Working together. Achieving results. “ The Wild, Wild West – Taking on Mother Nature and More” Jack Hawks NARUC Committee on Water July 15, 2014 Dallas, TX

California Update Hollywood and Maximum Contaminant Levels (water quality regulatory standard) A New Hexavalent Chromium MCL, Effective July 1st The Drought: Unrelenting Pressure  How Water Utilities Are Responding  New Emergency Drought Regulations

115 Regulated IOWCs  9 Class A water utilities (> 10,000 connections)  5 Class B water utilities (>2,000)  24 Class C water utilities (> 500)  77 Class D water utilities (< 500) 1.5 Million Customers $1.4 billion annual revenues 6 Million Served

Hollywood and Water Contamination A Civil Action (1996 – John Travolta)  Trichloroethylene (TCE) contamination of the town's water supply (Woburn, MA)  Financial settlement ($68 million) for town’s residents Erin Brockovich (2000 – Julia Roberts)  Hexavalent chromium (Cr +6 ) contamination in Hinkley, CA  PG&E financial settlement ($333 million) for town’s residents  Much agitation in California State Legislature

Hexavalent Chromium (Cr +6 ) - What a Long Strange Trip It’s Been

What Is It? Chromium is a naturally occurring element in rocks, animals, plants, soil; occurs predominantly as  Trivalent chromium (Cr +3 ), essential to normal glucose, protein, and fat metabolism and thus an essential dietary element for humans  Hexavalent chromium (Cr +6 ), used in making stainless steel, textile dyes, wood preservation, and for anti- corrosion, treatment of cooling tower water Human body reduces Cr +6 to Cr +3 USEPA has classified Cr +6 as a human carcinogen when inhaled because of results from animal studies

A Little History MCL established by USEPA and adopted by California at 50 parts per billion for Total Chromium (includes both Cr +6 and Cr +3 ); 1 ppb = about 1 drop of water in 250 chemical drums (3 seconds out of 100 yrs.) USEPA raised federal MCL to 100 ppb 2000 – Julia Roberts wins Oscar for ‘Erin Brockovich’; Prompts California legislature to force MCL development 2000 – City of Glendale begins treatment studies for Cr – California water utilities begin monitoring for Cr +6 under California UCMR

A Little More History March 2001 – CDHP requests that OEHHA prepare a Public Health Goal for Cr +6 May 2001 – National Toxicology Program (NTP) announces intent to conduct a long-term animal study to evaluate carcinogenicity of ingested Cr +6 October 2001 – SB 351 is signed by the Governor, requiring CDHP to adopt a Cr +6 MCL by 1/1/2004 November 2001 – OEHHA announces intent to develop a Cr +6 PHG 2004 – Water Research Foundation publishes three Cr +6 reports

Still More History 2007 – NTP reports there to be sufficient evidence of carcinogenicity in rodents August 2009 – OEHHA releases draft PHG at 60 ng/L (parts per trillion; 1 ppt = 1 drop in 20 Olympic-sized pools) 2010 – USEPA announces in second Six-year Review of existing standards, no revision to Total Chromium MCL September 2010 – External review draft of USEPA’s IRIS Toxicological Review of Hexavalent Chromium December 2010 – OEHHA releases revised draft PHG for Cr +6 at 20 ng/L (20 ppt)

Even More History December 2010 – Environmental Working Group releases report: Chromium-6 is Widespread in US Tap Water  Tested tap water in 35 cities  Range of positive tests: 30 ppt to 13 ppb  Cites WaterRF 2004 occurrence study April 3, 2011 – EWG press release: “Utilities Knew of Chrome-6 Contamination For Years”

Final PHG in California July 2011 – OEHHA finalizes the PHG for Cr +6 at 20 ppt CDPH can now finally start working on developing an MCL required by SB 351 It is now seven and one-half years since the SB 351 deadline

Water Research Foundation Keeps Science Moving Forward Project #Project Title (2011 – 2012) 4365Feasibility of Microfiltration in the RCF Process for Hexavalent Chromium Removal 4404Trace Level Chromium-6 Occurrence and Analysis: Reviewing and Testing the State of the Science 4414Total and Hexavalent Chromium Occurrence Analysis 4418Guidelines for Hexavalent Chromium Treatment Testing 4423Assessment of Single-Pass Ion Exchange and Adsorptive Media for Hexavalent Chromium Removal from Drinking Water WITAF 320/ 4432 National implications of Community-level Cost for a Theoretical Cr(VI) SDWA Standard 4445Development of a Uniform Approach to Prepare Drinking Water Hex Chrome Compliance Plans 4449Sources, Fate & Treatment of Hexavalent Chromium

Environmental Groups File Suit July 18, 2013 – NRDC, EWG file suit in Superior Court to force CDPH to propose and finalize a MCL for Cr +6 Court rules in plaintiffs’ favor and requires CDPH to propose an MCL by August 31, 2013

History in the Making 8/23/2013: CDPH Proposes Cr +6 MCL at 10 ppb Water Industry Comments Due 10/13/2013 AWWA CA-NV Section/CWA/ACWA  Coordinate comments  Hire two expert engineering firms to analyze the CDPH supporting evidence and produce technical documents Bottom Line: CDPH Vastly Underestimates Incidence, Compliance Costs of Cr +6

History in the Making 20,000 comments received by CDPH  About 250 were “significantly distinct”  Remaining were form s or post cards California Administrative Procedure Act allows up to one year to finalize a regulation (i.e., 8/23/2014) December 17, 2013 Court finds in favor of NRDC/EWG and orders CDPH to finalize MCL by April 15, 2014 If there are substantial changes to the rule, must finalize by June 15, 2014 and allow an additional 15-day comment period

History Made CDPH refutes, dismisses most comments Reiterates MCL of 10 ppb New MCL went into effect on July 1, 2014 Where is USEPA on all this?  Not enough evidence in second six-year review (2010) to warrant a federal Cr +6 MCL, nor change the total chromium MCL  USEPA will await occurrence data on total chromium and Cr+6 under UCMR 3 (thru 2015)  Continued IRIS review of Cr +6  No decision on Cr +6 anytime soon

Impact of New MCL For customers in affected service areas  Statewide capital costs - $4.1 billion  Annual O&M - $231 million Cal Water most affected of California IOUs  25 wells affected at 10 ppb  Capital costs up to $66 million, O&M up to $11 million/yr All affected water utilities, agencies, municipalities, districts struggling with compressed compliance time frame

Regulatory Response Memorandum Account Effective on July 1  Cal Water can apply for cost recovery in future  Not an automatic process Willows District Case History (2,610 customers)  Tested in ; CR +6 levels averaged 16 ppb  Total chromium averaged 24 ppb (vs. 50 ppb MCL)  Capital costs – up to $17.3 million; O&M $360,000/yr  Staggering treatment, selection of SBA, other cost reductions, etc. will reduce bill impacts  Cal Water estimates impact from $63/month to $111/month

Drought Update U.S. Drought Monitor California – 7/8/14 100% of California in drought for first time in recorded history 78% likelihood of El Nino prediction in fall 2014 … But … El Nino years do not guarantee above- average precipitation. A scary fire season

California Used to Extremes Folsom Reservoir, July 20, % Capacity Folsom Reservoir, January 16, % Capacity

2013 Redefined “Dry” in California January 18, 2013 January 18, 2014

California Precipitation Variable & Extreme Over Time & Location Most Occurs Nov.- March SOURCE: California Statewide Precipitation

6/9/14 Statewide Average - 0% Means major reservoirs will not be replenished Means reliance on groundwater has increase to 65+% from 38% Means falling groundwater levels, land subsidence, lower GW storage capacity, water quality degradation 0% Snow Water Content North Sierra/Trinity 0% Central Sierra 0% South Sierra 0%

CA Reservoir Storage July 8, 2014

Current Water Supplier Restrictions* Mandatory: 62 water suppliers Includes 6 rationing Voluntary: 154 water suppliers Drought impacts are strongly tied to local and regional water supply conditions * As of July 7, 2014, compiled by DWR

The State’s Response 2013 California Water Plan Update 2013 (draft) Governor establishes Drought Task Force 2014 Governor proclaims Drought Emergency on Jan. 17 California Water Action Plan released Drought Legislation: SB 103/104 Governor issues Executive Order April 25 to re-double drought efforts

Governor’s April 25 Proclamation Highlights Facilitate water transfers and exchanges Urban water suppliers directed to address outdoor water use Californians directed to eliminate water waste  Limit outdoor watering; irrigation, washing hard surfaces, car washing; commercial establishments Homeowner association rules voided Assist with temporary interconnections between water systems Protect threatened and endangered species CEQA / Water Code sections suspended to speed up actions, including water transfers

CPUC’s Regulatory Response February 27, 2014 – CPUC adopted Res. W-4976  Drought procedures for water conservation, rationing and service connection moratoria  Comply with Governor’s call for 20% voluntary conservation Tariff Rule No  Water Conservation and Rationing Plan  Lists non-essential and unauthorized water uses Tariff Schedule 14.1  Mandatory rationing  Requires DWA approval All Class A and B utilities have Rule 14.1 in place CPUC monitoring vulnerable systems

Tariff Rule 14.1 Highlights Voluntary Conservation Plan Customers Notified by Bill Insert or Direct Mailing Option to Request Activation of Staged Mandatory Rationing (Schedule 14.1) Small Utilities (< 2,000 connections) Shall Make Conservation Kits Available Section A of Rule: Non-Essential Uses

Non-Essential, Unauthorized Water Use Anything more than “minimal” landscaping “Excessive” water use (per utility notification) Potable water in gutters, streets Private car washing (except w/shut-off nozzle) Washing buildings, driveways, patios, etc., w/potable water Use of potable water for lawns, gardens, etc., other than drip irrigation or hand watering on specific schedules Use of potable water for construction purposes, dust control, etc., if other sources available

Non-Essential, Unauthorized Water Use Use of potable water for street cleaning Operation of commercial car washes unless 50% recycling per cycle Use of potable water for outside plants, lawn, landscape, turf during certain hours Use of potable water for decorative fountains, unless recycled water used Use of potable water for filling/refilling swimming pools Water service in restaurants, unless requested Use of potable water to flush hydrants, except when required for public safety

Schedule Rationing Utility makes decision on whether more stringent measures are required Must file w/CPUC to activate staged mandatory rationing measures in Rule 14.1 Filing conditioned on:  Declaration of Mandatory Rationing – can be made by utility or governing agency (e.g., State Water Board)  Whether utility is unable to address voluntary conservation levels set by itself, its supplier or governing agency  Whether utility chooses to subsequently activate a different stage Utility may not activate Schedule 14.1 unless authorized by CPUC Customer notification, public hearing required

Schedule 14.1: Enforcement Utility may charge a water use violation fine if non-essential/unauthorized use is observed (min. 3 Ccf/person/ month) After one written warning, utility can install flow-restricting device All monies collected via fines or penalties will be used to offset lost revenues

Recovery of Lost Revenues Utilities w/partial decoupling WRAMs  Can file for memorandum (tracking) accounts to track expenses, monies collected and lost revenues – can letter request recovery of the net balance, but … they must subtract amount equal to 20bp reduction in current authorized ROE – even then, recovery cannot exceed authorized ROR Utilities w/full decoupling WRAMs  Can file for memo account that only tracks expenses incurred and monies collected, since WRAM already protects for lost revenues

New Emergency Regulations Issued by State Water Resources Control Board July 8; approval on July 15 th Mandatory conservation actions, monthly data collection of water production, temporary water restrictions – prohibits:  The direct application of water to any hard surface for washing.  Watering of outdoor landscapes that cause runoff to adjacent property, walkways, roadways, parking lots, etc.  Using hose to wash automobiles, unless fitted with shut-off nozzle.  Using potable water in a fountain or decorative water feature, unless the water is recirculated. Violations punishable by fines of $500 per day; any employee of a public agency may write and issue a ticket to a violator – raises all sorts of “water police” questions

New Emergency Regulations State Board Chair Felicia Marcus has stated that new regs don’t apply to CPUC-regulated water utilities, but CPUC may well adopt them CWA’s July 14 comments note that Rule and Schedule 14.1 constitute drought management response Water IOUs will continue to work with the CPUC to coordinate their existing drought response plans and programs with the State Board’s new regulations

Questions? Thank You Jack Hawks California Water Association