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Home My WebLink About06.b. Update on Refinery Recycled Water Exchange Project Cost AllocationItem 6.b. J une 14, 2021 T O: R E A L E S TAT E, E NV I R O NME NTA L A ND P L A NNI NG C O MMI T T E E F RO M :ME L O D Y L A B E L L A , R E S O UR C E R E C O V E RY P R O G R A M MA NA G E R RE V I E WE D B Y:J E A N-MA R C P E T I T, D I R E C TO R O F E NG I NE E R I NG A ND T E C HNI C A L S E RV I C E S R O G E R S. B A I L E Y, G E NE R A L MA NA G E R S UB J E C T: R E C E I V E A N UP D AT E O N T HE R E F I NE RY R E C YC L E D WAT E R E X C HA NG E P R O J E C T C O S T A L L O C AT I O N I n order to complete the final task of the Work P lan associated with the Memorandum of Understanding between Central S an, Contra Costa Water D istrict, and S anta Clara Valley Water District (Valley Water) f or a Preliminary F easibility Evaluation of the R efinery Recycled Water E xchange Project (Water Exchange P roject), Central S an and Valley Water hired Raftelis F inancial Consultants, I nc. to work in conjunction with HD R , I nc. to establish a f ramework for cost sharing on the project. T he basis of the proposed cost allocation is that C entral San would contribute the amount of capital and operation and maintenance costs that would be required f or Central S an to independently build, operate, and maintain an advanced treatment process that would allow C entral S an to remove an equivalent amount of total inorganic nitrogen (T I N) as the Water E xchange P roject. The details of the proposed cost allocation are included in the attached presentation. Staf f looks forward to reviewing this information with you at the J une 14, 2021, Real Estate, E nvironmental and P lanning C ommittee meeting. Strategic Plan Tie-I n G O A L T W O: Environmental Stewardship Strategy 2 – Anticipate and prepare for potential regulatory changes, Strategy 3 – Support regional development of local water supply AT TAC HM E NT S : Description 1. Presentation June 14, 2021 REEP Committee Meeting Agenda Packet - Page 26 of 39 Page 1 of 8 1 UPDATE ON REFINERY RECYCLED WATER EXCHANGE PROJECT COST ALLOCATION Melody LaBella, P.E. Resource Recovery Program Manager Real Estate, Environmental & Planning Committee June 14, 2021 Transfer‐Bethany Pipeline (proposed) REFINERY RECYCLED WATER EXCHANGE PROJECT CONCEPT Martinez Refineries Contra Costa Water District (CCWD) South Bay Aqueduct 2 Los Vaqueros Reservoir (Santa Clara Valley Water District) June 14, 2021 REEP Committee Meeting Agenda Packet - Page 27 of 39 Page 2 of 8 2 MEMORANDUM OF UNDERSTANDING (MOU) •On April 30, 2018, a three-way MOU was executed between Central San, CCWD, and Valley Water to conduct a Preliminary Feasibility Evaluation of the Refinery Recycled Water Exchange Project •On July 3, 2019, Amendment 1 was executed, extending the termination date to June 30, 2020 •On June 22, 2020, Amendment 2 was executed, extending the termination date to June 30, 2021 3 WORK PLAN DEVELOPED JUNE 2018 •Central San, CCWD, and Valley Water staff collaborated to develop a Work Plan called for in the MOU •Tasks included: A.Review and update costs Central San previously developed to provide recycled water for refinery use B.Review refinery water quality requirements C.Evaluate/estimate the project’s yield D.Develop updated cost estimates E.Allocate costs, based on beneficiary pays F.Final report 4 June 14, 2021 REEP Committee Meeting Agenda Packet - Page 28 of 39 Page 3 of 8 3 Water Exchange Cost Sharing May 2021 5 Overview of Water Exchange Alternatives Alternative 1 – Targeted Nitrogen Removal DRAFT Costs for 21,600 AFY Recycled Water Delivery: (18.3 MGD) Capital Costs Treatment $ 407 M Conveyance $ 44 M Total Capital $ 451 M O&M ($/yr) $ 11 M Unit Cost $1,500/AF To Refineries To Refineries Costs for 18,500 AFY Recycled Water Delivery: (16.5 MGD) * Capital Costs Treatment $ 439 M Conveyance $ 44 M Total Capital $ 401 M O&M ($/yr) $ 9.5 M Unit Cost $1,500/AF New Treatment Processes MGD= million gallons per day * Lower flows capacity required due to changes in refinery operations 6 June 14, 2021 REEP Committee Meeting Agenda Packet - Page 29 of 39 Page 4 of 8 4 Cost Sharing Basis at 16.5 mgd delivery DRAFT Alternative 1: •Compliance until 2051 (23 years) 7 No Water Exchange – Parallel Treatment Constant-Flow Parallel Treatment DRAFT Costs for 24 MGD Parallel Treatment Train: Capital Costs Treatment $ 206 M Conveyance $ -- M Total Capital $ 206 M O&M ($/yr) $ 5.0 M 8 June 14, 2021 REEP Committee Meeting Agenda Packet - Page 30 of 39 Page 5 of 8 5 Cost Sharing Basis at 16.5 mgd delivery DRAFT No Water Exchange: •24 mgd parallel treatment •Capital cost = $225 M •Compliance until 2054 (20 years) 9 Cost Sharing Approach • Central San could contribute to the cost of providing the equivalent TIN load reduction as the Water Exchange Alternative 1 (i.e., Central San contributes the cost of the No Water Exchange Alternative) • Can be applied to any size delivery scenario DRAFT 10 June 14, 2021 REEP Committee Meeting Agenda Packet - Page 31 of 39 Page 6 of 8 6 Cost Sharing Summary DRAFT 18,500 AFY (16.5 mgd) delivery No Water Exchange (24 mgd) WEX Alternative 1 Total Capital Cost Total Operating Cost (PV) Total Recycled Water Unit Cost ($/AF) $ 208.0 M $ 83.0 M NA $ 402.0 M $ 185.0 M $1,400 Valley Water Capital Cost -- $ 195.0 M Central San Capital Cost $ 208.0 M $ 206.0 M Valley Water Recycled Water Unit Cost ($/AF) -- $700 Central San TIN Load Reduction Cost ($/kg TIN) $80 $90 21,600 AFY (18.3 mgd) delivery No Water Exchange (27 mgd) WEX Alternative 1 $ 227.0 M $ 94.0 M NA $ 437.0 M $ 209.0 M $ 1,200 -- $ 215.0 M $ 222.0 M $ 222.0 M -- $700 $80 $90 11 COST TABLE DEVELOPED BY CCWD (IN PROGRESS) Line Item Description Low Range Estimated Costs ($/AF) High Range Estimated Costs ($/AF)Treatment CostsCentral San Commodity Charge (negotiable)$0 $50 Recycled Water Treatment and Conveyance - Alternative 1, 40 YR PV and 100 YR PV $1,400 $1,400 Recycled Water Distribution (included above) O&M Labor Cost TBD TBD Recycled Water Cost Subtotal $1,500 $1,550 Central San Cost Allocation $700 $700 Net Recycled Water Cost with Central San Avoided Cost/Cost Benefit Allocation $700 $750 Transferable Recycled Water Cost Assumes 50% Yield to Valley Water $1,400 $1,500 Conveyance CostsUSBR CVP Cost of Service for exchange $41 $41 CCWD Conveyance $110 $110 CCWD Storage $0 $0 SBA Conveyance $40 $40 Transfer Bethany Pipeline Conveyance TBD TBD CCWD Avoided Costs (PRELIMINARY)($101) ($101) Net Water Conveyance Cost Subtotal $90 $90 Preliminary Net Water Cost Estimated Range $1,580 $1,680 DRAFT 12 June 14, 2021 REEP Committee Meeting Agenda Packet - Page 32 of 39 Page 7 of 8 7 QUESTIONS/DISCUSSION 13 June 14, 2021 REEP Committee Meeting Agenda Packet - Page 33 of 39 Page 8 of 8