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Home My WebLink AboutStaff Report 2409-35034.Discussion with San Francisco Public Utilities Commission’s Assistant General Manager of the Water Enterprise: Operations, Drought Planning, and Alternative Water Supply Planning (DISCUSSION 8:00 PM – 8:45 PM) Guest Speaker: Steve Ritchie, Assistant General Manager/Water Enterprise, and Alison Kastama, BAWSCA/Wholesale Customer Liaison Item No. 4. Page 1 of 1 Utilities Advisory Commission Staff Report From: Alan Kurotori, Utilities Chief Operating Officer Lead Department: Utilities Meeting Date: October 9, 2024 Report #: 2409-3503 TITLE Discussion with San Francisco Public Utilities Commission’s Assistant General Manager of the Water Enterprise: Operations, Drought Planning, and Alternative Water Supply Planning RECOMMENDATION This is a discussion with San Francisco Public Utilities Commission’s Assistant General Manager of the Water Enterprise. No Utilities Advisory Commission action is requested. EXECUTIVE SUMMARY The City of Palo Alto receives 100% of its potable water from the San Francisco Public Utilities Commission (SFPUC) through the Hetch Hetchy Regional Water System (RWS). Approximately 85 percent of this supply is from the Tuolumne River in the Sierra Nevada, delivered through the Hetch Hetchy aqueducts, and approximately 15 percent is treated water produced by the SFPUC from its local watersheds and facilities in Alameda and San Mateo Counties. The SFPUC owns and operates the RWS which serves 2.7 million residents and thousands of businesses in the San Francisco Bay Area. Steve Ritchie SFPUC’s Assistant General Manager of the Water Enterprise will present to the UAC. Mr. Ritchie will provide an overview of SFPUC’s operations, drought planning, and Alternative Water Supply Plan. ATTACHMENTS Attachment A: Presentation AUTHOR/TITLE: Alan Kurotori, Utilities Chief Operating Officer 1 Overview, Drought Planning & Alternative Water Supply Plan Steven R. Ritchie October 2024 Operated by the San Francisco Public Utilities Commission SFPUC Overview and Water Supply (Drought) Planning 2 •24/7/365 Perpetual Service: •As a critical public service, we have no end date to our operations. •Every day 2.7 million residents and thousands of businesses rely on the Hetch Hetchy Regional Water System for drinking water for public health, fire protection, and all aspects of their daily lives/businesses. •85% of the supply comes from the Tuolumne River, the remaining 15% is from local watersheds and reservoirs. •Smart Operations and Drought Planning: •Our daily operations emphasize high water quality and long-term water supply reliability. •Having junior water rights on the Tuolumne River means we have rights to very little water in dry years, but plenty of water in very wet years. As a result, we are very reliant on our stored water for reliability. 3 •Smart Operations and Drought Planning: •Our management decisions and planning are guided by “Water First”, Experience, and Risk Management. •“Water First”: Water supply is top priority with hydropower generation a secondary consideration. •Experience: 1987-92 and recent droughts were very real and can be repeated or worse. •Risk Management: How bad can conditions get, knowing that we cannot operate to zero storage at any point? Zero water in storage means no cushion for the next potential dry water year. •Drought Planning: We analyze a drought worse than that of 1987-92 by adding two additional dry years. SFPUC Overview and Water Supply (Drought) Planning 4 O’Shaughnessy Dam Upstream Face – March 1991 All outlets except for Canyon Tunnel are dry Wise Water Use and Regular Planning 5 •Active Conservation Programs: •Both in San Francisco, and, through BAWSCA, regional efforts are always underway to promote conservation and the wise use of water. •Among the Lowest Consumption Per Capita in the State •San Francisco currently averages 41 gallons of residential per capita use, and Wholesale Customers average 55.1 gpcd (a 52% decrease since 1975-78 in residential per capita use). •Urban Water Management Planning •Every 5 years, all water agencies need to demonstrate that they have enough supply to accommodate anticipated growth over the ensuing 25 years. Challenges Ahead 6 •2018 Adopted Bay-Delta Plan: •Unimpaired flow paradigm and existing agreements may require up to 93 million gallons per day (mgd) of impact to Regional Water System supplies. Healthy Rivers and Landscapes Program is an alternative being considered by the State. It also contains greater instream flow contributions but less than the Bay-Delta Plan. •State Actions: Curtailment, Proposed Legislation •Potential impact on water rights. •Population Growth and Demand Hardening •Population will continue to grow (e.g. State Housing General Plan Elements). Demand can only be reduced to a certain amount. •Climate Change •UMass Amherst Long-Term Vulnerability Study of our system shows shifts for more precipitation as rain than snow, with changes in runoff patterns. Alternative Water Supply Plan for the Regional Water System 7 Plan for Obligations, Build for Demands 8 •This plan was requested by both the San Francisco Public Utilities Commission and the BAWSCA Board of Directors. •This is not an adopted plan. •It is not a plan to construct any particular project or projects. •It is a living planning document that gives decision-makers information regarding potential future water supply issues and potential actions to augment the Regional Water System supplies to retain our current, appropriate risk management approach. Plan for Obligations, Build for Demands 9 •Regional Water System Existing and Potential Obligations: •The Supply Assurance of 184 mgd for the Wholesale Customers •Supply allocation of 81 mgd for San Francisco •San Jose and Santa Clara combined supply assurance of 9 mgd •Combined total of 274 mgd •Total Regional Water System Demands •244 mgd based on 2020 Urban Water Management Plans Plan for Obligations, Build for Demands 10 Alternative Water Supply Projects Throughout the Service Area 11 1. Daly City Recycled Water Expansion 2. PureWater Peninsula 3. South Bay Purified Water 4a. Los Vaqueros Reservoir Expansion (LVE) 4b. Supply Alternatives for LVE 4c. Conveyance Alternatives for LVE 5. ACWD-USD Purified Water 6. Calaveras Reservoir Expansion Alternative Water Supply Plan Recommendations and Actions 12 •Consider decisions on projects that are close to construction •Los Vaqueros Reservoir Expansion •Daly City Recycled Water Expansion •Advance the planning of Purified Water Projects •South Bay Purified Water •PureWater Peninsula • ACWD-USD Purified Water •Hire a Purified Water Program Manager Alternative Water Supply Plan Recommendations and Actions 13 •Further develop supplies from existing and other projects •Regional Groundwater Storage and Recovery Project •Alameda Creek Recapture Project •San Francisco Groundwater Project •PureWaterSF •Potential projects with Turlock and Modesto Irrigation Districts •Develop additional demand scenarios •Explore the feasibility of a Regional Water System grant program Financial Update 14 Total dollars spent for the AWS Program between July 2020 and May 2024: $12.4 million Financial Update 15 •Earlier this year, the SFPUC approved a 10-year Capital Improvement Plan, including funding for AWS regional project planning. The FY2025-34 CIP totals: •$1.63 Billion Regional Water, $1.53 Billion Hetchy Water •The AWS Program represents $260.1M in the 10-year plan •In FY24-25 thru FY25-26, $10.89M in AWS spending is planned. •This funding supports Purified Water and Other Studies, Daly City Recycled Water Expansion Project, and South Bay Purified Water Project. Financial Update 16 •Delivering our significant CIP takes sound financial planning. •This includes: •Smart infrastructure planning and investment •Low-cost debt funding (SRF, WIFIA, Tax-Exempt Bonds) •Conservative Financial Policies: Reserve, Debt Coverage, Ratepayer Affordability •Numerous proactive audits •Setting rates compliant with Prop 218 and the Water Supply Agreement •As such, we plan our finances to support our infrastructure needs without overly burdening our constituents. What Is San Francisco Doing In Its Retail Service Area? 17 Recycled Water Expansion •Maximizing recycled water use for large- scale irrigation with the construction of the Westside Recycled Water Project •Established and expanded ordinance since 2012, with 45 systems permitted and 29 planned •Continuing to seek new technologies to generate water savings and supplies at every scale (e.g., atmospheric water generation, efficient point-of-use fixtures) Innovations Program Groundwater Expansion Onsite Water Reuse Conservation Program •Robust active conservation program for over 30 years •Leak Alert Program has resulted in estimated savings of 73 million gallons in FY 2022-23 •Implementing recommendations of independent Pacific Institute review •Plans to continue expanding use in drinking water supply (up to 4 mgd) FYE 2025 Projected Wholesale Rate FYE 2025 Rate = $327.6𝑀𝑀−$4.3M+$19.4𝑀𝑀127.4 𝑀𝑀𝑀𝑀𝑀𝑀=$5.55/𝑐𝑐𝑐𝑐𝑐𝑐 FYE 2025 Rate Increase = 6.5% Factors driving rate increase: •Growth in capital spending •Continued low water usage •Balancing account being drawn down to make up for deferral in FYE 2024 Wholesale Revenue Requirement −Fixed Fee ±Balancing AccountWholesale VolumesWholesale Rate = 1 2 Adopted / Forecasted Rates $ 4.10 $ 4.10 $ 4.10 $ 4.10 $ 4.10 $ 4.75 $ 5.21 $ 5.55 $ 5.63 $ 5.93 $ 6.37 $ 6.60 Rate Change 9.3%0.0%0.0%0.0%0.0%15.9%9.7%6.5%1.4%5.3%7.4%3.6% Account $ 3.64 $ 4.14 $ 3.70 $ 3.98 $ 4.56 $ 5.34 $ 5.37 $ 5.24 $ 5.63 $ 5.92 $ 6.38 $ 6.59 2 Historic and Projected Wholesale Rates Questions? 33