Kira Z. Alonzo Metropolitan Water District of Southern California California Irrigation Institute February 3, 2015
Established in 1982 LRP provides incentives for new local projects Recycled water and groundwater recovery projects to reduce demand on imported water deliveries Need to accelerate project production Meet IRP and 20x2020 goals Current drought conditions
1980 Orange and Los Angeles Counties Reuse Study Recycled water potential Regional benefits/imported demand reduction 1982 Program for recycled water 1991 Program for recovered groundwater
Upfront Capital Funding Sliding Scale ($250/AF) Sliding Scale ($250/AF) 1982 1986 1991 1998 2007 Fixed Incentive ($154/AF) Competitive Process
2007 LRP target 174,000 AFY 23 projects approved 111,000 AFY Remaining target 63,000 AFY
Metropolitan Water District of Southern California Local Resources Program Program Number of Projects Contract Yield (AFY) Deliveries to Date (AF) Incentives to Date ($M) Recycling 75 307,000 2,026,000 360 Groundwater Recovery 24 113,000 719,000 127 Total 99 420,000 2,745,000 487
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 Acre -Feet 500,000 400,000 Recycled Water and GW Recovery LRP is successful in increasing recycled water and groundwater recovery production 300,000 200,000 100,000 0 Recycled Water Groundwater Recovery
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 Acre - Feet 2,500,000 Groundwater, Surface Water, LAA, Recycled Water for Direct Use 2,000,000 1,500,000 1,000,000 Consumptive use of local supplies is relatively flat over time 500,000 LRP production helped offset decline in local supplies Need to do more to help meet economic and demographic growth 0 (Excludes GW Replenishment)
LRP production is not at capacity Cost remains a predominant constraint Data shows most local projects cost more than MWD rate Financial assistance needed, especially in early years
1986 1990 1994 1998 2002 2006 2010 2014 Acre Feet 400,000 300,000 Contract Yield 123 TAF (34%) 200,000 356 TAF 239 TAF 100,000 Project Production 0 Fiscal year End
2007 Public Sector Program 85 sites 3,300 AFY 2013 Foundational Actions Funding Program $3 million for 13 projects Technical studies and pilot projects 2014 On-site Retrofit Pilot Program $7.5 million over three years 45 applications to date ($1.6 million for 1,700 AFY)
Funding for technical studies and pilot projects that reduce barriers to future water resource production $3 million 13 Projects 4 Recycled water 2 Seawater Desalination 2 Stormwater 5 Groundwater
$ Millions $7.5 Million 3-year Program 45 projects Parks Schools HOA Golf Courses Medians Approximately 1,700 AF Estimated incentives of $1.6 Million 9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 Remaining Golf Courses Estimated Incentives HOA Schools Parks
Meet 20x2020 (recycled water) Bring new projects online faster Motivate increased production from existing projects (faster ramp-up, expansions) Meet IRP resource needs Enhance storage opportunities Improve groundwater management and sustainability Alleviate current and potential future drought conditions
Increased Incentive Amount Include Seawater Alternate Desalination Incentive Payment Structure Options Include Onsite Retrofit Costs Reimbursable Services
Increasingly high costs to develop local projects Higher incentive needed to encourage accelerated project development Sliding scale incentive up to $340/AF over 25 years Calculated similar to current program Not for existing agreements
Three alternatives to choose from 1. Sliding scale incentive over 25 years (current payment structure) 2. Sliding scale incentive over 15 years (new structure) 3. Fixed incentive over 25 years (previously approved structure) Existing program criteria and performance provisions apply
$/AF Project Unit Cost Up to $340/AF MWD Water Rate Incremental Project Unit Cost
Incentive Rate ($/AF) $475/AF $340/AF Incentive payment up to $475/AF over 15 years Equivalent Maximum obligation to 25 year payment period Additional provisions to ensure production beyond 15 years 15-yr 25-yr
Incentive Rate ($/AF) Sliding Scale Fixed Conversion to Fixed Incentive Rate Based on estimated sliding scale payment converted to fixed incentive rate Fixed (adjusted) Incentive amount up to $305/AF (adjusted for risk) Adjusted fixed incentive rate varies per project based on project unit cost
Include seawater desalination as eligible resource in LRP Include recycled water on-site retrofit costs as eligible costs in LRP Reimbursable Services Expedite development of ready-to-proceed local projects Helps alleviate current drought conditions Metropolitan will offer a variety of technical and financial services Member agencies will reimburse Metropolitan
LRP application is posted on www.mwdh2o.com Until 63,000 AFY is committed ORP application posted on www.bewaterwise.com Until June 30, 2016 or when $7.5 is committed, whichever sooner Update to the Board 2015 - Foundational Actions Funding Program 2016 - On-site Retrofit Pilot Program 2017 - Foundational Action Funding Program study results
Local Resources Program Ray Mokhtari 213-217-6142 rmokhtari@mwdh2o.com On-site Retrofit Pilot Program Kira Alonzo 213-217-6489 kalonzo@mwdh2o.com