Delta Conveyance: Update on the Planning Process and Analysis of Water Supply and Costs

Delta Conveyance:Update on the Planning Process and Analysis of Water Supply and Costs

CCWA Board of DirectorsFebruary 25, 2010

Delta Conveyance: Analysis of Water Supply and Costs

Delta Conveyance Status

• Significant progress has been made on Delta Conveyance planning

• Significant additional steps are needed

• The planning process will run out of money by the end of 2010

• SWP Contractors need to decide on continuing the planning process


All of the information and data are preliminary and subject to revision.

About this Presentation…

DRAFT!

Preliminary Subject to Revision


Going from Plan to Permits


The Delta Habitat Conservation and Conveyance Program Process

BDCP Develops HCP Proposed Project(Includes habitat projects and conveyance)

DHCCP Team Creates the EIR/EIS

Record of Decision /Notice of Determination




BDCP/DHCCP Processes

• Bay Delta Conservation Plan (BDCP)• Initiated 2006• Focus on conveyance and restoring habitat for

fisheries within the Sacramento-San Joaquin Delta• Products

Habitat Conservation Plan Natural Communities Conservation Plan

• Delta Habitat Conservation and Conveyance Program (DHCCP)• Initiated 2008• Funding Agreements – $140 Million (50% SWP Share)• Develops EIR/EIS Documents and Record of Decision

(ROD)/Notice of Determination (NOD)




DHCCP Program Status

• Original Final EIR/EIS Completion – December 2010• Current Status:

Conceptual Engineering Design Completed Tunnels Identified as New Alternative Require Additional

Engineering Analysis BDCP Preferred Program Delayed – December 2008 Target

Delayed until 2010, Causing Delays in DHCCP• Project Delayed and Tunnels Added Costs

Increased• Original Budget – $150 Million (Including BDCP)• Actual Costs to Date – $58 Million• Additional Planning Costs – $98 Million Starting 2011


DHCCP/BDCP – Going from Plan to Permits





Funding Next Steps

• May Need to amend existing Funding Agreement• No increase in expenditures for 2010; Additional

revenue collected in 2011, Commitments needed in 2010

• Financing for planning costs being considered• Schedule (if amendment required):

February 2010 – DHCCP Executive Committee reviews cost share proposal

March 2010 – Funding Amendment provided to SWP Contractors

April 2010 – SWP Contractors sign amendments

• What will the project look like?o Where is the project?o How will it operate?

Can we afford a new Delta Conveyance Facility?

Delta Conveyance: Analysis of Water Supply and Costs Preliminary Subject to Revision

The three questions that everyone wants answers to:

• What are the benefits?o What can be delivered with new

conveyance?o How does this compare with what supplies

we currently receive?

• What will it cost?o How do we finance the costs?o How do we split the costs?

What will the Project look like?


Three alignment options:

For more information:

All Tunnel Alignment & Option Comparisions

Presented to:

BDCP Steering Committee

December 3, 2009



M-30 By-Pass Sur Túnel Norte, Madrid EPB Shield – 15.200 m diameter

What will it cost?Construction costs:


Eastern Alignment All Tunnel Western Alignment

Construction $7.9 to $8.5 billion $9.7 to $10.5 billion $8.2 to $9.0 billion

Footprint Land Acquisition $186.4 million $51.5 million $169.5 million

Mitigation Land Acquisition $247 million $87 million $241 million

Total Cost $8.33 to $8.93 billion $9.84 to $10.64 billion $8.61 to $9.41 billion

WARNING: ACTUAL C

OSTS ARE SUBJECT TO CHANGE

Long-term Bondo 40 yearso 5%

Cost Assumptiono $10 Billion – Current Tunnel Cost Estimateo Costs being updated – likely +/- 15%

Annual Debt Service (SWP & CVP Combined)o $583 Million

What will it cost?


Financing the construction costs:

What will it cost?Annual O&M and Power costs:


1 – Estimated Average Year Power Costs

Eastern Alignment

All Tunnel Western Alignment

O&M $17.6 Million $13.7 Million $16.0 Million

Power1 $33 Million $21.7 Million $26.9 Million

Total Cost $50.6 Million $35.4 Million $42.9 Million

What will it cost?


Possible Aproaches to Split costs between the Projects

Using conveyance capacity:o CVP: 39%o SWP: 61%


Using contract amounts:o CVP: 45%o SWP: 55%

Total Water Supplyo CVP: 40.6%o SWP: 59.4%

Firm Deliveries (other some other method)

Project Cost Estimateo $10 Billion

Annual Capital Repayment o $583 Million

Estimated SWP Share – 60%

Annual Costs (including Capital & O&M)o SWP – $346 Million o CVP – $237 Million

What will it cost?


Financing the construction costs:

To San Francisco

Sacr

amen

to R

iver

l Stockton

San Joaquin River

Clifton Court Forebay

The Delta

What are the benefits?


Compare With and Without new Delta conveyance

2005 SWP Reliability Report (Pre-Wanger):o Average Table A: 77%

Without Conveyance2009 SWP Reliability Report (Post BOs):

o Average Table A: 60%o Subject to Reductions due to

Regulatory Actions, Earthquakes, etc.

With ConveyanceBDCP Proposed Operation:

o Average Table A: 79%


What will we get and what will it cost?Annual Cost & Supply Impacts of Delta Conveyance


Without Delta

Conveyance Condition

With Delta

ConveyanceDifference

Supply1 2.15 MAF2 3.20 MAF3 1.05 MAF

Annual Cost $1,022 Million

$1,449 Million $427 Million

Melded Cost $408/AF $439/AF $31/AF

Incremental Cost $538/AF

1 – Supply Estimates do not Include Article 21 Water Availability2 – Assumes 60% SWP Reliability (2009 SWP Reliability Report)3 – Assumes 79% SWP Reliability (with BDCP Proposed Operations)

Water Quality:o Major reduction in salinity, chlorides, TOCs,

bromideso Reduced Treatment Costso Reduced Service Area Costs (e.g., reduced

homeowner costs for water heaters)

Improved Reliability:o Existing Supply Through Delta Potentially

Unusable in Future due to Significant Probability of Delta Levee Failure from Earthquakes, etc.

o Short term loss of supply (Table A and Article 21 Water) without Delta Conveyance

o Long term reduction without Delta Conveyanceo Delta Conveyance avoids potential future Delta

Regulatory restrictions


What are the benefits for me?Other benefits of a new Delta Conveyance


What are the Next Steps?


If DWR Financing of Planning Costs is Not Successful

• Key SWP Contractors Personnel Get Ready Access to DHCCP Documents including Environmental Material

• DHCCP developing a Funding Amendment with additional $49 Million ($98 Million total SWP & CVP) in costs to be billed in 2011

• Funding Amendments to be provided to SWP Contractors in March 2010

• Additional Costs for SWP Contractors Collectively -- $49 million

• Signed Funding Agreement Amendments needed by April 2010

• SWP Contractors working with DWR to finance planning costs – if successful, would eliminate need for Funding Agreements


Questions?


Delta Conveyance: Update on the Planning Process and Analysis of Water Supply and Costs

Documents

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