Access to Excess CAP Water, 2010 & beyond Customer/Stakeholder Workshop February 24, 2009 Review of Projected Excess Availability 1
CAP Excess Supply AZ Colorado River Entitlement 2,800,000 AF AZ on-river usage (higher priority) - 1,200,000 AF CAP Annual Entitlement 1,600,000 AF System Losses - 75,000 AF CAP Delivery Supply 1,525,000 AF M&I Subcontract water (2009 orders) - 478,000 AF Indian Subcontract water (2009 orders) - 206,000 AF Ag Subcontract water (2009 orders) - 9,000 AF Excess Supply (2009) 832,000 AF CAP Excess Supply Excess Supply (2009) 832,000 AF Ag Settlement Pool - 400,000 AF Remaining Excess Pool (2009) 432,000 AF Excess water orders (2009): Full Cost Excess 61,000 AF Incentive Water 345,000 AF AWBA/CAGRD RR 196,000 AF Total 602,000 AF Excess Pool Deficit (-) 170,000 AF 2
CAP Supply Utilization 1,750,000 Acre-Feet 1,500,000 1,250,000 1,000,000 750,000 500,000 250,000 - Other Excess Ag Pool 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 M&I Uses Indian Uses 2034 2036 2038 2040 2042 Excess; Other Excess; Ag Pool NIA; M&I M&I Indian; Lease P3; Exchange NIA; Indian Indian; On Res 2044 2046 2048 2050 2052 2054 2056 2058 600,000 Excess CAP Supply (Excluding Ag Settlement Pool) 500,000 400,000 Acre-Feet 300,000 200,000 100,000-2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 2050 2052 2054 2056 2058 Excess; Other Water Orders (excluding AWBA & GRD RR) 3
Proposed Process for Setting AWBA/CAGRD RR Pool Discussion of Pricing and Status of Incentive Recharge Program 4
Factors Under Consideration for Distributing Remaining Excess Access Factors For analytical purposes, Assume there is a defined block of Excess CAP water available to entities other than the AWBA & CAGRD RR Assume that the demand for that block of water is substantially larger than the supply Policy question: Who should have access to that water? 5
Access Factors Factors under consideration by CAP staff for access to the Other pool Who ordered the water? How does order relate to past? Where will the water be used? When will the water be used? What other policies will be advanced? For each factor, consider the question Does it matter. Who ordered the water? Municipal Water Providers Subcontractors CAGRD Members Non-CAGRD Members CAGRD SRP Excess Orders Placed for 2009 (Percent by Volume; excluding AWBA & Ag Pool) Muni 43% Industrial Users Mines Power plants Turf users Other Credit Remarketers Other Indus 28% CAGRD 10% SRP 6% Other 1% Remarket 12% 6
53k 55k 7k 63k 26k 4k 36k 33k 24k 99k 63k 7k 32k 52k 1k 1k How does order relate to past? Existing customer Order consistent with past Order inconsistent with past New customer Where will the water be used? Within CAP s Service Area Differentiated by AMA/County Not differentiated by AMA/County Outside CAP s Service Area Vidler TDRP Tonopah ID AFRP; HMRP Phoenix AMA Incentive Recharge, AWBA and CAGRD RR Orders Direct USFs SRP; SWC RWCD GRIIDD (PHX) MSIDD Pinal CAIDD; AMA HIDD GRIIDD (PIN) Kai NMIDD QCID LSCRP; AVRP CMID; BKW Tucson AMA CAVSRP SAVSRP PMRRP GSFs 7
When will the water be used? Now, by customer Direct delivery Treatment plant, supplemental Ag, turf, etc. Annual storage & recovery; Replenishment USF or GSF Within or outside the Area of Impact Now, by partner; Later, by customer Long-term storage credits @ GSF Later, by customer Long-term storage credits @ USF No credit earned Long-term storage credit earned What other policies will be advanced? Water management benefit AMA management goals CAP s public policy purposes Credit recovery targets Local/regional economic benefit Support for agriculture Support for municipal water providers Reduction in CAGRD obligation Self-firming 8
Access Factors Existing How New When Now/Now Now/Later Later/Later Consistent Inconsistent What Water Mgmt. Recovery Ag support Muni support Where Who Inside Outside Muni CAGRD Industrial Remarket SRP Phoenix AMA Subcontractor Mines Pinal AMA CAGRD Power Tucson AMA Non-CAGRD Turf Other Perspective Issues How involved should CAP be in customers business? Should the size of individual orders be limited? What role should rates play? How should pool access be set? Implementation must include mechanisms to discourage gaming but also be manageable 9
Hypothetical Implementation Fake example #1: Single pool, with access based on scoring Highest score: Muni provider, inside CAP service area, reducing CAGRD reliance through direct delivery Lowest score: Speculator, with no previous history, earning long-term storage credits outside of CAP service area 6 2 1 3 9 5 7 4 8 Hypothetical Implementation Fake example #2: Three pools, with separate eligibility requirements Pool A: Muni providers and CAGRD Pool B: Industrial users storing at GSFs Pool C: Unrestricted 10
Hypothetical Implementation Fake example #2: Three pools, with separate eligibility requirements Pool A: Muni providers and CAGRD Pool B: Industrial users storing at GSFs Pool C: Unrestricted Bottom Line: Many decisions will be required to design an effective program 11
Next Steps AWBA meeting on April 1 st Agenda item or back-to-back Recommendation to Board on Incentive Recharge Program Develop alternatives for Other access Timing Considerations: CAP s planning Rates AWBA planning Customers planning Send comments & questions to Ken Seasholes (kseasholes@cap-az.com) 12