Dennis A CushmanDennis A. CushmanAssistant General Manager

September 8, 2011 1

Wholesale water agency created by Legislature in 1944created by Legislature in 1944◦ 24 member agencies◦ 36-member board of directors36 member board of directors◦ Serves 3.1 million people,

$186 billion economy S i Service area◦ 950,000 acres◦ 97% of county’s population◦ 97% of county s population

Build, own and maintain large-scale water infrastructure

2

Water Authority secures supplies for

Local Water AgenciesCamp Pendleton

Lakeside WD City of Poway

Santa Fe IDsecures supplies for

24 local agencies◦ 6 cities

Carlsbad MWD

National City* Rainbow MWD

South Bay Irrigation District*

City of Del M

City of O id

Ramona MWD

Vallecitos WD

◦ 14 water or utility districts

Mar Oceanside MWD WD

City of Escondido

Olivenhain MWD

Rincon Del Diablo MWD

Valley Center MWD

◦ 3 irrigation districts

◦ 1 military base

Fallbrook PUD

Otay Water District

City of San Diego

Vista ID

Helix WD Padre Dam MWD

San Dieguito

Yuima MWDMWD Dieguito

WDMWD

* Member of the Sweetwater Authority

3

LAKESHASTA San Diego County

LAKEOROVILLE

State Water Project

g yimports ~70% of its water supply

State ate oject(Bay-Delta)

15%Colorado RiverColorado River

53%

Local Supplies and Conservation

32%32%

*Estimated4

5 5

2011(estimated)199172 TAF26 TAF

2020

552 TAF (95%)

80 TAF (13%)

80 TAF (10%)

72 TAF (12%)

26 TAF (5%)

44TAF (6%)

56 TAF

103 TAF (13%)

190 TAF

75 TAF (12%)

28 TAF (5%)

20 TAF (3%)

(95%)

285 TAF (47%)

231 TAF (30%)

27 TAF (4%)

(7%)190 TAF (24%)

51 TAF (8%)

Total = 578 TAF

48 TAF (6%)

Total = 779 TAFTotal = 611 TAFMetropolitan Water District Recycled WaterMetropolitan Water District

Imperial Irrigation District Transfer

All American & Coachella Canal Lining

Seawater Desalination

Groundwater

Local Surface WaterConservation (existing and additional)

6

Several hundred million dollars invested since 1991◦ 17 active non-potable recycling

projects countywide◦ >10 MGD brackish groundwater>10 MGD brackish groundwater

desalting◦ Recycled water and groundwater

supplies to double by 2020supplies to double by 2020 Indirect Potable Reuse Local supplies to provide 30% Local supplies to provide 30%

of the region’s water supply by 2020 y

7

Carlsbad Desalination Project Produce up to 56,000 AFY

Cooperati e agreement ith Cooperative agreement with Poseidon to begin negotiations to purchase water from plant

Camp Pendleton Project 56,000 to 168,000 AFY

Encina Power Station, Carlsbad

Feasibility/technical studies under way Feasibility/technical studies under way Bi-national Desalination Project In conjunction with agencies in Nevada, Arizona andIn conjunction with agencies in Nevada, Arizona and

Mexico Studying site in Baja California

8

Maintaining Water Use EfficiencyMaintaining Water Use Efficiency State mandate for 20

percent reduction in waterpercent reduction in water use by 2020

Maintain recent gains in ticonservation

◦ Regional water use down about 20% since 2007

Efficiency needs to be social norm

E h i dWater efficient planting and rotating nozzle

Emphasis on outdoor efficiency◦ Market transformation

9

a et t a s o at o

IID and Canal Lining Deliveries 2003-2021

300,000

Acre-Feet

IID W t

200,000

250,000IID Water Transfer

Canal Lining

100,000

150,000

g

0

50,000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

10

Calendar Year

$3.5 billion Capital Improvement Program (CIP)◦ $1.5 billion Emergency Storage Project◦ New and expanded surface storage◦ Water treatment◦ Water treatment◦ Pipelines◦ Pump stations◦ Power generation◦ Aqueduct Protection Program Pipeline relining programPipeline relining program

11

Major CIP Investments Since 1991

R i lPi li P i /Canal Linings

Regional Water

Treatment

Hydro-Electric

Pipelines Pumping/Control Facilities

1991 2000-2013 2020

Pipe Relining

Regional Water Storage

12

13

Project: All American & Coachella CanalLining ProjectsComplete: 2010 (AAC) and 2006 (CC)Cost: $452 million total, including

$198 million from Water Authority

14

$198 million from Water AuthorityBenefits: 80,000 AF/Y for 110 Years

Project: Twin Oaks Water Treatment Plant

Complete: 2008

15

Cost: $179 millionBenefit: 100 MGD treated supply for region

Project: Olivenhain Dam & ReservoirC l 2003Complete: 2003Cost: $198 millionB fi 22 000Benefit: 22,000 AF of storage

16

17

Project: Lake Hodges ProjectsProject: Lake Hodges ProjectsComplete: 2012Cost: $196 millionCost: $196 millionBenefits: 20,000 AF ESP storage; 40MW power

18

Project: San Vicente Pipeline & TunnelComplete: 2011Complete: 2011Cost: $459 millionBenefit: Improved Water DeliveryBenefit: Improved Water Delivery

19

Project: San Vicente Dam RaiseComplete: 2013

Cost: $449 million

2020

Cost: $449 millionBenefit: Increase reservoir capacity by 152,000 acre-feet

Rendering of dam raised by 117 feet

2121

Project: Pipeline Relining ProgramC l O iComplete: OngoingCost: $787 millionB fit E t d d lif f j i liBenefit: Extended life of major pipelines

22

Imported Supply ChallengesImported Supply Challenges San Diego County is semi-arid region

D th t◦ Dry years more common than wet years Supply reliability◦ Bay-Delta◦ Bay Delta◦ Colorado River◦ Climate change

Protecting ratepayers◦ MWD rate challenge

23

Bay-Delta Issues Need ResolutionBay Delta Issues Need Resolution Pumping restrictions to protect

threatened species have cut deliveries p Restrictions mitigated this year◦ Extremely high river flows

Delta smelt◦ Temporary judicial actions

No long-term plan in place for water reliability ecosystem recovery

Delta smelt

reliability, ecosystem recovery

Central Valley

Green sturgeon

Central Valley steelhead

24Longfin smelt

Chinook salmon

Colorado River SuppliesColorado River SuppliesDrought 9 of last 11

yearsyears Lake Mead elevation

earlier this year: 1,082’y ,◦ Lowest level since 1930s

Storage levels now risingg g Several more wet years

needed for recoveryLake Mead – 2010

Growing demand in Southwest on river’s limited supply

25

limited supply

Potential Impacts from Cli t ChClimate Change

More rain, less snowsnow◦ Decreases storage

held as snowpack Earlier snowmelt◦ Runoff comes earlier

than neededthan needed Less weather

predictabilityLake Oroville – April 2010 predictabilityWater Authority

working with other l d

Lake Oroville – April 2010

26

utilities to study effects and impacts

Experiencing significant new challenges:◦ Large rate increases◦ Significant decline in water sales High cost of waterHigh cost of water 20%x2020 Economy

27

2,000800

1,400

1,600

1,800

600

700 -38%

800

1,000

1,200

400

500

$ /A

F

000'

s/AF

400

600

800

100

200

300

Actual Sales (in 000's/AF) All-In Treated Rate ($/AF)*

d h S ($ )

0

200

0

100

20002001200220032004200520062007200820092010201120122013201420152016Calendar Year

Projected High-Rate Scenario ($/AF)Projected Low-Rate Scenario ($/AF)

Calendar Year

28

700,000 619,407

556,592

491,924

0 320455,456500,000

600,000

,

410,320 422,285,

300,000

400,000

Acr

e-fe

et

100,000

200,000

Estimate Budget Budget

-

FY 08 FY 09 FY 10 FY 11 FY 12 FY 13

Municipal & Industrial Sales Agricultural Sales

29

Two-Year 2010 & 2011 budget reductions: $6MR d ti i t t h $1 7M Reduction in spot water purchases: $1.7M

Selling stored water: $700,000 Deferral of 14 CIP projects: $150 million Deferral of 14 CIP projects: $150 million Reducing staff 12% since 2008◦ 33 3 FTE reduction in FY 12/FY 13 budget33.3 FTE reduction in FY 12/FY 13 budget

30

Biggest driver of Water Authority rates is MWD’s rates and its rate structure◦ Increased rates 75% since 2006◦ Water Authority suing MWD over how it misallocates◦ Water Authority suing MWD over how it misallocates

water supply costs to transportation charges Water Authority buys transportation services from

MWD t IID d C l Li i T f tMWD to move IID and Canal Lining Transfer water Significant impact to Water Authority ratepayers

31

MWD Impact on Wholesale RatesMWD Impact on Wholesale RatesEstimated CY 2012

Wholesale Costs per Household *

Payments to MWD for$26.33

MWD Costs

IID/QSA Costs

Payments to MWD for water and transportation comprise 55% of the

$4 15

IID/QSA Costs

Water Authority Treatment

comprise 55% of the wholesale cost of water

QSA Water

$4.42$0.86$4.15

Water Authority Operating

Water Authority C t 34 7%

QSA Water Supplies 8.6%

$12.24Water Authority Facilities

Costs 34.7%

TOTAL: $48/month

32* Based upon 0.5 AF of consumption a year

MWD Sales Decline & Rate IncreasesMWD Sales Decline & Rate Increases80% of MWD’s revenues come from water sales 80% of MWD’s revenues come from water sales

$1 600

$1,800

$2,000

2 000 000

2,500,000 MWD’s Projected Sales in 2020 are 16% Lower than

2000-2009 Average

$1,200

$1,400

$1,600

1,500,000

2,000,000

-29%

-fee

t

$600

$800

$1,000

1,000,000

75%ales

in A

cre-

$200

$400

$

500,000 +75%Sa

$0-

Actual Sales, including wheeled supplies. Source: MWD Jan. 2011 Long Range Finance PlanProjected. Source: MWD 2010 Integrated Resources Plan; includes wheeled supplies.MWD Tier 1 Treated Water Rate. Source: Actual MWD published rateProjected MWD Average Water Rate. Source: MWD Long-Range Finance Plan Forecast 2010-2020Projected MWD Average Water Rate. Source: MWD 2010 Integrated Resources Plan (Buffer—MWD Developed 2020-2035)

Over past two decades:◦ Achieved greater supply diversification◦ Secured 280,000 AF/YR of long-term reliable

new supplies from Colorado River◦ Reduced reliance on MWD by 50% Helped offset MWD water shortages from 2009-

2011◦ Achieved sustained water conservation◦ Invested billions in new, major water supply

infrastructure◦ Vastly improved water supply reliability to

protect region’s $186 billion economy and quality of life for 3.1 million people

34

Visit our website: sdcwa.org

35