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HomeMy WebLinkAboutSurplus Water Ltr distributed at 4/7/86 PC Mtg l ~':J ( 'v' \. -Cc I RECEIYED 1386 ( I I \ . DUBLIN PLANNING - ." March 31, 1986 TO: Planning Directors SUBJECT: Second Discussion Report on Alternatives for Proposed POlicy on Delivery of Surplus Water Outside EBMUD's Ultimate Boundary Enclosed are copies of the second discussion report on the proposed policy for you and the members of your Planning Commission. Copies have been sent to city managers, county administrators, city councils, and county boards of supervisors under separate cover. ,0 > /!.~ .I / '.. >.:-> ~~ EAST BAY MUNICIPAL UTILITY DISTRICT , '''', -' ! 1/ i r' {' (i It' ), ..'. f.')''- " ~1.' /'. .'~.'{ I I"~ ',1.1/.;" ....1 .' ~".' h' 1.', ',t';:fQ,"v1f & (~!{Bf-Rt (~"'r;:'r'ai 1"1,,'.'<1.1,'1'1 March 31, 1986 RE,CEIYED 1386 j I \ -' DUBLIN PLANNING TO: Interested Agencies, Organizations, and Individuals SUBJECT: Second Discussion Report on Alternatives for Proposed Policy on Delivery of Surplus Water Outside EBMUD's Ultimate Boundary EBMUD is developing a policy on the delivery of surplus water from its Mokelumne River supply when requested by cities or water agencies outside of its boundaries. A discussion report issued by the District in December 1985 evaluated various water sharing options. After receiving written comments and a public hearing on February 11, 1986, the District's Board of Directors determined that the sale of surplus water would be by contract, on an interruptible basis. The question of the duration of the interruptible contracts and other terms and conditions required further analysis. A second discussion report has been prepared and is enclosed for your review and comment. The suggested contract conditions and water pricing alternatives discussed in the report are for public discussion and are not necessarily the specific pOlicy provisions that may be adopted. Comments on the factors under consideration and the proposed policy may be made at the public hearing on April 22, 1986, and/or may be submitted in writing by April 25 (see enclosed report for details). For accuracy of record, written comments are desirable and encouraged. The comments should be supported by factual information whenever possible. Each agency or organization submitting comments is requested to include the name of its contact person. ~ ~ BOA liD OF DillE!: 1011'S. SA NnJ/if) M SKAGGS. Pi I ':;111, '!!; /\'1"1/0' C Wi1HHUV, VICe Prt'sll!!.'!!1 IIEUN BUh'KF HICK IIIL! KFNNI T11 KOFM/1N Will rU! /1 Mdt 4N KINNE T 1111. SIMMONS Page 2 March 31, 1986 Questions may be directed to Richard L. Kolm, Assistant Chief Engineer for Planning (891-0644), or David L. Perkins, Manager of Resources Planning (891-0641). Very truly yours, t1-u:'~\-<---~J ,e ome B. Gilbert J3 :RLK:jmm enclosure fall. \'\lO\'OSf.O \,o,-,C'/: 014 ,,\J f. R 14 ",1 \\f f. S ~'lIl>.lE\l N Rr.\,OR\ Of c.u\tytUS O\SCI.lSS\O OE\.\\lE\l't ~Jl>.lE \\OONOJl>.\l't ~ OOlS\OE E\\h\OO'S 0\.1\ !\oUtcb '}.s, 1'}s6 @@fJ@J[Jj}@ se~ot\d \lepott Ilf-"SO~S fOil Ilf-QUf-S1S fO\l ~,&.lE\l~ .,_t1:,AL.1H coNCERNS . L.OW oU,AL.l1'r' .HIGH COs1 O\\lEC10\lS \\o,&.\lO 0: 10 \lEQOES1S~ \lES\'ONS p11BLE .OEL.lVERy ~J~~~~L.US supPL. 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S'''; , , ..,,, ..on ". . , \Unb" ,.."." .. . ,,,,,\0' " ",",' , ' "no< ," ",,, .,.." .' " ",II .. "..."" ",,,,.. ,"".",,,", ., ,no .",,,,",,\bl' "."""" . "'" ,no .,,,. ,.","',,'" . \tb' ,.""" . I ,~.'" ,b" ,no . '"' ,,,,,,,,. . ,no ,.,,"~ .' .'" '. I' ,,,,,,,,,,,. ' ,no . , ..,,,, ~:~~:::::;~::, ..."',,,,, .' "'. ""''''': " ....'" ,n;' ,,,.n "'.; .. :;:~::.,~:~I~;",U" "",.. on . ..' ,b' "",,,,,''' ", """..., CIi'" ~.."" en"'''''''' " ,b' ,,",.,,~ ;:"~, "" " ""b'" L ~.,,,,, ."",,", " ~",,,,,, , tlG ,;;,,,..,, C' ..61" \,UeUC t\tp..\l\ -.1 ," S y,,^ \\."1"1 ,~\\b ~' <<1 0"1.' 1Uf.SO"~' "yll '"113" "Of-\.\~f- Slll" , l\l,&.l\ON CEN1E\l, _..&\ \0 ,&.Oty\\N\S Q ~ r blel\d ",e II sou1ce \1\ ,ela\\I\\\ costs JIIould leduce ,del\\\al use 0\ ~el tI\ 01\\'" ,e \oIlO\fl\I\\\'. 1111j'/' blel\d OIIjO'/' blel\d 101 ?Ij'/' blel\d ~\ ,act t\'le>d,ess pelO>l'l 0' It t"e au -"'1{ CONSII) -'u~ration of A 11011., · " annual versus Con ' . ''Y D","m,", "." I . ''""'"' '""''''Ptib!. · ReneWal OPtl'O" p", 'nd '"''''"p,;.,.. "'"'~'" '""''' 'n """al 1. '.s /fI annu I actors' · N"". , "'n,,,,,, . Or ma/fltenance of b . · ProVisions for c ,ackup SUPPly. serVation. ooperatlve Water SUPPly I ' · T, . Panning (includ' " riggers for the interrUPtion of d I' Ing JOint projects sUch as ifl" e IVery of Water DEFINItIONS . ~iSdf' District's CUStome e Ined as the quantity of "'nti ty " '" 'M ~. n" M. "";p" Utili, ~"" "''''b!. " ., On the Mok I Us Water IS the diffe 'I IstnCt Act" demand in t~ umne, River (325 MGD;ence b~tvveen (ill the e service area f h Plus Yield' ' severest of dry p' Or t e ensUing l' Yield may be reduce;nOds, the SUPPly p. Year Or may nOt b ' to Zero dUe' F e available at "I' Or eXamPle ' 335 MGD ,In a nOrmpl 335 MG . AssUmin/l , D sUPPlv to maintain 0' Interf/I' --..... Un" '(jGG. --- COA '\\ '00 >/'1\' 1'c1C\ 1)\\'1: \\0 C 'I.\\'cI'I. 'I: c0 u\'cI\\ \ 'cI~~ \'cIc'f.. I) \\0 \1)\ 'I: ~\\'\. 'ciCcI) t ~e l. ~d , nUa, ~t U~ 's Wa, 'OUS L ted nL let Up ~ ~ ---- 11us Wate, '3MUD SL " It 'I to be I Water to t. fUDs MOk, 'al reqUirer, ,u\\C '\n~ 01 ?.~{)~~, r conservar, , , ~r s specific, 1 the Water b th: reqUire ~ ~ DISCUSSION REPORT ON ALTERNATIVES FOR PROPOSED POLICY: ~ DELIVERY OF SURPLUS WATER ~ OUTSIDE EBMUD'S ULTIMATE BOUNDARY I Second Report March 25, 1986 SAN PABLO BA Y CLAYTON INTRODUCTION REASONS FOR REQUESTS FOR WATER: e HEAL TH CONCERNS e LOW QUALITY eHIGH COST BOARD OF DIRECTORS RESPONSE TO REQUESTS: eDELlVER INTERRUPTIBLE SUPPL Y OF SURPLUS WA TER BY CONTRACT POLICY CONSIDERATIONS: eDEFINITlONSOF SURPLUS AND INTERRUPTIBLE eTERMS OF CONTRACTS e CONTRA CT CONDITIONS The December 1985 report in this series evaluated various surplus water sharing options. Written comments were received from cities and other agencies, interested organizations, and individuals. The EBMUD Board of Directors conducted a public hearing on February II, 1986, and then determined the following: . The sale of surplus water will be on an interruptible basis; . Firm supply, meaning water available on the same basis as to existing EBMUD customers and sharing the same deficiencies, will be reserved for growth within EBMUD's ultimate boundary, except that due to Brentwood's existing contract and their water quality situation the question of a supply to the City of Brentwood was reserved for later consideration; .Supply to new service areas outside the ultimate boundary was eliminated from the list of surplus water priorities because if a decision is made to annex such areas they would be included in the EBMUD service area and thus receive a supply the same as existing customers; . The question of the duration of the interruptible contracts and other terms required further analysis; and . A second discussion report on the delivery of surplus water that includes the above determination will be disseminated for public review and comment following submittal of the additional information. Comments on the proposed policy and the alternatives discussed in this report may be presented orally at the Public Hearing or submitted in writing by April 25, 1986 to Richard L. Kolm, Assistant Chief Engineer for Planning, EBMUD, P.O. Box 24055, Oakland, CA 94623. PUBLIC HEARING TUESDAY, APRIL 22, 1986 AT 1:15 PM EBMUD ADMINISTRATION CENTER, 2130 ADELINE STREET, OAKLAND FACTORS UNDER CONSIDATION Consideration of annual versus continuous interruptible contracts focuses on several factors: . Definitions of surplus and interruptible. . Renewal options in annual contracts. . Need for maintenance of backup supply. . Provisions for cooperative water supply planning (including joint projects such as improving storage conditions) and water con- servation. . Triggers for the interruption of delivery of water. DEFINITIONS Surplus water is defined as the quantity of water available to the District above that which is required for meeting the needs of the District's customers. The Municipal Utility District Act authorizes the sale of such surplus outside the District. In most years the quantity of surplus water is the difference between (a) the maximum allowable diversion under the District's water rights entitlements on the Mokelumne River (325 MGD) plus yield from the local runoff into terminal reservoirs (10 MGD) and (b) the level of water demand in the service area for the ensuing 12 months plus water required for storage to maintain the District's standby supply. In the severest of dry periods, the supply available from the Mokelumne River will be less than the District's water rights and the local yield may be reduced to zero due to evaporation exceeding the runoff. Thus the quantity of surplus water may vary from year to year or may not be available at all. For example, in a normal hydrologic year the available supply would be 325 MGD plus 10 MGD as described above for a total of 335 MGD. Assuming an average annual demand of 215 MGD, the surplus would be the difference between that demand and the 335 MG D supply or 120 M G D. This maximum amount of surplus may be reduced by the need to deliver water into terminal storage to maintain standby capacity because of prior dry years or when necessary to optimize the operation of the system. Interruptible water supply is defined as a supply under a contract which provides for reduction or cessation of the delivery of water under certain specified conditions, Delivery of surplus water outside the District must be interruptible because such surplus may vary or may not be available as provided in the Municipal Utility District Act. TERM OF CONTRACT The questions related to the issue of annual versus continuous contracts for the delivery of surplus water are addressed in the sug- gested contract conditions listed in Table A. The two options for establishing a policy on term of contract can be defined as follows: . Annual Contracts - Sharing surplus water on an interruptible basis with no commitment for future years. Annual contracts would be set up without renewal options. EBMUD would make a new determination each year as to which potential buyers would receive surplus water. Does not establish a priority listing or ranking of the categories of buyers. . Continuous Contracts - Sharing surplus water on an interruptible basis with a stated maximum amount of water to be delivered for a stated number of years. The amount subject to reduction as hydrologic conditions and water demand within EBMUD dic- tate. May set up priorities or ranking of the categories of buyers. TABLE A--SUGGESTED CONTRACT CONDITIONS CONDITIONS COMMON TO EITHER ANNUAL OR CONTINUOUS CONTRACTS ADDITIONAL CONDITIONS . Amount of surplus water available beginning May 1 each year to be based on evaluation of EBMUD supply in April, with notice given to the buyer. Continued availability to be reviewed in July and December. . Rates of delivery of water to the buyer to be governed by the supply that can be delivered from EBMUD's Mokelumne system without using its local storage. . Location and operational requirements of buyer's connection to EBMUD system to be specified. . Buyer to implement a water conservation program as effective as EBMUD's program, tailored to the buyer's specific situation and the term of contract. . Buyer to advise its customers on the water bills that the supply from EBMUD is interruptible. . Buyer responsible for meeting the requirements of the California Environmental Quality Act before water is delivered. . Does not establish a priority listing . EBMUD is not committed to renewin in subsequent years. . Specific, fixed unit costs ($/acre-fol integral part of annual contracts. Continuous contracts would have certain advantages for EBMUD and for potential buyers over annual contracts. There would be an opportunity for higher negotiated prices for surplus water because of more certainty of supply for the buyers and no need to contin- ually negotiate contracts; thus producing the highest revenue for EBMUD. The coordination of water supply planning between EBMUD and the buyer would be meaningful only with continuous contracts. Continuous contracts would also provide a more clearly ordered set of priorities as to who would be able to buy surplus water. BUYER'S BACKUP SUPPLY The concern about EBMUD's ability to reduce or cease delivery when the quantity of water is limited or not available, and whether continuous contracts would develop a right of access to EBMUD water can be mitigated by requiring that buyers maintain alternative backup water supplies. Contract conditions would provide that the buyer demonstrate to EBMUD on a regular basis that an adequate alternative source of water is available and operable and can be brought on line within a short time. TRIGGERING THE INTERRUPTION OF DELIVERY The District monitors precipitation and snowpack throughout the fall and winter and evaluates its water supply in April of every year on the basis of: . The April 1 snow surveys and resulting forecast of spring runoff on the Mokelumne basin; . The projected demand in the District's service area; and . The current diversions by others and operating conditions on the Mokelumne River. Under the District's Water Supply Availability Policy established in 1985, the results of the annual evaluation will be reported to the Board of Directors at its second meeting in April. That report will include an estimate of the surplus water available for sale during the next 12 months. If surplus water is being delivered under a contract, the report could trigger a reduction or cessation of the delivery on May 1. If delivery is continued, its availability would be confirmed in July when the runoff is essentially completed, and in December when an early estimate of the next year's supply can be made. On either of those dates a decision could be made to reduce or cease delivery of surplus water if necessary to assure that the water supply to the District's customers is not adversely affected. WATER CHARGES The basic objective in the pricing of surplus water would be to assure that the existing users within EBMUD benefit. The price of water paid should be high enough to cover all costs which will be incurred in delivering the water plus a share of EBMUO's capital investment in the water supply system, as follows: · Operation and maintenance expenses for diversion and storage of water on the Mokelumne River and transmission of the water via the Mokelumne Aqueducts to the delivery point, including the revenue lost because of the additional diversion of water before it can be used to generate power at EBMUO's hydroelectric plants; plus · A capital cost component which should reflect the term of contract, ranging from full capital recovery for a continuous contract to a significant but limited capital recovery for an annual contract. OR ANNUAL CONTRACTS ADOITIONAL CONDITIONS FOR CONTINUOUS CONTRACTS Ir ranking of the categories of buyers. annual contracts or to providing water } will be determined and become an · A priority sequence could be established amongst all buyers which would first subject all buyers to specific percentage cutbacks, then cut off buyers in the reverse order that contracts were executed (Le. newest buyer cut off first). . In order for EBMUD to continue to be able to supply water under continuous contracts, buyers would be required to participate in coordinated, long term, water supply planning. . The initial unit price for delivery of surplus water ($/acre-foot) and formulas for annual cost reevaluations will be established and identified in each continuous contract. . All buyers will be required to actively maintain an alternative backup water supply which can be brought on line when EBMUD may not be able to deliver surplus water for any reason. l WATER CHARGES, continued The recommended capital cost component is a charge for a portion of the original cost of the existing facilities used to deliver the surplus supply, including Pardee and Camanche Reservoirs, the Mokelumne Aqueducts and pumping plants, and the local terminal reservoirs. The proportionate share of costs would be based on the delivery point, the ratio of buyer's peak use to maximum aqueduct capacity, and the period of use during the year. Alternatives for the capital cost component are listed in the first column of Table B. Other annual quantities, flow rates, delivery points, and arrangements could result in different prices. TABLE B-- TOT AL COSTS BASED ON CAP II AL COST COMPONENT ALTERNATIVES COST TO BUYER 1$/ACRE-FOOn ANNUAL REVENUE TO EBMUD 1$ MILLION) ANNUAL CONTRACT CONTINUOUS ANNUAL CONTRACT CONTINUOUS ALTERNATIVE CONTRACT CONTRACT O&M CAPITAL TOTAL CAPITAL TOTAL 10,000 AF 50,000 AF 10,000 AF 50,000 AF COSTS COMPONENT* COMPONENT 1 Buyer pays proportionate share of original costs of 85 45 130 75 160 1.3M 6.5M 1.6M 8.0M EBMUD facilities needed to deliver surplus supply 2 Buyer pays proportionate share of replacement costs for 85 265 350 445 530 3.5M 17.5M 5.3M 26.5M facilities to deliver surplus supply 3 Buyer pays proportionate share of cost of supplemental 85 50 135 80 165 104M 6.8M 1.7M 8.3M supply project to deliver surplus supply 4 This alternative includes the cost for buyer to acquire 85 150 235 250 335 2.4M 11.8M 3.4M 16.8M alternative supply elsewhere** * Reduced price for capital component on annual contract is intended to account for the lack of assurance that the contract will be renewed each year. Thus the buyer will need to incur costs to make other arrangements. ** Alternative 4 assumes a $250,000,000 capital project with 100,000 AF firm yield. TABLE C--RELA TIONSHIP OF THE WATER PRICE TO THE MONTHLY CHARGE FOR RESIDENTIAL SERVICE CHANGE IN MONTHLY USER COST IN DOLLARS NOTES: (1) Table assumes that purchaser will blend the PERCENTAGE OF EBMUD WATER IN BLEND EBMUO supply with their normal source in 25% 50% 75% amounts shown. WATER (2) Reduced treatment or other operating costs PRICE EBMUD BUYER EBMUD BUYER EBMUD BUYER for buyer are not included (would reduce I$/AF) CUSTOMER CUSTOMER CUSTOMER CUSTOMER CUSTOMER CUSTOMER buyer's costs shown). (3) Calculations based upon residential use of 100 -0.06 +0.58 -0.13 +1.15 -0.20 +1.72 10 units (hundred cubic feed per month. 150 -0.14 +0.86 -0.29 +1.72 -0.45 +2.58 (4) Based on buyer purchasing the following: 50,000 acre-feet for 75% blend 200 -0.22 +1.15 -0.46 +2.30 -0.70 +3.44 33,600 acre. feet for 50% blend 16,800 acre.feet for 25% blend Board of Directors Sanford M. Skaggs President Mary Warren Vice President Helen Burke Jack Hill Walter R, McLean Kenneth Kofman Kenneth H. Simmons For information contact the EBMUD Public I nformation Office at the address below or call (415) 891-0615, Jerome 8, Gilbert General Manager Board meetings open to the public are held at 1: 15 p,m. the second and fourth Tuesdays of each month, Room 100,2130 Adeline Street, corner of West Grand Avenue, Oakland. EAST ~NICIPAL UTILITY DISTRICT Po. BOX 2<1055 . OAKLAND, CA 94623 . (415) 835-3000