1. OWASA – UNC Water Reuse System Project: A Technical and Financial Partnership to Promote More Sustainable Water Management

2. About OWASA…  Serve ~80,000 people, 20,000 accounts  ~ 9 mgd average-day demand (UNC ~ 2.4 mgd) (UNC ~ 2.4 mgd)  3.4 billion gallon reservoir system  ~11.5 mgd safe yield  20 mgd WTP  14.5 mgd WWTP

3. Mason Farm WWTP Jones Ferry Road WTP

4.  OWASA was created in 1977  Water and sewer utilities were previously owned & operated by Carrboro, Chapel Hill and UNC  Contractually obligated to meet the water/sewer needs of the Towns and University as determined by the Towns and University

6. 2002 Drought Was Call for Action  Board-adopted goals for sustain- ability, environmental responsibility, and water conservation and reuse  OWASA’s water conservation program is part of our long-term supply plan – not simply short-term drought response management  Water reuse a very key strategy

7. Demands Have Been Stable

8. UNC’s Peak Demand Ratios are Higher Than Our System- wide Peaking Ratios

9. Is Water Reuse Feasible? Initially Evaluated in 1995 – Not Pursued Initially Evaluated in 1995 – Not Pursued 2002 Drought Led to Joint Re-evaluation 2002 Drought Led to Joint Re-evaluation 2003-2005 Study 2003-2005 Study Technical, economic, and environmental feasibility analysis Technical, economic, and environmental feasibility analysis Pilot-scale testing Pilot-scale testing Microbiological study Microbiological study Mason Farm WWTP upgrade underway Mason Farm WWTP upgrade underway UNC main campus expansion underway UNC main campus expansion underway

10. OWASA-UNC Reuse Project Feasible for use in cooling towers Feasible for use in cooling towers Feasible for irrigation use, toilet flushing Feasible for irrigation use, toilet flushing Other uses may also be possible Other uses may also be possible South Chiller Cooling Tower Cogeneration Plant Cooling Tower

11. Potential Reuse Demands* vs. Projected Potable Water Demands *Demands shown are for cooling tower make-up water and irrigation uses, only. Potential demands may be higher if other uses are met through reuse. Water reuse may also be a strategy for meeting Carolina North water needs, but that potential is not reflected in the above table. ReclaimedPotableTotalReclaimed Water Demandas % of (mgd) Total 20090.668.218.877.4% 20281.9410.9612.9015%

12. General Layout of the Planned Water Reuse System

13. Peak Day Demands – No Reuse

14. Reuse Defers WTP Expansion

15. Reduction in Water Revenue Year 1 Year 1 660,000 gpd loss in potable sales 660,000 gpd loss in potable sales > $1,000,000 revenue reduction in Year 1 > $1,000,000 revenue reduction in Year 1 Direct costs only reduced by $380,000 Direct costs only reduced by $380,000 (Less energy and chemicals for potable water) ~ 3.6% increase in water rate needed to balance water revenues ~ 3.6% increase in water rate needed to balance water revenues Projected RCW rate of @ $2.40/1,000 Projected RCW rate of @ $2.40/1,000 > $466,000 direct/indirect O&M costs > $466,000 direct/indirect O&M costs

16. Deferred Capital Costs Could defer 5 capital projects for several years through reuse/conservation Could defer 5 capital projects for several years through reuse/conservation Net Present Savings of project deferrals > $3,000,000 in next 9 years Net Present Savings of project deferrals > $3,000,000 in next 9 years Potential deferral/elimination of > $40 million to go to Jordan Lake Potential deferral/elimination of > $40 million to go to Jordan Lake

17. OWASA-UNC Reuse Project Sustainable management strategy Sustainable management strategy Save drinking water for human use Save drinking water for human use Reduce community’s risk to droughts Reduce community’s risk to droughts Reuse supply less vulnerable to drought Reuse supply less vulnerable to drought Locally controlled source Locally controlled source Reduce discharge of nutrients Reduce discharge of nutrients Reuse is cost-effective, safe and reliable approach for meeting multiple objectives

18. UNC > $10,000,000 for Phase I > $10,000,000 for Phase I $1.866 million CWMTF grant $1.866 million CWMTF grant $0.625 million EPA grant $0.625 million EPA grant Payback < 10 years Payback < 10 years UNC pays $5.85/1,000 gallons for all potable water use during May-Sept. and $3.08/1,000 gallons in all other months UNC pays $5.85/1,000 gallons for all potable water use during May-Sept. and $3.08/1,000 gallons in all other months

19. OWASA Positions… Water customers cover revenue loss Water customers cover revenue loss No subsidy of RCW capital or O&M by customers No subsidy of RCW capital or O&M by customers No reimbursement to UNC No reimbursement to UNC OWASA owns and operates system OWASA owns and operates system If RCW is down, UNC to pay for potable water at then-current water rate If RCW is down, UNC to pay for potable water at then-current water rate

20. OWASA-UNC Reuse Project OWASA-UNC reuse contract: April, 2006 OWASA-UNC reuse contract: April, 2006 UNC to pay full cost (less grants) UNC to pay full cost (less grants) Construction now underway Construction now underway Pump station/storage tank at WWTP Pump station/storage tank at WWTP 8,000 ft. of 24-inch main to south campus 8,000 ft. of 24-inch main to south campus Phase I: 7,000 ft. of pipe on main campus Phase I: 7,000 ft. of pipe on main campus Projected Start-up: March 2009 Projected Start-up: March 2009

21. Is Reuse in Your Future? Rates Rates Non-potable demands (current/future) Non-potable demands (current/future) Proximity of demands Proximity of demands WWTP capability WWTP capability Supplemental funding Supplemental funding Full cost recovery may not be possible Full cost recovery may not be possible Incentives for reuse may be needed Incentives for reuse may be needed

22. Thank You If you would like more information about the OWASA-UNC reuse project or OWASA’s conservation efforts, please contact: Patrick (Pat) Davis Utility Manager OWASA P.O. Box 366 Carrboro, NC 27510-0366 Telephone:919-537-4210 (Direct) Email:pdavis@owasa.org pdavis@owasa.org OWASA Website:www.owasa.org www.owasa.org

23. Increasing Block Rates for Residential Customers

24. Financial Goals Full-Cost Recovery Full-Cost Recovery National survey (1) National survey (1) 34% of systems have performed a cost of service analysis 34% of systems have performed a cost of service analysis Only about 14% of reclaimed water systems in US are fully recovering their RW system costs Only about 14% of reclaimed water systems in US are fully recovering their RW system costs (1) AWWA/WEF Water Reuse Rate Survey presented by Ken Thompson at 2004 Water Sources Conference, January 2004

25. Monthly Water Use by Residential Customers