LADWP WATER SYSTEM CAPITAL PROGRAM UPDATE July 25 th 2013

1 Los Angeles Water System Established in 1902 Largest municipally- owned utility in the U.S. Operating Revenue = $ 1.08 billion (FY2012/13) 3.86 million customers within 473 sq. mi. service area 679,000 active metered services Service elevation from sea level to over 2,400 feet 7,225 miles of pipeline, 114 tanks & reservoirs, 78 pump stations, 421 regulator stations 340-mile long Los Angeles Aqueduct System The Los Angeles Aqueduct

2 Water System Priorities Regulatory Compliance Safe Water Supply and Compliance with Regulatory Requirements Infrastructure Reliability Sustainable Infrastructure Replacement and Upgrade Sustainable Water Supply Increase Local Supply and Protect the Environment Investments that address these priorities are interdependent and interconnected. Los Angeles Aqueduct Cascades

3 Current and Projected Capital Expenditures Next 10 years $ in millions Total $8.5B Total $484M

4 Water System Priority: Regulatory Compliance Safety of the water we provide to our customers is LADWPs #1 Priority Drinking Water Regulations Require Major Investment in Water Infrastructure – two major water initiatives: 1)Open Reservoirs: cover, replace, or provide add. treatment Regulation: Long Term 2 Surface Water Treatment Rule (LT2, April 1, 2014) 2)Chloramine Disinfection: system-wide change will reduce harmful disinfection byproducts Regulation: Stage 2 Disinfection By-Products Rule (DBP2, June 30, 2021) Failure to comply with regulatory requirements is NOT an option.

5 Shallow flooding dust mitigation Gravel dust mitigation Water System Priority: Regulatory Compliance Owens Lake Dust Mitigation Project 90% of dust is controlled and Owens Lake is no longer in the top 10 list of PM10 (dust) emissions 42 square miles of dust control in operation Over $1.2 billion spent to date in capital (since Sep. 2000); $72 million in annual O&M (including cost of replacement water) Using up to 95,000 acre-feet per year of water from Los Angeles Aqueduct

6 Water System Priority: Regulatory Compliance 2012/13 Next 10 years Capital Investment Reservoirs & Trunk Lines$ 159.0$1,337.6 Chlorine to Chloramine Water Treatment Owens Lake Dust Mitigation Total $248.4$2,040.6 Current and Projected Expenditures: ($ in Millions) Includes Water Quality Improvement Program and Owens Lake Dust Mitigation Project

7 Water System Priority: Infrastructure Reliability LADWPs Water System is large and complex Continually aging (233 miles of pipe are over a century old and 70% of pipes are more than 50 years old) Maintenance and replacement is an ongoing and continuous effort Water System Annual Leak Rate 15 leaks per 100-miles is below N. America average of 25 leaks per 100-miles of pipe Current 315-year Pipe Replacement Cycle - severely deficient of frequency required for continued reliability Our 7,200 miles of water distribution pipeline is the backbone of our delivery infrastructure – we work very hard to keep its service reliability

8 Water System Priority: Infrastructure Reliability Water Main Replacement Program

9 Water System Priority: Infrastructure Reliability 2012/13 Next 10 years Capital Investment Mainlines & Trunk Lines$ 63.2$ 1,619.6 Reservoir, Pump, & Reg. Stations Meters, Services, Hydrants Seismic, Facilities, Equip., IT, Other L.A. Aqueduct System Total $154.7$ 3,654.8 Current and Projected Expenditures: ($ in Millions)

10 Water System Priority: Sustainable Water Supply The City of Los Angeles plans to meet all new water demands through local resource development. Environmental regulatory challenges and impacts of climate change requires continued focus on four major water initiatives: 1)Stormwater Capture 2)Water Conservation 2)Water Recycling 3)San Fernando Basin Groundwater Remediation

11 Water System Priority: Sustainable Water Supply FYE 2008 – 2012 Average Total: 574,600 AFY Fiscal Year 2034 – 35 Total: 711,000 AFY LA Aqueduct 206,815 37% Local GW 64,466 11% Recycled Water 6,706 1% MWD 297,945 51% Goal is to reduce our dependence on purchased supplemental imported water by 50 percent by 2035 or sooner Charts do not reflect 100,000 AF of existing conservation

12 Water System Priority: Sustainable Water Supply 2012/13 Next 10 years Capital Investment Groundwater Management & Remediation$ 12.9$1,561.9 Water Recycling Stormwater Capture Water Conservation Total $ 81.0$ 2,750.3 Current and Projected Expenditures: ($ in Millions)