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 the Development of Valley Water’s Water Supply Master Plan 2050.
End
RECOMMENDATION:
Recommendation
A. Receive an update on the Water Supply Master Plan 2050 Development; and
B. Provide feedback and direction to staff on the Water Supply Master Plan 2050 planning framework and engagement plan.
Body
SUMMARY:
The Water Supply Master Plan (WSMP) is the 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 about every five years, this long-range plan assesses 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 (LOS) goal through the planning horizon. Valley Water’s LOS goal is “Meet 100 percent of annual water demand during non-drought years and at least 80 percent demand in drought years.”
The most recent plan, Water Supply Master Plan 2040, was adopted by the Valley Water Board of Directors (Board) in 2019. This memorandum presents the framework of and progress on the development of the WSMP 2050, including planning goals and strategies, water supply needs, list of projects under consideration, and project evaluation criteria. It also provides the plan for board, committee and stakeholder engagement, as well as a timeline for completing the plan.
Planning Goals and Strategies
The WSMP 2050 proposes establishing planning goals to guide what Valley Water intends to achieve. 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 proposed 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
The WSMP 2040 recommended three strategies to help guide water supply investment decisions. Staff recommends updating these strategies to be better aligned with the planning goals, while preserving the gist of the existing strategies. The proposed strategies are:
1. Secure existing supplies and infrastructure
2. Expand water conservation and reuse
3. Increase system reliability and flexibility
Together, these three strategies establish a framework for providing a sustainable, reliable, and affordable water supply and strike a balance between protecting what we have, investing for the future, and making the most use of the existing water supply system.
Planning Horizon
For the WSMP 2050, staff recommends using a planning horizon of around 30 years (i.e. to 2050), rather than the previously used 20 years. This longer timeframe strikes a good balance between data availability and the uncertainty related to future conditions and will enable the full benefits of large infrastructure projects to be captured, as they often take several decades to be fully implemented and functioning. In addition, the 2050 planning horizon will ensure consistency between the updated WSMP and next Urban Water Management Plan, which Valley Water is required to update in 2025.
Planning Approach
To explicitly account for uncertainty affecting many factors in water supply planning and provide further flexibility in decision-making, a scenario planning approach is recommended to present alternatives of how the future might unfold, rather than one single forecast as was done with past plans. The approach involves analyzing several possible future conditions that bookend future water supply and demand possibilities, and identifying projects and programs that can meet water supply needs under each future condition.
With this approach, Valley Water is proposing to analyze four alternative futures based on the combination of demand projections and forecasted imported water supplies. Imported water accounts for about half of Valley Water’s annual supply and is often reduced during droughts. Imported water availability is the primary driver for reliability and therefore the most appropriate proxy for overall supply. The proposed four futures are:
A. Stable demand and stable imported supplies
B. Stable demand and reduced imported supplies
C. High demand and stable imported supplies
D. High demand and reduced imported supplies
The demand projections were developed from Valley Water’s demand model as described in Attachment 1. Valley Water’s demand modeling integrates the understanding of historic water use trends, housing and economic growth, climate change, and post-drought water use rebound. The stable demand, representing low end, assumes demands stay flat at 2025 levels through 2050, in part owing to the success in making water conservation a way of life and mitigating the impacts of growth on water use. The high demand assumes significant, unmitigated impacts from growth and severe climate change, which increases outdoor water use in particular. The forecasted 2050 countywide stable and high demands are approximately 330,000 acre feet per year (AFY) and 370,000 AFY, respectively, assuming Valley Water achieves its long-term conservation goals of 110,000 AFY by 2040. If water conservation goals are not achieved, demands are projected to be significantly higher, which highlights the importance of water conservation in reducing water demands. Staff is currently developing proposals for 2050 conservation targets as part of the WSMP 2050 development. The actual countywide water use for the year 2022, the last dry year of a three-year drought, was 283,900 AFY.
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 stable imports scenario represents SWP and CVP deliveries with small impact from climate change, while the reduced imports scenario represents significantly impacted deliveries, particularly during droughts.
Baseline Needs Assessment Under Alternative Futures
Under each of the four future conditions, water supply needs under baseline condition were assessed using modeling analysis. With no new investment, the baseline condition assumes completion of planned local dam seismic retrofits by 2035 (Almaden, Calero, Guadalupe), achieving long-term water conservation goals (2040), and maintaining Valley Water assets.
Valley Water’s current contract for participation in the Semitropic Water Storage District groundwater banking will expire in 2035. Given the challenges that Semitropic has faced related to water quality and new Sustainable Groundwater Management Act (SGMA) legislation and their potential impact on future groundwater banking at Semitropic, the modeling analysis considered two baselines - one with Semitropic still in place after 2035 and another one assuming Semitropic no longer available after 2035.
Under all four futures, Valley Water will experience water shortages if relying only on existing supplies and infrastructure, and the biggest challenge for meeting water supply needs will be multiple-year droughts. The shortages will start as early as 2030 in the future scenario of stable demand and reduced imported supplies. With Semitropic in place, the average shortages over a six-year drought in 2050 could range from 4,000 AFY to 76,000 AFY, and the shortages increase as demand increase and imported supplies decreases. Without Semitropic, the shortages could get worse, with a range from 30,000 AFY to 82,000 AFY, underscoring the importance of securing and diversifying groundwater banking. Valley Water’s current system can handle the first two years of a multi-year drought, with shortage starting the third year. The projected shortages represent the targets that future water supply investment aim to meet to achieve Valley Water’s LOS.
Projects Under Consideration
The WSMP 2040 evaluated a suite of projects, of which six were recommended for continued planning and investment. Staff has continued evaluating the rest of the projects, referred to as “backup projects,” in case recommended projects do not work out. The WSMP 2040 project list was reviewed to remove the ones currently not under active consideration and add new ones. The updated project list (Table 1) includes 18 projects that will be evaluated through the WSMP 2050 development for meeting future needs/goals. For organizational purposes, these projects are grouped as shown in Table 1, although their benefits are often more complex than indicated by this grouping. More detailed description of each project is provided in Attachment 2. Several South County projects are included to evaluate how to ensure a sustainable water supply for that area. In addition, Valley Water will continue to implement the ‘no-regrets’ package of conservation and stormwater capture projects identified in the WSMP 2040. The status of the ‘no-regrets’ package is provided in Attachment 3.
Table 1 Projects Under Consideration
For major projects, the additional information on water supply benefits and cost is provided in Tables 2 and 3. For supply projects, a unit cost was calculated using 30-year lifecycle cost (capital + annual O&M) with financing relative to proposed annual supply benefit. For storage projects, a "storage capacity cost" or cost per AF of storage capacity was calculated using 30-year lifecycle cost (capital + annual O&M) with financing relative to proposed storage capacity. However, actual project lifecycles vary, 30-year was chosen for ease of comparison at this stage, and longer lifecycles may be used in the future. These costs will be updated to consider additional details and modeling that will be performed as part of portfolio development. All costs are represented in 2023 dollars.
Table 2 Preliminary Unit Cost of Major Supply Projects (2023$)
Table 3 Preliminary Storage Capacity Cost of Major Storage Projects (2023$)
Project Evaluation Criteria
Project evaluation is a critical step in the WSMP 2050 development to identify the portfolios for recommendation. A list of 14 criteria (Table 4) was developed to evaluate and compare projects. The criteria are generally consistent with peer agency practices and the funding filters used by Valley Water’s Capital Improvement Program. Among the proposed criteria, the water supply benefit and cost will be the most important and therefore the first criteria to be used to evaluate projects and portfolios. Following that, the remaining criteria will be used to further differentiate among options. The project evaluation framework is intended to present a systematic and holistic approach to evaluate and ultimately recommend projects for selection within the context of the WSMP and financial constraints.
Table 4 Project Evaluation Criteria
Board and Committee Engagement Plan
Throughout the WSMP 2050 development process, staff plans to engage the Board and committees to present major milestones and progress and seek input and approval as follows:
• Engaging the board at regular board meetings for update and special workshops for in-depth discussions
• Engaging board committees as needed for discussion/recommendation on topics within their jurisdiction
o Water Conservation and Demand Management Committee
o Water Storage Exploratory Committee
o Recycled Water Committee
• Presenting at board advisory committees and stakeholder meetings for information sharing and feedback
o Agricultural Water Advisory Committee
o Water Retailer Meeting
o Environmental and Water Resources Committee
o Water Commission Meeting
o Youth Commission
Stakeholder Engagement Plan
Stakeholder engagement is an important component of the WSMP update process and will be carried out throughout the plan development. Valley Water plans to hold four meetings with retailers at various stages of the plan development to seek input. Two retailer meetings were held in March and July 2023, respectively, and another two are tentatively planned for January and September 2024.
In addition to formal meetings, committee meetings, and workshops, Valley Water will use the WSMP webpage (<https://www.valleywater.org/your-water/water-supply-planning/water-supply-master-plan>), stakeholder email list, and communication newsletter or other channels as ongoing opportunities to provide updates. Valley Water will update the WSMP webpage and use it as a central place to advertise committee and board meetings when the WSMP is on the agenda, post meeting materials, and provide a point of contact to ensure the public is engaged.
Expert panel
The development of the WSMP 2050 involves comprehensive review and evaluation of Valley Water’s future water supply needs and various projects and portfolios for providing a reliable supply of water for Santa Clara County. The primary analysis of the WSMP 2050 is being performed by Valley Water staff, but an independent review from outside experts can help ensure the data, assumptions, and analysis of the plan are sound and justifiable. Therefore, Valley Water convened a panel of four experts to review staff’s analyses:
• David Sunding, PhD - Professor at University of California, Berkeley
• Newsha Ajami, PhD - Chief Development Officer for Research, Lawrence Berkeley National Lab
• Michael Anderson, PhD - State Climatologist, Department of Water Resources
• Yung-Hsin Sun, PhD - Senior Principal Consultant, Sunzi Consulting LLC
The expert review will be focused on overall planning framework and approach, demand projection, cost analysis, project evaluation, and climate change analysis.
WSMP Update Timeline
The proposed timeline for the plan development is as follows. Staff proposes to return to the full Board with preliminary portfolio analysis in December 2023/January 2024.
• 2023
– Establishment of overall framework and procedures
– Project/portfolio analysis and evaluation
– Stakeholder engagement
• 2024
– Portfolio analysis and recommendation
– Plan development
– Stakeholder outreach
– Plan adoption
ENVIRONMENTAL JUSTICE IMPACT:
There are no Environmental Justice impacts associated with this item.
FINANCIAL IMPACT:
There is no financial impact associated with this item.
CEQA:
The recommended action does not constitute a project under CEQA because it does not have the potential for resulting in direct or reasonably foreseeable indirect physical change in the environment.
ATTACHMENTS:
Attachment 1: Demand Projection
Attachment 2: Project Description
Attachment 3: No-regrets Package Update
Attachment 4: PowerPoint
UNCLASSIFIED MANAGER:
Manager
Kirsten Struve, 408-630-3138