CAP Storage & Recovery in the Tucson AMA
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Transcript of CAP Storage & Recovery in the Tucson AMA
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AWBA Board Meeting, March 20, 2002Tucson AMA Institutional and Policy Advisory Group (IPAG)
CAP Storage & Recovery in the Tucson AMA
Preliminary Observations & Policy Options from the Institutional
and Policy Advisory Group (IPAG)
Informational BriefingAWBA Board Meeting, March 20, 2002
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AWBA Board Meeting, March 20, 2002Tucson AMA Institutional and Policy Advisory Group (IPAG)
IPAG Background
Regional Recharge Plan (1998)
AWBA Facilities Plan for TAMA (1998)
Ongoing examination• Recharge capacity & sites
» Kai-Avra proposal (2000)
• Subcontract firming • Recovery
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AWBA Board Meeting, March 20, 2002Tucson AMA Institutional and Policy Advisory Group (IPAG)
Analysis
Re-examination of the 1998 Regional Recharge Plan
• Much of the report remains valid and useful
• Partially outdated due to additional facilities and other factors
Updated analysis• More comprehensive exploration of physical
& financial variables
• Emphasis on AWBA activities
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AWBA Board Meeting, March 20, 2002Tucson AMA Institutional and Policy Advisory Group (IPAG)
Analytic Tool
• DEMAND by sector & provider
• USF & GSF capacities & fees
• AWBA funding & storage
• STORAGE by facility, storer & year
• SUMMARY
Series of linked, interactive spreadsheets
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AWBA Board Meeting, March 20, 2002Tucson AMA Institutional and Policy Advisory Group (IPAG)
AWBA Spreadsheet Cost of water, cost of
storage, 4-cent tax revenue & carryover, withdrawal fees, etc.
Incentive Priced CAP
$-
$10
$20
$30
$40
$50
$60
$70
$80
1996 1999 2002 2005 2008 2011 2014year
$/AF
FirmAdvisoryProjected
Ad Valorem tax
$0.0 mil.
$0.5 mil.
$1.0 mil.
$1.5 mil.
$2.0 mil.
$2.5 mil.
$3.0 mil.
1996 1999 2002 2005 2008 2011 2014year
$/AF
Projected
Actual
Annual & cumulative
storage
Annual AWBA storage (all sources)
0 kAF
25 kAF
50 kAF
75 kAF
2002 2006 2010 2014
Cumulative AWBA storage (by source)
0 kAF
250 kAF
500 kAF
750 kAF
1,000 kAF
2002 2006 2010 2014
“Baseline” Assumptions• Cost of water: CAP advisory rates through 2007, 3% growth thereafter
• Ad valorem tax: $1.6 million base, 3% annual growth
• Facility charge: flat $12, based on average cost at TAMA USFs and 2% GSF
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AWBA Board Meeting, March 20, 2002Tucson AMA Institutional and Policy Advisory Group (IPAG)
CAP Firming
• 200,000+ AF shortfall (30% below target)
• Shortfall reflects revenue constraints and cost of credits• Will likely result in future groundwater mining
The AWBA’s firming target for the Tucson AMA will not be met with projected revenue
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AWBA Board Meeting, March 20, 2002Tucson AMA Institutional and Policy Advisory Group (IPAG)
Firming Options
Bridging the firming gap {options under consideration}
– Lower the cost of credits• Continue to lower water costs
• Seek low-cost energy
• Continue to lower storage costs at USFs • Spread fixed costs by utilizing available capacity
• Increase utilization of TAMA GSFs• Invest in infrastructure to GSFs willing to pay $21/AF• Use Withdrawal Fee money to buy-down the $21• Lower the AWBA GSF price for the Tucson AMA
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AWBA Board Meeting, March 20, 2002Tucson AMA Institutional and Policy Advisory Group (IPAG)
Firming Options
Bridging the firming gap {options under consideration}
– Restructure existing TAMA revenue sources
• Extend ad valorem revenue stream• Use Withdrawal Fee money for firming
– Other
It is likely that a combination of solutions will be required
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AWBA Board Meeting, March 20, 2002Tucson AMA Institutional and Policy Advisory Group (IPAG)
• Lowering the cost of credits through buy-down of the $21/AF80% USF; 20% GSF with $4/AF buy-down
“Baseline” 98% USF
Firming Options Hypothetical Example
30% USF; 70% GSF with $4/AF buy-down
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AWBA Board Meeting, March 20, 2002Tucson AMA Institutional and Policy Advisory Group (IPAG)
CAP Recharge Locations
Pima Mine Rd.
Clearwater
Lower Santa Cruz USF
Avra USF
BKW
Kai-Red Rock
Service Areas/CC&Ns
Operational USFs
Operational GSFs
Central Arizona Project
Groundwaterflow
CMID
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AWBA Board Meeting, March 20, 2002Tucson AMA Institutional and Policy Advisory Group (IPAG)
• Encourage & participate in dialog with CAWCD, AWBA, ADWR, et al.
• Further identify TAMA subcontractors’ recovery needs
• Explore the recovery implications of interstate storage
Recovery
There is strong interest in where water is stored and how it will be recovered
Recovery planning activities
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AWBA Board Meeting, March 20, 2002Tucson AMA Institutional and Policy Advisory Group (IPAG)
Next Steps
Continue to refine analysis• Develop recommendations
Participate in recovery discussions