tac mprwa special meeting agenda packet 01-27-16

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AgendaMonterey Peninsula Regional Water Authority (MPRWA)

Technical Advisory Committee (TAC)Special Meeting

12:00 PM, Wednesday, January 27, 2016Council Chamber

580 Pacific Street, MontereyMonterey, 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. Approve Minutes from November 16, 2015 - Milton

AGENDA ITEMS

2. Receive Schedule of Technical Advisory Committee Meetings for CY 2016 - Cullem

3. Receive Report, Discuss, and make Recommendations on the Cal Am Net Present Value (NPV) Cost Comparisons between the 6.4 and 9.6 MGD Desal Plants - Cullem

4. Receive Report, Discuss, and Make Recommendations on the Draft NPV Cost Comparisons between a 6.4 Desal plus GWR vs 9.6 Desal Project, as Well as on the Draft

Externalities Study - Cullem

5. Receive, Discuss, and Make Recommendations as Necessary on a CPM Schedule for Permits and Approvals for the Monterey Peninsula Water Supply Project (MPWSP) - Cullem

ADJOURNMENT

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Created date 01/25/2016 3:31 PM Wednesday, January 27, 2016

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The Monterey Peninsula Regional Water Authority is committed to including the disabled in allof its services, programs and activities. In compliance with the Americans with Disabilities Act,if you need special assistance to participate in this meeting, please contact the Monterey CityClerk’s Office at (831) 646-3935. Notification 30 hours prior to the meeting will enable the Cityto make reasonable arrangements to ensure accessibility to this meeting [28 CFR 35.102-35.104 ADA Title II]. Later requests will be accommodated to the extent feasible. Forcommunication-related assistance, dial 711 to use the California Relay Service (CRS) to speak toCity offices. CRS offers free text-to-speech, speech-to-speech, and Spanish-language services 24hours a day, 7 days a week. If you require a hearing amplification device to attend a meeting, dial711 to use CRS to talk to the Monterey City Clerk's Office at (831) 646-3935 to coordinate use of a

device.

Agenda related writings or documents provided to the MPRWA are available for publicinspection during the meeting or may be requested from the Monterey City Clerk’s 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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Monterey Peninsula Regional Water AuthorityAgenda Report

Date: January 27, 2016

Item No: 2.

FROM: Executive Director Cullem

SUBJECT: Receive Schedule of Technical Advisory Committee Meetings for CY 2016

RECOMMENDATION:

It is recommended that the Water Authority TAC receive the schedule for its meetingsduring calendar year 2016.

DISCUSSION:

During calendar 2015, the Water Authority TAC has been able to conduct business onthe first Monday of each month, with the third Monday of each month reserved for anoptional meeting. Efforts were made to move the meeting to an earlier time or alternatedate but we were unable to secure a regular meeting place and had conflicts withscheduling member attendance. Therefore, It is recommended that the meetingschedule remain the same for 2016.

ATTACHMENTS:

A-Draft meeting schedule for CY 2016.


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2016 Meeting Dates

Director’s Meeting Dates through December 31, 2016

All meetings are on the Second Thursday of the month at 7:00 p.m. unless otherwise posted. TheFourth Thursday of the month is an “Optional Meeting” if necessary.

•January 14/January 28

•February 11 / February 25

•March 10 / March 24

•April 14 / April 28

•May 12 / May 26

•June 9/ June 23

•July 14/ July 28

•August 11 / August 25

•September 8 / September 22

•October 13 / October 27

•November 10 only (November 24 is a

Holiday)

•December 8 only

TAC Meeting Dates through December 31, 2016

All meetings are on first Monday of the month at 10:30 a.m. unless otherwise posted. The third

Monday of the month is an “Optional Meeting” if necessary.

•January 4

•February 1

•March 7

•April 4•May 2

•June 6

•July 18 (July 4 is a Holiday)

•August 1

•September 19 only (September 5 is a

Holiday)

•October 3•November 7

•December 5


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Item No: 3.

№06/12


SUBJECT: Receive Report, Discuss, and make Recommendationson the Cal Am Net Present Value (NPV) CostComparisons between the 6.4 and 9.6 MGD Desal Plants

RECOMMENDATION:

It is recommended that the TAC receive and discuss a Net Present Value

(NPV) Comparison between a 6.4 MGD Desal and a 9.6 MGD DesalProject.

DISCUSSION:

Cost data was provided to the CPUC on the 6.4 and 9.6 MGD Desalfacilities on December 15, 2015. This cost data will be presented by CalAm and discussed at the TAC meeting.

The Water Authority Board has directed the TAC to review the cost

comparison data and provide recommendations to the Board asappropriate.

ATTACHMENTS:

None


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Item No: 4.

№06/12


SUBJECT: Receive Report, Discuss, and Make Recommendationson the Draft NPV Cost Comparisons between a 6.4 Desalplus GWR vs 9.6 Desal Project, as Well as on the DraftExternalities Study

RECOMMENDATION:

It is recommended that the TAC receive and discuss a Net Present Value(NPV) Comparison between a 6.4 MGD Desal facility with a 3.2 MGD GWRvs a 9.6 MGD Desal Project.

DISCUSSION:

The submission deadline for Water Authority testimony was January 22,and the CPUC Administrative Law Judge (ALJ) will be conductingsettlement discussions for the next two months to resolve differences andwill receive rebuttal testimony on March 22. See attachment A.

In addition, cost data was provided to the CPUC on the 6.4 and 9.6 MGDDesal facilities as well as for the Pure Water Monterey (PWM)/GroundWater Replenishment (GWR).

The Water Authority Board has directed the TAC to review and discuss thecost comparison data and provide recommendations to the Board forinclusion in rebuttal testimony as appropriate.

For reference, the Nov 30, 2015 MPWMD Status Report on PWM/GWR isat attachment B. Specifics will be presented by Cal Am and the MRWMD atthe TAC meeting, including discussion of the Externalities Study.

ATTACHMENTS:

A- CPUC Schedule dated Nov 17, 2015B- Nov 30, 2015 MPWMD Status Report on PWM/GWR


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Attachment A


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Attachment B

Status Report

Pure Water Monterey

Groundwater Replenishment Project(Prepared by MPWMD 11-30-15)

SUMMARY: In July 2013, the District participated with the various parties to A.12-04-019 at

the Public Utilities Commission – the Cal-Am application – in developing a settlement andagreement for the proposed Monterey Peninsula Water Supply Project (MPWSP.) The

MPWMD Board of Directors provided direction in closed session whether to approve and sign

the settlement agreement(s). The District and other settling parties signed the agreements July

31, 2013.

At its January 30, 2013 and February 12, 2013 meetings the District Board indicated that it

would consider support for the Cal-Am application if certain conditions were met. One of those

conditions the Board proposed was a strong statement endorsing the Pure Water Montereygroundwater replenishment project (GWR). This was addressed in the General Settlement

Agreement, Section 4, and included 9 findings or criteria for the acceptance of GWR as part ofthe MPWSP. In the Settlement, the Parties agreed “the Commission should make the GWR

Decision based upon the findings set forth below and/or information supplied pursuant to the

advice letter process in Section 4.3(f). If all of the findings are made or addressed through the

advice letter process, then California American Water shall be ordered to enter into a WPA andbuild the smaller desalination plant.”

The purpose of this report is to update the board on where the Pure Water Monterey projectcurrently stands relative to the 9 acceptance criteria in the July 2013 proposed Settlement

Agreement.

DISCUSSION: The 9 criteria and current status are as follows:

Criterion 1: MRWPCA has approved the GWR Project pursuant to a certified Final EIR; andno CEQA suit has been filed within 30 days of a Notice of Determination ("NOD"), or if a

CEQA suit is filed, no stay of the GWR Project has been granted.

Status: Satisfied complete.

Criterion 2: The status of required permits is consistent with the published project schedule,

and for any required permits not yet obtained, the weight of the evidence in the record does notshow that any of the required permits for the GWR Project are unlikely to be obtained in a

timeframe consistent the published project schedule.

Status: The GWR Project will need to receive a wide variety of permits and approvals from an

equally wide variety of agencies in order to proceed to construction and operation. A separate

criterion (#4) specifically addresses the permit/approvals required from the California

Department of Public Health and Regional Water Quality Control Board; therefore, it is assumedthis criterion addresses all other permits. Permits are listed in the EIR. Contracts have been


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Attachment B

provided to various consultants to work on those permits this fiscal year. There are more permits

required if the Coastal Alignment of the product water pipeline is used. MRWPCA will preparea detailed permitting plan that covers all of the components of the GWR Project. The permitting

plan will identify each required permit or approval, the permitting entity, the steps to complete

the permit, the party responsible for obtaining the permit, and the estimated schedule and cost for

the permitting effort. At this time, there is no reason to believe that this criterion will not be met.

Criterion 3: There is sufficient legal certainty as to agreements or other determinations in placeto secure delivery of source water(s) necessary to produce between 3,000 to 3,500 acre feet per

year of GWR product water for the recommended project.

Status: The MRWPCA-MCWRA Amended and Restated Water Recycling Agreement was

approved by both agencies and the County Board of Supervisors in the past 30 days. An

Agreement between MRWPCA and the City of Salinas has also been approved. Hence, this

criterion has been met. A draft “definitive agreement” is under review and will be circulated theweek of November 30th.

Criterion 4: The weight of the evidence in the record does not show that the CaliforniaDepartment of Health or the Regional Water Quality Control Board will decline to accept or

approve the GWR extraction or GWR treatment and injection processes, respectively.

Status: The Division of Drinking Water (DDW), formerly part of CDPH but now part of

SWRCB, provided a letter dated June 5, 2014 indicating that there were no issues they had to

decline approval of GWR. DDW has been involved in the Independent Advisory Panel meetings

and other update meetings along with their colleagues at the Regional Water Quality ControlBoard (RWQCB.) The RWQCB has emailed the SWRCB in support of the project due to their

desire to see the diversion of Blanco Drain water away from the Salinas River. Hence, this

criterion appears to have been met, but additional evidence will be produced as needed.

Criterion 5: The GWR Project is on schedule, as verified by a report issued by an engineer

licensed in California, to be operable, on or before the later of (a) the then-effective date of theCease and Desist Order of the SWRCB or such other date as the SWRCB states in writing is

acceptable, or (b) the date the MPWSP desalination project is scheduled to become operable. The

Parties acknowledge that the actual date of operation for the GWR Project and the desalination

project could vary from the operation date projected in the schedules, and therefore agree to arange of up to an additional four months from the projected date of operation, before the GWR

Project schedule would no longer be considered on an acceptable schedule.

Status: The project is on schedule to be operable long before the desalination project and the

projected revised CDO effective date. However, an engineer’s report to that effect will be

included in the GWR testimony at the CPUC.

Criterion 6: Preliminary design for the GWR Project is at least at the 10% level, represented by

a basis of design report (so that an accurate project cost estimate can be generated) or is at a levelsimilar to or more advanced than the level of design for the desalination project portion of the

MPWSP.


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Attachment B

Status: The MPWSP desalination facility design is between the 60% and 90% level. GWR has

been designed at or beyond the 10% level of design and one component, connection between theAg Wash water and the Salinas Pump Station has been constructed. The connection from the

Salinas storm water and the Salinas Pump Station or the Salinas Industrial Ponds will be

designed to 100%. Criterion met. No additional work required.

Criterion 7: A GWR Project funding plan, sufficient in detail to be accepted as an application

for a State Revolving Fund loan, is in place.

Status: This is complete with one exception, an Approval Order on a change petition to the

SWRCB for the discharge of Salinas Industrial Pond water to the MRWPCA Regional TreatmentPlant, which is expected by the end of November.

Criterion 8: California American Water, MPWMD, and MRWPCA have agreed on a WPA

whose terms are just and reasonable.

Status: A substantially complete version has been exchanged between the parties and looks likethe form of agreement will be agreed to by the end of November. This is covered further underAgenda Item 21.

Criterion 9: The revenue requirement for the combination of the GWR Project and the smallerdesalination project, including the projected debt equivalence for the GWR Project, if any,

determined pursuant to Section 4.4, is just and reasonable when compared to the revenue

requirement for a larger desalination project alone. The parties agree that a revenue requirement

premium for the combination of the GWR Project and a smaller MPWSP desalination projectmay be determined just and reasonable, if the combined GWR/smaller desalination project

affords significant net benefits including, but are not limited to, the following: (i) a material

schedule advantage in that the GWR Project is anticipated to be operable sooner than thedesalination plant; (ii) water supply resilience and reliability (benefit of the portfolio approach);

and (iii) other positive externalities of the GWR Project, including, but not limited to reduced

atmospheric carbon emissions, reduced brine discharge, and the implementation andencouragement of State policies regarding water recycling through early adoption of a water

reuse project.

Status: An initial cost comparison analysis prepared by the District, but based on cost estimatesmade by Cal-Am and filed with the CPUC and estimates prepared by MRWPCA, has been

shared with Cal-Am November 12th

. The analysis was revised and circulated the week of

November 16th

. The results of that analysis shows positive impact to ratepayers for the “ProjectVariant” of GWR-plus-6.4MGD Desal for both life-cycle savings and net present value of life-

cycle savings.

However, the CPUC on October 12th held a prehearing conference on revisions to the Phase 2

proceedings on GWR. At that time, it was made clear that the economic cost comparison

analysis shall be redone for purposes of testimony based on updated Cal-Am costs expected inDecember and then-current best available GWR cost estimates. As a result, this analysis shall be

revisited. Cal-Am, the District, and MRWPCA will meet on December 9th to discuss the cost

comparison framework, methodology, and data. A Cal-Am filing of updated costs is due at the

CPUC on December 15th

.


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Attachment B

Further, the District’s consultant, HDR, is undertaking a study or “triple bottom line” analysis todemonstrate the potential benefits environmentally and/or socially, of the externalities. The

HDR study is expected to be complete by the end of the year and inform expert testimony in the

CPUC Phase 2 proceedings on GWR. HDR will hold a half-day workshop for interested

stakeholders on December 8

th

.


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Item No: 5.

№06/12


SUBJECT: Receive, Discuss, and Make Recommendations asNecessary on a CPM Schedule for Permits and Approvalsfor the Monterey Peninsula Water Supply Project(MPWSP)

RECOMMENDATION:

It is recommended that the TAC receive and discuss Cal Am's schedule forthe required permits and approvals for the MPWSP, identify the permitsand approvals critical path to project completion, and make appropriaterecommendations to the Water Authority Board if needed.

DISCUSSION:

An estimated fifty (50) or more permit and approvals remain to be obtainedbefore the desal plant can be completed and placed in operation in 2020.

Accordingly, the TAC has been tasked by the Water Authority Board toclosely examine Cal Am's latest "detailed" permits and approvals schedule,including identification of the "permit critical path" in an effort to identifypotential future delays or approval challenges that might require WaterAuthority attention.

Cal Am will provide the current Cal Am critical path schedule for Permitsand Approvals at the meeting.

ATTACHMENTS:

None


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tac mprwa special meeting agenda packet 01-27-16

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