Dublin San Ramon Services District Recycled Water Program Dave Requa Assistant General Manager/District Engineer Board Member WateReuse January 20, 2012

Presentation Outline Why Recycled Water (Drivers & Benefits) Public-Private Playing Field DSRSD Recycled Water Program – Drivers & Benefits – Customer base – Capital requirements & characteristics – Rate setting Closing thoughts

Driver California Policy (the Boss said so) California Goal MAF by 2030 – 2009 recycling MAF (4 fold increase) – 2009 urban water use 9 MAF (25% of urban use) – 2009 wastewater discharged 5 MAF (11% utilized to 50% utilized) Of the total 3.5 MAF discharged to salt water

Driver California Policy (the Boss said so) – What this means Urban centers distant from natural supplies Recycling a local supply for urban centers Most recycling growth in urban use

Recycled Water Use Trend In California 2009 Survey

Recycled Water Use Trend In California MAF in MAF increase by 2030

More Drivers & Benefits Limited current and future potable supplies Water Conservation Act (SBx7_7) – 20% potable demand reduction by 2020

More Drivers & Benefits Other Benefits – Preserve stream & river flows – Diverts pollutants from water environment – Drought resistant (not drought proof) – Green parks and schools in drought – Reduced Energy and greenhouse gas 20% electrical used for water in California

Energy Intensity by Water Source Source: Pacific Institute analysis regarding SDCWA data kWh/AF

Public-Private Playing Field Cost of service & customer equity Local acceptance – Statewide uniformity Community judgment – Legal/accountant scrutiny Capital cost a nuisance– Rate of return on capital (tax implications, limited public financing, purchase developer facilities) – Urban reuse capital intensive (direct potable/groundwater recharge low capital)

DSRSD Recycled Water Program Art by

DSRSD Drivers/Benefits & Program All of opening reasons – 20% by 2020 later - current 29% reduction Joint program with EBMUD – DSRSD has water - EBMUD money & clout – First deliveries 2001 – Current DSRSD 1,740 AF – EBMUD 413 AF – 100% of DSRSD wastewater flow (Pleasanton supply) Service area characteristics – DSRSD 95% new development – EBMUD 90% infill

DSRSD Program Requirements New Development Zone – Required to use recycled water – Unless determined not feasible by District Engineer – Major infrastructure by District (connection fees) – Minor infrastructure by developer dedicated to District

DSRSD Program Requirements Existing Development Zone – Voluntary use – District builds to meter with available funds & grants – District retrofits on site for public facilities – Owner retrofits on site for private facilities – Zone 7 connection fee credit (in progress)

Capital Recycled Program DERWA Program - $83.1 million – 51% DSRSD – 49% EBMUD DSRSD Program - $57.2 million – $5.6 million developer dedicated (no purchase) – $6.4 million grants (public financing) – $9.8 million connection fees (limited private usage form of loan) – $11.7 million state loans (20% rates 80% fees) – $29.9 million bonds (20% rates 80% fees)

Fee and Rate Incentives Water is Water Enterprise Approach – Potable/recycled melded rates – Most public agencies use some variation Connection Fees Incentive – DSRSD $12,000 potable or recycled (5/8” meter) – Zone 7 $22,900 potable (5/8” meter) User Fee Incentives – Potable water “Inverted Block Rate” – Recycled water “Uniform 90% potable irrigation – No shortage surcharge 83% of tier 3

Cost Structure Recycled WaterPotable WaterCombined Current Demand1,740 AF6,880 AF8,620 AF Current Accounts277 (2,209 DUE) 18,053 (26,174 DUE) 18,330 (28,383 DUE) Future1,360 DUE13,305 DUE14,665 Connection Fees Capital on Fees$56.2 million$24.4 million$80.6 million Capital per DUE$41,300$1,830$5,490 User Rates Capital$595 AF$20 AF$136 AF Replacement$250 AF$168 AF$184 AF Water purchase$532 AF$875 AF$805 AF Distribution O&M$540 AF$610 AF$596 AF Total$1,917 AF$1,673 AF$1,721 AF

Rate Structure CategoryMeasureRate/amount NormalStage 1 Tier units$3.07$3.13 Tier units$3.25$3.13 Tier 335+ units$3.38$3.72 Potable Irrigationall$3.43$3.76 Recycledall$3.09 Fixed Charge5/8” meter$16.66 Retail Water Costs Zone 7 Potable$2.27 DERWA Recycled$1.38 Potable subsidizes recycled – customers get in return adequate potable supply, green parks and schools in a drought and environmental enhancement (excludes 20% capital)

What I Think I Think From Water Week Vol 0412

Variable Charge Rate Structures Usage Per Unit Cost Uniform Rate Structure Usage Per Unit Cost Declining Block Rate Structure Per Unit Cost Usage Inverted Block Rate Structure Usage Per Unit Cost Seasonal Rate Structure Peak Season Non-Peak

2007 Volumetric Rate Structures California-Nevada AWWA Survey

Final Thoughts Planning Requirements – Require in new development – Submit analysis of retro- fit feasibility Melded Rate Approach Funding Assistance Public/Private Utility Support Minimize Mandatory

Think “Value of Water”... not Cost of Water A Gallon of Tap Water: $0.002 Average Monthly Cost of Tap Water: $53 A gallon of gas $4 A gallon of milk $2.49 A gallon of coffee $16 A gallon of bottled water $11.35 A gallon wine $45 Monthly cost of electricity $100 Monthly cost of garbage pick-up $30 Monthly cost of satellite TV $70 Monthly cost of mobile phone $78

The End Thank You!