Thomas V. Wornham, Chair, Board of Directors Dennis Cushman, Assistant General Manager

September 17, 2013

Carlsbad City Council

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State Water Project Facilities

Colorado River Aqueduct

Water Authority Facilities

MWD Water Facilities

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State Water Project: ◦ Feather River Project enacted in

1951 ◦ Ratified by voters in November

1960 -Burns-Porter Act; $1.5 billion bond

◦ Key facilities: Oroville Dam,

California Aqueduct

◦ Began delivering water in 1967

◦ Serves North and South Bay Area, San Joaquin Valley, Southern California

◦ Metropolitan Water District of Southern California Is the largest contractor (50%) San Diego is MWD’s largest

customer (25%)

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Federal Central Valley Project ◦ Built by federal government

beginning in 1937

◦ Flood control, navigation, water supply for agriculture and urban purposes, hydroelectric power

◦ Key facilities: Shasta Dam, Friant Dam, Delta-Mendota Canal, Contra Costa Canal, Delta Cross Channel

◦ Westlands Water District is the largest contractor

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Banks Pumping Plant State Water Project Chinook salmon

Central Valley steelhead

Green sturgeon

Delta smelt

Longfin smelt

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Water Authority and San Diego business community support a Bay-Delta fix ◦ Water Authority and San Diego business leaders worked

together to pass 2009 legislation that established coequal goals: Water Supply Reliability Ecosystem Restoration 2014 water bond would provide public funding for ecosystem

restoration Water Authority board ◦ Adopted Bay-Delta Policy Principles to guide review of a

Delta fix ◦ Has not endorsed a specific conveyance project

Water Authority has review and process for Board consideration later this year

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Water Supply Reliability ◦ Recognize, encourage and integrate local supplies and factor

those into demands for Delta water Ecosystem Restoration ◦ Restore the Bay-Delta ecosystem (NCCP and HCP)

Finance and Funding ◦ Encourage and support project that is cost-effective when

compared with other water supply development options ◦ Require firm commitments to pay by all parties through take-

or-pay contracts or legal equivalent Facilities ◦ “Right-sized” facilities to match firm commitments to pay

Governance ◦ Support continued state ownership and operation of the State

Water Project as a public resource

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Preferred Alternative 9,000 cfs, twin-tunnel project advocated by Natural

Resources Agency and water contractors (e.g. MWD) No Action Alternative

Status quo conveyance facilities and capacity Delta Vision Foundation’s BDCP-Plus Strategy

5,000-6,000 cfs project, additional storage and integration with local supplies

Natural Resources Defense Council’s Portfolio Alternative Single tunnel of at least 3,000 cfs, additional south of

Delta storage, levee improvements, 1 million acre-feet of additional local supplies and conservation

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Return on $25 billion investment: unknown ◦ Under “Decision Tree” process: spend the money,

build project, operate it, then determine water yield MWD depends on water sales revenues to pay

>80% of its bills: ◦ Member agencies have no obligation to buy any

water from MWD ◦ MWD sales down 30% since 2007 and agencies plan

to buy even less water in the future ◦ What is the certainty all MWD member agencies will

pay their fair share of the Delta fix costs?

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Based on BDCP’s Financing Chapter 8, who will bear the capital costs and debt obligations?

Answer: Unknown. BDCP (page 8-80) says: ◦ “Details of the financing…

are still being determined through on-going discussion between the state and federal governments and between the government, the state and federal water contractors and other interests.”

Source: BDCP Web site fact sheet Estimated Funding to Implement the BDCP

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Metropolitan Water District

Imperial Irrigation District Transfer

All American & Coachella Canal Lining Local Surface Water Groundwater

Conservation (existing and additional)

2013

1991

Total = 645 TAF

Recycled Water

297 TAF 46%

46 TAF 7%

21 TAF 3%

27 TAF 4%

80 TAF 13% 103 TAF

16%

550 TAF 95%

28 TAF 5%

2020

Total = 779 TAF

231 TAF 30%

48 TAF 6%

27 TAF 4%

44 TAF 6%

103 TAF 13%

80 TAF 10%

190 TAF 24%

56 TAF 7%

Seawater Desalination

Total = 578 TAF

TAF=Thousand Acre-

71 TAF 11%

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1990: 672,800 acre-feet 2013: 297,000 acre-feet 2020: 231,000 acre-feet: 66% less than 1990

0

200,000

400,000

600,000

800,000

1,000,000

1990 2013 2020

MWD purchases

Total Water Use

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MWD

28 Other State Water

Project Contractors

MWD 50% Central Valley Project

Contractors

50% State Water

Project Contractors

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Water Authority Pays About 25% of MWD’s Spending

MWD Member Agencies (FY 2012)

Anaheim Beverly Hills Burbank Calleguas Central Basin Compton

Eastern Foothill Fullerton Glendale Inland Empire Las Virgenes

Long Beach Los Angeles MWDOC* Pasadena San Diego San Fernando

San Marino Santa Ana Santa Monica Three Valleys Torrance Upper San Gabriel

West Basin Western

San Diego County Water Authority

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Canal Water Purchases*

<1%

IID Water Purchases*

20%

MWD Exchange Agreement Costs

28%

Total Cost = $294M

MWD Represents 80% of the

Cost of Water

Excludes MWD’s fixed RTS and CRC charges *Excludes the debt service for capital projects and recovery of settlement expenditures

MWD Supply Costs 52%

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$443

$890

22%

45%

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

2005 2014 $200 $400

$/AF

Untreated Tier 1 Rate

$331

$593

34%

67%

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

2005 2014 $200 $400

$/AF

MWD rate increase since

2005: 79%

Treated Tier 1 Rate

Range of Impacts $/AF

Range of Impacts $/AF

MWD rate increase since 2005: 101%

Percentage Increase on 2014 MWD Rate

Percentage Increase on 2014 MWD Rate

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1. After accounting for local supply development, what is the real demand for water from the Delta?

2. What is the right-sized project to meet the demand? 3. How much water will we get for $25 billion?

“Decision Tree” process says build the project, operate it, then determine yield

4. Who is going to commit to pay for the project? What happens if some water contractors are unable to pay

their share? “Step-up” provisions? Property taxes? 5. Should MWD contractually commit to pay $6+ billion

without contractual commitments from its member agencies to pay it? Without such commitments, how will San Diego County

businesses and ratepayers be protected from shouldering a disproportionate cost burden in the future?

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Meeting Imported Water Committee/Board Activity

July 25, 2013 Provide input on scope of proposed Water Authority analysis of BDCP alternatives; provide input on policy questions to be addressed

Aug. 8, 2013 Special Meeting

Overview of Bay-Delta and proposals for Delta fix, including description of alternatives

Aug. 22, 2013 Review of technical analysis – demand assumptions; alternative project yield assumptions; projected costs

Sept. 12 , 2013 Special Meeting

BDCP economic study on cost-benefit of BDCP preferred alternative

Sept. 26, 2013 Review of technical analysis (cont.), including responses to policy questions

Oct. 10, 2013 Special Meeting

Summary of technical analysis: Comparison of alternatives with Delta Policy Principles

Oct. 24 2013 Information: Identify areas of concern; potential CEQA-NEPA comment letter

Nov. 21, 2013 Action: EIR/EIS comment letter; earliest opportunity to consider adopting position on BDCP alternative(s)

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Support the Water Authority’s review and analysis of alternatives

Review results of Water Authority’s analysis before taking a formal position on any proposal

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