BOARD AGENDA MEMORANDUM
Government Code § 84308 Applies: Yes ☐ No ☒
(If “YES” Complete Attachment A - Gov. Code § 84308)
SUBJECT: Title
Receive Information and Provide Feedback on Valley Water’s Draft Water Supply Master Plan 2050.
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RECOMMENDATION: Recommendation
Provide feedback on Valley Water’s Draft Water Supply Master Plan 2050.
Body
SUMMARY:
The Water Supply Master Plan (WSMP) is Santa Clara Valley Water District’s (Valley Water) guiding document for long-term water supply investments to ensure water supply reliability for Santa Clara County. Updated approximately every five years, this long-range plan assesses projected future county-wide demands and evaluates and recommends water supply and infrastructure projects to meet those demands to achieve Valley Water’s level of service goal through the planning horizon. Valley Water’s level of service goal, as established in Board Ends Policy E2, is to “Meet 100 percent of annual water demand during non-drought years and at least 80 percent of demand in drought years.”
Valley Water has developed the WSMP 2050 to evaluate and respond to changing conditions such as severe drought, reductions in imported water supplies, shifting water demands, and concerns about affordability. The WSMP 2050 addresses both existing and emerging challenges and identifies strategies to maintain the reliable water supply system for Santa Clara County through 2050. The cornerstone of the WSMP 2050 is an adaptive management strategy to support investment decisions in the face of uncertainties associated with future conditions and project development.
The WSMP 2050 planning effort spanned two years with regular updates and requests for feedback and direction to the Valley Water Board of Directors (Board) and committees, presentations to advisory committees, retail partners, and stakeholders. A technical advisory panel helped guide each update and development of the plan. The resulting draft WSMP 2050 is attached (Attachment 1). This memorandum summarizes the key aspects of the draft WSMP 2050 and recommendations.
Planning Goal
Valley Water’s mission is to provide a safe and reliable water supply now and in the future. To that end and consistent with Board Ends Policies, the planning goals of the WSMP 2050 are to:
• Ensure reliability and sustainability of the existing water supply system
• Diversify water supplies to meet the Level of Service goal
• Minimize the risk of shortage and disruption
• Maintain affordable water rates through cost-effective water supply investments and management
Planning Approach
The WSMP 2050 analyzes four alternative futures based on the combination of demand projections and forecasted imported water supplies. This approach is intended to account for uncertainty in forecasted future demand and supply and provide an adaptive framework for decision-making:
A. Stable Demand and Moderately Impacted Imports
B. Stable Demand and Severely Impacted Imports
C. High Demand and Moderately Impacted Imports
D. High Demand and Severely Impacted Imports
The demand projections were developed from Valley Water’s demand model. Demand modeling integrates historic water use trends, housing and economic growth from the Association of Bay Area Governments (ABAG), climate change, and post-drought water use rebound. The stable demand, representing low end at 330,000 acre-feet per year (AFY), assumes demand stays flat at 2030 levels through 2050, in part owing to the success in making water conservation a way of life and mitigating the impacts of growth and climate change on water use. The high demand at 350,000 AFY assumes significant, unmitigated impacts from growth and severe climate change, which increases outdoor water use, in particular. Demand projections assume Valley Water achieves its long-term conservation goals of 99,000 AFY by 2030, 110,000 AFY by 2040, and 126,000 AFY by 2050.
The imported water baseline supply scenarios were selected from Department of Water Resources (DWR) modeling. The modeling assumes existing regulatory conditions and State Water Project (SWP) and Central Valley Project (CVP) infrastructure and takes into account climate change impacts. The Moderately Impacted Imports scenario represents SWP and CVP deliveries with small impact from climate change, while the Severely Impacted Imports scenario represents significantly impacted deliveries, particularly during droughts.
Need for Investment
Under each of the four future conditions, water supply needs under the baseline condition were assessed using modeling analysis to serve as a basis for identifying projects and programs for potential investment. The baseline condition assumes completion of local dam seismic retrofits by 2035, achieving long-term water conservation goals, maintaining Valley Water assets, and expanding recycled water use. The baseline condition analysis simulates how baseline supplies can meet future demands and unmet demand is then estimated as a shortage. The shortage evaluation assumes Valley Water can achieve 10-15% water use reduction during droughts for the stable and increasing demands, respectively.
Valley Water’s current system and sources of water supply can meet demands during wet and normal years, but extended droughts remain the biggest water supply challenge. Under all four potential 2050 futures, Valley Water will experience water shortages if relying only on existing supplies and infrastructure during multi-year droughts. The shortages may start as early as 2030. In 2050, the average shortage over a six-year drought could be as much as 70,000 AFY, depending on the projected demand and imported water supply conditions. These shortages are large and already take into account meeting drought water use reduction calls and achieving long-term conservation goals. Valley Water needs to invest in new projects to address those shortages to ensure long-term water supply reliability for the county.
Without additional investments, the predicted shortages mean Valley Water will have a reduced service level, and therefore less water available to the community. A reduced level of service could have an immediate and real impact on residents and businesses, billions of dollars in economic losses, and could adversely and chronically affect economic development in the county.
Water Conservation and Reuse Goals
As part of this plan development, Valley Water developed water conservation and reuse goals to address future shortages. The established water conservation goal for 2050 is 126,000 AFY, which is considered ambitious but implementable and balances benefits with affordability concerns. This water conservation goal recognizes that Santa Clara County is already very water efficient and complements the State’s “Making Water Conservation a Way of Life” regulation. It allows Valley Water to stay at the forefront of conservation with sufficient feasible program expansion options supported by community interest and reduces the need to invest in additional new supplies and/or storage.
The goal for water reuse is to develop 24,000 AFY of potable reuse by 2035, with a long-term vision to maximize water reuse in the county up to 32,000 AFY by 2050. This long-term vision includes additional potable and non-potable reuse, desalination, stormwater capture, and other alternative water sources. The inclusion of a 2035 goal with the long-term vision promotes a phased approach that accounts for uncertainty with future demand and wastewater availability while balancing affordability and risk of overinvestment.
Water Supply Strategy
Valley Water considers and evaluates a broad range of projects in the WSMP 2050 to address future water supply needs, including alternative supply projects, local and imported surface supply projects, storage projects, and recharge projects. The projects were evaluated using a number of criteria, including supply benefit, cost, reliability, likelihood of success, environmental impacts, jurisdiction and partnership, and public acceptance.
The water supply strategies were developed through portfolio analysis and evaluation. The modeling analysis of portfolios was done in a stepwise fashion - first starting with testing individual projects, then gradually adding projects to build up portfolios until they eliminate water shortages. With the high number of potential projects, there are many combinations and strategies to achieve long-term water supply reliability, depending on different considerations and factors. To help outline investment options and present tradeoffs, potential investment strategies were developed based on three themes - lower cost, local control, and diversified. Under each strategy, multiple portfolios can meet future water supply needs. Based on the project evaluation and discussions with both internal and external experts, one representative portfolio for each strategy was selected and summarized in Table 1, along with the total lifecycle cost in 2025 dollars and expected supply or storage benefits. Actual benefits of each project and strategy vary by demand, hydrological condition, and how they operate in the system. And additional supply benefits can be achieved in portfolios when some projects complement each other and make the whole system much more efficient, highlighting the need for diversified projects to better utilize project potentials.
Each strategy represents a pathway to future water supply reliability, but with tradeoffs:
• Lower Cost - Focuses on affordability and minimizing costs, with a mix of supply and storage projects. However, it has high risks, as all major projects require partnership and institutional agreements to be successful.
• Local Control - Focuses on the projects in the County that Valley Water exercises more control. However, it has the highest cost, as it includes the three most expensive projects being considered (two potable reuse projects and Pacheco).
• Diversified - Focuses on diversifying the existing system with a diverse set of projects. However, it has a relatively high cost and more institutional complexity since it includes more projects. This strategy can also meet the high demand for the worst-case future condition.
The three strategies are able to address the shortage for all futures except the worst-case condition and serve as the basis for developing strategies for that condition and an adaptive management framework. Each strategy includes South County Recharge to help improve water supply reliability for South County.
Adaptive Management
Since there are different strategies to achieve future water supply reliability and given uncertainty in project development and future supply and demand conditions, an adaptive management approach was developed to provide the Board with flexibility and the ability to make incremental investment decisions. The adaptive framework includes a roadmap and annual reporting. The roadmap outlines near- and mid-term actions and defines indicators and conditions to guide project decisions. The annual reporting tracks project progress and provides up-to-date information to help inform decision-making.
The roadmap includes recommended actions at different timelines, especially immediate actions as the starting point of the adaptive management framework:
• Now - focus on the Lower Cost strategy, which includes San Jose Potable Reuse, B.F. Sisk Dam Raise, Delta Conveyance Project, Groundwater Banking, and South County Recharge; Continue planning for Pacheco and Sites; Continue the Desalination feasibility study; Continue implementing conservation programs.
• Near-term (2-3 years) - Assess success/progress on project planning and implementation; Make project funding, participation, or go/no-go decisions based on indicators, new information, and actual conditions; Continue planning for other projects.
• Mid-term (5 years) - Assess progress on project implementation; Update demand projections and water supply outlook; Update WSMP
Annual reporting through the Monitoring and Assessment Program (MAP) will be a critical component of the adaptive management framework. A standard MAP report will be devised to track key elements of the WSMP, including progress on projects, conditions of indicators, and whether any adjustments are recommended. The timing of the MAP will be aligned with the annual Capital Improvement Program (CIP) Five-Year Plan and water rate-setting cycle to support related decision-making.
Outreach Efforts
Stakeholder engagement is an important component of the WSMP 2050 development process and is carried out throughout the plan development. Staff has presented updates at various Committees and retailer meetings. Staff also met with environmental stakeholders to discuss their questions and responses to written comments. In addition, Valley Water continues to use the WSMP webpage, stakeholder email list, blogs, social media, and communication newsletter as ongoing opportunities to provide updates and engage the public and stakeholders.
Valley Water convened an expert panel to support WSMP analyses and engaged with them through the plan development. They have been invited to attend the Board meeting.
Next Steps
Staff will continue stakeholder outreach, finalize the plan, and bring the final plan for Board adoption in the Fall.
ENVIRONMENTAL JUSTICE AND EQUITY IMPACT:
The Water Supply Master Plan addresses water supply equity by ensuring a cost-effective, high-quality supply is available for all of Santa Clara County, including disadvantaged communities.
FINANCIAL IMPACT:
There is no financial impact associated with this item.
CEQA:
The recommended actions do not constitute a project under CEQA because they do not have the potential for resulting in direct or reasonably foreseeable indirect physical change in the environment.
ATTACHMENTS:
Attachment 1: Draft WSMP 2050
Attachment 2: PowerPoint
*Handout 3.4-A: Sierra Club
*Handout 3.4-B: Infractiv
UNCLASSIFIED MANAGER: Manager
Kirsten Struve, 408-630-3138