Some of the thinking of the San Diego County Water Authority (SDCWA) about the ongoing negotiations over the purchase of water from the Carlsbad desalination plant were revealed at a special board of directors meeting on 14 June 2012.
Total capital costs (capex) for the seawater reverse-osmosis project, including financing costs, now range between US$ 870 million and US$ 970 million. Operating and maintenance (O&M) costs are estimated at US$ 49‑56 million/year.
It was also revealed that the SDCWA had been examining reducing the plant size from 50 MGD (189,000 m³/d) to 40 MGD (151,000 m³/d), either with or without a possible expansion to 50 MGD. An additional component of this would be to establish a lower fixed commitment based on wet or multi-year demand, with flexibility to purchase additional supplies in normal or dry years.
Eventually, the SDCWA officers came up with two possible configurations:
· A 50 MGD plant and pipeline with a 12 MGD (45,420 m³/d) production minimum to align with low winter demand
· A 40 MGD plant with a 10 MGD (37,850 m³/d) minimum.
The 50 MGD plant was considered the most cost-effective, because reducing the capacity by 20% resulted in less than 10% capex savings. It also aligned better with the authority’s demand profile.
Analysis of 110 years of hydrology indicated that 75‑80% of the time, demand in a wet year would exceed 50,000 acre‑ft/year (AFY) (61.7 million m³/year). It would also allow the authority to receive its contract minimum from Twin Oaks Water Treatment Plant and avoid penalties.
The staff therefore concluded that SDCWA should establish 48,000 AFY (59.2 million m³/y) as its contractual minimum delivery. Deliveries over this amount would be at the authority’s discretion and subject to a variable charge to be negotiated.
The presentation made it clear that payments were entirely linked to water production – no water, no payment. The risks of construction and operation were transferred to project promoter Poseidon Resources, the meeting was told.
Of total capex, the conveyance pipeline accounts for US$ 140‑150 million, while the finance cost is estimated at US$ 200‑250 million. Electricity accounts for around 53% of the O&M costs.
Indirect costs such as pipeline rehabilitation and treatment plant modifications add another US$ 60‑68 million to the capex total and US$ 2‑4 million to the O&M.
The workshop was told that the water unit price, with conveyance and water authority improvements, would range between US$ 2,062 and US$ 2,329/AF (US$ 1.67‑1.89/m³). This broke down as follows:
Fixed costs – debt service charge, equity charge, fixed O&M and electricity
US$ 1,172‑1,327/AF (US$ 0.95‑1.08/m³)
Variable costs – O&M and electricity
US$ 515‑530/AF (US$ 0.42‑0.43/m³)
Conveyance
US$ 268-302/AF (US$ 0.22‑0.24/m³)
Water authority improvements
US$ 70-87/AF (US$ 0.06‑0.07/m³)
Twin Oaks WTP inefficiencies
US$ 37-83/AF (US$ 0.03‑0.07/m³)
·Time to upgrade Carlsbad SWRO design to NF‑SWRO Hybrid ? Register free and read this feature from the May/June 2012 issue of D&WR.