July Coastal Water Project Capital and O&M Cost Description North Marina Alternative - Desalination Plant Site

2 Introduction  Present cost estimates for North Marina Project Alternative including key assumptions and approach  Workshop Presenters: Mark Schubert, PE, CAW Paul Findley, PE, RBF Consulting Dave Stephenson, CAW  Data and assumptions derived from cost estimates contained in Attachments K and L of the Schubert Testimony, dated May 22, 2009

North Marina Project  First Proposed in PEA, 2005  Basic Components, per DEIR:  11 mgd Desalination Plant in North Marina  Sourced from Slant Wells  Return up to 800 afy to water users in Salinas Valley  Brine Disposal to MRWPCA Outfall  Pipelines to CAW Service Area  Terminal Reservoir  Pump Station and Pipeline to ASR Wells  2 New ASR Wells + 2 Existing ASR Wells

North Marina Project (cont’d) Cost Estimate History Capital Costs Annual O&M Costs  PEA: $214M$7.8M (gross) (2005 $) (for 11,730 afy)  Current: $250M$ M (gross) (2009 $) $7.6M-8.1M (net) (for 10,100-10,900 afy)

North Marina Cost Estimates  Changes, Compared to PEA Estimate:  Updated to 2009 dollars (from 2005 dollars), checked previous estimates, and added more detail  Slant well intakes instead of HDD well intakes  11mgd desalination plant capacity, instead of 10 mgd  Added facilities for delivery of up to 2 mgd to CSIP system  Brine disposal to MRWPCA Outfall instead of MLPP Outfall

North Marina Cost Estimates (Cont’d)  Changes, Compared to PEA Estimate:  Added pressure dual media filters  Added 20% RO standby capacity  Incorporated same system changes as Moss Landing Project, south of Reservation Road  O&M costs estimated at meeting 15,200 afy total CAW system demand plus 800 afy to CSIP  Assumed power from grid instead of self-generation

7 Capital Cost Estimate Capital Cost Description Pipeline Pump StationWell Process Equipment Building/ Structure Civil WorksTank Elec. I&CProperty Allowance (% of total) Construction Costs Off-Site Feedwater & Brine FacilitiesXXNMML NM X Desalination Plant X XXXXX X Desalinated Water ConveyanceXX XX X X Terminal Reservoir & ASR PSXX XXX X X ASR SystemX X XX X X Implementation Costs X ROW Easement & Land Acquisition X Contingency Allowance X ML = Moss Landing NM = North Marina X = Both Sites

8 Pipelines  Cost Components:  Material Adjusted Vendor Quotes for Pipes Type II Asphalt Concrete Erosion Control (BMP)  Labor & Equipment ROW Preparation, Pipeline Installation, Erosion Control, Surface Restoration, & Bore Pit Construction Prevailing Wages per Department of Labor Variable Production Rates for Standard Crews Off-site Transport and Storage of Excavated Material Required Equipment per Construction expert

9 Pipelines (cont’d)  Special Construction $1,500/ LF for Jack and Bore Dewatering Wells = $32,000 per Jack and Bore Crossing  Cathodic Protection $5/ LF for metallic pipelines  Contractor Overhead & Profit (OH&P) 18.5% of all above costs

10 Pump Stations  Desalinated Water PS & ASR PS:  Quantity estimates and unit prices per recent similar project estimate  All Other Pump Stations:  Equipment estimated on $/ Installed HP, plus 25% for taxes, installation, & material, plus 18.5% for contractor OH&P  Building based on $110/ SF, includes contractor OH&P  Wet wells based on $700/ CY of concrete

11 ASR Wells  Monitoring Well, Core, & Test well at ASR Well 3  Test Well at ASR Well 4  Stainless Steel Material for Test Wells  Wellhead facilities at ASR Wells 3 & 4  Conversion of Test Wells to Production wells  Well Pumps  Electrical & Pump Building  Well Field Piping & Civil Work  Electrical, I&C  Back flush Water Reclamation Facility  Estimates from ASR Systems  Contractor OH&P included in above

12 Slant Wells  Test Slant Well & 5 Additional Production Slant Wells  $13.8 million, Including contractor OH&P  Slant Well Drilling costs detailed by Doheny State Beach Slant Well Driller  Stainless Steel Material  Includes: Well Pumps & Installation Well Development & Testing Testing / Development Water Disposal facility Civil works and well head vaults Electrical, I&C Electrical Costs Include additional $250,000 for upgraded service to site

13 Process Equipment  Cost Components:  Vendor Supplied Equipment RO System, Pressure Filters, Pumps, Screens, & Chemical Systems Includes Delivery, Taxes, Manuals, Testing, & Training  Installation Includes Labor, Equipment, & Contractor Supplied Appurtenances Estimate based on expert consultation and experience  Building, Electrical, I&C, and Site Work Estimated Separately  Contractor OH&P 10% for RO Equipment 18.5% for other installed equipment  The North Marina RO Process Facility cost was developed by multiplying the Moss Landing RO Process cost by a factor of 1.10

14 Buildings & Structures  Floor Slabs, Foundations, and Hydraulic Structures were estimated at $1100/ CY  Superstructures were estimated at:  $120/ SF for large process buildings  $110/ SF for pump stations  $350/ SF (first floor area) for two story admin building  Detailed estimates for buildings were estimated using commercially available cost estimating software

15 Civil Works  Line Items in the Estimate:  Desalination Plant Earthwork, Sitework, & Piping  Terminal Reservoir Earthwork, Sitework, & Piping  ASR Backflush Reclamation Basin  Dried Solids Storage  RO Clean in Place (CIP) Waste Storage

16 Civil Works (cont’d)  Unit Costs:  General Site work $5/ SF Site Preparation Rough Grading Fine Grading Paving Landscape & Irrigation Site Lighting & Security Fencing  Excavation / Backfill $7/ CY  Yard Piping $400/ LF  Above Costs Include 18.5% Contractor OH&P

17 Tanks (Reservoirs)  Circumferentially Pre-stressed, Post-Tensioned Concrete Tanks w/ Concrete Covers  Partially Buried Clearwell: $1.75/ gallon  Clearwell at Moss Landing:$1.50/gallon  Buried Terminal Reservoir:$1.75/ gallon  Costs Include 18.5% Contractor OH&P  Earthwork, Site work, and Piping estimated separately  Based on analysis of two similar recently constructed projects

18 Electrical, Instrumentation &Control (I&C)  Desalination Plant Electrical /I&C  Power intensive facility  Allowance of 25% of other plant non-electrical costs, based on recommendation from electrical engineering expert Includes plant control systems, and SCADA system for remote communications and control  Other Facilities Electrical /I&C  Allowance of 5 to 15% of facility non-electrical costs, depending on power intensity of facility Includes connection to SCADA system

19 Property  Site Acquisition  Desalination Plant and other above ground facilities  Based on 2009 communication with licensed real estate appraiser: Residential:$400,000 - $1,000,000/Acre Light Industrial:$600,000 - $800,000/Acre Agricultural:$3, ,000/Acre  ROW Acquisition for Pipelines (Present Worth)  Transportation Agency of Monterey County and private agricultural lands evaluated by licensed real estate appraiser

20 Allowances  Electrical / I&C  Contractor OH&P  18.5% except for RO Equipment at 10%  Contractor Mobilization/Demobilization  Included in OH&P. Added 1% for Desalination Plant only

21 Allowances (cont’d)  Implementation  Project Administration and Management, Engineering, Legal  Design/Bid/Build Facilities: Used 30% of base construction costs, based on experience, excluding costs through December 31,  Design/Build Facility: Used 20% of base construction costs  Contingency  Covers unanticipated changes in project scope or schedule due to unforeseen changed site conditions; regulatory or institutional requirements, including mitigation implementation and permit compliance; and acts of nature.  20%, based on AACEI, for “conceptual design” stage of project development.

22 North Marina Capital Cost Estimate Summary ( 2009 $) Off-site Feedwater/Brine$ 20M Desalination Plant$ 81M Desalinated Water Conveyance$ 38M Terminal Reservoir/ ASRPS$ 15M ASR System$ 10M Subtotal for Construction$ 164M Implementation Costs$ 42M Present Worth of Land/ROW Costs $ 5M Contingency Allowance$ 42M Total Capital Costs$ 253M Rounded to$ 250M

23 Accuracy of Estimate  Cost estimating accuracy is typically keyed to project development stage  North Marina Alternative between Class 3 and Class 4  AACEI Class 3-Budget, 10-40%: -10/20% to +10/30%  AACEI Class 4-Study, 1-15%: -15/30% to +20/50%  Used -15%/+25 %  Final North Marina Project capital costs could be in range of $210M to $310M in 2009 Dollars.

24 Operation & Maintenance Costs O&M Cost Description EnergyChemicalsLabor Membrane Replacement General R&R O&M Costs Avoided Facilities Off-Site Feedwater & Brine FacilitiesX NM Desalination PlantXXXXX Desalinated Water PumpingX X Terminal Reservoir & ASR PSX X ASR WellsXXX X Valley Greens PSX X Begonia Iron Removal PlantXXX X Segunda PSX X X Seaside Wells X General System X ML = Moss Landing NM = North Marina X = Both Sites O&M Costs Avoided Include: Energy, Chemicals, & Labor

25 Energy  Energy Rate Schedules were selected considering:  Based on PG&E Tariffs  Load E-19 (< 1000 kw) E-20 (> 1000 kw)  Grid Voltage Transmission Voltage Primary Voltage Secondary Voltage

26 Energy (cont’d)  Unit Costs for Energy for each facility were developed considering:  Time of day (Peak, Partial Peak, Off-Peak)  Season (Summer / Winter)  Service Voltage  Maximum Demand per Month  Average Use per month  Diurnal Load Profiles  Energy Unit Costs: $ $0.142 /kWh  North Marina Desal Plant Unit Costs Winter $0.093 / kwh Summer $0.136 / kwh  Highest Unit Cost is at remote pump stations

27 Chemicals  Variable according to annual production  Chemicals and dosages per DEIR Project Description  Chemical costs obtained by 2009 quotation from national vendor  Bulk delivery and storage

28 Labor  Fixed, does not vary with annual production  Operations labor categories and rates from CAW- Monterey  Desalination plant staffing levels estimated on basis of two other desalination plants and consultation with industry experts

29 Repair and Replacement  Assumed replacement of 15% of membranes every year starting in 2017 for North Marina Project  Assumed R&R for structures, buildings, and civil works at 1% of original cost, per year.  Assumed R&R for mechanical and electrical systems at 3% of original cost, per year.

30 O&M Costs Avoided  Project will reduce production and operations costs at:  Begonia WTP (BIRP) by 6,900 afy, $1.36M annual reduction  Segunda PS, by 6,900 afy, $0.37M annual reduction  Seaside Wells, by 2,200 afy, $0.28M annual reduction  Datum used is current conditions:  Begonia WTP (BIRP) at 11,500 afy  Seaside Wells at 3,700 afy  Avoided costs were developed on basis of existing operational data, calculation of avoided power, and consistent (calculated) energy unit cost

31 North Marina Project O&M Cost Estimate  For 2021, in 2009 Dollars, at 10,900 AFY: Desalination Plant:$ 9.2M Desalinated Water Conveyance:$ 0.5M ASR System:$ 0.5M Total (gross) $10.2M Costs avoided: ($ 2.0M) Total (net)$ 8.2M

End of Formal Presentation