HomeMy WebLinkAbout03/12/1996, 2 - NACIMIENTO WATER SUPPLY PROJECT - WATER EXCHANGES AND WHEELING MEMNG DATE:
uulll city of San Luis OBISPO March 12 1996
ITEM
WWI i COUNCIL AGENDA REPORT 02-
NUMBER:
FROM: John Modector
;4A PREPARED BY: Dan Gilmore
Utilities Utilities Engineer
SUBJECT: Nacimiento Water Supply Project - Water Exchanges and Wheeling
CAO RECOMMENDATION:
Provide direction to staff regarding the Nacimiento Water Supply Project and alternatives that
involve water exchanges and wheeling.
BACKGROUND:
The San Luis Obispo County Flood Control and Water Conservation District ("District") has an
entitlement of 17,500 acre-feet per year (afy) of water from Nacimiento Lake through a contract
with Monterey County. Approximately 1,300 afy have been contracted for use around the lake,
leaving 16,200 afy for allocation to other areas within the County of San Luis Obispo.
The Nacimiento Project has been evaluated a number of times in the past and has recently been
studied at length for feasibility, reliability, and environmental considerations. The first phase
of the study involved an evaluation of the reliability of the Nacimiento Project to deliver water
at a maximum amount of 17,500 afy. Phase I was completed and presented to the Board of
Supervisors in December of 1992. The results of the reliability assessment concluded that the
Nacimiento Project can deliver 17,500 afy based on historic hydrologic data. Phase II of the
Nacimiento Project involved the Preliminary Engineering Evaluation and Environmental
Assessment for the Nacimiento Water Supply Project. The results of the study by Boyle
Engineering showed a viable project. No "fatal flaws" were found that would hinder the project
from proceeding to completion. The Phase H report was accepted and approved by the Board
of Supervisors on June 7, 1994. The Board directed County staff to proceed with the project
and develop the Nacimiento Project Preliminary Engineering and Environmental Impact Report
Reservation and Participation Agreement. Agreement No. A-15-94-CC was approved by the San
Luis Obispo City Council on January 3, 1995 and subsequently executed by the County. Three
consultant contracts were awarded for the completion of this phase. Boyle Engineering was
retained as Program Manager, to guide the project and coordinate the efforts of the participants
and the other two consultants. Carollo Engineers was awarded the contract for Preliminary
Engineering. Carollo's main function is to provide sufficient engineering on the project to
ensure that the EIR is complete and legally defensible. The contract for preparation of the EIR
was awarded to Ogden Environmental. Completion of this phase will be highlighted by the
certification of the EIR near the end of 1997.
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HiiiS COUNCIL AGENDA REPORT
Nacimiento Water Exchanges and Wheeling
Page 2
DISCUSSION:
Project Description. To date, work in the current phase has been primarily the reaffirmation
of participant water allocation requests and the development of a "preferred project" description
by the engineering consultant. Carollo Engineers issued the draft Initial Project Description on
January 18, 1996, titled Technical Memorandum No. 1. Since that time there has been a great
deal of discussion among the project participants in an effort to fine tune the preferred project
to meet the greatest number of participant needs. Throughout every discussion, minimizing or
deferring project costs and allowing for maximum flexibility have been common themes.
Deferral of certain project costs. is possible through construction phasing. Once a final project
description is decided on and approved by the NPAC, preparation of the EIR will proceed on
the basis of the new project description.
Carollo's Initial Project Description, dated January 1996, is available in the Council reading file.
The project that Carollo has identified as the preferred project consists primarily of a raw water
pipeline from Nacimiento through Paso Robles, Templeton, Atascadero, and Santa Margarita,
through the Cuesta Tunnel, and down to the City of San Luis Obispo Water Treatment Plant.
Exhibit A shows the various jurisdictions that have allocation requests for Nacimiento water.
Several of these agencies lie a distance from the pipeline route or beyond the City of San Luis
Obispo. There are two ways that these agencies can receive Nacimiento water. One way would
be to construct spur lines which would connect the agencies to the Nacimiento pipeline. Exhibit
A shows where these spur lines would likely be located. For the areas beyond San Luis Obispo,
spur lines would be constructed either through town or outside City Limits. The other option
for providing water to the outlying agencies would be through water exchanges or water
wheeling.
The Initial Project Description indicates that the preferred project defers much of the project
costs by delaying delivery to the agencies that do not have an immediate need for the water.
Carollo's description of the first phase of the preferred project include the following main points
taken from their Technical Memorandum No. 1:
• Raw water conveyance from the Nacimiento Reservoir to the City of San Luis Obispo
treatment plant.
• Release water to the Salinas River which will then be extracted from wells adjacent to
the river to serve Atascadero, Templeton, Paso Robles, and Santa Margarita.
• Los Osos to receive State Water Project water from CMC's entitlement in exchange for
their Nacimiento Project water. Los Osos would receive state water via the Chorro
Valley Pipeline.
• Wheel treated water to the purveyors near the airport and other adjacent areas via the
City of San Luis Obispo system.
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Em= COUNCIL AGENDA REPORT
Nacimiento Water Exchanges and Wheeling
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• Agreements between Cayucos purveyors and City of San Luis Obispo to exchange Whale
Rock Water for Nacimiento water.
Future project phases would include:
• Construction of a treatment plant at Templeton to serve Templeton, Atascadero, and Paso
Robles, and a small second plant in Santa Margarita to serve that community.
• Cease raw water releases to Salinas River.
• Continue the same delivery pattern to City of San Luis Obispo, Los Osos, Cayucos,
Morro Bay High School and agencies beyond the City of San Luis Obispo.
This approach best meets the needs of the project purveyors. Initial capital and operational costs
will be reduced by the elimination of a water treatment plant in the initial construction phase.
Conveyance facilities in the initial project would provide the most flexibility of operation and
future projects. For example, the options of building either a single regional treatment plant or
any number of satellite treatment plants both remain viable. The four North County purveyors
can have equivalent treated water through discharge of Nacimiento water to the Salinas River
and subsequent extraction of Salinas River underflow. The City of San Luis Obispo can have
raw water which can be treated at our existing Water Treatment Plant. This releases the City
from the need to participate in the project's proposed treatment plant(s). And, water deliveries
can be made to the Airport Area, Los Osos, Cayucos, and Morro Bay High School without the
need for constructing costly spur lines to these areas. This results in a project that is not only
less costly, but less disruptive, and reduces environmental impacts. It also represents the
preferred project as identified by the NPAC.
Water exchanges. Due to geographic and infrastructure limitations, water exchanges are often
the most economical way to deliver water from a new source. Water exchanges involve the
inter-agency trading of entitled water from one source for water from a more convenient source.
With reference to the Nacimiento Project, there are several agencies that would benefit from
water exchanges.
In Cayucos, the Morro Rock Mutual Water Company, Paso Robles Beach Water Association,
and County Service Area 10A (CSA 10A) would all prefer to see their Nacimiento water
exchanged for water from Whale Rock Reservoir. This exchange would take place between
these agencies and one or more of the Whale Rock Commission members, City of SLO, CMC,
or Cal Poly. Currently, CMC and Cal Poly are not participants in the Nacimiento Water Supply
Project. As a result, the project contains no provisions for conveying water to CMC or Cal
Poly. This means that the City is the most likely candidate for exchanging water with the three
agencies in Cayucos. Exchange agreements generally take into consideration certain inequities
that the exchange presents. For example, Nacimiento water may be more costly to treat than
Whale Rock water. Also, constant delivery to the three Cayucos agencies from Whale Rock
city of San IW 6 OBISPO
= COUNCIL AGENDA REPORT
Nacimiento Water Exchanges and Wheeling
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Reservoir will impact the City's safe annual yield from that reservoir. These issues are typically
resolved or compensated for somehow in the exchange agreements.
Three other agencies have already initiated discussions with CMC for another water exchange.
San Luis Coastal Unified School District (Morro Bay High School), Cal Cities-Los Osos, and
CSA 9A are looldng to exchange their entitlement of Nacimiento water for State Water Project
water to be delivered to their agencies via the Chorro Valley Pipeline.
Both of these exchange scenarios result in a net cost savings. They avoid the construction of
costly and redundant pipeline facilities to reach these remote communities.
Water wheeling. Water wheeling differs from water exchanging in that one agency's entitled
water is transmitted through the other wheeling agency's existing infrastructure. The most
recognizable example would be the case of CSA 22 - the Airport Area. The wheeling option
for CSA 22 involves the delivery of their Nacimiento entitlement through the City's water
distribution system. If the final Nacimiento Project is a raw water project, CSA 22 will need
their Nacimiento water to be treated at the City's Water Treatment Plant. If CSA 22 opts to
build their own pipeline through or around the City, then they would need to provide their own
treatment facility.
Along with CSA 22, five other agencies may be looldng to have their Nacimiento entitlement
wheeled through the City's system; Edna Valley Mutual Water Company, Cal Cities - Edna,
East Airport Mutual Water Company, Fiero Lane Water Company, and Afuero de Chorro Water
Company (Exhibit B). At least one agency, Afuero de Chorro Water Company, has indicated
that it will be forced to drop out of the Nacimiento Water Supply Project if it cannot wheel
water through the City. This is due to the high projected cost to build a pipeline bypassing the
City to serve the area.
Of the six agencies that could potentially receive Nacimiento water wheeled through the City
system, the two largest agencies would have a significant impact on the City's system. CSA-22
is requesting 890 acre-feet per year (afy) while Edna Valley Mutual Water Company is
requesting 955 afy. The other four agencies, combined, are requesting a total of only 262 afy.
Any or all of the four smaller water agencies could wheel water through the City with minimal
impacts. In order to fully address the issue of water wheeling, several potential impacts must
be considered. The adequacy of existing facilities, overall water supply picture, and impacts on
existing water customers must all be addressed. The following components of the City's water
system would have to be considered in the development of water wheeling agreements:
• For a raw water project, the City's raw water storage facilities would have to be
evaluated for adequacy.
• The capacity of the City's Water Treatment Plant and its ability to treat the additional
water from the Nacimiento Project would have to be studied.
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COUNCIL AGENDA REPORT
Nacimiento Water Exchanges and Wheeling
Page 5
• Treated water storage would have to be evaluated both at the Water Treatment Plant and
in the pressure zones that would serve the areas receiving wheeled water.
• The City system's ability to transmit the water needed to the outlying agencies would
have to be studied. This could be done through computer modelling.
Transmission mains eventually feed into a distribution system. As stated previously, portions
of the City's distribution system may be considered in analyzing the transmission of water for
the purposes of wheeling. Agencies receiving the wheeled water will be responsible for the
distribution systems within their own boundaries.
Any costs associated with wheeling water will be passed on to the benefitting agency without
impact to existing City customers. In many instances, improvements needed for effective water
wheeling will also serve to strengthen the City's own system. If approved, water wheeling
agreements would be prepared to determine what level of buy-in would be necessary for each
of the areas benefitting from water wheeling through the City.
Chapter 13.16 of the Municipal Code states that "...the city shall not approve any provision or
entitlement to water or sewer service for the use or benefit of properties outside the city limits."
It is not clear whether water wheeling would fall under this language or not. If it is determined
that water wheeling to areas outside of the City limits is prohibited under this chapter, then
Council could amend the Municipal Code to grant an exception for the agencies participating in
the Nacimiento Project. Section 13.16.020 sets a precedent for this by granting general
exceptions to the ordinance as well as specifically excluding one particular property.
If Council so directs staff, we will entertain requests for water wheeling in connection with the
Nacimiento Water Supply Project and begin working out the details of the water wheeling
agreements. Each of these agreements will come back to Council for approval and authority to
execute once they have been developed. In addition, individual projects that would enhance the
City's ability to wheel water to the requesting agencies would also be brought back to Council,
including any plans for financing or recovering the cost of such projects.
In general, wheeling water may serve to lower project costs to those agencies downstream of
San Luis Obispo and ensure participation by those agencies. It is however, not certain that
treating and wheeling water for the agencies south of San Luis Obispo will result in any cost
savings for the City. In fact, under the current proposed financing strategy, cost would be
neutral to San Luis Obispo. Cost for the City could increase if participation in the project were
to reduce.
As a minimum, staff recommends that Council support treating and wheeling water to the Afuero
de Chorro Mutual Water Company and Fiero Lane Water Company. These areas are
immediately adjacent to the City's water distribution system and their requested allocation
amounts would not significantly impact the City's system. Additionally, as stated earlier, Afuero
de Chorro may be forced to drop out of the project if the City does not treat and wheel water
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COUNCIL AGENDA REPORT
Nacimiento Water Exchanges and Wheeling
Page 6
for them. Decreasing project participation is likely to be the greatest threat to successful
completion of the Nacimiento Water Supply Project.
RSCAL IMPACT:
Making a decision as to whether or not the City should treat, wheel, or exchange water for the
benefit of other agencies in conjunction with the Nacimiento Water Supply Project will have no
impact on the current budget. However, the decision on this issue will have an impact on the
overall cost to construct the Nacimiento Water Supply Project.
Attachments: A. Nacimiento Project Delivery System
B. Water Agencies Serve Areas South of San Luis Obispo
M O N T E R E Y C O .
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EXHIBIT B
City of
San Luis Obispo
1. Afuero de Chorro Water Company 1.
32 acre-feet
2. California Cities Water Company
50 acre-feet
3. County Service Area 22 ~:< 4 5.
890 acre-feet
4. East Airport Mutual Water Company 6.
80 acre-feet I
5. Edna Valley Mutual Water Company \
955 acre-feet f
6. Fiero Lane Water Company
2.
100 acre-feet
NORTH
ilk
City of
San LUIS OBISPO �'�