TEAM TWO ALTERNATIVE ADD WATER PROJECT May 20, 2009

5 Hypothetical Users User-identified needs: CAGRD30,000 firm 10,000 non-firm City X 20,000 firm City Y 15,000 firm City Z 5,000 af firm Industrial user 5,000 firm 20,000 non-firm

EXAMPLE: ADD Water Phase Opening CAWCD Board ADD Water subcommittee (meeting quarterly) establishes stakeholder working group Stakeholder working group & CAP staff develop proposal for new ADD Water phase to submit to CAWCD Board for approval: –100,000 af increment of CAP canal expansion –Proposal identifies required studies and planning costs –User-submitted water demand growth CAWCD Board approves opening of new ADD Water phase –Formula (based on user-submitted demand growth data) generates initial contract allocation of 40% CAGRD, 35% municipal, 25% other (industrial)

EXAMPLE: Planning Stage Planning contracts for 100,000 af expansion made available to user categories under formula –CAGRD:40,000 af (30 firm, 10 non-firm) –Municipalities:35,000 af (all firm) –Industrial:25,000 af (20 firm, 5 non-firm) Municipal over-subscribed by 5,000 af –Municipal users then agree among themselves as to allocation within their category City X: 20,000 af 18,000 af City Y: 15,000 af 13,000 af City Z: 5,000 af 4,000 af Participants council (composed of planning contractors) oversees phase planning, phase plan identifies actual capacity volume and costs, potential water supplies to meet needs, etc.

EXAMPLE: Capacity Stage CAWCD Board signs off on phase plan and directs issuance of capacity contracts Capacity contracts made available based on planning contract allocation –However, Industrial User decides costs of firm water will be too high and takes only 20,000 af; available canal capacity contracts transferred to cities Final capacity allocation: –CAGRD: 40,000 af –City X:20,000 af –City Y: 15,000 af –City Z: 5,000 af –Industrial User: 20,000 af

Water Supply Stage Phase plan also identifies planned water supply acquisitions and types; once phase plan is approved, water supply contracts issued (firm, non-firm, reserved) Supplies sought: 70,000 firm, 30,000 non-firm –Only three supplies ultimately acquired: 50,000 af of pre Colorado River water (firm), 6,000 af of desalination water (firm), 30,000 of lease water (non- firm) 14,000 af firm supply shortfall allocated pro-rata based on capacity, i.e., each user gets 80% of expected supply ExpectedActual –CAGRD:30,00024,000 –City X:20,00016,000 –City Y:15,00012,000 –City Z:5,0004,000