................................ 4-5

TABLE 4-5SUMMARY OF PROJECTED PRODUCT QUALITY FROM PMLFACILITY1

...................................................................... 4-6

TABLE 4-6-SUMMARY OF PROJECTED PATHOGEN CREDITS FOR PMLPROJECT ......................................................................... 4-6

TABLE 5-1SUMMARY OF CHEMICAL UNIT PRICES .............................................................................................................. 5-2

TABLE 5-2SUMMARY OF EVALUATED CAPITAL AND OPERATING COST ESTIMATES.................................................................... 5-4

TABLE 5-3SUMMARY OF CAL-AM CAPITAL COST EVALUATION............................................................................................. 5-6

TABLE 5-4SUMMARY OF CAL-AM O&MCOST EVALUATION ............................................................................................... 5-7

TABLE 5-5SUMMARY OF CAL-AM COST SENSITIVITY EVALUATIONS ...................................................................................... 5-8

TABLE 5-6SUMMARY OF DWDCAPITAL COST EVALUATION................................................................................................ 5-9

TABLE 5-7SUMMARY OF DWDO&MCOST EVALUATION................................................................................................ 5-10

TABLE 5-8-SUMMARY OF DWDCOST SENSITIVITY EVALUATIONS ........................................................................................ 5-11

TABLE 5-9SUMMARY OF PMLCAPITAL COST EVALUATION............................................................................................... 5-12

TABLE 5-10SUMMARY OF PMLO&MCOST EVALUATION ............................................................................................... 5-13

LIST OF FIGURESFIGURE ES-1PROJECTED CAL-AM PROJECT IMPLEMENTATION SCHEDULE ............................................................................. ES-8

FIGURE ES-2PROJECTED DWDPROJECT IMPLEMENTATION SCHEDULE ................................................................................ ES-8

FIGURE ES-3PROJECTED PMLPROJECT IMPLEMENTATION SCHEDULE.................................................................................. ES-8

FIGURE 2-1CAL-AM PROJECT LOCATION MAP.................................................................................................................. 2-3

FIGURE 2-2DWDPROJECT LOCATION MAP..................................................................................................................... 2-5

FIGURE 2-3PMLPROJECT LOCATION MAP ...................................................................................................................... 2-7

FIGURE 6-1CONCEPTUAL IMPLEMENTATION SCHEDULE FOR THE CAL-AM PROJECT.................................................................. 6-6


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MONTEREY PENINSULA REGIONAL WATER AUTHORITY TABLE OF CONTENTS

January 2013 Page iii

FIGURE 6-2CAL-AM PROPOSED IMPLEMENTATION SCHEDULE ............................................................................................. 6-6

FIGURE 6-3DWDPROPOSED IMPLEMENTATION SCHEDULE ................................................................................................ 6-7

FIGURE 6-4CONCEPTUAL IMPLEMENTATION SCHEDULE FOR THE DWDPROJECT..................................................................... 6-9

FIGURE 6-5-CONCEPTUAL IMPLEMENTATION SCHEDULE FOR THE PMLPROJECT..................................................................... 6-11

ABBREVIATIONS AND ACRONYMS

AACEAssociation for the Advancement of Cost Engineering

AFAcre-Foot

AFYAcre-Feet/Year

ASRAquifer Storage and Recovery

Cal-AmCalifornia American Water

CDPHCalifornia Department of Public Health

CEQACalifornia Environmental Quality Act

CPCN - Certificate of Public Convenience and Necessity

CPUCCalifornia Public Utilities Commission

CRFCapital Recovery Factor

Crypto - Cryptosporidium

CSIPCastroville Seawater Intrusion Project

DWDDeepWater Desal

EAEnvironmental Assessment

EIREnvironmental Impact Report

EISEnvironmental Impact Statement

EPAU.S. Environmental Protection Agency

ERDEnergy Recovery Device

fpsfeet per second

FPVCFusible Polyvinyl Chloride\

gfdGallons per Day per Square Foot

GWRGroundwater ReplenishmentHDPEHigh Density Polyethylene

JPAJoint Powers Authority

KHCKris Helm Consulting

lb - pound

LFLineal Foot


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TABLE OF CONTENTS MONTEREY PENINSULA REGIONAL WATER AUTHORITY

January 2013 Page iv

MCLMaximum Contaminant Level

MPRWAMonterey Peninsula Regional Water Authority

MRWPCAMonterey Regional Water Pollution Control Agency

mgdMillion Gallons per Day

MFMicrofiltration

MGMillion Gallons

MLCPMoss Landing Commercial Park

MLPPMoss Landing Power Plant

MPWSPMonterey Peninsula Water Supply Project

NEPANational Environmental Policy Act

NODNotice of Determination

NOPNotice of Preparation

NOAANational Oceanic and Atmospheric Administration

NPDESNational Pollutant Discharge Elimination System

O&MOperations and Maintenance

PG&EPacific Gas and Electric

PMLPeoples Moss Landing

ROReverse Osmosis

SCADASupervisory Control and Data Acquisition

SDISilt Density IndexSPISeparation Processes Inc.

SVGBSalinas Valley Groundwater Basin

SWRCBState Water Resources Control Board

SWTRSurface Water Treatment Rule

TACTechnical Advisory Committee

TBDTo Be Determined

TDSTotal Dissolved Solids

TOCTotal Organic Carbon

UF - Ultrafiltration

UVUltra Violet Light


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MONTEREY PENINSULA REGIONAL WATER AUTHORITY EXECUTIVE SUMMARY

January 2013 Page ES-1

Separation Processes Inc. (SPI) in association with Kris Helm Consulting (KHC) is providingengineering and consulting support to the Monterey Peninsula Regional Water Authority(MPWRA) to assist with the evaluation of three candidate desalination projects on the MontereyPeninsula. This report presents the results of our evaluation of the projects, targeted at replacing

supplies currently extracted from the Carmel River but subject to a 1995 order from the StateWater Resources Control board to secure an alternate source of supply by December, 2016.

The proposed strategy for meeting the projected annual demand within the California AmericanWater service area of 15,250 acre-feet is a multi-pronged approach including permittedextractions from the Carmel River and Seaside Basin, an aquifer-storage and recovery system,and the existing Sand City desalination plant--totaling 6,250 acre-feet; leaving a 9,000 acre-feetgap in supply. Two alternatives are under consideration to compose this final supplya 9,000acre-feet production seawater desalination plant; or a 5,500 acre-feet seawater desalination plantin concert with a groundwater water replenishment project using advanced treated recycled waterof 3,500 acre-feet.

This report presents the results of our evaluation of three candidate alternatives for the seawaterdesalination component of the overall water supply portfolio. California American Water isactively engaged with the California Public Utilities Commission to build a facility and securethe required supply. Two other development groups have proposed alternative projects forconsiderationDeepWater Desal, LLC and the Peoples Moss Landing Water Desal Project.The three projects were analyzed on functional, performance, economic and implementationgrounds in an effort to provide a balanced evaluation for consideration by the MPRWA. Thisreport is based on information collected on each project up through October 15, 2012. It doesnot cover additional project developments between that time and the date of this report.

The three projects are in the conceptual or preliminary stage of development and all three have astheir objective to provide California American Water the seawater desal component of therequired replacement water supply under State Water Resources Control Board Order No. 95-10.The DeepWater Desal group proposes to provide an expandable plant capable of servingadditional regional water needs as well, outside of the California American Water service area.Brief summaries of the projects follow:

Proponent(s) California American Water (Cal-Am)

Location46-acre site of vacant, disturbed land west of the MRWPCARegional Treatment Plant (RTP).

Purpose

To supply supplemental desal component of the MontereyPeninsula regional water supply

This project is currently under consideration by theCalifornia Public Utilities Commission (CPUC).

Production Volume 5.4 mgd or 9.0 mgd


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EXECUTIVE SUMMARY MONTEREY PENINSULA REGIONAL WATER AUTHORITY

Page ES-2 January 2013

Proponent(s)DeepWater Desal, LLC, Dynegy Moss Landing Power Plant,MFJK Partnership of the Capurro Ranch, PV2 Solar, andEcomert Technologies G3 Data Centers

Location Capurro Ranch Property, north of /Elkhorn Slough MossLanding Power Plant

PurposePhase 1 to supply supplemental desal component of theMonterey Peninsula regional water supply

Phase 2 to supply northern customers

Production VolumePhase 1: 4.9 mgd or 9.1 mgd

Phase 2: 22.0 mgd

Proponent(s)DeSal America, LLC composed of Moss LandingCommercial Park, LLC; and Stanley and Patricia-VanceLueck

LocationMoss Landing Commercial Park

Purpose

To supply supplemental desal component of the MontereyPeninsula regional water supply

This project is currently proposed as alternative to the Cal-Am MPWSP.

Production Volume4.8 mgd or 9.4 mgd

We evaluated the function of each project in terms of project purpose, customers identified,adequacy of treatment approach, residuals handling, feed water characterization, quality ofproject information, and any omissions or fatal flaws in the information provided. Theevaluation was conducted based on information provided in response to a 56-item questionnaireprepared by the MPRWA technical advisory committee and submitted by each proponent; along

with additional information each provided in response to specific questions and interviews fromSPI and KHC.

All three projects have available sites for building the required treatment facilities; and credibleseawater intake and brine disposal approaches, though there are substantive differences amongthem. Cal-Am proposes to use a group of subsurface slant intake wells (up to eight for themaximum capacity plant alternative); DWD proposes a new screened open ocean intake installedat roughly 65-ft of depth; and PML is considering options to use either an existing seawaterintake pump station drawing from the Moss Landing Harbor, or potentially a new screened open


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ocean intake installed coincident with an existing 51-in diameter concrete outfall pipeline ownedby the Moss Landing Commercial Park. Cal-Am has projected there may up to 3 percent ofgroundwater from the Salinas Valley Groundwater Basin (SVGB) entrained with their intakesupply that would need to be returned (as facility product water) to the basin. For brine disposal,Cal-Am and DWD propose to blend concentrated brine from the desal plants with existing

outfall flowsCal-Am blending with the existing Monterey Peninsula Regional Water PollutionControl Agencys wastewater plant outfall; and DWD using the existing cooling water returnoutfall at the Moss Landing Power Plant. Both sources have sufficient dilution and hydrauliccapacities. PML proposes to use their existing 51-in diameter outfall, currently permitted todischarge magnesium-depleted seawater. There is some evidence of disrepair of the outfall interms of pipeline integrity and condition of the existing diffusers which would need to beaddressed along with the permitting of a non-shore diluted brine stream.

Cal-Am and PML propose to serve only the identified demand within the Cal-Am service area atthe two plant capacity increments under consideration; while DWD envisions a higher capacityregional project, capable of producing up to 25,000 AFY. DWD has not yet secured agreementswith any potential customers.

In terms of treatment approachall three candidate teams propose to use reverse osmosis (RO)as the primary desalination technology. However, both DWD and PML propose a single passRO system; while Cal-Am has proposed a partial double or two pass systemtreating a portionof the product water from the first pass RO system with a second RO system and blending thesupplies to form the final treated water. The issue relates to the quality of product waterproduced, more than treatment function; as either approach is considered functional.

Pre- and post-treatment approaches are similar. All incorporate granular media filtration of theincoming seawater, with PML following on with a low pressure membrane filtration system(microfiltration or ultrafiltration) to deal with the anticipated higher solids load from waterextracted from Moss Landing Harbor. In the case of Cal-Am, the aquifer filtration provided by

the slant wells could obviate the need for media filtration; but the potential presence of iron andmanganese in the supply could just as well make them necessaryso the approach is consideredconservative. In the case of DWD, the incoming seawater extracted at depth will be cold(roughly 15 C) and warmed through a proprietary warming system at the Moss Landing PowerPlant prior to transmission to the treatment plant site. All three proponents propose to use calcitebeds, carbon dioxide and sodium hydroxide for re-mineralization/stabilization of the RO treatedproduct water and chlorine disinfection.

Cal-Am and DWD will require offsite pipelines for feed, product water and brine disposal; whilePML proposes to use existing intake and outfall pipelines originating on site; requiring only aproduct water delivery pipeline. DWDs site location north of the Elkhorn Slough is likely toentail complex issues with crossings for all three of their large diameter pipelines (one 48-in and

two 36-in). DWDs co-located site at the Moss Landing Power Plant will permit it to connect toexisting intake and outfall facilities; requiring only on off-site product water pipeline.

All three proponents were cooperative with our original evaluation and provided all availableand requested information. The Cal-Am project through past work on other regional projects aswell as ongoing procedures with the California Public Utilities Commission has produced themost detailed information on their project, followed by DWD who have prepared a fair amountof predesign data on their proposed system along with active environmental investigations for


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their proposed intake. PML is at a more preliminary level of engineering and planning incomparison. Their project has transitioned in ownership/proponents, with the new entity electingnot to participate in this evaluation. Importantly however, we have not found any fatal flaws of atechnical nature associated with any of the candidate projects.

Performance of each proposed system was gauged relative to categories of plant design capacity,targeted product water quality and disinfection strategy.

For plant capacity, we considered the proposed instantaneous design capacity of each treatmentfacility in comparison to the required annual production incrementeither 5,500 AFY or 9,000AFY. What we found were wide variationswith Cal-Am proposing capacities of 5.4 mgd and9.0 mgd; DWD of 4.9 mgd and 9.1 mgd; and PML at 4.8 mgd and 9.4 mgd. We considered thelevel of equipment redundancy proposed by each team in the context of the amount of online

time it would require a facility at a given rated capacity to deliver the required annual allotment.For Cal-Am, we gauged their planned design capacities adequate considering the need to return

flow to the SVGB as well as meet the 5,500 AFY or 9,000 AFY into their distribution system.At capacities of 5.4 mgd and 9.0 mgd, the plant(s) would need to operate 98 percent of the timeto meet productionnot overly conservative but achievable given the level of equipmentredundancy (including spare process units) in their proposed facility. DWD, with similarproposed levels of redundancy, would have equivalent minimum facility capacity requirementsof 5.0 mgd and 8.2 mgd; somewhat lower than Cal-Am as they lack the requirement to returnflow to the SVGB. PML did not provide a detailed equipment list indicating numbers of processunits; so gauging proposed levels of equipment redundancy was uncertain. However, we feel thefacility should have adequate reliability and conducted our evaluation on that basisrecommending equivalent capacity ratings to DWD of 5.0 mgd and 8.2 mgd.

The product quality produced by the proposed systems would differ based on the configuration

of their proposed RO systems. Cal-Ams proposed partial two-pass system could likely achievechloride, boron, and total dissolved solids (TDS) consistent with current Carmel River supplies;but the single pass systems would not. We consider a lower salinity product supply an asset andevaluated all three projects (from an economic perspective) as having partial two-pass ROsystems. The recommended product quality goal is summarized in Table ES-1-1.

Table ES-1-1 Summary of Proposed Product Water Quality

Total Dissolved Solids mg/L 380

Chloride mg/L 60

Boron mg/L 0.5

pH units 8.0

Calcium mg/L as CaCO3 40

Alkalinity mg/L as CaCO3 40


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For disinfection, the proposed facilities must comply with the Surface Water Treatment Rule andLong-Term 2 Enhanced Surface Water Treatment Rule. Under these regulations, pathogenremoval/inactivation requirements are set on a logarithmic (log) scale, with the CaliforniaDepartment of Public Health establishing specific log removal for priority pathogens, includinggiardia, cryptosporidium (crypto), and virus. The levels set will be based on source water quality

and other factors, and are expected to be in the range of 3-5 for giardia, 2-4 for crypto, and 4-6for virus, based on each of the project source waters being classified as surface waters or underthe influence of surface waters. We find all three projects are likely to achieve sufficient logremoval credits under their proposed treatment schemes to comply.

A primary focus of our evaluation was to provide a balanced, apples to apples comparison ofthe candidate projects from an economic perspective. We implemented this by focusing on thefollowing principles:

Uniformity in plant design capacity for the two non-regional approaches; equivalentcapacity allocation for the proposed DWD regional project.

Equivalency in treatment to achieve: a common RO feed water quality followingpretreatment; a common treated water quality goal; and pathogen removal creditsrequired for the applicable supply source.

Uniformity in equipment redundancy. Uniformity in unit cost criteria for common items. Uniformity in cost factors applied to aggregated costs (e.g., contingencies; electrical

and I&C costs; etc.).

Uniformity in unit costs for chemicals and other consumables for treatmentevaluations.

To implement the above, we adjusted plant capacities for the evaluation on the basis described inthe Project Performance discussion, rating Cal-Ams proposed system at design capacities of 5.4mgd and 9.0 mgd; and the DWD and PML systems at 5.0 mgd and 8.2 mgd. In terms oftreatment process, we attempted to maintain the overall proposed process design of theproponents, but did evaluate all as including a partial (40 percent) capacity second pass ROsystem. We also assumed N+1 redundancy on all rotating equipment and major treatmentprocess units (e.g., filters, RO membrane trains). We employed an equivalent basis indeveloping our capital equipment cost estimates, relying on targeted quotes for equipment andSPIs cost information from past, similar seawater RO projects. For indirect costs, we assumedfixed factors and applied them uniformly to each project.

We implemented a similar strategy on annual operating and maintenance expenses, usingcommon chemical unit prices along with pricing on common consumables, such as the ROprocess membranes. The results of our evaluation are presented in Table ES-1-2.

Legal and financial considerations, such as water rights and payment schedules (for example,Surcharge 2 proposed by Cal-Am) were outside the scope of this evaluation and are notaddressed herein. Overall, the costs presented are meant for comparative evaluation on aplanning basis. They have an overall accuracy level of -30 to +50 percent.


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Table ES-1-2 - Summary of Evaluated Capital and Operating Cost Estimates

Intake/Outfall Facilities $23.0 $17.7 $-0- $-0- $-0- $-0-

Pretreatment & Residuals Handling $10.6 $7.94 $11.2 $7.94 $20.2 $13.6

Desalination System $22.4 $15.0 $19.4 $13.2 $19.9 $14.0

Post-Treatment $1.48 $0.88 $1.48 $0.88 $1.66 $1.07

Distribution Facilities $6.14 $5.08 $3.35 $3.26 $0.35 $0.26

Site Structures $11.5 $10.8 $3.65 $2.52 $10.0 $7.00

Offsite Trenched Pipelines $24.9 $24.9 $23.0 $22.7 $25.1 $25.1

Indirect Costs1 $57.5 $50.3 $52.9 $42.7 $67.9 $62.3

Contingency Allowance (30%) $47.2 $39.8 $34.5 $28.0 $43.6 $37.0

Mitigation Allowance (1%) $1.60 $1.30 $1.20 $0.90 $1.50 $1.20

Energy $5.38 $3.26 $3.44 $2.10 $3.98 $2.43

Chemicals $0.32 $0.19 $0.81 $0.49 $0.93 $0.57

Expendables $0.69 $0.45 $0.78 $0.52 $1.09 $0.65

Other Proponent Expenses -- -- $1.59 $1.45 -- --

O&M Labor $2.69 $2.36 $2.69 $2.36 $2.69 $2.36

Equipment Replacement2 $1.50 $1.23 $0.93 $0.76 $1.16 $0.92

Capital Recovery3 $19.1 $16.2 $8.73 $7.06 $11.0 $9.37

Total Annual Cost $29.7 $23.7 $18.9 $14.7 $20.9 $16.3

$2,310 - $4,950 $3,017 - $6,465 $1,470 - $3,150 $1,870 - $4,005 $1,625 - $3,480 $2,075 - $4,450

1Includes implementation costs at 25%; ROW easement/land costs, mobilization/demobilization at 2%; electrical and I&Csystems at 18%; engineering and startup at 15%; and additional project proponent prescribed costs. All percentages appliedto plant facilities costs.

2 Calculated as 1.5% of plant facilities costs.3 Capital recovery factor for DWD and PML based on an interest rate of 4.0% and term of 30 years; based on an interest rate of

8.49% and 30 years for Cal-Am; see additional discussion in Section 5.4Overall accuracy of costs is estimated at AACE Class 5 with an accuracy of -30% to +50%; range values indicate potential

spread.


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Overall, the projected capital and operating costs for each facility are fairly equivalent given theoverall accuracy of the estimate and degree of project development. Cal-Ams capital cost is thehighest; owing largely to its high intake system cost. PML is proposing to reuse existing intakeinfrastructure; while DWD has an unspecified separate business entity which will be funding itsintake, outside of the assigned DWD facility budget. Cal-Ams operating cost is also relatively

high, owing in large measure to higher stipulated energy costs than either DWD or PMLroughly $0.13/kW-hr vs. $0.08 kW-hr. However, Cal-Am has recently indicated they may beable to secure lower power through a direct purchase agreement with PG&E, resulting in a costof $0.087/kW-hr. The potential impact of this change is addressed in a sensitivity analysis forCal-Ams costs in Section 5. The overall water production costs diverge considerably in ourevaluation, due to the higher cost of capital assigned to Cal-Am vs. DWD and PML; so while thebase costs are similar, Cal-Ams cost of water produced is higher. An expanded discussion ofhow the capital recovery factor (CRF) for Cal-Am was generated is presented in Section 5.

The three projects are at varying states of development in terms of the regulatory permittingprocess. Cal-Am is further along than either DWD or PML, though DWD has completed or isnearing completion of their initial CEQA compliance documents. Forecast projectimplementation schedules were identified for each project proponent, based on a select numberof key environmental and permitting tasks, including:

1. A project description must be completed.2. An Environmental Assessment must be made.3. An EIR/EIS must be completed (CEQA/NEPA compliance).4. Commercial Agreements must be negotiated/ Cal-Am must obtain a Certificate of Public

Convenience and Necessity (CPCN), after certification of the EIR.

5. Jurisdictional Permits must be obtained for facilities impacting Waters of the U.S.6. NPDES Permits must be amended/obtained.7. Coastal Development Permits must be obtained.

It was further assumed that each proponent had the financial capacity to proceed with predesignpreparation/procurement package development such that the project could be put out to finaldesign and construction bid coincident with approval of the final project permits. The schedulesare provided below as Figure ES-1, Figure ES-2 and Figure ES-3. The project proponentswere invited to provide their updated schedules following publication of the draft report. Cal-Am and DWD each elected to provide a schedule, which are included in Section 6.


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Figure ES-1 Projected Cal-Am Project Implementation Schedule

Figure ES-2 Projected DWD Project Implementation Schedule

Figure ES-3 Projected PML Project Implementation Schedule


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MONTEREY PENINSULA REGIONAL WATER AUTHORITY INTRODUCTION

January 2013 Page 1-1

Separation Processes Inc. (SPI) and Kris Helm Consulting (KHC) are providing engineering andconsulting support to the Monterey Peninsula Regional Water Authority (MPWRA) to assistwith the evaluation of three candidate desalination projects on the Monterey Peninsula. SPI

conducted technical and economic evaluations of the proposed projects; while KHC examinedissues relating to permitting and environmental compliance.

California American Water (Cal-Am) is an investor owned public utility who is responsible forproviding the water supply to cities covered within the MPRWACarmel-by-the-Sea, Del ReyOaks, Monterey, Pacific Grove, Sand City and Seaside. The proposed projects wouldsupplement supply previously extracted for the region from the Carmel River. In 1995, the StateWater Resources Control Board (SWRCB) in its Order No 95-10 found that Cal-Am waswithdrawing water from a subterranean stream, rather than percolating groundwater; and in theprocess extracting an average of 10,730 AFY in excess of its valid right of 3,376 AFY. Theorder required Cal-Am to secure a replacement source of supply by December 2016.

The average annual water demand in the region is 15,250 AFY1. Currently identified sourcesinclude established rights to Carmel River and Seaside Basin waters of 4,850 AFY, the aquiferstorage and recovery (ASR) system of 1,300 AFY, and 94 AFY from the Sand City DesalinationPlant. This leaves a roughly 9,000 AFY deficit to be made up. Alternatives include a new 9,000AFY seawater desalination plant; and a new groundwater replenishment (GWR) project of 3,500AFY in combination with a new 5,500 AFY seawater desalination plant.

The technical advisory committee (TAC) of the MPRWA developed a list of 56 questions tosubmit to the three desalination project proponents, including Cal-Am, DeepWater Desal, LLC(DWD) and the Peoples Moss Landing Desal (PML). Each proponent is proposing to build adesalination facility to satisfy the planned desalination component of the regional water supply.Responses and supporting information were received from each, exhibiting various stages ofdevelopment and differences in approach. The differences were such that a deliberative, faircomparative evaluation could not be conducted solely on the basis of the information provided.

This report presents the results of a more detailed evaluation and analysis conducted by SPI andKHC. The work was conducted based on information provided in the original responses to thequestions from the TAC along with supplemental information provided by each proponent. Thegoal was to provide an apples-to-apples comparison of each project on an equivalent costbasis; along with an evaluation of the realistic implementation schedule for each, taking intoaccount environmental and permitting issues.

1 RBF Memorandum, Recommended Capacity for the Monterey Peninsula Water Supply Project (MPWSP)Desalination Plant, April 20, 2012


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MONTEREY PENINSULA REGIONAL WATER AUTHORITY PROJECT SUMMARIES


The tabular summaries provided in this section include information on each of the proponentprojects, including:

Project name Proponent(s) Location Purpose Production volume Key features Facility map Key information provided to review team Persons interviewed/corresponded with

The TAC requested information from each proponent that would satisfy the desalinationcomponent of the proposed water supply. Responses received from the Cal-Am and PMLgroups were generally in line with this request; though there were slight differences in theproposed plant capacities. The DWD response proposed to only serve the higher 9,000 AFYrequirement, along with a planned expansion to act as a regional water supply source to otheragencies on the peninsula as well as cities north of Moss Landing. DWD did reveal in responseto subsequent inquiries how they would serve the 5,500 AFY supply scenario. The informationpresented for each project represents their current status from the proponents at the time of this

report writing.


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PROJECT SUMMARIES MONTEREY PENINSULA REGIONAL WATER AUTHORITY

Page 2-2 January 2013

Project Name Monterey Peninsula Water Supply Project(MPWSP)

Proponent(s) California American Water

Location 46-acre site of vacant, disturbed land west of theMRWPCA Regional Treatment Plant (RTP).

Purpose To supply supplemental desal component of theMonterey Peninsula regional water supply

This project is currently under consideration by theCalifornia Public Utilities Commission (CPUC).


Key Features 1.Raw seawater supply through a series of up toeight sub-surface slant wells located on a vacant

376 acre parcel with roughly 7,000 feet of oceanshoreline.2.Raw water and pump to waste transmission

through one of eight candidate alignments.3.Single-stage, dual media pressure filtration

pretreatment.4.Partial 2-pass RO desalination treatment with

energy recovery. Final product has a proposedblend of 60:40 first pass:second pass product.

5.Product stabilization with calcite, carbon dioxide,and sodium hydroxide.

6.Disinfection with sodium hypochlorite andtemporary UV.

7.2 x 1.0 MG product storage tanks, productdistribution pumps, and 36-in diameter productpipeline to Cal-Am distribution system nearSeaside.

8.24-in brine disposal pipeline to the existing RTPoutfall.

Key Information Provided 1.TAC response package2.Response to supplemental questions from SPI

and KHC

3.Relevant testimony to the CPUC4.RBF 2011 memo on implementation schedulerisk of regional supply alternatives

5.RFB 2011 memo on cost analysis of regionalsupply alternatives

Persons Interviewed/Corresponded With Richard Svindland


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Figure 2-1 Cal-Am Project Location Map

____Slant Well

____ Intake

____ Brine

____ Product Water

Desalination Plant

Tie-in to CAL AMexisting facilities


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Project Name DeepWater Desal

Proponent(s) DeepWater Desal, LLC, Dynegy Moss LandingPower Plant, MFJK Partnership of the CapurroRanch, PV2 Solar, and Ecomert Technologies G3Data Centers

Location Capurro Ranch Property, north of /Elkhorn SloughMoss Landing Power Plant

Purpose Phase 1 to supply supplemental desal component ofthe Monterey Peninsula regional water supply;Phase 2 to supply northern customers

Production Volume Phase 1: 4.9 mgd or 9.1 mgd

Phase 2: 22.0 mgd

Key Features 1.

Raw seawater supply through a new 48-in openintake extending into the Monterey Bay west ofMoss Landing at a depth of roughly 65-ft.

2. Raw water transmission through an existingright of way maintained by MLPP to an existingpump station at MLPP for transfer to the site.

3. Proprietary warming system at MLPP whichwill increase the temperature of the raw water.

4. Transmission of the warmed feed water througha new 36-in pipeline to the Capurro Ranch site.

5. Single-stage, dual media pressure filtrationpretreatment.

6. Single-pass RO desalination treatment withenergy recovery.

7. Product stabilization with calcite, carbondioxide, and corrosion inhibitor.

8. Disinfection with sodium hypochlorite.9. 2.5 MG product storage tank, product

distribution pumps, and 30-in diameter productpipeline to Cal-Am distribution system.

10.36-in brine disposal pipeline to MLPP existingcooling water ocean discharge.

Key Information Provided 1.TAC response package2.Response to questions from SPI/ KHC3.Tenera Environmental, Preliminary Modeling of

Potential Impacts from Operation of aDesalination Facility Ocean Intake, August 22,2012

Persons Interviewed/Corresponded With Dennis Ing, Scott Jackson, Jonathan Dietrich


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Figure 2-2 DWD Project Location Map

____Intake

____ Brine

____ Product Water

Desalination Plant

Tie-in to CAL AMexisting facilities


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Project Name The Peoples Moss Landing Water Desal Project

Proponent(s) DeSal America, LLC composed of Moss LandingCommercial Park, LLC; and Stanley and Patricia-Vance Lueck

Location Moss Landing Commercial Park

Purpose To supply supplemental desal component of theMonterey Peninsula regional water supply

This project is currently proposed as alternative tothe Cal-Am MPWSP.


Key Features 1. Raw seawater supply through an existing intakesystem drawing from the Moss Landing Harbor.

2.

Single-stage, zeolite pressure filtration followedby ultrafiltration (UF) pretreatment.3. Single-pass RO desalination treatment with

energy recovery.4. Product stabilization with calcite, carbon

dioxide, and sodium hydroxide.5. Disinfection unspecified, but presumed to be

with sodium hypochlorite.6. Product storage in existing site tankage. New

distribution pump station and 36-in diameterproduct pipeline to Cal-Am distribution systemnear Seaside.

7. Brine disposal through existing 51-in (internaldiameter) outfall.

Key Information Provided 1.TAC response package2.Project information package dated July 20123.Response to supplemental questions from SPI

and KHC4.Video of a portion of the existing outfall.5.August 2012 Structural Evaluation Report of site

structures and outfall, conducted by JAMSEEngineering, Inc.

6.Construction drawings for the outfall (1973) andmodifications made to the intake pump station(1968).

7.September 2012 Environmental Issues andConstraints Report by SMB Environmental Inc.

Persons Interviewed/Corresponded With Nader Agha, George Schroeder, Stanley Lueck


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Figure 2-3 PML Project Location Map

____Intake

____ Brine

____ Product Water

Desalination Plant

Tie-in to CAL AMexistin facilities


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MONTEREY PENINSULA REGIONAL WATER AUTHORITY PROJECT FUNCTION


The function of each proponent project is evaluated on the following criteria:

Project purpose Customers identified Adequacy of treatment approach Residuals handling Feed water characterization Quality of project information Omissions or fatal flaws

In an initial screening level evaluation2, we found no disqualifying criteria for any of the

candidate projects. We did however find differences in the level of project development andapproach. Each project is discussed separately below.

3.1.1 Project PurposeCal-Am proposes their project to serve the needs of the identified demand on the MontereyPeninsula within their service area to comply with SWRCB Order 95-10. The proposedtreatment plant would serve the identified desalination component of the regional water supplyportfolio. They specifically do not propose to provide a plant capacity in excess of definedregional water supply requirements under two scenarioswith GWR and without GWR3.

3.1.2 Customers IdentifiedTreated water would be supplied to the Cal-Water distribution system for service to its currentservice area. Any groundwater from Salinas Basin drawn through the proposed supply wellswould be returned the basin as plant treated water through the Castroville Seawater IntrusionProject (CSIP) ponds

3.

3.1.3 Adequacy of Treatment ApproachFeed water for the desalination plant would be extracted from subsurface slant wells. Over thelong term, feed water is projected to include about 97 percent seawater and 3 percent intrudedgroundwater from the Salinas Valley Groundwater Basin (SVGB)3. The desalination plant willbe operated such that on an annual average basis, the plant would return desalinated water to theSVGB in an amount equal to the freshwater extracted from the slant wells.

2 SPI Memorandum, Monterey Desalination StudyInitial Scoping and Constraints Analysis, August 30, 20123 Direct Testimony of Richard C. Svindland Before the Public Utilities Commission of the State of California, filedApril 23, 2012


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PROJECT FUNCTION MONTEREY PENINSULA REGIONAL WATER AUTHORITY


The preferred site for construction of the slant wells is an approximately 376 acre parcel of landwith 7,000 feet of ocean shoreline, located west of the proposed desal plant site. The angle of theslant wells will be determined by a proposed test well program, with a maximum well length ofapproximately 750 lineal feet. Wells would initially be placed on the beach, as far as possiblefrom the existing shoreline, but avoiding undisturbed dune habitat. This may cause some or all

wells to be within the predicted 50-year erosion boundary; however, the expected useful life ofthe wells is less than 50 years. A contingency plan will be needed for relocating the wells inlandin the event that coastal erosion renders the wells inoperable4.

Two design capacities are proposed: (1) seven wells operating at 2,200 gpm per well plus oneadditional well as a backup, for a total of 22 mgd (15,400 gpm) producing 9.0 mgd of productwater; (2) five wells operating at 1,840 gpm per well plus one additional well as backup, for atotal of 13.2 mgd (9,200 gpm) producing 5.4 mgd of product water4.

Eight feed water pipeline alignments are being considered, all of which will be made of HDPE orFPVC, and will have a 30-inch or 36-inch diameter. The final selected alignment would includea parallel 16-in diameter pump to waste pipeline, to allow wasting of initial produced water froma pump following startup.

The proposed treatment plant would be located on a vacant but disturbed 46-acre parcel west ofthe MRWPCA Regional Treatment Plant (RTP). The site would be accessed off of CharlesBenson Rd., a two-lane roadway that also serves the MRWPCA RTP along with the MontereyRegional Waste Management District. Access would be via an easement from the WasteManagement District. A new turn lane would need to be provided to allow safe access to theproposed desal plant for personnel and chemicals deliveries. Cal-Am is currently in negotiationsto purchase the site from the existing land owner. Overall, land acquisition is not a large concernas Cal-Am has the authority to exercise eminent domain privileges should a negotiated purchaseprove untenable.

Incoming seawater would be stored in two 0.5 MG storage tanks then pumped to granular media

pressure filters. Provisions would be included to pre-chlorinate the filter feed if necessary; aswell as include proprietary media to remove iron and manganese should it be present in the rawseawater. Filter effluent would be dechlorinated if necessary, then flow to inline cartridge filtersprior to routing to the RO trains. The proposed RO system would be arranged as a full singlepass and partial second pass; with the second pass product making up 40 50 percent of the finalproduct supply. The first pass trains would include high pressure booster pumps and isobaricenergy recovery devices (ERDs); while the second pass trains would be equipped with highpressure booster pumps only. Operating recovery of the first pass trains would be roughly 45.5percent; while the second pass trains would operate at 90 percent. First and second pass trains,related pumps, and ERDs would be arranged in an N+1 configuration, with a total of fourprocess trains for the 5.4 mgd plant option and six process trains for the 9.0 mgd plant option.

5

The product water from the RO system would be post-treated with calcite and carbon dioxide forstabilization, along with addition of a corrosion inhibitor. For disinfection, the product would bedosed with sodium hypochlorite and stored in two, 1.0 MG storage tanks. Provisions may beincluded for a temporary or permanent UV disinfection system as well, should conditionswarrant (e.g., if additional disinfection credits are required).

5

4 RBF Memorandum, Monterey Peninsula Water Supply Project (MPWSP) Project Description, April 20, 20125 Cal-Am Response to SPI Questions, October 3, 2012


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Overall the treatment approach is gauged to be sound. The greatest process risk is likelyassociated with the proposed slant wells. Slant well intake systems can provide significantadvantages over traditional open ocean intakes including:

Natural filtration

Avoidance of impingement and entrainment of marine life No ocean construction impacts No permanent aesthetic impacts.

However, slant wells can also pose more construction challenges than other well types as a resultof shallow construction angles and less vertical gravitational force. Slant wells need periodicaccess to the well head area. In areas where recreation exists (e.g., at a public beach) provisionmust be made to minimize disturbance6. Slant well intakes can be used with large desalinationplants, with seawater intake capacities of up to 50 mgd7. Maintenance of well specific capacitylong term is unknown; and elsewhere where employed the wells have been known to initiallydraw from an ancient marine aquifer containing high levels of iron and manganese

8. Lastly, the

specific long term amount of groundwater uptake from the SVGB, estimated at up to 3 percent,is uncertain.

Cal-Am plans to install a test slant well to establish site specific operating conditions andgenerate data which should help to confirm actual conditions and allow development ofappropriate mitigation strategies. Cal-Am has already included provisions for removing iron andmanganese across their pretreatment filters if necessary. The slant wells themselves can bescreened or installed at different angles to control the mix of seawater to diluent water extracted.Cal-Am is currently pursuing permits for the test well. An initial operating period of 6 12months is planned to develop data required for the EIR CEQA work. Cal-Am has indicated thatthe test period could extend as long as 18-24 months if additional data is required5. Should thetest well reveal slant wells to be problematic, a more conventional Ranney sub-surface intakewell could be used as an alternative. The conceptual layout would include three vertical caissonsand horizontal well clusters located across a 1,000 1,500 feet beach front area. Each caissonwould be capable of extracting up to 10 mgd. Costs would roughly equivalent to the proposedslant wells; however, shoreline disruption would be greater. To help gauge the potential costimpacts of shorter-than anticipated life of the slant wells, a cost sensitivity analysis is provided inSection 5.

With either intake system, delivered raw seawater quality is likely to be good, with lowparticulate and silt density index (SDI) levels, making single-stage filtration an acceptablepretreatment approach. The RO process design is conservative, with a full first pass and partialsecond pass; including N+1 redundancy for all process units. The proposal does not include

acidification or antiscalant dosing to the first pass RO system feed water, but this is likely

6 Williams, D.E.Design and Construction of Slant and Vertical Wells for Desalination Intake. IDA WorldCongress-Perth Convention and Exhibition Centre (PCEC)Perth, Western Austrailia September 4-9, 2011REF:IDAWC/PER11-0507 Pankratz, T.A Review of Seawater Desal Intake, Pretreatment & Discharge Technologies. IDAIran 06 WDTSProceedings September 17 & 18, 20068 Ghiu, S.18 Month Demonstration of Slant Well Intake System Pretreatment and Desalination Technology forSeawater Desalination. WaterReuse Research Conference Proceedings, June 2012.


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acceptable as the planned recovery of the first pass system is limited to 45 percent. Feed andproduct storage tanks are arranges as 2 x 50 percent units, allowing the ability to take a tank outof service for maintenance. A preliminary site plan indicates the proposed site is sufficient toaccommodate the proposed treatment plant facilities and related administrative and maintenancefacilities adequately.

3.1.4 Residuals HandlingPlant residuals would be handled in a combination of storage and transfer systems. Backwashwaste from the filters would be collected in a 0.5 acre storage pond, with decant disposed withthe RO brine. RO brine would be sent to the MRWPCA ocean outfall. Analyses have shownthat the outfall has sufficient capacity to accommodate the projected peak brine flow from theplant under all but a worst case hydraulic loading scenario that is anticipated to last for sixhours9. In these situations, brine would temporarily be stored on site in a 3.0 MG detentionpond. The majority of the time (96 percent) the outfall is projected to have sufficient capacity.Waste residuals from the RO cleaning system would be neutralized and discharged with the brine

to the outfall as well; or alternately to the site sanitary sewer if disposal with the brine is notpermitted.

3.1.5 Feed Water CharacterizationThere has been no detailed characterization of plant feed water to date. Data will be generated aspart of the planned test well program.

3.1.6 Quality of Project InformationAvailable documentation for the Cal-Am project is the most extensive and well developedamong the three proponents. Primarily this is a consequence of their involvement in thepreviously proposed regional project with Marina Coast Water District along with filings to theCPUC supporting their proposed project and development of required CEQA documentation.Appendices to their response to the TAC included the following:

RBF Memorandum, Monterey Peninsula Water Supply Project (MPWSP) Capital andO&M Cost Estimate Update, April 20, 2012.

RBF Memorandum, Monterey Peninsula Water Supply Project (MPWSP) ProjectDescription, April 20, 2012.

Direct Testimony of Jeffrey T. Linam Before the Public Utilities Commission of theState of California, Filed April 23, 2012.

Other project related documents were available on the Monterey Peninsula Water Supply Projectwebsite, including:

9Trussel Technologies Inc. Technical Memorandum, MRWPCA Outfall Hydraulic Capacity Analysis, April 18,2012.


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California America Water Company, Coastal Water Project, Final EnvironmentalImpact Report, October 30, 2009.

Download Filings for Proceeding A1204019 Presentations, including Technical Workshops on Monterey Peninsula Water Supply

Project (July 2012); Monterey Peninsula Water Supply Project Presentation (April2012); and Monterey Peninsula Water Supply Project Presentation (July 2012).

Project Map (April 23, 2012). California American Water Application for Monterey Project (PDFA) California American Water Application for Monterey Project (POS, NOA,PDFA) California American Water Direct Testimony of Keith Israel, including a Technical

Memo from Trussell Technologies, MRWPCA Outfall Hydraulic Capacity Analysis,April 18, 2012

California American Water Direct Testimony of Jeffrey T. Linam California American Water Direct Testimony of Eric J. Sabolsice California American Water Direct Testimony of F. Mark Schubert, P.E. California American Water Direct Testimony of David P. Stephenson California American Water Direct Testimony of Richard C. Svindland California American Water Direct Testimony of Kevin Thomas

Cal-Am also provided a response to questions from SPI, including the following documents:

Capital Cost Worksheet O&M Cost Worksheet RBF Memorandum, Implementation Schedule Risk Analysis of Water Supply

Alternatives, October 24, 2011

RBF Memorandum, Cost Analysis of Water Supply Alternatives, October 19, 2011Overall the information is considered sufficient to evaluate the proposed project from a technicaland economic perspective.

3.1.7 Omissions or Fatal FlawsOur evaluation and investigation of the proposed Cal-Am project did not uncover any perceivedfatal flaws of a technical nature or significant omissions of project information.


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tac agenda packet 01-28-13

Documents