1. Eric Hansen, P.E. Capital Planning Program CPUC Recycled Water Order Instituting Rulemaking (R. 10-11-014) San Francisco January 20, 2012 Workshop 3: Understanding Wholesale and Retail Recycled Water Costs, Distinct Customer Classes, Revenue Requirements, and Recycled Water Rates

2.   Rate ≠ Cost

5. SBWR Transmission Pump Station

6. SBWR System 120 Mile Pipeline 4 Pump Stations 2 Reservoirs 9.5MG 615 Customers 10 MGD or 10K AFY 3 Billion Gallons

7. San Jose/Santa Clara Water Pollution Control Plant Dumbarton Bridge Artesian Slough (Discharge) South San Francisco Bay (Silicon Valley)

8. SBWR System and Potential Extensions

9. San José/Santa Clara Water Pollution Control Plant Joint Powers Authority Administered by the City of San José Serves over 1,500,000 people that live and work in the 300-square mile area encompassing San Jose, Santa Clara, Milpitas, Campbell, Cupertino, Los Gatos, Saratoga, and Monte Sereno.

10. Developer Pays

11. Government Pays “…design and construction of demonstration and permanent facilities to reclaim and reuse water in the San José metropolitan service area" (Title XVI of Public Law 102-575 Reclamation Projects Authorization and Adjustment Act of 1992, Section 1607)

12. $6.46 million offered towards construction of up to 10 projects 8 projects with an estimated cost of $14.77 million selected for construction, operation by 9/30/11 Additional projects may be built if significant cost savings or additional funds are available. 2009 American Recovery and Reinvestment Act Funded Projects SBWR Phase 1C Projects Project Cost AFY 1.SC Central Park $4.30110 2.SJ Airport $1.72100 3.SCIndustrial 1 $0.75300 4.SBWR Laterals &Garden $0.98105 5.SJ State University $0.79135 6.SC Industrial 2 $1.90140 7.SC Industrial 3A$5.30500 8.SJ School Extensions$1.14100 Total Phase 1C Improvements 14.78 1500-2000

13. Statewide Inter-regional Cooperation lCommon issues lShare tools lPolitical “clout” BARWRPBARWRP SCCWRRSSCCWRRS

14. BARWC Brings Communities Together and Promotes Sustainable Water Use

15. 40-Year Partnership $53 million

18. Comparison of Advanced Treatment Methods for Partial Desalting of Tertiary Effluents http://www.usbr.gov/pmts/water/publications/reportpdfs/report097.pdf $300/AF $2.5 million/7,300AF $330/AF

20. San José‘s Green Vision Goal #6 San José’s Ordinance…

24. Ground Water Rate FY 11-12 - $569/AF Irrigation Discount ($105)/AF Irrigation Wholesale Rate - $464/AF Industrial Discount ($325)/AF Industrial Wholesale Rate - $244/AF

25. Other Incentives… U.S. Green Building Council and LEED Certification The right thing to do…

26. South Bay Water Recycling “Providing drought proof, high-quality water for our community.” SAFE

29. N+1 N+1 redundancy is a form of resilience that ensures system availability in the event of component failure. “Data center power generators that activate when the normal power source is unavailable.” Silicon Valley Power and PG&E Recycled Water and Potable Water

33. BenefitsWhat does this mean? What Else? Locally Sustainable Water Supply Not Subject to Regulatory Droughts Less impacted by imported water rate increases Pay bills during regulatory droughts Economy becomes robust, demand increases Energy ConservationCan we get benefits from State on energy reduction? Economic DevelopmentCan we get benefits from State? Tax incentives to convert? Drought ProofN+1Backup in a catastrophe

34.  Rate ≠ Cost Benefit = Cost?