Water for Monterey County Regional Project Capital and O&M Cost Description 1 Lyndel Melton, P.E. RMC Water and Environment

Capital and O&M Cost Description Agenda Regional Project Description Basis for Cost Estimates Capital and O&M Costs Comparison of Costs 2

Regional Project Updated Phase 1 Description 3

Phase 1 Project Description DEIR Phase 1 Project 10 mgd Desal Plant 14 mgd SWTP +3 ASR Wells Common Facilities – Terminal Reservoir – ASR Wells & PS – Monterey Pipeline – Valley Greens PS Revised Phase 1 Project 10 mgd Desal Plant No SWTP No Added ASR Wells Common Facilities – Terminal Reservoir – ASR Wells & PS – Monterey Pipeline – Valley Greens PS 4

5 Surface Water Treatment Plant With Surface Water Treatment Plant

6 No Surface Water Treatment Plant

Regional Project Supply Sources 7 To ASR To MCWD CAW Only Supplies

Coastal Water Project Supply Sources 8 CAW Only Supplies

Desal Plant Vicinity Plan 9

Desal Plant Site Plan 10

Need for Partial Second Pass RO System 11 With single pass: Boron concentrations can be toxic to some crops & foliage Maximum chloride and sodium concentrations are anticipated to be 200 & 180 mg/L Partial second pass would: Reduce boron levels to <0.5 mg/L Reduce chloride and sodium concentrations to 100 & 80 mg/L

Intake Well Locations 12

Intake Well Locations 13

Regional Project Basis for Cost Estimates 14

Basis for Capital Cost Estimating 15 Used CAW’s cost criteria/unit costs Reviewed for appropriateness and agree with bases Supplemented with vendor quotes Design/Build for Desal Design-Bid-Construct for Other Facilities

Basis for O&M Estimating 16 Used CAW’s O&M Labor Chemical R&R *Membrane Replacement Power supply costs Desal Plant – MRWMD Winter – $0.08/kW-hr Summer - $0.12/kW-hr Desal Wells – PG&E Winter – $0.09/kW-hr Summer - $0.14/kW-hr

Expected Accuracy Ranges for Cost Estimating (Same as CAW Estimates) 17 0% +60% +40% +20% -20% Expected Accuracy Range for Cost Estimate Level of Project Definition 10% Project Complete (Class 4) 30% Project Complete (Class 3) 100% Project Complete (Class 1) Project Completion

Regional Project Capital and O&M Cost Estimates 18

Table 7 – Estimated Cost – Phase 1 DEIR Project 19 Construction Costs DEIR Regional Project DEIR Regional Project w/Partial 2 nd Pass Intake Facilities $ 10,300,000 $ 10,700,000 Desalination Plant $ 64,400,000 $ 81,100,000 SWTP $ 26,000,000 Product Water Delivery $ 39,100,000 Common Components $ - Contractor's O&P $ 13,400,000 $ 13,500,000 Implementation Costs $ 36,300,000 $ 38,900,000 ROW/Land Acquisition $ - Contingencies $ 37,900,000 $ 41,900,000 Total Capital $ 227,400,000 $ 251,200,000 Total Annual O&M $ 9,840,000 $ 11,040,000 Cost of Water ($/AFY) $ 2,400 $ 2,670 Annual Production (AFY)10,500

Table 8 – Estimated Costs of Common Facilities 20 Construction Costs Common Components $ 37,700,000 Contractor's O&P included above Implementation Costs $ 11,300,000 ROW/Land Acquisition $ 3,900,000 Contingencies $ 10,600,000 Total $ 63,500,000

Table 9 – Estimated Costs of Phase 1 Project With No Surface Water Supply 21 Construction Costs Regional Project w/no SWTP Intake Facilities $ 10,700,000 Desalination Plant $ 81,100,000 SWTP $ - Product Water Delivery $ 30,500,000 Common Components $ - Contractor's O&P $ 7,300,000 Implementation Costs $ 26,700,000 ROW/Land Acquisition $ - Contingencies $ 31,300,000 Total Capital $ 187,600,000 Total Annual O&M $ 11,300,000 Cost of Water ($/AFY) $ 2,290 Annual Production (AFY)10,500

Alternative Project Cost Comparisons 22

Basis for Cost Comparisons 23 Used CAW’s & MCWD’s cost and production numbers Cost of capital for Regional Project – 5.15% over 30 years Cost of funds for CAW alternatives – 8.55% over 30 years Unit water costs developed to compare all alternatives (Annualized Capital Costs + Annual O&M Cost) Average Annual Water Production in AFY Unit Cost of Water =

Table 10 – Comparison of Estimated Costs of DEIR Based Projects 24 Construction Costs Regional ProjectCAWCAW Moss Landing Intake Facilities $ 10,300,000 $ 20,000,000 $ 2,800,000 Desalination Plant $ 64,400,000 $ 80,600,000 $ 96,400,000 SWTP $ 26,000,000 $ - Product Water Delivery $ 39,100,000 $ 25,200,000 $ 41,400,000 Common Components $ - Contractor's O&P $ 13,400,000 $ 10,900,000 $ 11,200,000 Implementation Costs $ 36,300,000 $ 30,700,000 $ 27,700,000 ROW/Land Acquisition $ - $ 1,000,000 $ 3,300,000 Contingencies $ 37,900,000 $ 33,700,000 $ 36,600,000 Total Capital $ 227,400,000 $ 202,100,000 $ 219,400,000 Total Annual O&M $ 9,840,000 $ 10,100,000 $ 9,300,000 Cost of Water ($/AFY) $ 2,400 $ 3,350 $ 3,440 Annual Production (AFY)10,5008,800

Table 11 – Comparison of Estimated Costs with no Surface Water Supply 25 Construction Costs Regional Project w/no SWTP CAWCAW Moss Landing Intake Facilities $ 10,700,000 $ 20,000,000 $ 2,800,000 Desalination Plant $ 81,100,000 $ 80,600,000 $ 96,400,000 SWTP $ - Product Water Delivery $ 30,500,000 $ 25,200,000 $ 41,400,000 Common Components $ - Contractor's O&P $ 7,300,000 $ 10,900,000 $ 11,200,000 Implementation Costs $ 26,700,000 $ 30,700,000 $ 27,700,000 ROW/Land Acquisition $ - $ 1,000,000 $ 3,300,000 Contingencies $ 31,300,000 $ 33,700,000 $ 36,600,000 Total Capital $ 187,600,000 $ 202,100,000 $ 219,400,000 Total Annual O&M $ 11,300,000 $ 10,100,000 $ 9,300,000 Cost of Water ($/AFY) $ 2,290 $ 3,350 $ 3,440 Annual Production (AFY)10,5008,800

Table 13 – Sensitivity Analysis 26 Assumptions (No SWTP Regional Phase 1 Project) Net Benefit Before Sensitivity Net Benefit After Sensitivity Percent Change Notes Obtain Grant Funding $1,060 AFY$1,320+24% Assumed $40 million in grants. Potential exists for greater levels of grant funding. 50% Increase in Capital Costs with no grant funding $1,060 AFY$450-42% Doubling the capital costs of the Regional Project with no Federal or State grants results in a unit water cost that is still $450/AF less than to the CAW North Marina Alternative. 50% Increase in capital costs and obtain grant funding $1,060 AFY$710-67%Doubling the capital costs of the Regional Project but including Federal and State grants increases the unit cost of water by 67%, which is still $710/AF less than the CAW North Marina Alternative.

Regional Project – Phase 1 Implementation Schedule 27 Project Component Anticipated Water Delivery Date Seaside Aquifer Storage & Recovery2009 Sand City Desalination2009 Recycled Water for Urban Irrigation2010 Regional Desalination Project2012 Surface Water Treatment Plant2014