Economic Analyses of BMPs for The Cedar Creek Reservoir...

1CCRWS7/20/2009

Agriculture is Life.

Stakeholder MeetingWatershed Protection Plan

Development for theCedar Creek Reservoir Watershed (CCRWS)

July 20, 2009Kaufman, Texas

North Central TexasWater Quality Project (NCTXWQ)

2CCRWS7/20/2009

Economic Analyses of BMPs forEconomic Analyses of BMPs forThe Cedar Creek Reservoir WatershedThe Cedar Creek Reservoir Watershed

M. Edward Rister, Ronald D. Lacewell, Allen W. Sturdivant, Taesoo Lee, Raghavan "Srini" Srinivasan, Balaji Narasimhan,

Clint Wolfe, David Waidler, Darrel Andrews, Mark Ernst, and Jennifer Owens

Department of Agricultural EconomicsDepartment of Ecosystem Science and Management, Spatial Sciences Laboratory

Texas AgriLife Research, Dallas Urban Solutions CenterTarrant Regional Water District


Funding provided by the Natural Resources Conservation Service (NRCS), Environmental ProtectionAgency (EPA) and Cooperative State Research, Education, and Extension Service, U.S. Department ofAgriculture (CSREES). Research conducted under Hatch project #s H-9050 and TEX09161.

3CCRWS7/20/2009

NCTXWQ CCRWS Project Collaborators, 1 of 5NCTXWQ CCRWS Project Collaborators, 1 of 5Texas AgriLife Extension Service, Biological and Agricultural Engineering

Dr. Bruce Lesikar Justin MechellMolly Griffin Ryan Gerlach

Texas AgriLife Extension Service, County Agents (CEA)Ralph Davis, Kaufman County CEATodd Williams, Rockwall County CEA

Kaufman County Environmental CoopMarilyn May

Kaufman County Master Gardener AssociationBrad Ackerman

Agriculture is Life.4CCRWS7/20/2009

NCTXWQ CCRWS Project Collaborators, 2 of 5NCTXWQ CCRWS Project Collaborators, 2 of 5Natural Resources Conservation Service (NRCS)

State Steve UseltonDonna Long

LocalJulie MooreRonnie BeerwinkleGlenn Lubke

Texas State Soil and Water Conservation State Board (TSSWCSB)Lee MunzAaron Wendt

Kaufman-Van Zandt Soil and Water Conservation DistrictZach KinseyMark WiseMike BengeCecil Chaney


5CCRWS7/20/2009

NCTXWQ CCRWS Project Collaborators, 3 of 5NCTXWQ CCRWS Project Collaborators, 3 of 5Texas Commission on Environmental Quality (TCEQ)

Jon MummertArt CroweRob CookBill Carter

Texas Parks and Wildlife Department (TPWD)Adam WhisenantRichard Ott

Texas AgriLife Research and Extension Urban Solution Center, DallasDr. Allan Jones Tamaron Hunt

Texas A&M AgriLife Research and Extension, Texas Water ResourcesInstitute

Dr. Bill HarrisLucas Gregory


NCTXWQ CCRWS Project Collaborators, 4 of 5NCTXWQ CCRWS Project Collaborators, 4 of 5Espey Consultants, Inc.

Bill EspeyDavid HarkinsMargarethe Berge

Alan Plummer Associates, Inc.Alan PlummerDr. Robert AdamsBetty JordanBill RatlifKen LawrenceRanjan Muttrah

Tarrant Regional Water District (TRWD)Woody Frossard


7CCRWS7/20/2009

NCTXWQ CCRWS Project Collaborators, 5 of 5NCTXWQ CCRWS Project Collaborators, 5 of 5

Numerous Stakeholders!!!!


Problem• Tarrant Regional Water District (TRWD)

owns/operates four (4) major water-supply reservoirs (impacting 1.6 million) » realizing increased/problematic levels of:

● sediments● nutrients (nitrogen, phosphorous)

» seeking to develop plan forreducing/preventing intrusion via most cost-effective portfolio of BMPs

Water-Quality with BMP ECONOMICS©

9CCRWS7/20/2009

http://www.trwd.com/TRWD_reservoirs.asp

Ft. Worth

Dallas

TRWD Raw Municipal Water Source Reservoirs

10CCRWS7/20/2009

Cedar Creek ReservoirTotal Watershed Area 1007 mi2

260,817 ha – 644,480 acres

11CCRWS7/20/2009

Cedar Creek ReservoirSub-Watersheds’ Contribution to P Load

12CCRWS7/20/2009

CCRWSAnnual Inflows and Target Reductions

Cedar Creek Reservoir Average Annual Load (1991-2001)

Item Metric English

P -35% 188,670 kg 208.0 -72.8 ET

N 1,419,380 kg 1,564.6 ET

Sediment 450,000 MT 496,035.0 ET

Black: Annual InflowsRed: Target Reduction in Annual FlowsKg: 2.2 lbsMT: 2,204.6 lbsET: 2,000 lbs

13CCRWS7/20/2009

CCRWS Best Management Practices (BMP) Categories

14CCRWS7/20/2009

Cedar Creek Reservoir WatershedBest Management Practices (BMP) Challengers#001 Cropland to Grass#001A Contour Farming#003 Nutrient Mgmt#004 Filter Strip#006 Grassed Waterways#007 Terracing

#101 Prescribed Grazing#105 Pasture Planting#107 Crit. Pasture Planting#402 Grade Stabilization

#s201-9 Phase II Urban BMPs#210 Voluntary Urban Nutrient Mgmt#211 Required Urban Nutrient Mgmt

2,000 ft Buffer Strip

#301A Rip. Buff. Strips — non-critical

#302 Rip. Buff. Strips — critical#401A1 Wetland – L. Kings Creek #401B1 Wetland - End Cedar Creek

#501 Hypolimnetic Aeration#502B P Inactivat. w/ Alum – 1/3#505 Hypolimnetic H2O Release

#701 WWTP - - Level I to II#702 WWTP - - Level I to III

15CCRWS7/20/2009

Cedar Creek Reservoir Watershed Which BMPs to Select?

16CCRWS7/20/2009

Cedar Creek Reservoir Watershed Objective of BMP Economic Analyses

Identifying how to obtain the most ‘bang’ for the

‘bucks’!, i.e., the least-cost solution.

17CCRWS7/20/2009

Cedar Creek Reservoir WatershedSteps in Economic Analyses

and Current Status• Considerable time involved in developing and linking financial

and economics optimizing models as well as in identifying and assimilating appropriate data, including incentive payments and contingency allowances.

• Series of validation meetings with TRWD management and other team members.

• Several, intermittent, validation meetings with stakeholders.• Focused verification meeting with ag producers – adoption rates.• Intermediate results prompted TWRD management to revisit

selected BMP data and expand scope of desired Sensitivity Scenario Analyses.

• BMP ECONOMICS© model revised in May-June 2009.• Baseline and Sensitivity Scenarios analyzed July 15-16, 2009.• Results validated with project team July 17, 2009.• This presentation developed this weekend.• Development of final report in progress. 18

CCRWS7/20/2009

Cedar Creek Reservoir Watershed RESULTS!

19CCRWS7/20/2009

CCRWS Data-- P reduction for each BMP

20CCRWS7/20/2009

CCRWS Data -- Annuity Equivalent costs for each BMP

21CCRWS7/20/2009

CCRWS Data -- Initial Construction Costs for each BMP

22CCRWS7/20/2009

CCRWS Data -- Annual O&M plus Interm. Cap. Replacement Costs for each BMP

23CCRWS7/20/2009

CCRWS Data -- Annuity Equivalent costs per English ton of P reduction for each BMP

24CCRWS7/20/2009

CCRWS Data -- Annuity Equivalent costs per reduced English ton of P for each BMP; BMPs in ascending order of $/P unit cost

25CCRWS7/20/2009

CCRWS BMP Activity Constraints

BMP Category Description Type Constraint

#211 Urban

Required Urban Nutrient Mgmt in 2,000 ft Reservoir Buffer Strip Binary - 0,1

#401A ChannelWetland - Lower Kings Creek (SB 54) Binary - 0,1

#401B ChannelWetland - End Cedar Creek (SB 70) Binary - 0,1

#501 Reservoir 'In-Lake' Hypolimnetic Aeration Binary - 0,1

#502B Reservoir 'In-Lake'P Inactivation with Alum – 1/3 of Reservoir Binary - 0,1

#701 WWTP WWTP - - Level I to II Binary - 0,1

#702 WWTP WWTP - - Level I to III Binary - 0,1

#001A & #007 CroplandContour Farming & Terracing

Linked -- one but not both

#701 & #702 WWTPWWTP from Level I to II or III

Linked -- one but not both

26CCRWS7/20/2009

CCRWS Data -- Annuity Equivalent costs per reduced English ton of P for each BMP; BMPs in ascending order of $/P unit cost;

recognition of activity constraints

27CCRWS7/20/2009

CCRWSBMP ECONOMICS©

-- optimization component (LINDO)

• Several scenarios considered– (A) Baseline, focused on reducing P by 35%– (B) Sensitivity w.r.t. P reduction levels– (C) Sensitivity w.r.t. Combined Nutrient/Sediment

Reduction and Value of Sediment Reduction– (D) Sensitivity w.r.t. Categories/BMPs

• Results of importance– Objective function value (AE)– BMPs in the solution– Nutrient/Sediment Reduction Levels– Financial costs

– Initial construction– Operating & Maintenance plus Intermittent

Capital Replacement of Selected Components– Other details available 28

CCRWS7/20/2009

CCRWSBMP ECONOMICS©

-- optimization component (LINDO)(A)Baseline

– Focused on reducing P inflow by 35% (72.8 ET)– 22 BMPs considered (challengers)– S.W.A.T. estimated effectiveness of BMPs– Subjective assessment of BMPs adoption

• Revised BMPs effectiveness levels– Calculated costs for each BMP

• Area affected / number of installations• Expected useful life• Initial construction costs (NPV)• Annual Operating & Maintenance plus Intermittent

Capital Replacement of Selected Components• Identified comparable annual costs (AE)

– Considered constraints on BMP implementation• Binary (none or all – 0,1)• Linked (one or the other, but not both)

29CCRWS7/20/2009

BMP ECONOMICS© RESULTSCCRWS Baseline Scenario

Optimal Solution

Scenario

Label / Annual

Cost (AE)

BMPs

Cropland Pasture Urban ChannelReserv

oirWWTP

001

001A

003

004

006

007

101

105

107

402

201t209

210

211

301A

302

401A

401B

501

502B

505

701

702

Integer BMPsLinked BMPs

Baseline, reduce P 35% $ 2.25 mil .66

In solution at maximum level; In solution at partial level; Blocked from being included in the solution

30CCRWS7/20/2009


Financial and Load Reduction Performance Details

Scenario

Label / Total Annual

Cost (mill. AE)

O&M and

Interm. Cap. Repl. Costs (mill. AE)

Init. Constr. Costs (mill. AE)

Init. Constr. Costs (mill. NPV)

Load Reduction (ET)

P N SedBaseline, reduce P 35% $ 2.25 $1.40 $ 0.84 $13.0 72.8 392.4 126.5K

31CCRWS7/20/2009


-- finances of the optimal solution

$2.25 million$13.0 million

32CCRWS7/20/2009

CCRWS Baseline Results -- Indication of Optimal BMPs and Annuity Equivalent

costs per reduced English ton of P for each BMP

X

Int Int66%

Optimal BMPs Non-Optimal BMPs

33CCRWS7/20/2009

CCRWS BMP ECONOMICS© BASELINE RESULTS-- increasing marginal costs aspects

of the optimal solution

34CCRWS7/20/2009

CCRWS BMP ECONOMICS© BASELINE RESULTS-- costs of reducing P inflows

Labels Units Values

Description n/a Base

Total AE Cost $ $ 2.25 Mill.

Reductions in P % 35

Reductions in P English tons 72.8Marginal Cost of Another Unit of P Reduction $/English tons $ 70,289

Average Cost per Unit of P Reduction $/English tons $ 31,743

35CCRWS7/20/2009

CCRWSOptimal Baseline Solution Observations

• 35% P reduction is achievable

• Baseline annual costs are approx. $2.25 million

• Up front, time 0, initial construction cash costs are approximately $13.0 million

• A portfolio of BMPs is optimal

• Inclusion of ag-related BMPs is cost-effective

• Some BMPs are relatively cost inefficient

• Optimal economic solution is based on a myriad of factors

36CCRWS7/20/2009

CCRWS Sensitivity Scenario Analyses –What if ??? ….

• Optimal economic solution is based on a myriad of factors.

• Are there other solutions with similar costs? i.e., How dominant is the optimal solution?

• How do various assumptions imposed on the analysis affect the results?

• What are the tradeoffs in targeting different P reduction levels?

• What are the implications of simultaneously targeting reductions in P, N, and Sed?

• Does valuing sediment reduction, recognizing delayed requirements for constructing reservoirs, affect the optimal solution?

• If BMPs in each category are required to reduce the load associated with that category, what are the implications?

• If different categories of BMPs are excluded (or mandatorily included), what are the consequences?

37CCRWS7/20/2009

Sensitivity Scenario Analyses –Testing the Dominance of Optimal Solution

AE $

Alternative BMP Portfolio Solutions

$2.25 million

AE $

Alternative BMP Portfolio Solutions

$2.25 million

VERSUS

38CCRWS7/20/2009

BMP ECONOMICS©

-- CCRWS Sensitivity Scenario Analyses

(B1) What are the consequences associated with targeting different P reduction levels?

-/+ % about baseline target of 35% reduction

39CCRWS7/20/2009

BMP ECONOMICS© RESULTSSensitivity Scenario B1

Optimal Solution

Scenario

Label / Annual

Cost (AE)

BMPs


oirWWTP

001

001A

003

004

006

007

101

105

107

402

201t209

210

211

301A

302

401A

401B

501

502B

505

701

702


Sensitivity, reduce P 25% $ 0.91 mil .59





In solution at maximum level; In solution at partial level; Blocked from being included in the solution 40

CCRWS7/20/2009



Scenario

Total Annual

Cost (mill. AE)

O&M and




Load Reduction (ET)

P N SedSensitivity, reduce P 25% $ 0.91 mil $0.32 $ 0.59 $ 8.6 52.0 252.7 87.2KSensitivity, reduce P 30% $ 1.53 mil $0.87 $ 0.66 $ 9.7 62.4 289.8 107.9KBaseline, reduce P 35% $ 2.25 mil $1.40 $ 0.84 $13.0 72.8 392.4 126.5K

Sensitivity, reduce P 40% $ 3.42 mil $2.16 $ 1.25 $18.3 83.2 463.9 153.3KSensitivity, reduce P 50% $ 7.19 mil $4.76 $ 2.40 $23.4 104.0 632.8 180.1K

41CCRWS7/20/2009

CCRWSOptimal B1 Solution Observations• No big surprises• The higher the target P reduction level, the

higher the costs• BMPs come into the solution according to AE

$ per P unit, cheapest first• Integer constraints may result in lower cost non-

integer BMP being in solution at < 100%• Ag BMPs are important• Channel and Reservoir-In-Lake BMPs are

included in solution at high target P reduction levels

42CCRWS7/20/2009

BMP ECONOMICS©


(B2) What are the consequences associated with targeting different P reduction levels?

Consideration of probable inflow levels, based on frequency of historical flows, 1966-2002

43CCRWS7/20/2009

BMP ECONOMICS©

-- CCRWS Frequency Of Annual Inflows,H2O (m3/s)

average = 227.9 m3/s

44CCRWS7/20/2009

BMP ECONOMICS©

-- CCRWS Frequency Of Annual Inflows,P (ET)

average = 208.8 ET--->72.8 ET (35%)

45CCRWS7/20/2009

BMP ECONOMICS©

-- CCRWS Selected Targeted Frequencyof Annual Inflows, P (ET)

46CCRWS7/20/2009


Optimal Solution

Scenario

Label / Annual

Cost (AE)

BMPs


oirWWTP

001

001A

003

004

006

007

101

105

107

402

201t209

210

211

301A

302

401A

401B

501

502B

505

701

702


Sensitivity 10%,92.3ET 32.3ET $ 0.19 mill .23Sensitivity 25%,137.1ET 48.0ET $ 0.74 mill .26

Baseline, 208.2ET 72.8ET $ 2.25 mill .66

Sensitivity 50%,222.5ET 77.9ET $ 2.71 mill .44Sensitivity 75%,254.8ET 89.2ET $ 4.28 mill .10

Sensitivity 90%,295.1ET 103.3ET $ 7.04 mill .58

47CCRWS7/20/2009



Scenario

Total Annual

Cost (mill. AE)

O&M and




Load Reduction (ET)

P N SedSensitivity 10%,92.3ET 32.3ET $ 0.19 mill $ 0.15 $ 0.04 $ 0.2 32.3 138.8 57.3K

Sensitivity 25%,137.1ET 48.0ET $ 0.74 mill $ 0.51 $ 0.23 $ 1.7 48.0 245.5 98.7KBaseline, 208.2ET 72.8ET $ 2.25 mill $1.40 $ 0.84 $13.0 72.8 392.4 126.5K

Sensitivity 50%,222.5ET 77.9ET $ 2.71 mill $1.72 $ 0.99 $15.2 77.9 435.9 139.7KSensitivity 75%,254.8ET 89.2ET $ 4.28 mill $2.10 $2.17 $25.4 89.2 452.4 151.4KSensitivity 90%,295.1ET 103.3ET $ 7.04 mill $4.61 $2.42 $27.4 103.3 627.0 179.4K

48CCRWS7/20/2009

CCRWS Optimal B2 Solution Observations

• Again, no big surprises• Similar results to previous sensitivity

scenario• Higher levels of reduction require higher

annual budget and more upfront cash commitment for initial construction

• Highlights the issue of identifying the appropriate target P reduction level• 1-targeted frequency level represents % of

time some P inflows will not be mitigated• How much is “enough”?

49CCRWS7/20/2009

BMP ECONOMICS©


(C1) What are the consequences associated with targeting reductions in P, N, and Sed levels simultaneously?

50CCRWS7/20/2009

BMP ECONOMICS© RESULTSSensitivity Scenario C1

Optimal Solution

Scenario

Label / Annual

Cost (AE)

BMPs


oirWWTP

001

001A

003

004

006

007

101

105

107

402

201t209

210

211

301A

302

401A

401B

501

502B

505

701

702


Reduce P, N, and Sed by 25% $ 1.38 mill .49 .98

Reduce P, N, and Sed by 30% $ 2.23 mill .42 .05 .99


Reduce P, N, and Sed by 35% $ 3.87 mill .17 .55

Reduce P, N, and Sed by 40% $ 6.32 mill .42

Reduce P, N, and Sed by 50% $ 8.63 mill .95


51CCRWS7/20/2009



Scenario

Total Annual

Cost (mill. AE)

O&M and




Load Reduction (ET)

P N SedReduce P, N, and Sed by 25% $ 1.38 $ 0.67 $ 0.70 $ 8.2 52.0 311.3 124.0KReduce P, N, and Sed by 30% $ 2.23 $1.33 $ 0.90 $10.1 62.4 469.5 148.8KBaseline, reduce P 35% $ 2.25 $1.40 $ 0.84 $13.0 72.8 392.4 126.5KReduce P, N, and Sed by 35% $ 3.87 $2.79 $1.08 $18.2 77.4 547.8 173.6KReduce P, N, and Sed by 40% $ 6.32 $4.10 $2.22 $35.3 85.9 626.0 199.1KReduce P, N, and Sed by 50% $ 8.63 $6.00 $2.63 $42.9 104.0 722.2 208.4K

52CCRWS7/20/2009

CCRWSOptimal C1 Solution Observations• LP analysis approach facilitates evaluating

meeting more than one target objective simultaneously

• Reducing P, N, and Sed by same %s simultaneously is more expensive than Baseline, for both Total AE and Cash ICC• In Baseline, N and Sed reduction < 35%• ?What is appropriate target N and Sed reduction

level?• Attention to N & Sed encourages attention to

different portfolio of BMPs• Some BMPs do not reduce Sed

53CCRWS7/20/2009

BMP ECONOMICS©


(C2) What are the consequences associated with value reductions in Sed levels?

2,136 tons of Sed equivalent to one acre-foot of reservoir space

54CCRWS7/20/2009


Optimal Solution

Scenario

Label / Annual

Cost (AE)

BMPs


oirWWTP

001

001A

003

004

006

007

101

105

107

402

201t209

210

211

301A

302

401A

401B

501

502B

505

701



Sensitivity, Sed at $4,200 ac-ft $ 2.25 mil .66




55CCRWS7/20/2009



Scenario

Total Annual

Cost (mill. AE)

O&M and




Load Reduction (ET)

P N SedBaseline, reduce P 35% $ 2.25 $1.40 $ 0.84 $13.0 72.8 392.4 126.5KSensitivity, Sed at $4,200 ac-ft $ 2.25 $1.40 $ 0.84 $13.0 72.8 392.4 126.5KSensitivity, Sed at $5,000 ac-ft $ 2.25 $1.40 $ 0.84 $13.0 72.8 392.4 126.5KSensitivity, Sed at $6,000 ac-ft $ 2.25 $1.40 $ 0.84 $13.0 72.8 392.4 126.5K

56CCRWS7/20/2009

CCRWSOptimal C2 Solution Observations• In all of these scenarios, the optimal solution

is the same as that for the Baseline• An exception is the optimal LP objective function

value which is lowered as follows, recognizing credit of the non-cash value attributed to reducing Sed levels by the equivalent of 59.2 ac-ft:• $4,200 $248,672• $5,000 $296,038• $6,000 $355,246

• More than $6,000 per ac-ft value is required to favor those BMPs more productive in reducing Sed but not in the optimal Baseline solution

57CCRWS7/20/2009

BMP ECONOMICS©


(D1) What are the consequences associated with requiring BMPs in each category to mitigate the P loads associated with that category?

58CCRWS7/20/2009

BMP ECONOMICS©

-- CCRWS Sensitivity Scenario D1 Analyses

59CCRWS7/20/2009

BMP ECONOMICS©

-- CCRWS Sensitivity Scenario D1 Analyses

Reduction Level %

Annual P Inflow Level (ET)

35% 208

Category Source ET0.35 of 208 Source

ET

Maximum Possible

Reduction ET

Source %s

Allocate 0.35 of 208

ET

Maximum Possible

Reduction (% of 208

ET)BMPs in this

Category

BMPs excluded in

Calculations

Ag cropland 86.32 30.21 53.62 42% 14.53% 25.78%

001, 001A, 003, 004, 006, 007

drop 001A since < 007

Ag Pasture 48.672 17.04 16.83 23% 8.19% 8.09%101, 105, 107, 402

Urban 22.464 7.86 21.57 11% 3.78% 10.37%201t209, 210, 211

Channel 23.504 8.23 6.59 11% 3.96% 3.17%301A, 302, 401A, 401B

WWTP 14.56 5.10 11.23 7% 2.45% 5.40% 701, 702

Reservoir-In-Lake 12.48 4.37 11.02 6% 2.10% 5.30%501, 502B,

505use 702

since > 701208.00 72.80 120.87 100% 35.00% 35.00%

60CCRWS7/20/2009

BMP ECONOMICS© RESULTSSensitivity Scenario D1

Optimal Solution

Scenario

Label / Annual

Cost (AE)

BMPs


oirWWTP

001

001A

003

004

006

007

101

105

107

402

201t209

210

211

301A

302

401A

401B

501

502B

505

701

702


Baseline, reduce P 35% $ 2.25 mill .66

Each category reduces 35% $ 5.83 mill .97 .14

Each category reduces 30% $ 5.22 mill .83 .55 .07

Each category reduces 25% $ 3.81 mill .69 .05 .00 .73

In solution at maximum level;In solution at partial level; Blocked from being included in the solution

61CCRWS7/20/2009



Scenario

Total Annual

Cost (mill. AE)

O&M and




Load Reduction (ET)

P N SedBaseline, reduce P 35% $ 2.25 $1.40 $ 0.84 $13.0 72.8 392.4 126.5KEach category reduces 35% $ 5.83 mill $2.20 $3.63 $52.0 77.6 541.8 154.8KEach category reduces 30% $ 5.22 mill $1.72 $3.50 $51.0 69.9 467.8 137.9KEach category reduces 25% $ 3.81 mill $1.54 $2.26 $39.5 58.1 385.0 113.5K

62CCRWS7/20/2009


Load Reduction Performance Details by Category

Required P Reduction ET Solution P Reduction ET

Category 35% 30% 25% 35% 30% 25%

Cropland 30.21 25.90 21.58 30.21 25.90 21.58

Pasture and Rangeland 17.04 14.60 12.17 16.81 14.60 12.17

Urban 7.86 6.74 5.62 7.86 6.74 5.62

Channel 8.23 7.05 5.88 6.59 6.59 5.88

Waste Water Treatment Plants 5.10 4.37 3.64 9.57 9.57 9.57

Reservoir-in-Lake 4.37 3.74 3.12 6.55 6.55 3.33TOTAL ACROSS ALL

CATEGORIES 72.80 62.40 52.00 77.59 69.95 58.15

63CCRWS7/20/2009

CCRWSOptimal D1 Solution Observations

• Pasture category has difficulty @35% reduction• Channel category has difficulty @35% & 30%• No category difficulties @25%• Overall, no difficulties because integer nature of

WWTP and Reservoir-In-Lake BMPs provides excess reduction beyond needs of categories

• Ag Cropland, Urban, WWTP, and Reservoir-In-Lake categories have excess capacity• Much less Ag Cropland BMPs in optimal solution

than in Baseline• Enforcing each category to be accountable is

more expensive than using most economic BMPs

64CCRWS7/20/2009

BMP ECONOMICS©


(D2) What are the consequences associated with excluding specific categories of BMPs?

65CCRWS7/20/2009


Optimal Solution

Scenario

Label / Annual

Cost (AE)

BMPs


oirWWTP

001

001A

003

004

006

007

101

105

107

402

201t209

210

211

301A

302

401A

401B

501

502B

505

701

702



Exclude Ag. Cropland BMPs $11.93 mill .97

Exclude Ag. Pasture BMPs $ 3.32 mill .60

Exclude All Ag. BMPs $10.81 mill .99

Exclude All Urban BMPs $ 2.28 mill .72


66CCRWS7/20/2009



Scenario

Total Annual

Cost (mill. AE)

O&M and




Load Reduction (ET)

P N Sed

Baseline, reduce P 35% $ 2.25 $1.40$

0.84 $13.0 72.8 392.4126.5

KExclude Ag. Cropland BMPs $11.93 mill $7.92 $4.01 $58.8 67.2 544.3 116.2K

Exclude Ag. Pasture BMPs $ 3.32 mill $1.65 $1.67 $18.9 72.8 279.3 105.0K

Exclude All Ag. BMPs $10.81 mill $7.37 $3.44 $52.6 50.4 283.2 62.0K

Exclude All Urban BMPs $ 2.28 mill $1.27 $1.02 $15.5 72.8 389.2 143.3K

67CCRWS7/20/2009


• Excluding Ag Cropland BMPs is expensive• Requires WWTP to increase to level III• Requires all Channel and Reservoir-In-Lake BMPs to

enter solution• Ag Pasture BMPs are not contributing

substantially, in a relative sense• There are close economic substitutes

• Excluding Urban category BMPs has minimal effect• Although BMP 211 (Required Nutrient Mgmt in

2,000 Buffer Strip Around Reservoir) is in Baseline solution, BMP 301A is a close economic substitute

• Spotlights tradeoffs in per unit P reduction costs AND BMPs respective capacities to reduce P inflows 68

CCRWS7/20/2009

BMP ECONOMICS©


(D3) What are the consequences associated with requiring specific BMPs?

69CCRWS7/20/2009


Optimal Solution

Scenario

Label / Annual

Cost (AE)

BMPs


oirWWTP

001

001A

003

004

006

007

101

105

107

402

201t209

210

211

301A

302

401A

401B

501

502B

505

701

702

Integer BMPs

Linked BMPs


Require All Urban BMPs $ 4.77 mill .41

Require WWTP Upgrade to Level II $ 2.25 mill .66

Require WWTP Upgrade to Level III $ 3.07 mill .92Allow WWTP Upgrade to be Non-Integer $ 2.25 mill .66

Require Wetlands BMP 401A $ 2.96 mill .34

Require Wetlands BMP 401B $ 2.90 mill .97

Require Both Wetlands BMPs $ 3.62 mill .99In solution at maximum level; In solution at partial level; Blocked from being included in the solution

70CCRWS7/20/2009



Scenario

Total Annual

Cost (mill. AE)

O&M and




Load Reduction (ET)

P N SedBaseline, reduce P 35% $ 2.25 $1.40 $ 0.84 $13.0 72.8 392.4 126.5KRequire All Urban BMPs $ 4.77 $ 4.17 $ 0.60 $ 8.93 72.8 434.2104.1KRequire WWTP Upgrade to Level II $ 2.23 $ 1.39 $0.84 $13.0 72.8 392.4126.5KRequire WWTP Upgrade to Level III $ 3.07 $1.90 $1.17 $19.1 72.8 393.1129.4KAllow WWTP Upgrade to be Non-Integer $ 2.23 $1.39 $0.84 $13.0 72.8 392.4126.5K

Require Wetlands BMP 401A $ 2.96 $1.46 $1.50 $25.1 72.8 365.9137.8K

Require Wetlands BMP 401B $ 2.90 $1.50 $1.40 $24.2 72.8 395.2137.8K

Require Both Wetlands BMPs $ 3.62 $1.67 $1.95 $34.5 72.8 358.6 1415K

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• Nothing apparent that is surprisingly impressive• Implementing all Urban BMPs more than

doubles annual costs• Ag BMPs drop out

• WWTP• Requiring level II is inconsequential – it is in Baseline

solution• Increasing to level III is more expensive• Changing to non-integer has no effect

• Requiring wetlands• More expensive• These BMPs contribute minimal P reduction• Including allows BMP 211 “Reservoir Buffer Strip” to

fall out72CCRWS7/20/2009

BMP ECONOMICS©


(D4) What are the consequences associated with speculating on the probable level of adoption of different BMPs?

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Optimal Solution

Scenario

Label / Annual

Cost (AE)

BMPs


oirWWTP

001

001A

003

004

006

007

101

105

107

402

201t209

210

211

301A

302

401A

401B

501

502B

505

701

702


Baseline, reduce P 35% $ 2.25 mill .66

Require All BMPs, Except Wetlands, @ >=50%, w/Binary Constraints Imposed $ 7.54 mill .50 .50 .50 0.6 .50 .50 .50 .50 .50 .50 .50 .50 1 .50 .50 1 1 .50 1Exclude “Most Unlikely” BMPs, Allowing Only “More Likely” BMPs $ 4.62 mill 1 1 1 1 1 1 .65 1 1 1

In solution at maximum level; In solution at partial level;Blocked from being included in the solution

74CCRWS7/20/2009



Scenario

Total Annual

Cost (mill. AE)

O&M and




Load Reduction (ET)

P N SedBaseline, reduce P 35% $ 2.25 $1.40 $ 0.84 $13.0 72.8 392.4 126.5K

Require All BMPs, Except Wetlands, @ >=50%, w/Binary Constraints Imposed $ 7.54 mill $5.47 $2.07 $24.0 72.8 387.1103.4K

Exclude “Most Unlikely” BMPs, Allowing Only “More Likely” BMPs $ 4.62 mill $3.48 $1.14 $14.3 72.8 457.0136.3K

75CCRWS7/20/2009

CCRWSOptimal D4 Solution Observations• Subjective interpretation of what might

happen is suggestive of more expensive solutions than the Baseline solution• Annual costs could more than double• Initial construction costs could be $1-$11 higher

• Identifying funding sources for BMPs in Baseline solution and encouraging the adoption/implementation of these BMPs appears economical

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CCRWS BMP ECONOMICS©

Overall Conclusions• 35% P reduction is achievable

• Baseline solution annual costs are approx. $2.25 million• ~$1.40 million for O&M plus Interm. Cap.

Replacement Costs• ~$0.84 million for Initial Construction / Sinking

Fund• Up front, time 0 costs are ~$13.0 million

• A portfolio of BMPs is optimal• Inclusion of ag-related BMPs is cost-effective• Some BMPs are relatively expensive and

ineffective • Optimal economic solution is based on a

myriad of factors

77CCRWS7/20/2009

What’s Next?

• Interested in your perspectives today.

• Preparing the final report.

78CCRWS7/20/2009

~ Bringing Economics, Finance, Accounting, and ~ Bringing Economics, Finance, Accounting, and Computer Modeling to Water Planning in the Cedar Computer Modeling to Water Planning in the Cedar

Creek Watershed and beyond!~Creek Watershed and beyond!~source: http://images.google.com

Thank YouCollaborators & Supporters !

79CCRWS7/20/2009

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