Doheny Desalination Project. Technical Studies. October 31, 2017

Transcription

1 Doheny Desalination Project Technical Studies October 31, 2017

2 Agenda Brine Dispersion and Coastal Hazards Analysis Southeast Intake Wells/Updated Slant Well Modeling Cultural Resources Hydrology Study (Flood Protection) Power Supply Update 3 mgd Ocean Desal Plant Capacity Alternative Value for Money Updates Architectural Renderings 2

3 Brine Dispersion and Coastal Hazards Analysis 3

4 Brine Dilution San Juan Creek Ocean Outfall Year Built: 1978 Length: 2.2 Miles off Doheny State Beach Diameter: 57-inch Capacity Used in 2017: 11.3 MGD Hydraulic Capacity: 85 MGD Water Quality Monitoring Sites: 18 Governed by Regional Water Quality Control Board NPDES permit R

5 Brine Dilution Evaluated 3 mgd 15 mgd brine flow Existing Diffuser meets Ocean Plan requirements for brine dilution in all but no wastewater flow condition Sensitivity Analyses showed 1 mgd and 0.35 mgd of wastewater flow is needed for 3 and 5 mgd brine flow, respectively Permitted Capacity issue with SOCWA outfall at highest flows Existing WW Flows =~11 mgd Dense (negatively buoyant) Discharge Scenarios Buoyant Discharge Scenarios 5

6 Coastal Hazards Evaluates flooding and wave overtopping under a variety of ocean conditions Various sea level rise projections, tsunamis, storms Based off California Coastal Commission Sea Level Rise Policy Guidance document (CCC, 2015) 6

7 Coastal Hazards Northwest Well Facilities (Near Mouth of San Juan Creek) Periodic overtopping and flooding of wellhead vaults is evident This will be addressed with design features 7

8 Coastal Hazards Southeast Well Facilities Greater Exposure Risk for Southeast wells Periodic overtopping and flooding of wellhead vaults is evident This will be addressed with design features 8

9 Southeast Area Intake Wells 9

10 Project Update - Southeast Intake Wells 10

11 Southeast Intake Wells Conceptual based on ongoing GeoScience work Constructability Challenges To be refined as needed following completion of ongoing work Key Issues State Parks Approval County Parks Approval Private party parcel Railroad ROW Coastal Hazards 11

12 Updated Slant Well Modeling 5 mgd Production Summary of Predictive Scenario Basin Impacts Summary of Predictive Scenario Feedwater Quality 12

13 Cultural Resources 13

14 Cultural Resources Report Potential sensitivity with raw water pipeline alignment options A monitoring program is recommended during pipeline construction 14

15 Plant Site Hydrology Study 15

16 Existing Hydrology Infrastructure 16

17 Site Hydrology Study Done in conjunction with Coastal Hazards Analysis Several Alternatives to protect site from flooding Major contributor to flooding is San Juan Creek bridge crossing footings Alternative 1 results in site raised approx. 4 17

18 Power Supply Update 18

19 SDG&E Power Study Current SDG&E Infrastructure can support up to 5 mgd facility (i.e. 4 MW) Any Ocean Desalination facility larger than 5 mgd would require additional electrical infrastructure by SDG&E, ~3 years to complete Offsite Underground Lines Laguna Niguel Option A Capistrano Option B 19

20 Alternative Power Supply Study Why consider alternative power supply? Overall Cost of Water Overall Project Reliability 20

21 Impact of Power Cost Cost of Electricity at Start of Project ($/kwh) Cost of Doheny Desalination Project Water at Start of Project* ($/AF) $1241 (equal to projected MWD Rate) 0.10 $ $ $ $ mgd Project 30 year State Revolving Fund Loan, MWD LRP Rebate of $475/AF $10M DWR Prop 1 Grant Year

22 Improve Overall Project Reliability & Environmental Stewardship Multiple Sources of Power Improves Overall Project Reliability Electricity from the grid supplied by San Diego Gas & Electric Natural gas supplied to the site from Southern California Gas On site solar (limited can only supply ~ 1% of plant power demand) Offsite renewables wind/solar farms located in the desert, for example 22

23 Electricity and Natural Gas Supply SDG&E Service Area SoCal Gas OC pipelines 23

24 On-site Generation Available Footprint Approximately 15,000 sq. ft of available footprint for On-site Power Generation Equipment (in addition to solar panels on suitable flat roof space) 24

25 On-site Power Generation Options with Natural Gas Technology Pros Cons Internal Combustion Engines Natural Gas would be used to generate electricity, which would power a Ocean Desal Facility Reliable, Proven Technology Turbines Proven and reliable Fuel Cells Lower emissions than combustion technology Air quality/ permitting Lower efficiency than internal combustion Medium Maturity 25

26 Estimated Power Cost Technology Estimated 20 year Levelized Generation Cost $/kwh Estimated Additional Levelized SDG&E Fees/Charges ($/kwh) Estimated Final Levelized Cost to District ($/kwh) SDG&E AL-TOU NA On-Site Natural Gas Internal Combustion Engine On-Site Natural Gas Turbine On-Site Natural Gas Fuel Cell Offsite Solar Offsite Wind Waste-to-Energy Highly Variable Highly Variable Variable ( ) ( ) 26

27 3 mgd Desalination Plant Capacity Alternative 27

28 3 mgd Doheny Ocean Desalination Plant Alternative Including this option as part of the Draft EIR with minimal expanded infrastructure for the initial phase Project Component Slant Wells Raw Water Pipeline Plant Site Works RO Building Product Water Storage Tank Description 2 duty / No Standby Assumes shorter segments, but able to handle higher flows Only for 3 mgd Sized only for 3 mgd Sized only for 3 mgd (0.5 million gallons) High Level Construction Cost Estimate $70M 28

29 Value for Money Analysis 29

30 Project Delivery Alternatives District-Owned Project Enters into a Design-Build Contract for the final design and construction of the facility Enters into a Operations and Maintenance Contract for the O&M of the facilities District secures financing Initial capacity can vary, with future transitions to JPA or PPP Private Sector Owned Project Private developer designs, builds, finances, operates, maintains, and owns the facility District enters into a long-term Water Purchase Agreement with a private project developer 30

31 Impacts to Project Delivery Method Cost Risk Transfer District-Owned Private Sector Owned Access to below market rate loans through State Revolving Fund Higher financing costs lead to higher cost of water Certain level of Risk will sit with District Private Sector will take on more (not all) project Risk Other Considerations Grant Balance Sheet, Future Projects Project Schedule 31

32 Updates to Value for Money Analysis A 30-year DWSRF loan is now available A maximum grant amount of $10 million Comparison of several different financing options using WIFIA Customer Rate Increase Analysis 32

33 Updates to Projected Cost of Water 33

34 MET Rate Forecast Available Data: Expected water cost from 2016 to 2026 (published by MET) MWDOC estimate of add l CAPEX and O&M costs from 2018 to 2040, per OC Water Reliability Study (2016) Used MWDOC s projections and added sensitivity to inflation and power cost Extended projections from 2040 to 2049 by applying the constant average growth rate from 2020 to

35 Cost of Water Estimate 5 mgd District-Owned $104M Capital Cost, $10M Grant 30 year SRF 2% $475/AF MWD Rebate for 15 years Cost of Power = $0.1294/kWh at beginning of project 35

36 Cost of Water Estimate 5 mgd PPP 30% Private Equity at 9.5% Return 70% Financing at 4% interest for 30 years $475/AF MWD Rebate for 15 years Cost of Power = $0.1294/kWh at beginning of project 36

37 Cost of Water Estimate 15 mgd District-Owned $237M Capital Cost (Includes $50M for distribution infrastructure) $10M Grant 30 year 3% (Illustrative Only) $475/AF MWD Rebate for 15 years Cost of Power = $0.1294/kWh at beginning of project 37

38 Cost of Water Estimate 15 mgd PPP 30% Private Equity at 9.5% Return 70% Financing at 4% interest for 30 years $475/AF MWD Rebate for 15 years Cost of Power = $0.1294/kWh at beginning of project 38

39 Cost of Water Comparison Project Cost of Water Beginning of Project ($/AF) 5 mgd Projected MWD Imported Water $1,241 3 mgd District-Owned, 30-year SRF 2% $1,675 5 mgd District-Owned, 30-year SRF $1,465 2% 5 mgd Public Private Partnership $2, mgd District-Owned $1, mgd Public Private Partnership $1,737 39

40 Net Present Cost Comparison - Various Financing Options Financing structure* Comment 30 year DWSRF loan Best available financing option (30 year SRF loan) given new terms indicated by State after March 2017 workshop 20 year DWSRF loan DBO base case used for initial VfM analyses presented in Sections 5, 6 and 7. Effective WACC NPC with $5 million DWR Grant Available in PPP? Revised NPC with $10 million DWR Grant 2.0% $193 M $189 M 2.0% $198 M $194 M 80% 30 yr DWSRF + 20% municipal financing Possible financing structure if SRF funding for whole Project CAPEX cannot be obtained. Assumes municipal 5% p.a. 2.6% $200 M $196 M 49% WIFIA + 51% municipal financing Likely funding structure if WIFIA pursued instead of SRF. Assumes WIFIA 3% p.a. 4.02% $219 M $214 M 49% WIFIA + 21% private debt + 30% private equity (IRR = 5.5%) Best case PPP financing structure assuming receives WIFIA and equity investors willing to accept lower IRR 4.12% $225 M No change + Municipal financing Worst case DBO 5.0% $232 M $227 M 49% WIFIA + 21% private debt Most likely PPP financing structure incorporating WIFIA + 30% private equity (IRR = 9.5%) 5.35% $245 M No change + 70% private debt + 30% private equity PPP base case 6.2% $262 M No change + 40

41 Single Family Residence Current Bill Data To Illustrate this concept, the Total South Coast Water District Annual Costs to customers, summing all monthly bills and tax bills, was divided by

42 Illustration of Calculation Step 1 - Take Cost of Doheny Desal Water ($/AF) Cost of Imported Water ($/AF) Step 2 Convert $/AF to $/ Hundred Cubic Feet Step 3 Multiply $/ Hundred Cubic Feet x Number of Hundred Cubic Feet used per month to get $/Month Impact 42

43 Average Total Monthly Bill - 5 mgd Doheny Desalination Facility Customer Type Average Hundred Cubic Foot /Month Usage Average Current Monthly SCWD Bill 5 mgd District-Owned 30 year SRF Loan $ / month Increase SFR Tier 1 3 $87.60 $ % SFR Tier 2 10 $ $ % SFR Tier 3 25 $ $ % HOA s (Top 10) 1,168 $8, $ % Resorts (Top 4) 2,870 $34, $1, % % To Illustrate this concept, the Total South Coast Water District Annual Costs to customers, summing all monthly bills and tax bills, was divided by 12. SFR = Single Family Residence 43

44 Average Total Monthly Bill Increase Other Scenarios Customer Type 3 mgd - 30 year SRF Loan $/month Increase % Increase $/month Increase 5 mgd PPP 15 MGD PPP % Increase $/month Increase % Increase SFR Tier 1 $ % $ % $ % SFR Tier 2 $ % $ % $ % SFR Tier 3 $ % $ % $ % HOA s $ % $2, % $1, % Resorts $1, % $6, % $3, % SFR = Single Family Residence 44

45 Risk Transfer Original Conclusions Remain Unchanged A Public Private Partnership (PPP) reduces risk exposure significantly. However, that saving is not sufficient to counter the lower financing costs for Design-Build-Operate. If the SRF loan was not available, a PPP would appear very similar, and perhaps even more attractive than a Design-Build-Operate. 45

46 Project Renderings Before and After Renderings of Plant Site and Doheny State Beach 46

47 Before Aerial View 47

48 After Aerial View 48

49 Before Pacific Coast Highway Bridge View 49

50 After Pacific Coast Highway Bridge View 50

51 Before Resident View 51

52 After Resident View 52

53 Before Bike Path 53

54 After Bike Path 54

55 Train View 55

56 Questions? 56

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