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HomeMy WebLinkAbout07.a. Consider approving principles of agreement with Contra Costa Water District (CCWD) re 0.5 MGC recycled water project for refineriesCentral Contra Costa Sanitary District 7at ' BOARD OF DIRECTORS POSITION PAPER Board Meeting Date: November 19, 2015 Subject: PRINCIPLES OF AGREEMENT WITH CONTRA COSTA WATER DISTRICT FOR 0.5 MILLION GALLONS PER DAY REFINERY RECYCLED WATER PROJECT Submitted By: Initiating DeptJDiv.: Danea Gemmell— Planning & Engineering & Technical Services / Development Services Division Manager Planning & Development Services REVIEWED AND RECOMMENDED FOR BOARD ACTION. JM. Petit — Director of Engineering & Technical Services Kent Alm Counsel for the ISSUE: Board authorization is required for execution of agreements. Roger S. Bailey General Manager BACKGROUND: Recycled Water is an integral part of both the District's mission and Strategic Plan. • Strategic Goal Four, Strategy 2 "Collaborate with regional water and wastewater agencies to augment the region's water supply while expanding access to recycled water for Central San customers." • Mission Statement: "Embracing a policy of sustainability for the responsible use of existing resources." For many years, the District has worked to develop a joint project with Contra Costa Water District (CCWD) to develop a refinery recycled water project. The refinery project is particularly attractive because it represents a large year -round demand for recycled water and could make use of existing recycled water conveyance and storage facilities that are already in place. The existing filter plant and treatment facilities, installed in the 1970s, are permitted to produce 3.8 million gallons per day (MGD) of tertiary treated recycled water. Currently, the District uses approximately 1.1 MGD for internal operations and provides approximately 1.5 MGD for Zone 1 customers, leaving 1.2 MGD available for new customers with existing infrastructure. The proposed 0.5 MGD Refinery Recycled Water Project would be a joint project between the two agencies and utilize the existing infrastructure to provide tertiary treated recycled water to the refineries or other industrial customers that can use the existing water quality. As much of the infrastructure has sat idle for the last 24 years, rehabilitation of the conveyance and storage facilities is necessary. Page 1 of 2, POSITION PAPER Board Meeting Date: November 19, 2015 subject: PRINCIPLES OF AGREEMENT WITH CONTRA COSTA WATER DISTRICT FOR 0.5 MILLION GALLONS PER DAY REFINERY RECYCLED WATER PROJECT Both agencies have been working these last few months to develop general principles of agreement before starting to draft a comprehensive wholesale agreement. These terms are outlined in Attachment 1. ALTERNATIVES /CONSIDERATIONS: The Board of Directors could request additional terms for the agreement to be addressed. FINANCIAL IMPACTS: CCWD has initiated a $2.1 million grant application, on behalf of both agencies, to the State's Proposition 1 program to partially fund the $6 million rehabilitation project; if successful, the project could commence in 2016. COMMITTEE RECOMMENDATION: The draft principles of agreement were reviewed by the Real Estate and Environmental Planning Committee at the October 13, 2015 meeting. RECOMMENDED BOARD ACTION: Approve the principles of agreement for the Refinery Recycled Water Project and direct staff to draft a wholesale agreement for a 0.5MGD of recycled water to be delivered to Contra Costa Water District. Attached Supporting Document(s): 1. Table: CCCSD -CCWD Principles of Agreement: Refinery Recycled Water Project 2. Map: Recycled Water Line Division of Ownership and Point of Delivery 3. Presentation: CCCSD -CCWD Principles of Agreement: Refinery Recycled Water Project Page 2 of 2 Attachment 1 CCCSD — CCWD DRAFT Principles of Agreement: Refinery Recycled Water Project 10/21/15 Agreement Items Terms Purveyorship: CCWD retains purveyorship to customers. Purpose of Use includes industrial, irrigation, or other uses consistent with regulations and level of recycled water treatment. Quantity: 0.5 MGD with Annual Demand Schedule. Total Quantity available for CCWD's use 1.2 MGD. Annual demand schedule does not obligate CCWD to take delivery of recycled water. Water Quality: CCCSD responsible for water quality up to and at Point of Delivery. CCWD responsible for water quality from Point of Delivery to customer. Specific water quality parameters will be reflected in final agreement Term: Initial term is 10 Years consisting of two 5 -year terms; renewable thereafter in 5 -year increments with the approval of each agencies' General Manager. Wholesale Rate: $246 per acre -foot for water provided to the Point of Delivery; reflects current 0 &M costs upstream from Point of Delivery. CCCSD has excluded capital recovery for filter plant construction costs in the wholesale rate for this Agreement. CCWD will be investing in rehabilitation of CCCSD -owned facilities including the recycled water pipeline and pump station. Point of Delivery Flow meter to be installed on the discharge piping (or header) of the Industrial Recycled water pump(s). Electrical Meter CCWD responsible for power costs at recycled water distribution pump Charge: station. Power options: a) CCWD can purchase power from CCCSD for Pump electrical (rate TBD). CCCSD to be made whole if CCWD's use of generated power requires CCCSD to use PG &E power. b) CCWD can establish sub - metered electrical account and purchase power directly from PG &E. Escalation: Maximum change in price from year to year (annual escalation) is the Consumer Price Index (reference to specific index), until such time as a Cost of Service is performed. Cost of Service: An initial Cost of Service (COS) will be performed in three years to ensure that full cost recovery is achieved for costs and included in Wholesale Rate. COS performed at five year anniversary and incorporated into rate for each successive five -year term. COS calculation methodology and CCCSD — CCWD DRAFT Principles of Agreement: Refinery Recycled Water Project 10/21/15 example for $246 /rate will be included as an exhibit to the Agreement. Changes in the COS methodology may only be made upon agreement from both parties. Expansion: Agreement will allow for future expansion. Both parties agree to negotiate future expansion costs. Grant: Partnering by Both with CCWD Lead Agency CEQA: CCWD Lead Agency Design /Construction: CCWD Lead Agency with coordination on design with CCCSD; Project estimate of $6M Operations Operations agreement will be developed and approved by the Director Agreement of O &M (CCWD) and Deputy General Manager (CCCSD). Implementation Implementation of the recycled water project will be contingent on CCWD's business case analysis of the project, which will include but is not limited to the following considerations: suitability of delivered water quality, availability of grant funds, service agreement with recycled water customer(s), and final price of recycled water. Termination The agreement may be terminated by CCWD for any of the following reasons: 1. Failure of recycled water to meet water quality parameters specified in the agreement. 2. Changes in the Wholesale Rate resulting from the COS review that impact the cost effectiveness of recycled water deliveries. 3. Loss of recycled water customer(s). 4. Future maintenance or repair costs to CCCSD or CCWD owned facilities that impact the cost effectiveness of recycled water deliveries. CCCSD – CCWD DRAFT Principles of Agreement: Refinery Recycled Water Project 10/21/15 Facility Responsibilities Ownership Capital O &M Recycled Water Treatment Facility CCCSD Clearwell and Suction Header Recycled Water Pump Station and wetwell � level instrumentation with CCWD SCADA Controls tied to CCWD Tank. Telemetry provided to CCCSD and CCWD. Flow Meter and Electrical Meter R 42 -inch Industrial Pipeline CCWD Distribution Pipeline & Tanks I soft- ATTnruenC!kl -- n ATTACHMENT 3 CCCSD - CCWD Principles of Agreement: Refinery Recycled Water Project Danea Gemmell Planning & Development Services Division Manager November 19, 2015 Board Meeting 01 Central Contra Costa Sanitary District Protecting Public Health and the Environment Recycled Water Line Division of Ownership and Point of Delivery Facility Responsibilities Ownership Capital O &M Recycled Water Treatment Facility CCCSD Clearwell and Suction Header Recycled Water Pump Station and wetwell level instrumentation with CCWD SCADA Controls tied to CCWD Tank. Telemetry provided to CCCSD and CCWD. Flow Meter and Electrical Meter 42 -inch Industrial Pipeline CCWD Distribution Pipeline & Tanks Agreement Items Terms Purveyorship: CCWD retains purveyorship to customers. Purpose of Use includes industrial, irrigation, or other uses consistent with regulations and level of recycled water treatment. Quantity: 0.5 MGD with Annual Demand Schedule. Total Quantity available for CCWD's use 1.2 MGD. Annual demand schedule does not obligate CCWD to take delivery of recycled water. Water Quality: CCCSD responsible for water quality up to and at Point of Delivery. CCWD responsible for water quality from Point of Delivery to customer. Specific water quality parameters will be reflected in final agreement Term: Initial term is 10 Years consisting of two 5 -year terms; renewable thereafter in 5 -year increments with the approval of each agencies' General Manager. Wholesale Rate: $246 per acre -foot for water provided to the Point of Delivery; reflects current O &M costs upstream from Point of Delivery. CCCSD has excluded capital recovery for filter plant construction costs in the wholesale rate for this Agreement. CCWD will be investing in rehabilitation of CCCSD -owned facilities including the recycled water pipeline and pump station. Point of Delivery Flow meter to be installed on the discharge piping (or header) of the Industrial Recycled water pump(s). Electrical Meter CCWD responsible for power costs at recycled water distribution pump Charge: station. Power options: a) CCWD can purchase power from CCCSD for Pump electrical (rate TBD). CCCSD to be made whole if CCWD's use of generated power requires CCCSD to use PG &E power. b) CCWD can establish sub - metered electrical account and purchase power directly from PG &E. Escalation: Maximum change in price from year to year (annual escalation) is the Consumer Price Index (reference to specific index), until such time as a Cost of Service is performed. Cost of Service: An initial Cost of Service (COS) will be performed in three years to ensure that full cost recovery is achieved for costs and included in Wholesale Rate. COS performed at five year anniversary and incorporated into rate for each successive five -year term. COS calculation methodology and example for $246 /rate will be included as an exhibit to the Agreement. Changes in the COS methodology may only be made upon agreement from both parties. Expansion: Agreement will allow for future expansion. Both parties agree to negotiate future expansion costs. Grant: Partnering by Both with CCWD Lead Agency CEQA: CCWD Lead Agency Design /Construction CCWD Lead Agency with coordination on design with CCCSD; Project estimate of $6M Operations Operations agreement will be developed and approved by the Director of Agreement . O &M (CCWD) and Deputy General Manager (CCCSD). Implementation Implementation of the recycled water project will be contingent on CCWD's business case analysis of the project, which will include but is not limited to the following considerations: suitability of delivered water quality, availability of grant funds, service agreement with recycled water customer(s), and final price of recycled water. Termination The agreement may be terminated by CCWD for any of the following reasons: 1. Failure of recycled water to meet water quality parameters specified in the agreement. 2. Changes in the Wholesale Rate resulting from the COS review that impact the cost effectiveness of recycled water deliveries. 3. Loss of recycled water customer(s). 4. Future maintenance or repair costs to CCCSD or CCWD owned facilities that impact the cost effectiveness of recycled water deliveries.