HomeMy WebLinkAbout2003-10-07; Municipal Water District; 558; Update on IID/SDCWA Water Transfer AgreementI
AB# 358
MTG. 10/07/03
DEPT. CMWD
m
DEPT. HD.
CITY MGR.
TITLE:
An Update On The IlDlSDCWA Water Transfer
Agreement
RECOMMENDED ACTION:
There is no recommended action at this time. This is an informational item only.
ITEM EXPLANATION:
At the most recent San Diego County Water Authority Board of Directors meeting the Board
approved the Quantification Settlement Agreement (QSA), which includes approval of the Imperial
Irrigation DistricVSan Diego County Water Authority (IID/SDCWA) Water Transfer Agreement. This
agreement would transfer up to 200,000 acre feet of water conserved by IID. There was an option to
acquire an additional 77,700 acre-feet of water. The SDCWA Board voted on this option.
Staff will be presenting an update on this IID/SDCWA Water Transfer Agreement.
FISCAL IMPACT:
This is an informational item only, and therefore there is no fiscal impact at this time.
EXHIBITS:
None
DEPARTMENT CONTACT: Bob Greaney, (760) 438-2722, bgrea@ci.carlsbad.ca.us
H:\WORD\2003 Agenda BillsWB Update on IID-SDCWA Transfer Agreement - CMWD.doc
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UPDATE ON IID/SDCWAWATER TRANSFER AGREEMENT
Agreement BackgroundAgreement Background::!IID will sell conserved Colorado River water to the Authority – 20,000 acre-feet in the first year of the contract and up to 200,000 acre-feet in the tenth year. !The contract would last 45 years, with a renewal provision for another 30 years. !The water’s cost would be determined by a formula that takes into account the cost of MWD water, the estimated cost of wheeling the water to San Diego County, and the actual wheeling cost
Agreement BackgroundAgreement Background(cont(cont’’d.)d.)!Water gained helps the Authority achieve goals outlined their Water Resource Plan. !Helps the Metropolitan Water District maintain access to surplus water from the Colorado River!Helps California live within its Colorado River entitlement of 4.4 million acre-feet .!Agreement finally signed on April 29, 1998.!Activities related to implementation entering fourth year.
SDCWA OptionSDCWA OptionOption 1: IID Transfer/MWD Exchange– Exchange Agreement fixed rate schedule for 35 years or a maximum 5.1 MAF, whichever occurs first– Pay MWD wheeling rate thereafter– Capacity not guaranteed beyond 45 years
SDCWA OptionSDCWA OptionOption 2: Canal lining projects and water– State pays $235 M to Water Authority• Eligible for $20M Prop. 50 grants for canal projects–MWD assigns to SDCWA canal lining saved water• 77,700 AF for 110 years (8.5 MAF)–Pay lawful MWD wheeling rate for all transferred water
Engineering Due Diligence ReviewEngineering Due Diligence Review• All-American CanalLining Project• Coachella CanalLining Project
Basis of ReviewBasis of Review• All-American Canal– Site Reconnaissance– Final EIS/EIR– Bureau of ReclamationStudies– Personal Interviews– Previous Reports• Coachella Canal– Site Reconnaissance– Final EIS/EIR– Bureau of ReclamationStudies– Personal Interviews– 90% Design Submittal
AllAll--American Canal Lining ProjectAmerican Canal Lining ProjectSchedule and Cost Summary• Schedule– Design – 2 years–Construction –4 years•Cost– Construction Costs - $159,200,000– Construction Contingency (10%)– Engineering, CM & Admin (20%)– Project Cost (2007) – $233,000,000
Coachella Canal Lining ProjectCoachella Canal Lining ProjectSchedule and Cost Summary• Schedule– Design – 1 year–Construction –4 years• Cost– Construction Costs - $69,000,000– Construction Contingency (10%)– Engineering, CM & Admin (15%)– Project Cost (2003) – $86,300,000
Option 2 Option 2 --Financial Risk/BenefitFinancial Risk/Benefit• Risk:– Exposure to MWD Wheeling Rate• Benefit:– State funding ($235M) for canal-lining projects– SDCWA will receive 77,700 af/year for 110 years– Total of 8.5 MAF• Cost for benefit received from canal lining– Present value difference between Exchange Agreement cost and MWD Wheeling Rate cost for 35 years• MWD Wheeling Rate inflation sensitivity needsto be considered
Option 2: Financial Risk AnalysisOption 2: Financial Risk AnalysisAssumptions:• SDCWA-MWD Exchange Agreement contractprice for each acre-foot delivered–$97/af in year 2003 to $140/af in year 35• MWD Wheeling Rate ($253/af) includes SystemAccess Rate, Water Stewardship Rate and Power• Risk is in difference between MWD Wheeling Ratecost and wheeling cost under Exchange Agreement• Present value of differential is cost of canal liningwater benefit
Option 2 Risk Analysis (Cont.)
ComparisonComparisonWater Supply CostWater Supply Cost$/AF• MWD Tier-1: 73• MWD Tier-2: 154• Long-term market transfers: 250-300• Canal Lining Option*: 50-107*** Based on PV cost differential between MWD Wheeling Rate andExchange Rate** $92M cost estimate overrun adds $10/af to this range
Option 2: Cost Comparison with Transportation2003 $/AF
Option 1 & Option 2: 20-Year Melded Cost Comparison
Key QSA AgreementsAgreements being signed include:• Colorado River Water Delivery Agreement:• CWA-IID Transfer Fourth Amendment• CWA-MWD Exchange Agreement Amendment• Environmental Cost Sharing Agreement• QSA JPA Creation and Funding Agreement• Conservation Agreement
Key QSA Agreements (Cont.)• Implementation Agreement on USFWSBiological Opinion (Jan. 12, 2001):• Agreement for Acquisition of Restoration andInterim Surplus Guidelines Backfill Water• SDCWA and CVWD Backfill Agreement• Canal Lining Water Allocation Agreement• Assignment Agreement on AAC/CC Canal• Wheeling Agreement between SDCWA andSLR Settlement Parties
Worth Considering• It has taken the Water Authority 12 years (or eightyears and one week since the MOU with IID wassigned) to secure 200,000 acre-feet of Priority 3 Colorado River water supplies.– Largest water transfer in history• It will have taken less than a month to secure another 77,700 acre-feet of Priority 3 Colorado River water supplies– Longest water transfer in history
CWA Staff Recommendation• Adopt certifying resolution and environmental determinations• Approve the assignments of MWD’s canal lining project water rights in consideration for the Water Authority paying MWD’s lawful wheeling rate• Authorize and direct the General Manager andGeneral Counsel to take all actions necessary to implement the QSA and related agreements
END OF PRESENTATION