Securing Californias Water FutureJeff KightlingerConstruction Management Association of AmericaJune 5, 2014

1THE METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIATerms:

Acre-foot--A common water industry unit of measurement. An acre-foot is 325,851 gallons, or the amount of water needed to cover one acre with water one foot deep. An acre-foot serves annual needs of two typical southern California households.

Cubic FootA frequent water industry term of measurement, as in cubic feet per second. One cubic foot (cf) or one basketball equals 7.48 gallons. A cubic foot per second is 450 gallons per minute.

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Metropolitan Water DistrictRegional water wholesaler26 Member Agencies6 countiesServing approximately19 million residents5,200 square mile service area$1 trillion economy2The Metropolitan Water District of Southern California is a consortium of 26 cities and water districts that provides drinking water to nearly 19 million people in a 5,200 square-mile service area covering parts of Los Angeles, Orange, San Diego, Riverside, San Bernardino and Ventura counties.

The regional economy is approximately $1 trillion, about half of the Californias economy.

Metropolitan supplies approximately 50 percent of the regions water through supplies it imports from hundreds of miles away and invests in regional water projects with its member agencies.

The mission of the Metropolitan Water District of Southern California is to provide its service area with adequate and reliable supplies of high-quality water to meet present and future needs in an environmentally and economically responsible way.

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Metropolitans Service Area Diverse Water SuppliesSouthern California Water Portfolio25% Colorado River30% State Water Project (through the Delta)45% Local SuppliesLos Angeles AqueductConservationGroundwater RecyclingDesalinationLos Angeles AqueductColorado River AqueductConservation,Local Groundwater and RecyclingState Water ProjectBay-Delta3Southern California has a diverse water portfolio, which provides reliability even with changing conditions.

On average, approximately of the regions water supplies comes from the Colorado River, about 1/3 comes from the State Water Project and just under half of the water comes from local supplies which include:

Los Angeles Aqueductserving just the city of Los Angeles.

ConservationMetropolitan and its member agencies have implemented extensive conservation programs for more than 20 years.

Groundwater and recycling Water recycling and groundwater recovery and storage are important assets in the regions diverse local resource portfolio and help bring greater water supply reliability to Southern California. These resources help offset imported water supplies. Metropolitan, its member agencies and other local water agencies have largely led the development of water recycling and groundwater recovery projects with many new projects incentivized by Metropolitans Local Resources Program (LRP).

Desalination--Metropolitan has incentive agreements with three member agencies for local seawater desalination projects. These projects are in the pilot-study phase with the potential to produce up to 46,000 AF per year.

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OrovilleDiamond ValleySan Luis52%Lake Mead42%46%70%Water Supply Conditions5

Northern39%

UpperColorado Basin112%May 11, 20145

Bay Area 33% Central Valley 23 to 90%Metropolitan 30%Some regions 100% dependent 6California relies on water that flows through the Delta66The last few slides focused on Metropolitans service area, but viewing Delta exports from a statewide context, beyond Metropolitans service area, we see that water flowing through the Delta is essential for the entire state. Water that flows through the Delta supplies 30 percent of Southern Californias drinking water. It also supplies 33 percent of the Bay Areas and 23 to 90 percent of the Central Valleys drinking and irrigation water. Some regions are 100 percent dependent on the Delta for their water supplies.

NOTESBay Area includes: Contra Costa Water District, East Bay Municipal Utilities District, San Francisco Public Utilities District, Santa Clara Valley Water District, and Alameda County

Central Valleythrough the Central Valley ProjectAnnually delivers about 7 million acre-feet (MAF) of water for agricultural, urban, and wildlife use. Provides water for 6 of the top 10 agricultural counties in the nation`s leading farm stateProvides about 5 MAF for farms -- enough to irrigate about 3 million acres, or approximately one-third of the agricultural land in California. Furnishes about 600,000 acre-feet for municipal and industrial use--enough to supply close to 1 million households with their water needs each year.

The California State Water ProjectPrimary purpose is to store water and distribute it to 29 urban and agricultural water suppliers in Northern California, the San Francisco Bay Area, the San Joaquin Valley, the Central Coast, and Southern California. Of the contracted water supply, 70% goes to urban users and 30% percent goes to agricultural users.The Project makes deliveries to two-thirds of California's population. It is maintained and operated by the California Department of Water Resources. 7

7Delta: Hub of Californias Water Supply25 million CaliforniansIrrigation for much of the produce grown domestically57 Islands and Tracts700 miles of sloughs and channelsUnique manmade topography threatenedSeismicSea-level riseSubsidence

88Water Flowing from the Delta WatershedSource: Delta Vision Report -Estimated total annual runoff 32.85 maf (2007)Pacific Ocean48%UpstreamConsumptive Use31%Delta Exports17%Metropolitan4%In-Delta Consumptive Use4%9Upstream Consumptive UseResidentialCommercialAgricultureIndustrialInstitutionalDelta ExportsCentral Valley ProjectState Water Project

9In 2007, Governor Schwarzenegger commissioned a blue ribbon panel that issued The Delta Vision Report, which estimates 33 maf of annual runoff flowing through the Delta.

Approximately half of water flowing through the Delta goes to the Pacific Ocean.

About one-third is upstream consumptive use and diversions for Friant-Kern Canal, EBMUD's Mokelumne Aqueduct, and SFPUC's Hetch-Hetchy Aqueduct.

Four percent is used within the Delta

Of the remaining 17 percent that is exported, 4 percent is used within Metropolitans service area.

Notes:___________________________________________________________________

Usage Trends Percent Acre-Feet Outflow to Ocean 48% 15,768,000 af Upstream Consumptive Use 31% 10,183,500 af CVP - SWP Exports 17% 5,584,500 af In-Delta Consumptive Use 4% 1,314,000 af TOTAL 32,850,000 af

Southern Cal MWD 3.6 4.5% 1,2 1.500,000 af

Bay Area Contra Costa WD 0.4% 115,000 af East Bay MUD 0.7% 213,000 af San Francisco 0.9% 302,000 af Santa Clara VWD 1.3% 430,000 af Alameda County 0.2% 56,000 af

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Seismic RiskBay Area Faults

Key Delta Risks10Fishery Declines Delta smelt

Subsidence Sea Level Rise10Unfortunately, there are significant risks to this water supply. During the last two decades export pumping to the State Water Project and Central Valley Project has been reduced by over 2 million acre feet. In 2012, pumping was reduced by nearly 900,000 acre-feet.While various scientific panels have attributed the decline in the Deltas health to numerous causes, (manmade activities and development over the last 100 years have changed 95 percent of the Delta, leaving only 5% in its historical state, according *State of Bay Delta Science, 2008, Cal Fed Bay Delta Program), enforcement efforts to date have focused almost exclusively on curtailing public water supplies from Delta facilities. Export agencies experienced cutbacks to pumping dating back to 1991 due to Endangered Species Act requirements. This chronic shortage of supplies has serious consequences for the state, depleting urban water supplies and impacting the states multi-billion dollar agriculture industry costing jobs.

95 percent of the original tidal wetlands were erased by levee construction*95 percent of the original floodplain was blocked by levees and development*95 percent of Delta biomass is now non-native**State of Bay Delta Science, 2008, CalFed Bay Delta Program.

The risk of seismic activity causes more concern. There are several faults running through the Delta region, which is a fragile system with hundreds of miles of man-made levees. According to the USGS, there is a 66 percent chance of a magnitude 6.5 earthquake hitting the Bay-Delta region by 2032. And according to DWRs Delta Risk Management Study, there is a 25 percent chance of an earthquake causing 30 islands to collapse in the next 25 years. Statewide economic costs of such an event could exceed $40 billion.

Another challenge is ongoing subsidence of the Delta islands. Currently, the rate of subsidence averages about 1.5 inches per year.Historically, the loss of land surface elevation has been as high as 6 inches per year. The causes of subsidence are changing. During the early 1900s, compaction, burning, and wind erosion played a significant role. Now, the oxidation of the organic peat soils due to farming accounts for most of the soil loss. The volume of soil lost, is in excess of 3.5 million acre-feet or almost 8,000 Rose Bowl stadiums! As the islands (more appropriately called holes) sink deeper below sea level, the water pressure on the levees becomes exponentially greater.The problem is further compounded by sea-level rise. Experts say Delta planners should plan for a 1-foot rise in sea level by 2050 and 55 inches by 2100.* (*The Impacts of Sea Level Rise on the California Coast May, 2009, California Climate Change Center). Rising sea levels will not only put greater pressures on the levees, but will cause seawater to intrude further inland impacting water quality.

NOTESFISH CONFLICTSThe current location for water diversions in the Delta was never intended to be permanent. Exporting water at the end of a channel creates a dead-end for fish with no way to move past the screens, as you would have on a river system. Eggs, larvae and small fish that are drawn into the channels around the state and federal pumping plants need to be screened out of the water and then trucked 20 miles back to Sherman Island in the western Delta.EARTHQUAKES If the 1906 earthquake hit today, it is estimated it would cause the failure of 22 Delta islands, which would likely cut off Delta water exports for several years, and it is likely that water exports would never fully recover.SUBSIDENCEOn-going subsidence increases the potential impacts from a large earthquake by increasing the size of the seawatergulp as seawater rushes in to fill the void.SEA LEVEL RISESophisticated modeling predicts salt could move well inland, unless vast quantities of water are released from upstream reservoirs to repel it. Raising the levees to keep up with this rise will cost between $4 billion and $12 billion, according to DWR.

Seismic Event in the Delta

1111Sacramento12SWP PumpsCVP PumpsSac RiverStocktonPreliminary Subject toSJ River

SacramentoSWP PumpsCVP PumpsSac RiverStocktonPreliminary Subject to RevisionSJ RiverNorth DiversionSouth DiversionCONVEYANCEThree intakes/pumping plantsState-of-the-art fish screensForebay temporarily stores water pumped from river Two gravity flow tunnels (30 miles long; 9,000 cfs)ECOSYSTEM RESTORATION56 species~150,000 acres

REDUCING ENVIRONMENTAL STRESSORSToxic pollutantsInvasive speciesPredator controlIllegal poachingHatchery practicesBay-Delta Conservation Plan

1212122009 Bay Delta Conservation Plan Authorizing Legislation.

In November 2009, the California Legislature passed a historic package of legislation to address the water supply and ecosystem challenges in the Sacramento-San Joaquin Delta as well as advance statewide water management reforms. The legislative package wisely chose to set achievable and balanced set of state policies to restore the Delta estuary and improve reliability of statewide water supplies; directed the development of a new plan for the Delta to guide the actions of numerous state agencies; established new co-equal goals of water supply reliability and ecosystem restoration; devised a more responsive and accountable governance structure; and set achievable goals in statewide water conservation.

One element of the package is a new plan to achieve co-equal goals of water supply reliability and ecosystem restoration with an improved water supply conveyance system and a habitat conservation plan, known as the Bay Delta Conservation Plan.

ConveyanceCurrently the SWP draws water exclusively from the Southern area of the Delta, and this effects natural flow of Delta rivers by reversing historic flows, pulling water towards the pumps. A new conveyance tunnel is proposed to be built under the Delta to protect drinking water supplies and keep them from interfering with the natural tidal fluctuations in the Delta. This tunnel system would draw water at the northern or southern end, and by having a northern and southern option for accessing water, the BDCP will allow more flexibility to manage the system better and reduce the stress of relying on a single export tunnel in one ecologically sensitive area of the Delta. The new conveyance system beginning in the northern Delta protects both the quantity and quality of public water supplies from threats ranging from earthquakes to climate change. Three intakes/pumping plantsState-of-the-art fish screensForebay temporarily stores water pumped from river Two gravity flow tunnels (30 miles long; 9,000 cfs)Metropolitan and other public water agencies throughout the state that rely on Delta supplies are prepared to pay for this conveyance improvement as part of a broader water supply reliability investment strategy; no state or federal funds are required. HabitatCurrently the species-by-species approach to complying with the Endangered Species Act is failing to protect Californias native species, including important salmon fisheries. A comprehensive, multi-species conservation plan is necessary to restore the Delta ecosystem; this plan covers: 57 species; and will provide 145,000 acres of improved habitat

The plan also includes:

Reducing Environmental StressorsRegulatory actions to reduce pollutants and other stressors including:Toxic pollutantsInvasive speciesPredator controlIllegal poachingHatchery practices

These actions are essential to ensuring success of ecosystem improvements. ImprovementsCapitalO&M (Total 50 Years)Funding SourceConveyance$14.57 billion$1.46 billionWater ContractorsEco-Restoration & Other Stressors$5.28 billion$3.44 billionFed/State/Water Contractors/OtherTOTAL Capital/O&M$19.85 billion$4.90 billionTOTAL BDCP$24.75 billionMetropolitans share is approximately 25 percentEstimated costs from BDCP Pubic Draft Chapter 8 (Dec 2013) in undiscounted 2012 dollars.Bay Delta Conservation Plan Users pay for new conveyance facility & mitigationBeneficiaries pay for habitat conservation & statewide benefits $5 - 6/month per household for Southern Californians

1313The cost of the $14.5 billion capital conveyance improvements and $1.5 billion O&M costs would be charged to federal and state water contractors that rely upon the State Water Project and Central Valley Project, like any other improvement to the system.

Federal and State sources including federal appropriations identified in BDCP, state bond and other sources as well as public water agencies will pay for the $5.2 billion capital costs and $3.4 O&M costs for ecosystem restoration and measures to address other stressors

NOTESFunding sources for BDCP (Public Draft Chapter 8 Pages 8-65 and 8-66):Water Contractors68.4%$16,930 mFederal Funding14.3% $3,545 mState Funding16.6% $4,117 mInterest Income .07% $162 m

REFERENCES

BDCP PUBLIC DRAFT PAGE 8-14 Table 87. Cost 1 Estimate for Water Facility Construction Capital $14.57bO&M $1.456b

BDCP PUBLIC DRAFT PAGE 8-62 Table 833. Page Undiscounted Capital Costs by Plan Implementation Phase and ElementCM1$14.57BCM 2-11 $4.17BCM 12-22$0.9267Changed Circumstances and $0.1839 EIR/EIS migration measures not counted elsewhere)

BDCP PUBLIC DRAFT PAGE 8-62Table 834. Undiscounted O&M 1 Costs by Plan Implementation Phase and Element Conveyance CM 1$1,456.0mCM 2-11 Natural Communities$236.6mCM 12-22 Other Stressors$1,734.5mLocal Government revenue replacement$226.0mMonitoring and research$912.8mPlan Administration$336.4mTOTAL $4,902.3 m

Statewide Economic ReportCosts/Benefits of BDCP$5 billion in overall net benefits177,000 construction and habitat restoration jobs created$84 billion in statewide business activity over 50-year lifeAvoidance of water shortages that could cost over 1 million jobs

14Estimated 110,500 construction jobs during the project's first decade, followed by 11,300 permanent jobs to operate the project over the subsequent 40 years.1 million new jobs resulting from a more reliable water supply.

This would give farmers and business owners confidence to invest in new projects without fear of losing water, said Allan Zaremberg, president of the California Chamber of Commerce. "What the business community looks to is certainty a certainty they're going to a have reliable and affordable water supply over the next century," he said.

Notes:_____________________________________

More background information on CA Natural Resources Agency draft statewide economic impact report:

The California Natural Resources Agency released the draft statewide economic impact report this week of the Bay Delta Conservation Plan, the results of a study led by Dr. David Sunding of UC Berkeley and The Brattle Group. The study focused on an analysis of the overall economic impacts of the BDCP on the state as a whole. The report concluded that the BDCP would create approximately 177,000 new jobs, as well as protect the jobs of more than one million California residents. The study also determined that the BDCP will lead to a significant net economic benefit to the state, amounting to a net improvement of $4.8 billion to $5.4 billion in economic welfare for California residents. The results of the new statewide draft economic impact study clearly convey that the BDCP makes both economic and environmental sense for the state of California, serving the best interests of all California residents today and in the future by securing a more reliable water supply. The report not only sheds light on the tremendous benefits of the BDCP, it also stresses the critical importance of following through with its implementation to avoid an economic disaster. There is no doubt that the loss of one million jobs would be devastating and with approximately 75% of the jobs protected under the BDCP being in Southern California, its essential for this region to become more actively involved in the conversation about the BDCP and more engaged on issues relating to the Delta.

Impacts to the largely agricultural Delta region are significant in terms of temporary, construction-related air pollution and traffic delays and the loss of farm jobs as land is converted to tidal wetlands and other habitat. An estimated 37,000 farm jobs could be lost as habitat restoration is implemented, according to the economic analysis. The economic cost of traffic disruption is estimated at $53 million to $79 million over a nine-year construction period. The study also predicts that the total costs of changes in regional air quality will range up to $16 million.Overall changes in salinity in Delta waterways due to implementation of the BDCP is expected to cost $1.86 million per year in farm revenues a decline of less than one-half of one percent of total annual farm revenues in the Delta. The biggest economic stimulus of the conservation plan would be centered in the Delta. The Delta would be home to an estimated 110,600 construction jobs (over 7.5 years), 11,300 operations and maintenance jobs (over 40 years), and 55,800 jobs related to restoration (over 50 years). (A job is defined in the economic analysis as a position equivalent to one full-time worker for an entire year.)Measures to protect, restore, and enhance wildlife habitat are expected to provide a net increase to boating, picnicking, wildlife viewing, waterfowl hunting, fishing, and other recreational activities, with net economic benefits estimated at $222 million to $370 million over a 50-year period.

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Regional Investment PortfolioLocal (FY 2012-13)Conservation: 906,000 af/yrRecycling: 178,000 af/yrGW Recovery: 55,000 af/yrKern DeltaSemitropic Coachella ValleyImperialPalo VerdeArvin-Edison San Bernardino ValleyMojave W.A.Groundwater Banking & Water Mgmt. Programs 15151515Water Portfolio (IRP Dry Year)20152035Water Use Efficiency1.6 maf/yr2.2 maf/yrLocal Supplies (Grdwtr/LA Aqued)2.1 maf/yr2.1 maf/yrImported1.8 maf/yr1.6 maf/yrTOTAL5.6 maf/yr5.8 maf/yr

Seawater Desalination Projects:signed agreements with member agencies for $250/AF:Long Beach: 10,000 AFYWest Basin:20,000 AFYMWDOC:16,000 AFYTotal46,000 AFY

Other potential Seawater Desalination project MWD may participate in:Carlsbad:56,000 AFY - in SDP but no signed agreement due to litigation; on-line in 2016Huntington Beach:56,000 AFY applied for funding under LRP programsTotal:112,000 AFY

Metropolitan's Storage CapacityDesert / CoachellaLake Mathews& Lake SkinnerCastaic & PerrisMojave Demo & Additional Prop. 13Diamond Valley LakeLake Mead DemoKern Delta Prop. 13 ProgramsArvin EdisonAdditional Lake MeadSemitropicMojave Amendment16161980 Lake Matthews and Skinner1990 Desert and Coachella1995 Semitropic, Castaic and Perris under Monterey Agreement1998 - Arvin Edison2000 DVL2003 Kern-Delta and Prop 13 conjunctive use programs2006 Mojave Demo and Additional Prop 13 conjunctive use programs2007 Lake Mead Demo2008 Established Lake Mead storage (1.5 MAF Capacity 400AF max draw)

System Capacity

Water SupplySystem Reliability

Infrastructure Reliability

Emergency ResponseSystem Flexibility1717TO MEET OUR MISSION TO PROVIDE RELIABLE SERVICE TO THE REGION, OUR SYSTEM MUST HAVE a reliable supply of water sufficient to meet current and projected needs addressed through IRP process, WSO storage programs a system with sufficient capacity to treat and deliver the water addressed through system overview study and CIP projects a reliable infrastructure that is in good condition and available when needed addressed through WSO O&M, ESGs Infrastructure Protection Plan & CIP a system that has the flexibility to maintain deliveries during outages flexibility improved primarily through demand driven projects and finally, an effective emergency response plan to respond to emergencies and restore service includes emergency response plan, business continuity plan, IT Disaster Recovery Plan

These five components of reliability were identified and documented in the 2007 Integrated Area Study, which was a collaborative effort between MWD staff and our member agencies, and WED LIKE TO THANK MWDOCS STAFF FOR THEIR PART IN HELPING US AND OUR MEMBER AGENCIES REACH A CONSENSUS ON THESE RELIABILITY TERMS.

ON THE NEXT SLIDE, WELL REVIEW THE RESULTS OF THE JOINT AGENCY EVALAUTION OF SYSTEM FLEXIBILITY

AND THEN WE WILL FOCUS ON MWDSEFFORTS TO ENSURE THE RELIABILITY OF OUR INFRASTRUCTURE IN THE DIEMER SERVICE AREA

The Metropolitan Water District of Southern CaliforniaAnnual Capital Expenditures (adjusted to 2011)$ MillionColorado River AqueductCRA and Dist. System Expansion 184 Peaks prior to 2000.

18The Metropolitan Water District of Southern CaliforniaAnnual Capital Expenditures (adjusted to 2011)$ MillionState Water ProjectDiamond Valley Lake, Inland Feeder, Skinner Expansion, San Diego Pipeline 6, Ozone Retrofit19Another major expansion started in the late 80s w/ DVL and Inland Feeder and ozone.

19The Metropolitan Water District of Southern CaliforniaAnnual Capital Expenditures (adjusted to 2011)$ MillionInfrastructure Reliability20Going fwd, the next phase is rehab of aging infrastructure to ensure reliable operations.

20Intake Pump Plant

Intake Pump Plant21Intake Pump Plant

Intake Pump PlantCRA Reliability 5Year Estimate - $136 Million2222

Mills 1978Skinner 1976Jensen 1972Weymouth 1941Diemer 1963830 miles of pipeline and tunnel242 miles of aqueduct5 major treatment plants7 pumping plantsOlder than 50 yrs Metropolitan Distribution System232323

Mills 1978Skinner 1976Jensen 1972Weymouth 1941Diemer 1963830 miles of pipeline and tunnel242 miles of aqueduct5 major treatment plants7 pumping plantsOlder than 50 yrs Metropolitan Distribution SystemDistribution System Reliability 5 Year Estimate - $261 Million

Prestressed Concrete Cylinder Pipe5-Year Estimate - $109 Million242424

Weymouth Water Treatment Plant25

Weymouth Water Treatment PlantTreatment Plant Reliability 5Year Estimate - $410 Million26Supervisory Control and Data Acquisition System Replacement(SCADA)

27272728Supervisory Control and Data Acquisition System Replacement(SCADA)

SCADA System Replacement 5Year Estimate - $52 Million28Shows how complex our control systems are.28

Californias Bay DeltaJeff Kightlinger(213) 217-6211Jkightlinger@mwdh2o.com29THE METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA29