A.12-04-019 Exhibits 1-16 MPWSP Report PDF

Exhibit 1
California-American Water Company

Monterey Peninsula Water Supply Project

APPLICATION NO. A.12-04-019
DATA REQUEST RESPONSE

Response Provided By: Richard C. Svindland
Title: Vice President Engineering
Address: 4701 Beloit Drive
Sacramento, CA 95838
DRA Request: DRA-A.12-04-019-CAL AM 007
Company Number: MPWSP-CAW 007 Q 001 (a)
Date Received: 08/02/2012
Date Response Due: 08/12/2012
Subject Area: Cost Estimates
DRA QUESTION:
1. Please provide justifications for the percentage values (shown in bold below)
used to calculate the following items in Cal Ams cost estimates:

a) Implementation costs (20% of base construction cost);
COMPANY RESPONSE:
Implementation costs for the intake, desalination plant and product water pipeline were
estimated at 20% of the base construction costs for these items. Estimates prepared by
California American Water in 2009 have used a more complex formula for estimating
implementation costs that used 15% of the base construction cost for the desalination
plant, assuming that it would be built using a design-build delivery method, and 30% of
the base construction cost for the intake system assuming that it would be built using a
design-bid-build project delivery method. Using that combined approach for estimating,
the 2009 estimate prepared for Mark Shuberts testimony developed an estimate of
$20,070,000 of implementation costs for implementation of the intake system and
desalination components of the North Marina Alternative, or approximately 20% of the
estimated construction costs for those facilities. Recognizing that in order to fast-track
implementation of the project, design-build project delivery may also be used for all or a
portion of the intake system and product water pipeline, California American Water
decided to use a single value of 20% for the purposes of estimating implementation
costs for the intake system, desalination plant, and product water pipeline components
of the MPWSP.



Company Number: MPWSP-CAW 007 Q 001 (b)
DRA QUESTION:

b) Contingencies (25% of base construction cost + implementation cost +
ROW/Land/Outfall cost);

COMPANY RESPONSE:
The percentages used to estimate Contingencies and Mitigation Costs are consistent
with the percentages that were used for the RDP since 2009, as documented on April
15, 2010 in the Joint Response to Data Request CWP #53 and CWP Project Cost
Comparison.



Company Number: MPWSP-CAW 007 Q 001 (c)
DRA QUESTION:

c) Mitigation Costs (1% of base construction cost + implementation cost +
ROW/Land/Outfall cost).
COMPANY RESPONSE:
See response to question 1(b).



Company Number: MPWSP-CAW 007 Q 002
DRA QUESTION:
2. Please provide all items included in Cal Ams calculation of Implementation Costs
for the MPWSP as reflected in Table 3 of Appendix E (Pg. 6).

COMPANY RESPONSE:
Implementation costs shown on Table 3 of Appendix E are for future engineering, legal,
permitting, and day-to-day administrative and management work required to implement
the MPWSP project components are described in Table 2 of Appendix E (Pg. 4).



DRA QUESTION:
3. In Cal Ams application (Appendix E, Pg. 6), RBF Consulting provided a cost
breakdown for the Intake Wells/Supply/Return Facilities line item under Base
Construction Costs of both plant options (5.4 and 9.0 mgd). For each line item
on the cost breakdown, please identify and provide a justification for all
unit costs. Additionally, please include a breakdown of activities and costs for
line items under Base Construction Costs in the Intake Wells and
Supply/Return Facilities section.

If the detailed cost breakdown spreadsheet, as requested above, is part of an
overall cost worksheet, please provide that worksheet in your response.
COMPANY RESPONSE:
See attached spreadsheet entitled Base Construction Cost Breakdown DRA#7 Q3.



DRA QUESTION:
4. In Cal Ams application (Appendix E, Pg. 7), the analysis prepared by RBF
Consulting shows that intake facility costs in the new project (MPWSP) are
higher than the intake facility costs for the RDP. One of the proffered reasons for
the difference in cost is the number of required intake wells for the MPWSP.
RBF Consulting then explains that there are different assumptions regarding the
following items:
(a) Capacity of each well;

Please list and provide detailed explanations for these assumptions. How are
these assumptions different than the assumptions used for the RDP?
COMPANY RESPONSE:
According to August 2009 cost estimates, prepared by RMC, for the Regional
Desalination Project (RDP), the RDP included the following:
6 wells at approximately 2600 gpm each.
Desalination plant capacity of 10 mgd (6,940 gpm).
Estimated overall desalination plant recovery of 43.2 percent.
No standby well capacity ( i.e., all 6 wells required for the desalination plant to
produce 10 mgd).
The MPWSP desalination plant alternatives are sized according to the following criteria:
6 slant wells, including one standby well, at approximately 1840 gpm per well,
for the 5.4 mgd desalination plant alternative.


8 slant wells, including one standby well, at approximately 2200 gpm per well,
for the 9.0 mgd desalination plant alternative.
Estimated overall desalination plant recovery of 40.6 percent.
The assumed well capacity is subject to confirmation by the test well program. Standby
well capacity is consistent with accepted reliability and redundancy criteria (n+1) for
water production facilities and allows full production from the desalination plant in the
event that one of the well pumps needs to be maintained or repaired. During normal
operation with all wells available and the desalination plant at full production, the
standby status would be rotated among the pumps, with each one of the wells placed in
standby mode (rested) for a few hours per day.

The desalination plant recovery is calculated using a series of process calculations and
involves engineering assumptions and judgment as well as computerized RO process
models. Since these calculations and assumptions were done by different engineers,
with slightly different process trains and loading rates, and different RO process models,
slightly different results would be expected. In this case, the predicted plant recovery
for the MPWSP is less than 3 percentage points different than the higher recovery rate
calculated for the RDP.



DRA QUESTION:
following items:
(b) Recovery percentage of desalination plant


COMPANY RESPONSE:
See response to question 4(a).



Company Number:
MPWSP-CAW 007 Q 004 (c)
DRA QUESTION:
following items:
(c) Addition of standby well capacity

COMPANY RESPONSE:
See response to question 4(a).

Monterey Peninsula Water supply Project


DRA QUESTION:
5. In Cal Ams application (Appendix E, Pg. 8), RBF Consulting provided a cost
breakdown for the product water pipeline for both plant options (5.4 and 9.0
mgd).

Please provide a detailed cost breakdown that lists all items included in the
base construction cost of the product water pipeline. For each item on the
cost breakdown, please provide justifications for all unit costs.

If the detailed cost breakdown spreadsheet, as requested above, is part of an
overall cost worksheet, please provide that worksheet in your response.
COMPANY RESPONSE:
The base construction cost estimate for the Product Water Pipeline is based on a
simple calculation of 32,000 LF of pipeline at approximately $340/LF. The unit cost of
$340/ LF is based on our judgment and experience and based on the Coastal Water
Project cost estimating information that was developed in 2005 for constructing a 30-
inch diameter pipeline in the TAMC right-of way (please refer to attached spreadsheet
entitled Base Construction Cost Breakdown for DRA#7 Q5 which incorporates
appropriate productivity assumptions and surface repair assumptions for this section of
pipeline). When the 2005 estimate is adjusted for escalation (to October 2012) and
diameter (from 30 inches to 36 inches) and jack and bore costs are removed, the result
is a unit cost of $340/LF.



DRA QUESTION:
6. If Cal Am has undertaken groundwater modeling specifically for the MPWSP,
please provide results and assumptions for this modeling. In addition, please
submit any reports that have been compiled for any such groundwater modeling.
COMPANY RESPONSE:
California American Water has not performed any groundwater modeling specifically for
the MPWSP. We have relied on modeling work performed and included the prior FEIR
for the North Marina Alternative which investigated a series of slant wells located
approximately 2000 to 2500 feet to the south of our currently proposed site.
Furthermore, California American Water was informed by the Commissions CEQA staff
that they will be conducting the groundwater modeling for the MPWSP as part of their
environmental review of the project.



DRA QUESTION:
7. Answer 64 in the direct testimony of Mr. Richard Svindland discusses potential
offsets to the cost of additional wells and pipeline for the GWR project. Please
list and explain all potential modifications to the number and size of the Terminal
Reservoirs and the sizing of other pipelines.

COMPANY RESPONSE:
It is premature to speculate on the following: 1) how California American Water would
accommodate a dilution pipeline and injections wells without knowing the final CDPH
requirements for dilution water; and 2) how certain project components are being
delivered in terms of costs.

However, California American Water is attempting to deliver all the needed project
components for the same overall capital costs that the Commission already approved.
As an example, California American Water may choose to install only one Terminal
Reservoir if GWR is implemented because the Company would have redundancy stored
in the ground. Likewise, California American Water could also explore two 1.5 MG
reservoirs in lieu of the two 3 MG reservoirs which are currently a part of the California
American Water-only facilities, because again the Company would have redundant
storage in the ground.

In terms of pipeline sizing, once California American Water is in the design phase, the
Company would re-investigate pipeline sizing to determine if segments could be
changed to provide a way to fund any needed dilution wells or pipes.

Exhibit 2

Joint Powers Authority Member Entities:
Boronda County Sanitation District, Castroville Community Services District, County of Monterey, Del Rey Oaks, Fort Ord, Marina Coast Water District, Monterey,
Moss Landing County Sanitation District, Pacific Grove, Salinas, Sand City, and Seaside.

February 7, 2013

Ms. Suzie Rose, PURA IV
Division of Ratepayer Advocates
California Public Utilities Commission
505 Van Ness Avenue
San Francisco, CA 94102

Dear Ms. Rose:

RE: DRA Data Request A.12-04-019 California American Water (U210W)

At the January 9, 2013 public participation meetings in Monterey for California-
America Water Companys (Cal Am) A.12-04-019, the MRWPCA provided
updated estimated costs for the Groundwater Replenishment Project (GWR).
Your request of February 5 provides an opportunity to clarify that information.
Mr. Robert Holden, Principal Engineer for the GWR project, has furnished the
following responses to your questions:

1. Please provide MRWPCAs most current projection for the low end of the
purchase price for GWR water (in $/acre foot).
The lowest current projected purchase price for GWR water is $2,000/acre foot.
2. Please provide MRWPCAs most current projection for the high end of the
The highest current projected purchase price for GWR water is $2,600/acre foot.
3. Please provide MRWPCAs most current projection for the most probably
Our current most probably purchase price for GWR water is $2,500/acre foot.

DRA Data Request
February 7, 2013
Page 2 of 2

4. Please discuss the factors that have resulte4d in a lower projected
purchase price for GWR water than the costs provided in A.12-04-019.
The factors that have resulted in a lower water purchase price include:
Increasing the loan duration and reducing the interest rate
Increasing the size of the facility to provide water to Monterey County
Water Resources Agency in addition to GWR
Proposing a separate pump station and pipeline to procure other water
sources
5. Please provide MRWPCAs most current projection for the schedule of the
GWR Project.
Our current projected schedule anticipates:
Completing the CEQA process in the second quarter of 2014
Completing design in the first quarter of 2015
Completing construction and starting injection in the fourth quarter of
2016.
MRWPCA is still in the planning stage. We hope to start a feasibility study in
March 2013 that will allow us to get a better idea of the anticipated costs.
If you have any questions, or if there is additional information that would be
helpful to you, please feel free to contact us. Mr. Holden can be reached via
email at bobh@mrwpca.com or by phone at 831-645-44634.

Yours truly,

Keith Israel
General Manager

cc: Mr. Terrence Shia, Senior Utilities Engineer
cc: Mr. Jonathan Knapp, Attorney for DRA

Z:\General Manager\CPUC\DRA Data Request 2-7-2013.doc

Exhibit 3
March 11, 2010
Bureau of Reclamation Review
Comments on Coastal Water
Project and Alternatives
Monterey, CA
Prepared for the Division of Ratepayers Advocates
California Public Utilities Commission
Contents
Page
1 Introduction .......................................................................................................... 3
1.1 Background ...................................................................................................... 3
1.2 Bureau of Reclamation Experience ................................................................... 3
1.3 Data.................................................................................................................. 3
1.4 Recommendations ............................................................................................ 4
2 Water Treatment .................................................................................................. 6
2.1 Inlet and Source Water ..................................................................................... 6
2.1.1 Slant Wells ................................................................................................ 6
2.1.2 Vertical Wells............................................................................................ 8
2.1.3 Well Water Composition and Need for a Pilot Project for both North
Marina Alternative and Regional Project................................................................. 9
2.1.4 Boron ...................................................................................................... 10
2.1.5 Sodiumand Chloride ............................................................................... 11
2.2 Pretreatment ................................................................................................... 11
2.3 Desalination.................................................................................................... 11
2.3.1 Membrane Replacement .......................................................................... 12
2.3.2 Water Analyses ....................................................................................... 13
2.3.3 Plant Staffing........................................................................................... 13
2.4 Post Treatment................................................................................................ 13
2.4.1 Stabilization ............................................................................................ 13
2.4.2 Disinfection............................................................................................. 14
2.5 Concentrate Disposal ...................................................................................... 15
2.6 Water Treatment Costs from a Technical Perspective ..................................... 15
2.6.1 Desalination Equipment Costs ................................................................. 15
2.6.2 Chemical Costs........................................................................................ 20
2.6.3 Labor Costs ............................................................................................. 20
2.7 ASR System................................................................................................... 20
2.8 Desalinated Product Water Pipeline................................................................ 21
3 Capital Costs ....................................................................................................... 22
3.1 Intake Facilities (Off-site Feedwater).............................................................. 23
3.1.1 Moss Landing (ML) and North Marina Alternative (NMA) Projects........ 23
3.1.2 Regional Project ...................................................................................... 23
3.2 Desalination Plant........................................................................................... 23
3.2.1 Moss Landing Project .............................................................................. 23
3.2.2 North Marina Alternative Project............................................................. 24
3.3 Desalinated Water Transfer Pipelines ............................................................. 25
3.4 CAW-Only Facilities ...................................................................................... 25
3.5 MRWPCA Outfall Capacity Charge ............................................................... 26
3.6 Right of Way Easements and Land Acquisition Costs (ROW and LA)............ 26
3.6.1 Moss Landing Project .............................................................................. 26
3.6.2 North Marina Alternative......................................................................... 26
2
3.7 Unit Costs....................................................................................................... 27
3.8 Contractors Overhead and Profit.................................................................... 28
3.9 Implementation Costs ..................................................................................... 28
3.9.1 North Marina Project Pilot Plant ........................................................... 29
3.9.2 General.................................................................................................... 29
3.10 Project Contingency.................................................................................... 29
3.11 Mitigation Measures.................................................................................... 30
3.12 Accuracy Range of Estimates...................................................................... 30
3.13 Cost Summary ............................................................................................ 31
4 Conclusion........................................................................................................... 33
Appendix A Documents Reviewed in 2008
Appendix B Determination of Fraction of Groundwater in a Mixture of Seawater and
Groundwater
Appendix C Boron Concentration Data
Appendix D Base-Loading of a Desalination Plant
Appendix E ASR Review (performed in 2008)
Appendix F Pipeline and Corrosion Review (performed in 2008)
Appendix G Moss Landing Unit Cost Review (performed in 2008)
3
1 Introduction
1.1 Background
In March 2007 the Bureau of Reclamation (Reclamation) entered into an Agreement with
the California Public Utilities Commission Division of Ratepayers Advocates (DRA) to
review and analyze the technical feasibility, reliability, risks, and cost estimates for a
major desalination plant on Monterey Bay, as proposed by California American Water
Company. As stated in the Agreement, Reclamation will provide a neutral effort on the
exhibits or the documents reviewed. The United States acting by and through the Bureau
of Reclamation Technical Service Center (TSC) shall maintain a neutral posture with
regard to any effort, action and/or analysis provided under this Agreement.
In July 2008 Reclamation provided draft review comments to DRA regarding the Moss
Landing alternative of the Coastal Water Project (CWP). At that time, the two largest
project risks identified by Reclamation were the uncertainties regarding the water
treatment component of the project and the application of adders (contingencies,
implementation, etc.) in the preliminary cost estimates. Please see Appendix A for a list
of documents reviewed in 2008. Reclamations review of the CWP has now expanded to
include the Moss Landing Project, the North Marina Project, and the Monterey Regional
Water Supply Project (Regional Project).
1.2 Bureau of Reclamation Experience
The Bureau of Reclamation was established in 1902, and is the largest wholesaler of
water in the United Sates. Reclamation brings water to more than 31 million people and
provides irrigation water for 10 million acres of farmland. Reclamation is also the
second largest producer of hydroelectric power in the western United States, annually
producing more than 40 billion kilowatt hours of electricity.
Today, Reclamation is a contemporary water management agency with numerous
programs, initiatives, and activities that will help the Western States, Native American
Tribes, and others meet new water needs and balance the multitude of competing uses of
water in the West. Reclamation places great emphasis on fulfilling water delivery
obligations, water conversation, water recycling and reuse, and developing partnerships
with customers, states, and Native American Tribes, and in finding ways to bring together
the variety of interests to address the competing needs for our limited water resources.
1.3 Data
All information reviewed by Reclamation was provided by DRA staff as detailed below.
Over the course of the project, Reclamation submitted requests for additional information
4
to DRA staff, who then submitted the request to the appropriate parties. Reclamation
reviewed the following documents:
Direct Testimony of Mark Schubert, Phase 2 Issues, 5/22/09 (with exhibits)
Direct Testimony of Kevin Thomas, Phase 2 Issues, 5/22/09 (with exhibits)
Direct Testimony of David A. Berger, Phase 2 Issues, 5/22/09 (with exhibits)
Direct Testimony of David P. Stephenson, Phase 2 Issues, 5/22/09 (with exhibits)
Direct Testimony of Lyndel W. Melton, Phase 2 Issues, 6/24/09 (with exhibits)
Direct Testimony of Thomas E. Gaffney, Phase 2 Issues, 6/24/09 (with exhibits)
Technical Memorandum - Capital and O&M Cost Estimate Update for the
Coastal Water Project, 8/14/09 (with Project Cost Comparison Exhibit) [Joint
Comparison Exhibit or JCE]
Costal Water Project Data Request Responses #34 - #50
Technical Memorandum: Changes to DEIR Phase 1 Project, Marina Coast Water
District, California American Water, and Monterey County Water Resources
Agency, 10/15/2009
For the purposes of this review, the information found in the Joint Comparison Exhibit
(JCE) was assumed to be the most accurate and up to date data. Where discrepancies
existed between the JCE and other sources, the information found in the JCE was used.
Information discussed at the Coastal Water Project Cost Workshop (7/7/09 7/8/09) is
also included in this report.
1.4 Recommendations
Throughout this report a number of recommendations are made which could lead to
improved project reliability, a decrease in capital or operations and maintenance costs, or
a decrease in project risk. A summary of these recommendations are as follows:
Drill and operate a test well before proceeding with either the North Marina
Alternative or Regional Project. (Sections 2.1.1 and 2.1.2)
Performa year-long pilot test of the proposed water treatment equipment using water
obtained from the test well or wells. (Section 2.1)
Abandon the concept of a second pass for the RO systems as not necessary to meet
existing CDPH notification level for Boron and secondary standards for sodium and
chloride. (Sections 2.1.4 and 2.1.5)
Shorten the estimated lifetime of RO elements to five years and develop membrane
replacement criterion. (Section 2.3.1)
Develop a formal work alone policy for the proposed water treatment plant.
(Section 2.3.3)
Carry out stabilization tests on desalination plant product water (Section 2.4.1).
Analyze chlorinated desalination plant product water for disinfection byproducts.
(Section 2.4.2)
5
Conduct the Brine Waste Disposal Study and further investigate the impact of
possible brine corrosion issues of outfall system as recommended by Brown and
Caldwell. In addition, investigation the potential formation of disinfection
byproducts in the concentrate stream. (Section 2.5)
Further investigate the feasibility and potential cost savings associated with base-
loading the desalination plant. (Section 2.6.1)
Decrease the capacity of the proposed Moss Landing desalination plant from12
million gallons per day (MGD) [6 arrays of 2 MGD] to 10 MGD [5 arrays of 2
MGD]. (Section 2.6.1)
Obtain a second cost estimate for the proposed desalination plant from a potential
bidder. (Section 2.6.1)
Obtain desalination plant by competitive bid. (Section 2.6.1)
Separate the cost of energy recovery equipment from cost of desalination plant.
(Section 2.6.1)
Investigate constructing the 6-MG Terminal reservoir structure above-ground in order
to reduce estimated construction costs. (Section 3.4)
Generate estimates for anticipated land purchases for the Regional Project
desalination plant and source water wells in order to ascertain how much extra these
will add to overall project costs. (Section 3.6.3)
Obtain an independent estimate for Regional Project unit costs to provide a more
accurate estimate of costs. (Section 3.7)
Generate mitigation cost estimates based upon the FEIR impact and mitigation
summary. (Section 3.11)
6
2 Water Treatment
Discussed within this section are topics of concern that may affect the cost and the
reliability of the proposed Moss Landing Plant, the North Marina Plant and the Regional
Plant. These topics relate primarily to the treatment of water. The topics are presented in
process order from inlet to the plant to outlet. Because some costs are influenced by
technical concerns, they are discussed in Section 2.6. Concerns are listed by subject
rather than being separated into design, construction and operation. Where desirable, the
discussion is followed by a specific recommendation. Data taken directly from the Moss
Landing pilot project quarterly progress reports is confidential and has been redacted.
2.1 Inlet and Source Water
The feedwater for the Moss Landing Plant, with the possible exception of a few
components, has been thoroughly investigated and it appears suitable for the reverse
osmosis systemthat is envisioned. However, the feedwaters for the North Marina Plant
and for the Regional Plant have not been characterized. Feed for the latter two plants is
to be taken from wells, in the first case slant wells, in the second case vertical wells.
2.1.1 Slant Wells
The source water for the North Marina alternative is to be taken from slant wells yet to be
drilled. Slant wells conceptually offer certain advantages: Like that of vertical wells, the
water slant wells produce is filtered, so there should be less burden on the pretreatment
systemand there should be little entrapment or impingement. The productivity per well
is expected to be greater than that of a vertical well for an aquifer of given thickness. By
orienting the well so that it protrudes toward or under the sea, the ratio of seawater to
groundwater extracted by a slant well should be substantially higher than that of a vertical
well. This means that for a desalting plant of a given size the volume of groundwater
extracted will be considerably lower.
The technology for drilling such wells may be satisfactory; however, there is not much
practical experience with slant wells as a source of desalination plant feed. This
technology was demonstrated one time at Dana Point at Doheny Beach in a project
partially funded by Reclamation, and perhaps elsewhere. There is relatively little
operating experience with slant wells. In particular, long termoperating experience is
virtually non-existent. Thus use of a slant well entails more technical risk than use of
vertical wells; however, this risk can be considerably decreased by drilling and operating
a test well in a location such that it can be used to supply part of the water for the
desalination plant.
Whether either type of well works as designed depends on the local geology. The level
of detail in the information that we have seen thus far concerning the local geology does
not provide us with confidence that the wells will work as described. Figure 3 in
7
Technical Memorandum 31.003-02
1
contains some geological information, although the
permeability of the sand or gravel layer is not indicated. As an example of what kind of
information is needed, Figure 1, below, taken from the final report on a test slant well at
Dana Point provided to Reclamation
2
, shows approximately where permeable and
impermeable layers are located and indicates to a non-geologist that the formation
appears appropriate for water collection by a slant well and suggests where the well
should be cased and where the well screen should be located.
It is assumed that the natural filtration of water from either slant or vertical wells will
greatly reduce the concentration of suspended solids. Modeling of the slant wells
suggests that the water taken from such wells would be 95% seawater and 5%
groundwater, which would cause a decrease, by about 5%, in the total salinity of the
water. The groundwater can be expected to contain some iron and possibly other fouling
species. These are all assumptions, reasonable ones indeed, but still assumptions that
need to be followed up by appropriate testing. See Section 2.1.3 for further discussion on
feed water composition.
Drilling and operating a test well was discussed at the Cost Workshop. This well should
be operated for long enough for the water to come to steady state. This might take 3 to 4
months. It may be possible from the modeling done for the proposed wells to make a
better estimate than this of how long it would take for a well to come to steady state.
Approach to steady state can be determined by tracking concentrations of species that
appear in significant concentrations in seawater such as bromide and magnesium. A
much poorer test, albeit a continuous test, would be to monitor conductivity of water
from the well. Please see Appendix B for a procedure to determine the fraction of
groundwater found in the water extracted from the proposed wells.

1
Technical Memorandum 31.003-02, from RMC/Trussell Technologies, Inc., to Marina Coast Water
District, dated December 22, 2008. This memorandum was contained in a response to question 28b of data
request #51.
2
DWPR Report No 151, October 2008.
8
Figure 1. MWDOC Test Slant Well, Dana Point, CA (Drawing by Geoscience)
Recommendation: Before proceeding with the North Marina alternative, drill and operate
a test slant well as discussed above.
2.1.2 Vertical Wells
The vertical wells proposed for the Regional Project are more conventional than the slant
wells proposed for the North Marina project. The information that we have does not
appear to say much about the process that was used to establish the assertion that the
water in these wells would be 85% seawater and 15% groundwater. This vertical well
systemshould be tested over a reasonable span of time to have credibility
3
. Again, the
modeling done for these wells may give an indication on how long it may take for a well
to come to steady state. We have no information about the performance of these wells
other than that derived from modeling. The information received thus far leaves us with
questions about whether the groundwater is more like a surface runoff or a
groundwater that is equilibrated with the soil. We also have no specific information
about the probable composition of the water from the wells other than that it is an 85/15
mixture. Knowledge of the composition of the feedwater is important because it affects
the possibility, or probability, of scaling and fouling of the membranes. See Appendix B

3
The question at issue is whether water from the wells proposed will be suitable for use as feedwater to a
reverse osmosis plant. It needs to be determined whether the composition, in terms of TDS, possible
scaling compounds, organic materials and boron, is what is being projected and whether the wells in this
particular location will have the productivity required. Further, is the operation of this well going to match
the results of the modeling of the groundwater flow in this area?
9
for a procedure to determine the fraction of groundwater found in the water extracted
from the proposed wells.
Recommendation: Before proceeding with the Regional Project, drill and operate a test
vertical well as discussed above.
2.1.3 Well Water Composition and Need for a Desalting Pilot Project
for both North Marina Alternative and Regional Project
The groundwater taken in by the wells at either the North Marina or the Regional Project
will differ from that at the Moss Landing site. It can be expected to be anaerobic. This
means that iron would be in the ferrous (Fe
++
) state and manganese, which frequently
accompanies iron in terrestrial deposits and consequently in groundwater, would be in the
manganous (Mn
++
) state. Manganese is a concern since manganous ion is not as easily
oxidized as ferrous ion. Chlorine, in sufficiently high concentration, should take care of
this problem. There is the probability of contamination by other species like calcium,
magnesium, bicarbonate and sulfate in relatively higher proportions than are normally
found in seawater. These are scale forming materials that, in high enough concentrations,
can adversely affect the performance of the RO membranes. We believe that piloting the
desalting facility would be a wise course and would be worth the time and expense. Not
to do so would be a risky procedure.
Recommendation: If either the North Marina or the Regional alternative is selected as the
choice of long term water supply, then perform a year-long desalting pilot test using
water from the test well.
If the pilot unit from Moss Landing can be refurbished and used, the estimated cost for
the pilot test would be about $1.5 million ($1 million for moving, reconfiguring to
simulate the plant as designed and startup, and $0.5 million for operation). Cal Am has
included an allowance for pilot plant costs associated with the North Marina alternative
as part of the 20% Implementation Costs for design/build/bid facilities
4
. These
Implementation Costs are listed as $16,100,000 but at this time it is unclear how much of
this line item is allocated to pilot testing. Cal Am has stated that a detailed cost estimate
for a North Marina alternative pilot project would be developed if a future pilot program
is implemented
5
.
Performa desalting pilot test, preferably of a years duration, to disclose any problems
relating to iron and manganese (among other things) and to allow for time for their
resolution.

4
Direct testimony of F. Mark Schubert, P.E., Phase 2 Issues, Attachment K, pg 15
5
California American Water Company Data Response #48, Question 2
10
2.1.4 Boron
The Joint Comparison Exhibit indicates that plants at all three possible locations will be
designed to have a second pass in the desalination plant capable of treating 40% of the
product water from the first pass in the plant with a recovery of 85% to 95%. This is
expected to reduce the boron content of the treated water to below 0.5 mg/L. The
necessity for this level of boron reduction is discussed below. Based on the performance
of commercial SWRO elements, this expectation is reasonable, although, if it is applied
to the North Marina and the Regional alternatives, it includes the unspoken assumption
that the groundwater contains low or negligible concentrations of boron, which may not
be correct.
Boron concentration in sea water can vary significantly. If this were the case at Moss
Landing, it is possible that the second pass system might need to be operated only during
certain seasons of the year to achieve the goals of reducing the boron level in treated
water to below 0.5 mg/L. This would clearly affect both modes of operation and
operation costs. It is likely that whatever phenomenon causes the variation in boron
content of the water at Moss Landing would also cause a variation at the intake wells for
the North Marina Alternative and for the Regional Plant, so the same operational
considerations would probably hold true in these cases as well.
However, for human consumption, the production of water of 0.5 mg/L appears
excessively strict and is unnecessary. The California Department of Public Health
(CDPH) has a boron notification level of 1 mg/L.
6
CDPH does not have testing or
sampling protocols. For the Carlsbad desalination plant, CDPH has suggested two
samples per year. The World Health Organization (WHO) has recently raised their
guideline on boron in drinking water from 1 mg/L to 2.4 mg/L
7
. This change will appear
in the next printed version of the WHO Guidelines. Background information for this
decision is published
8
. Treating the source water to the level of 0.5 mg/L adds
unnecessary additional expense. The results of the pilot project at Moss Landing indicate
that the concentration of boron in the product water tends to be about 1 mg/L, with
variation of about 0.2 mg/L. Since the California notification level is 1 mg/L, a boron
concentration of up to, and including, 1.4 mg/L would be allowed under EPA rules for
rounding, before the local government notification requirements or customer notification
recommendations are triggered.

6
CDPH Notification Levels are advisory in nature and not enforceable standards. However, if a chemical
is present in drinking water over its Notification Level, the water agency is required by statute to notify
local governments where users of the drinking water reside. Consumer notice, including information about
the presence of the contaminant, and about the health concerns associated with exposure to it, is also
recommended by CDPH. This can be done in a utilitys annual Consumer Confidence Report, a separate
mailing, or other method but is not required.
7
http://waterdesalreport.com/articles/26737
8
http://www.who.int/water_sanitation_health/dwq/chemicals/Boron_revision3_novemberJKF2008.doc
11
It is important to note that boron concentration in the feedwater of the Moss Landing
pilot project is not necessarily the same as the boron concentrations that will exist in the
feedwater for either the North Marina or Regional Project alternatives. A comparison of
the feedwaters for at least several months after the test wells have come to steady state
will indicate whether a second pass is required in the RO system for a project located
somewhere other than Moss Landing. This can be confirmed during a desalination pilot
test (See Section 2.1.3).
Please see Appendix C for additional comments regarding boron issues. Please note that
Appendix C contains confidential information.
2.1.5 Sodium and Chloride
The concentration limits of 100 mg/L for sodium and chloride, proposed in Appendix Q
of the FEIR, are excessively strict for drinking water. Compared to anticipated values of
180 and 200 mg/L respectively, there would be little improvement of taste, which is the
only aesthetic parameter that might be affected. That the anticipated values are higher
than the current average values of 54 and 69 mg/L is a weak justification for a substantial
cost increase. The CDPH does not have a notification level or primary standard for either
sodium or chloride, but does have secondary standards.
9
For chloride the secondary
standard is 250 mg/l. There is a 500 mg/l secondary standard for total dissolved solids
(TDS), which would include sodium. The Environmental Protection Agency has a
secondary standard of 250 mg/L for chloride and no standard for sodium (except for the
overall secondary standard of 500 mg/L for TDS).
Recommendation (based on 2.1.4 and 2.1.5): Abandon the concept of a second pass for
the RO system as it is not necessary to meet existing CDPH notification level for Boron
and secondary standards for sodium and chloride.
2.2 Pretreatment
The suggestion is made that the North Marina and the Regional plants would contain
10-foot or 12-foot diameter horizontal pressure filters. Use of pressure filters of 12 foot
diameter may prove difficult or costly to ship because of their size. Selecting a particular
filter diameter is not simply a technical decision.
2.3 Desalination

9
Secondary standards are described as impacting the "cosmetic or aesthetic effects" of drinkable water.
12
2.3.1 Membrane Replacement
Membrane element replacement costs are based on membrane lifetime. It appears that
the membrane elements in the Moss Landing pilot plant have worked well for one year.
However, from a pilot test of one years duration, it is not possible to make a reasonable
estimate of membrane lifetime, which may be 5 or more years under reasonable
conditions. A reliable estimate can only be obtained from operational experience in
plants of similar service, usually by the element manufacturer. The current projection for
the Moss Landing plant, and probably for the other alternatives, is that there will be no
element replacement for the first 5 years and 15% replacement per year thereafter.
Fifteen percent replacement per year is equivalent to a membrane element lifetime of 6.7
years. This is a long lifetime. We have not been able to locate a reference to this extent
of lifetime. Cal Am, in CWP Data Response #42, did not provide any documentation to
substantiate this estimate.
It is admittedly difficult to express membrane replacement from startup since one starts
with all new elements and one does not usually replace all of the elements in a plant at
one time. For our analysis, we assume that all replacement occurs at the beginning of the
year. The first 15% of the elements to be replaced would have a service life of 5 years.
Other original elements would have increasingly longer service lives with the last 10% of
the original elements to be replaced having a service life of at least 11 years, which seems
improbably long. The consequence of not replacing elements when some fraction of the
elements are not working adequately is that the plant will operate at reduced capacity
and/or the product water quality will not be as good as it should be. It is unlikely that a
competent plant manager would ignore element replacement so completely that the plant
would fall out of service.
In addition, it will be necessary to set up a procedure to determine when a single element
or group of elements will be replaced.
Recommendation: Shorten the estimated lifetime of elements to 5 years
10
, beginning
after the fifth year, in the absence of a credible reference to a longer lifetime
11
.
Recommendation: Develop a criterion indicating which elements are to be replaced.
There are several possibilities. Generally the procedures that are most effective in
ferreting out the poorest performing elements take the most operator effort. This criterion
does not need to be developed now, but it will be needed and it will affect cost and
performance of the plant.

10
The recommended five year membrane life is only for the purposes of cost estimating. Once a specific
membrane is selected, the expected membrane life can be adjusted based on manufacturer specifications.
11
This cost appears to be $ $445,000 in box H118 on tab CAW (ML) O&M2022 of the Joint Cost
Comparison spreadsheets. It is not clear how this value was generated.
13
2.3.2 Water Analyses
Costs for a laboratory are shown in the JCE cost estimates, but it is not clear whether this
is to be a certified laboratory for potable water. The cost of having a certified laboratory
would be slightly higher, but it would avoid the inconvenience to the plant manager and
operators of having to ship out samples with the attendant complexities of chain of
custody and record keeping.
2.3.3 Plant Staffing
The staffing for the desalination plant is scheduled so that one operator will be in
working alone for 16 hours per day and one operator will be working alone during
weekends. This means that over 75% of the time one operator will be working alone.
This concept is satisfactory for calculating the workforce required for the plant since it
appears that the required operational procedures for maintaining the plant can be
adequately carried out. Tending a desalination plant does not appear to involve
operations where OSHA regulations specifically prohibit working alone. However, there
are potential hazards including pressures up to 900 psi, voltages above 110 volts,
hazardous chemicals, and possibly wet and slippery surfaces. Consequently, as an
operating procedure, it is not desirable to have an operator working alone.
Recommendation: As a minimum, a formal written work alone policy and any
required equipment such as communication or signaling devices should be in place when
operation starts.
2.4 Post Treatment
Post-treatment includes any operations following the desalination process.
2.4.1 Stabilization
The product water from the desalination plant in any of the alternatives is estimated to
contain about 350 mg/L TDS consisting principally of sodium chloride. The
concentration of calcium, magnesium and sulfate ions will be low since RO membranes
are particularly effective at removal of divalent ions. This water will be aggressive
toward new piping in the distribution systemand toward any protective layers that may
exist on previously used piping. To prevent corrosion of piping some adjustment to
composition (stabilization) must be made. Cal Am has proposed to stabilize the product
water by addition of calcium carbonate through calcite (calcium carbonate) contactors
and injection of carbon dioxide. The operating parameters of the stabilization process
have not been described. Treated water is to be tested for compatibility with other waters
with which the desalted water may be mixed during operation of the project. However,
these tests have not been conducted. Until the tests have been conducted, there is a
14
significant risk of pipe corrosion or of a red water incident
12
. Unfortunately, the latter
constitutes a public relations risk, which can be serious and troublesome.
There are several problems here, all of which must be solved. Piping systems that have
been in use for some time usually have a coating consisting mostly of calcium carbonate
but also of corrosion products. The water must be treated in such a way that: 1) it is not
aggressive to the materials of any new piping that is installed, and 2) it is not aggressive
to any coatings that have developed through use in any piping into which the treated
water may be introduced. While the water must be negatively aggressive, that is, have a
tendency to deposit material on the pipe surfaces, it must not deposit so much material
that the pipes begin to close off. The stabilization must work correctly right from the
start. Finally, mixtures of the treated water and any other water that may be flowing
through the system must meet these same criteria. Several standards may be used
including the Langelier Saturation Index, the Ryznar Stability Index and the Calcium
Carbonate Precipitation Potential, which are combinations of pH, calcium concentration,
and alkalinity. It is not clear which of these standards would produce the best results.
There is no practical way to put a dollar value on the effect of serious red-water incident.
Depending on the seriousness, such an incident might stop production of the plant for a
year or longer.
Recommendation: Carry out the proposed stabilization tests looking at the effect of both
product water and product water mixtures on both new piping and on existing piping.
2.4.2 Disinfection
Final treatment of the product water consists of addition of sodium hypochlorite for
disinfection. This process and the initial disinfection of the sea water feed typically
produce disinfection byproducts. The product water so treated needs to be analyzed to
ensure that the product does not contain materials that would be hazardous to the health
of the consumers.
Recommendation: Include analysis of chlorinated product water for disinfection
byproducts to ensure that the level of these compounds will not exceed maximum
contamination levels for drinking water
13
.

12
In a distribution system that has been operating satisfactorily for a number of years a protective layer of
calcium carbonate generally develops on in inside surfaces of the piping. When an aggressive water is
introduced into this sort of piping, the protective layer and any corrosion products, usually iron oxides, is
removed and delivered to the customers. This imparts a reddish color to the water. Removal of this layer
sometimes opens leaks that had been plugged by the protective layer. Overall this is not pleasing to the
customers.
13
The reason for making this recommendation is that if excessive disinfection by-products are generated
then some means of removing them or not generating them in the first place needs to be included in the
plant design. At this level of design, there does not appear to be any such means of reduction or removal of
DBPs.
15
2.5 Concentrate Disposal
Both the North Marina or the Regional plants would dispose of the brine concentrate
through the MRWPCA ocean outfall. While a preliminary review by Brown and
Caldwell (BC) did not find any fatal flaw that would prohibit the proposed brine
discharges, BC recommended a more comprehensive Brine Waste Disposal Study to
evaluate the impacts of the brine discharges on the compliance of the NPDES permit
requirements, including a detailed description of the brine receiving and monitoring
facilities.
14
This would be required to obtain approval for the Regional Water Quality
Control Board. BC also noted possible corrosion issues that should be investigated
further.
15
The potential formation of disinfection byproducts in the concentrate stream
(due to the use of chlorine in the treatment process) should also be investigated.
Concentrate disposal at the Moss Landing Plant is simpler and the present plans, mixing
with the cooling water to be discharged, appear to be reasonable.
Recommendation: Conduct the Brine Waste Disposal Study and further investigate the
impact of possible brine corrosion issues of outfall system as recommended by BC. In
addition, investigate the potential formation of disinfection byproducts in the concentrate
stream.
2.6 Water Treatment Costs from a Technical Perspective
2.6.1 Desalination Equipment Costs
In the discussion that follows, numbers and costs relate to the Moss Landing Plant.
Similar arguments can be made for the other projects; only the numbers will be a little
different. When one looks at the total cost of water, the overall impression is that the
water, which translates to $10.79/kgal, is expensive
16
. For comparison, a published list
of sea water desalting plant product costs appeared in the Water Desalination Report
17
.
For details, see referenced publication. This report listed costs for 42 plants around the
world. Estimates from 33 of these plants were determined between 2005 and 2008.
Earlier estimates were not included in this evaluation to eliminate the effect of time.
These data are shown in Figure 2 below. In this figure, the blue diamonds represent

14
Brown and Caldwell Letter Report Preliminary Technical and Financial Evaluation for Brine Disposal
through Existing Ocean Outfall, July 31, 2009 to Mr. Robert Holden, Principal Engineer at Monterey
Regional Water Pollution Control Agency.
15
Ibid at page 4. Corrosion Issues. An additional issue of concern for brine discharge through the outfall
system is the nature of the brine. Typically effluent is not very corrosive in nature and the system designer
selected outfall materials appropriate to the nature of the effluent and the systems installation in the ocean.
In contrast, the brine would be much saltier than seawater and may be more corrosive than effluent. In our
opinion this issue should be investigated further.
16
This is calculated from values for Moss Landing Plant in the Project Cost Comparison worksheet, dated
14-Aug-09, tab Overall Summary Cells F55 and F62, converted to $/kilogallon. Values in the two cells are
identical.
17
Water Desalination Report, September 15, 2008.
16
individual plants with capacities mostly between 5 and 60 MGD. The black line is a
curve fit, which essentially is the average cost as a function of capacity. To quantify the
distribution around this average, a red line shows 25% above average cost and the pink
Figure 2. Comparison of Water Production Costs
line shows 15% below average cost. The yellow square show the Moss Landing
estimated costs per kgal. The cost of the proposed Moss Landing project is well above
the average cost of other plants.
Several alternative explanations are available. First, the Moss Landing Plant appears to
be oversized. It consists of six 2 MGD plants, which should amount to 12 MGD in total;
however, for operating reasons, this is called a 10 MGD plant. The plant utilization
appears low, which may be the real critical issue. Unit cost is based on 8,800 acre-feet
per year, which translates to 7.86 MGD. This means that the plant on average would be
operating at 78.6 % of nominal capacity, based on 10 MGD nominal capacity, and at
65.4% of nameplate capacity, based on 12 MGD nameplate capacity. This would cause a
significant increase in the apparent capital costs. Increasing plant utilization is a way to
reduce the unit cost of water. It is not unusual for plants to have utilization factors above
90%. Project proponents should investigate further the feasibility and potential cost
savings that would result from increasing the operating fraction coming closer to base-
loading the desalination plant. Appendix D contains further general information
regarding plant utilization and base-loading.
Recommendation: Further investigate the feasibility and potential cost savings associated
with increasing the utilization factor of the desalination plant.
17
Recommendation: Decrease the capacity of the proposed Moss Landing desalination
plant from 12 MGD [6 arrays of 2 MGD] to 10 MGD [5 arrays of 2 MGD].
18

Second, the plant contains a second pass for boron removal, treating 40% of the product
of the first pass at 90% recovery. This is actually a 3.8 MGD brackish water plant. An
analysis developed from WTCost II (a cost estimate program supported in part by
Reclamation) indicates that that addition of a second pass will increase the capital cost by
approximately one third of the first pass capital cost.
Recommendation: As noted above, remove the second pass for boron removal.
19

A third reason may be that the price for the desalination plant is based on a single vendor
quote. This does not allow for the significant effect of competitiveness. It is generally
observed, that the more competition that is involved, the lower the price. While there is
no general method for determining the distribution of bids for a plant, Table 1 shows the
distribution of bids for a recent seawater desalination plant, which is about the size of the
plants under discussion. Note that the lowest bid is only 57% of the highest bid. This is
an example, which is typical of the bids received in open competition
20
.
Table 1. Summary of Bids from a Recent Seawater Desalination Plant Tender
Bidder
10.9 MGD
initial capacity,
$ US
7.2 MGD
addition,
$US
Aqua Engr 75,610,189 16,569,121
Aqua (Alternative) 74,531,746 16,125,509
Veolia 111,612,750 24,197,861
Veolia (Alternative) 109,419,759 20,831,863
Degrmont 121,463,724 20,785,553
Befesa 131,546,039 38,191,201
Recommendation: Obtain a second estimate from a potential competitive bidder.

18
Such a reduction would change cell 7F on tab Overall Summary of Project Cost Comparisons - (August
14, 2009) from $105,400,000 to $91,100,000 (assuming a cost scale factor of 0.8). and would reduce costs
dependant on this cell, e.g., Cells 55F and 61F from $3,520 to $3,320, without counting probable
reductions in annual costs.
19
Such a reduction would change cell 7F on tab Overall Summary of Project Cost Comparisons - (August
14, 2009) from $105,400,000 to $79,050,000 and would reduce costs dependant on this cell, e.g., cells 55F
and 61F from $3,520 to $3,160, without counting probable reductions in annual costs. If both this and the
recommendation to reduce the plant capacity were followed, the cost reductions would be additive. The
total reduction would change cell 7F from $105,400,000 to $64,750,000 and would reduce cells 55F and
61F to $2,970.
20
Information from Water Desalination Report, June 23, 2008.
18
Recommendation: Obtain plant by competitive bid rather than by sole-source
procurement.
Typically desalination costs cited relate to the desalination plant only. In particular, the
distribution system is typically not included in water production costs. If we exclude this
from the overall costs, the capital cost item would be reduced by 23% ($32.7
million/$140 million). If we exclude both the intake and distribution systems for
comparison purposes, the capital costs would be reduced by 25% ($34.5 million/$140
million).
Figure 3 compares the approximate cost of water for the proposed Moss Landing project
without including the costs of the associated distribution system
21
. As seen in this Figure,
removing the distribution costs from the proposed project only results in a modest
decrease in the overall cost of water.
Figure 3. Comparison of Water Production Costs without Distribution

21
The approximate cost of water without distribution components was calculated by adjusting the Overall
Summary of Project Cost Comparisons (August 14, 2009). The Desalinated Water Transfer Pipelines
line item was set to $0, and the Implementation Costs and Project Contingency values were reduced
accordingly. For the sake of simplicity, please note that other costs associated with the distribution system
(O&M, ROW easements, etc.) were not removed in this calculation.
19
The distribution of costs is also unusual. As a general rule, one expects costs to be
distributed about 1/3 each to energy, other operating costs, and capital amortization. A
recently published typical distribution is shown in Figure 4. In this figure operating costs
are broken down into chemicals, maintenance, labor membranes and cartridge filters,
which sum up to 27%
22
. In the Joint Cost Comparison, the annualized capital cost of the
Moss Landing plant is 62% of the total annual costs ($18.70 million/ $30.08 million)
Figure 4. Distribution of Desalination Costs
The distribution of costs given in Figure 4 above is believed to be for a plant without
energy recovery. One must ask what is the effect of energy recovery on this distribution.
Since the energy recovery system is not split out in the cost sheets, we can only estimate
what effect this has. Unfortunately energy recovery equipment is sufficiently new that it
has not been commoditized and one suspects that the sellers may be using opportunity
pricing, that is setting the price to match, or slightly undercut, whatever savings in energy
cost might be produced by the use of the equipment. Unfortunately, energy recovery has
not been commoditized to the point where one can predict what the cost will be or
determine if opportunity pricing is occurring. Installation of an energy recovery system
has the effect of transferring operating cost (for energy) to capital cost. For a plant
operating at 45% recovery as product, about half of the energy can be recovered. Energy
recovery is done for two reasons: environmental and economic. In a plant to be located
in California, the environmental reasons probably dominate. Even so, one must assume
that the choice must make economic sense, that is, that the overall unit cost would not
increase as a result of the energy recovery. If the distribution of costs before installation
of energy recovery equipment were 33.3% capital, 33.3% energy and 33.4% labor and
other operating costs, then the distribution after installation of energy recovery equipment

22
Data from Water Desalination Report, 15 September 2008
Energy (at $0.07/kWh)
36%
Annualized Capital Costs
37%
Chemicals
12%
Total Maintenance
6%
Membranes (5-yr life)
4%
Cartridge filters
1%
Total Labor
4%
20
would be 50% capital, 16.7% energy and 33.4% other. This ratio is still not as lopsided
as the Moss Landing plant cost estimate which is 65% capital, 12% energy and 23%
other.
Recommendation: Separate cost of energy recovery equipment from cost of desalination
plant.
Looking at the other two alternatives, the cost of water is $6.90/kgal for the Regional
Project and $10.49/kgal for the North Marina alternative
23
. These numbers include costs
for intake and distribution system. While these values are lower than those for the Moss
Landing Plant, the water is still expensive. The cost for the Regional Project is lower
because the production to consumers is substantially higher and the capital cost is lower.
2.6.2 Chemical Costs
Calculation of chemical costs is very straightforward, requiring simple application of
stoichiometry. Data required are process stream flowrate, dosage and unit chemical cost.
The dosage is determined during desalting pilot testing, leaving only the unit chemical
cost during the operating time of the plant to be projected. The values in the Joint
Comparison exhibit appear reasonable.
2.6.3 Labor Costs
As indicated in Section 2.3.3, the staffing appears reasonable.
2.7 ASR System
As part of the 2008 review, preliminary plans for the ASR system were reviewed. This
review can be found in Appendix E. There is still much uncertainty regarding the ASR
systemwhich wont be resolved until permits are issued.
Cal Am Data Response #50 provides justification for increasing the ASR well estimate
$3,000,000 from the 2005 estimate. This cost increase appears reasonable considering
design changes and additional technical data that has become available since the 2005
estimate was prepared. Currently, Cal Am is in the process of obtaining the necessary
permits in order to access the proposed ASR sites. Once Cal Am obtains site access and
drills the proposed monitoring well, it will be possible to further refine the ASR cost
estimates.

23
These values are shown in tab Overall Summary boxes B55 and B62 for the Regional Project and D 55
and D62 for the North marina alternative.
21
2.8 Desalinated Product Water Pipeline
Cal Am Data Response #50 (Q2) provides clarification on the size of the proposed
desalinated water conveyance line. The FEIR allows for a transmission line up to 36,
which is the size used in the JCE. As requested in Data Request #50, Cal Am has
provided an estimate of cost savings if the 36 pipeline was reduced to 30. An
estimated $24 per lineal foot in pipe material costs (for a total of $2.2 million) would be
saved by with the pipeline size reduction. The approach used to estimate the cost savings
seems reasonable since the pipeline installation costs will not be substantially affected by
a minor change in pipeline size. The larger pipeline size would allow for increased
operationally flexibility in the future, as more water will be able to flow from the
proposed desalination plant location to the Cal Am service area.
It is important to note that cost estimate for Cal Ams proposed Monterey and Seaside
and product water pipeline North of Reservation Road uses different unit costs for
certain portions of the pipeline due to varying pipeline installation rates. As described in
Mr. Schuberts testimony,
24
the Seaside pipeline assumes an average installation pace of
100 lineal feet per day, the Monterey pipeline assumes 150 lineal feet per day, and the
North of Reservation Road pipeline assumes 240 lineal feet per day. One would expect a
lower average installation pace (resulting in a higher unit cost) in urban environments due
to the existence of other underground utilities, the need to cut and replace pavement,
increased traffic control issues, etc. so these differences are reasonable.
As part of the 2008 review, preliminary pipeline plans were reviewed. This review can
be found in Appendix F.

24
Direct testimony of F. Mark Schubert, P.E., Phase 2 Issues, Attachment K, pgs 10-12
22
3 Capital Costs
In order to evaluate estimated Coastal Water Project and costs, and the costs of the two
alternatives, Reclamation reviewed the Technical Memorandum Capital and O&M Cost
Estimate Update for the Coastal Water Project (TM and Project Cost Comparisons
spreadsheet (generally referred to as the Joint Comparison Exhibit or JCE), dated August
14, 2009, compiled by the California-American Water Company (CAW) and the Marina
Coast Water District (MCWD). The TM was completed in response to the informal cost
workshop held in San Francisco, California, on July 7 and 8, 2009, to discuss
assumptions and costs for the Moss Landing desalination plant and the two proposed
alternatives to provide water to the Monterey County, California, area; and
Administrative Law Judge (ALJ) Minkins July 21, 2009 ruling. As requested by ALJ
Minkin, CAW and MCWD coordinated to provide an apples to apples comparison and
summary of the costs for the alternatives presented.
The three alternatives are summarized in the TM and their capital costs (designated as
August 2009 costs for this review) with contingency (designated as Most Probable
Capital Cost with Contingency) are listed on Sheet 1 of 18 of the TM Exhibit as follows:-
i. Coastal Water Project Moss Landing (ML) - Desalination Plant Site
proposed by CAW at $213,750,000; excluding the CAW-Only Facilities
shown at $73,200,000. Combined total equals $286,950,000.
ii. North Marina Alternative (NMA) - Desalination Plant Site proposed by CAW
at $200,000,000; excluding the CAW-Only Facilities shown at $73,200,000.
Combined total equals $273,200,000.
iii. Regional Project (RP) proposed by MCWD at $170,100,000; excluding the
MCWD-Only Facilities shown at $7,400,000 and CAW-Only Facilities shown
at $73,200,000. Combined total equals $250,700,000.
The following comments address the differences between the costs included in CAW and
MCWD Phase 2 testimony
25
(June 2009) and the costs in the TM and JCE (August 2009).
August 2009 June 2009 Difference
CAW Moss Landing $ 229,000,000 * $ 225,000,000 $ 4,000,000
CAW North Marina Alt $ 216,000,000 * $ 210,000,000 $ 6,000,000
MCWD Regional Project $ 198,500,000 $ 209,200,000 ($ 10,700,000)
All totals include the CAW-Only Facilities and exclude the MCWD-Only Facilities. The
above costs exclude contingency and mitigation costs. An evaluation of the MCWD-
Only Facilities was not conducted during this review process.
* FromSheet 10 of 18 of the TM Exhibit.

25
CAW Phase 2 testimony filed on 5/22/09, MCWD Phase 2 testimony filed on 6/24/09.
23
The costs presented in the TM and JCE assume a partial second pass treatment for all
three desalination plants (see Section 2.1.4). The MCWDs RP costs do not include any
costs for a Surface Water Treatment Plant (SWTP) that was previously included at
$26,000,000 in some variations for the RP presented at the Cost Workshop, which now
allows for an apples to apples comparison. Note the June 2009 RP total costs in the
above table did not include the SWTP. The Final Environmental Impact Report (FEIR)
issued October 30, 2009, evaluates the Regional Project without the SWTP.
No detailed backup was provided so a review of the unit prices could not be completed.
The following sections provide general review comments on how capital costs included
in Cal Am and MCWD testimony were modified in the Joint Comparison Exhibit.
3.1 Intake Facilities (Off-site Feedwater)
3.1.1 Moss Landing (ML) and North Marina Alternative (NMA)
Projects
Revisions add $600,000 to the NMA for the 3,000 feet of extra pipe due to a relocation of
the NMA desalination plant per TM.
3.1.2 Regional Project
The contractors overhead and profit for intake facilities was actually reduced by
$1,060,000 to $840,000 from the $1,900,000 included in the June 2009 costs although the
scope of work is unchanged. The reduction is based on the assumption that the overhead
and profit are included in the CAW unit costs used for this estimate. See Unit Costs
comments below.
3.2 Desalination Plant
For actual desalination plant treatment components see Section 2.6. Comments included
in this section refer to the sitework, structures and clearwells.
3.2.1 Moss Landing Project
Of the sitework, structures, and clearwell components, a major cost reduction is for the 3-
MG clearwell which was reduced by $2,400,000 from $4,500,000 to $2,100,000 as a
result of reducing the unit cost from $1.50 to $0.70/gallon since the sitework is accounted
for separately. The sitework lump sum cost of $5,100,000 for the August 2009 summary
is unchanged from the previous June 2009 summary, therefore it appears that costs for
the clearwell overall have been reduced. The unit cost for the clearwell appears
24
reasonable although no details are provided for the sitework associated with the
$5,100,000 lump sum costs.
Building unit costs for the general structures and buildings range from approximately
$160.00 to $180.00/SF, and for the administration/O&M/lab building $200.00/SF is used,
which appear reasonable although no details are provided.
3.2.2 North Marina Alternative Project
The 3-MG clearwell costs were reduced by $2,200,000 from $5,200,000 to $3,000,000 as
a result of reducing the unit cost from$1.75 to $1.00/gallon since the sitework is
accounted for separately. . The sitework lump sum cost of $2,178,000 for the August
2009 summary is $322,000 lower than the previous June 2009 summary which included
$2,500,000. From the summary sheets it appears that the August 2009 costs are for
435,600 square feet of sitework while the June 2009 summary was for 500,000 square
feet. No details are provided for either area and costs. The clearwell cost is higher than
used for Moss Landings $0.70/gallon. The description for the North Marina clearwell
indicates partially buried and may account for the difference of additional sitework and
tank construction. Note the Regional Project below also utilized the $1.00/gallon unit
cost.
The general structures and buildings unit costs range from $137.00 to $167.00/SF, while
the administration/O&M/lab building utilizes the same $200.00/SF as Moss Landing.
Again, these appear reasonable but no details provided.
The clearwell costs were reduced by $4,500,000 from $7,500,000 to $3,000,000 as a
result of reducing the unit cost to $1.00/gallon similar to North Marina above and also
reducing the size of clearwell from 5 MG to 3 MG
26
. The size reduction was made to
match the North Marina Project. The sitework costs for the Regional Project increased
from $1,100,000 to $2,200,000 but it appears this is not due to the clearwell but as stated
in the TM the size of the site has been increased to 10 acres
27
to match the North marina
Project.
The structures and buildings unit costs are the same as the North Marina Project since
MCWD utilized CAWs costs. Please refer to Section 2.6 for a discussion on how
competitive bidding could affect the CAW cost estimates.

26
Technical Memorandum: Changes to DEIR Phase 1 Project, Marina Coast Water District, California
American Water, and Monterey County Water Resources Agency, October 15, 2009, page 1
27
Technical Memorandum: Changes to DEIR Phase 1 Project, Marina Coast Water District, California
American Water, and Monterey County Water Resources Agency, October 15, 2009, page 1
25
The contractors overhead and profit line item was reduced from the $6,350,000 (June
2009) to zero dollars. The reduction is based on the assumption that the overhead and
profit are included in the CAW unit costs used for this estimate. See Unit Costs
comments below.
3.3 Desalinated Water Transfer Pipelines
As indicated in the TM the various pipelines have been re-organized to provide the
requested apples to apples comparison. A review of the lengths and unit costs, and
therefore the costs, for all three projects appear to be the same with minor adjustments as
described in the TM (see Section 2.8). However, see Regional Project comment on
contractor overhead and profit below.
The contractors overhead and profit line item was reduced from the $5,430,000 (June
2009) to zero dollars. The reduction is based on the assumption that the overhead and
profit are included in the CAW unit costs used for this estimate. See Unit Costs
comments below.
3.4 CAW-Only Facilities
These components are listed separately but are required for all projects.
The 6-MG Terminal reservoir structures costs were reduced by $3,900,000 from
$10,500,000 to $6,600,000 as a result of reducing the unit cost from $1.75 to $1.10/gallon
since the sitework is accounted for separately. The unit cost for the clearwell appears
reasonable although it is $0.10/gallon higher than previous partially buried clearwell.
No details are provided for the sitework associated with the $2,600,000 lump sum costs
which is unchanged from the June 2009 summary.
Cal Am Data Response #50 (Q1) provides additional information regarding the cost
estimate of the proposed terminal reservoir. The construction cost of the terminal
reservoir is currently estimated assuming a buried reservoir, but Cal Am estimates that
the construction cost of an above-ground reservoir would be $0.70 per gallon (for a
construction cost of $4,200,000). This unit price is the same that is used for the proposed
above-ground tank for the Moss Landing project.
Recommendation: Investigate constructing the 6-MG Terminal reservoir structure above-
ground would reduce estimated construction cost of this reservoir by $2.2 million.
26
3.5 MRWPCA Outfall Capacity Charge
This item is only included for the North Marina and Regional Projects. New added cost
of $9,400,000 included in the JCE. Costs are based on a letter report prepared by Brown
and Caldwell for the Monterey Regional Water Pollution Control Agency
28
.
Recently, an Outfall Agreement was completed between Monterey Regional Water
Pollution Control Agency (MRWPCA) and Marina Coast Water District. As shown in
Exhibit C of the Outfall Agreement, the one time capacity charge has been reduced to an
estimated $2,436,305 reflecting the fact that 72% of the initial costs to construct the
outfall were funded through grants. The outfall capacity charge appears reasonable.
3.6 Right of Way Easements and Land Acquisition Costs (ROW
and LA)
3.6.1 Moss Landing Project
The total Right of Way (ROW) and Land Acquistion (LA) costs are shown on TM
Exhibit Sheet 10 of 18 as $7,200,000. When combining the totals shown on the
Summary Sheet for the CAW-Moss Landing Alternative ($3,100,000) and the CAW-
Only Facilities ($2,730,000) the ROW and LA costs equal $5,830,000 which is
$1,370,000 less that the $7,200,000 shown. The TM provides no explanation for this
difference. CAW has indicated
29
that the ROW values did not properly transpose onto
the Summary Sheet, and that the $3,100,000 cost for ROW Easements and Land
Acquisition should be $4,500,000.
3.6.2 North Marina Alternative
Similar to the Moss Landing Project above the ROW and LA total costs (Sheet 10 of 18)
equals $4,900,000 (excluding the MRWPCA Ocean Outfall Connection Charge) for the
North Marina Project, and on the Summary Sheet for the CAW-North Marina Alternative
($2,200,000) and the CAW-Only Facilities ($2,730,000) the total ROW and LA costs
equal $4,930,000 which is $30,000 more that the backup. The TM provides no
explanation for this difference, however it appears to be only a rounding difference.
The ROW and LA costs shown on the detail TM Exhibit Sheet 3 of 18 is $1,200,000 for
the Product Water Delivery components and the same total is shown on the Summary
Sheet for the Regional Project. There are no ROW and LA costs shown for the Regional

28
Letter Report Preliminary Technical and Financial Evaluation for Brine Disposal through Existing
Ocean Outfall, dated July 31, 2009
29
Email from John Klein (CAW) to Max Gomberg (DRA) on 11/9/09
27
Projects Desalination Intake Facilities and Desalination Plant and no explanation is
given.
Exhibit 28
30
in the direct testimony of Lloyd W. Lowery, Jr. indicates that MCWD will
pay the J.G. Armstrong family members $45,000 every six months from December 2003
through December 2009, and $50,000 every six months thereafter for an option on land in
the MCWD Reserved Area. It also states that payments made by MCWD will be
credited against the purchase price of any portion of the MCWD Reserved Area. It is
unclear what the purchase price of this land will be however. Furthermore, the direct
testimony of Lyndel W. Melton
31
states that MCWD is also negotiating with the
Armstrongs for the property necessary to locate the desalination source water wells. It is
unclear what the purchase price of this land may be either.
When combining the CAW-Only Facilities ROW and LA costs ($2,730,000) with the
$1,200,000 above the total equals $3,930,000. This total is $1,900,000 less than the
Moss Landing Project combined total and $1,000,000 less than the North Marina Project
combined total. The TM does not provide comment on the differences.
Recommendation: Estimates are needed for anticipated land purchases for the Regional
Project desalination plant and source water wells in order to ascertain how much extra
these will add to overall project costs.
3.7 Unit Costs
During this evaluation, no breakdown was provided for a detailed review of unit costs. In
2008 Reclamation reviewed unit costs (for the proposed Moss Landing project) provided
in CAW testimony
32
which included labor, materials, equipment, and subcontract costs.
At the time of the previous review, it was determined that in general, the raw costs
appeared reasonable, although there were a number of lump sum components that were
not clearly defined and could not be reviewed. The detailed unit cost review performed
in 2008 can be found in Appendix G.
A review of the unit costs for this project indicate that the majority are based on the
CAW projects unit costs, including the $31,000,000 for the Reverse Osmosis process
equipment on TM Exhibit Sheet 5 of 18.

30
Exhibit LWL-28 of the direct testimony of Lloyd W. Lowery, Jr., section 5.2.2, 6/24/09
31
Direct testimony of Lyndel W. Melton, page 15, 6/24/09
32
Unit costs previously reviewed can are found in the Capital Cost Estimate Basis Summary, which is
Exhibit 3 of the Lawrence E. Gallery testimony filed on 7/14/05.
28
The use of CAW unit costs for the pipelines, buildings, tanks, and site work as well as the
assumption of all the common facilities prices being equal tends to indicate that the
MCWD estimate is a lower level appraisal type estimate.
Recommendation: To obtain a more accurate estimate of costs, MCWD should obtain an
independent estimate for Regional Project unit costs for the pipelines, buildings, tanks,
and site work as well as common facilities.
3.8 Contractors Overhead and Profit
The TM indicates that all three projects utilize the same adder (18%) for Overhead and
Profit. The TM is more a summary of the costs and the majority of the Overhead and
Profit is included in the unit costs.
The Contractor Overhead and Profit of 18%, which includes General Conditions at 3%
(includes Mobilization) and Overhead and Profit at 15%, appears low compared to
typical BOR percentages. Typically, BORs combined total range for Mobilization (5%),
Field Office Overhead (10 to 15%), Home Office G&A (7 to 8%) and Profit (7 to 8%) is
32 to 40% when compounded.
Note that the Desalination Plants for all three projects include a 1% adder for
mobilization but for the other components the mobilization is considered included in the
Contractors Overhead and Profit. Either method is reasonable although the BOR
typically includes up to 5% for mobilization and preparatory work.
The Moss Landing and North Marina Projects assumed that the Contractors Overhead
and Profit was included in the unit costs for both the June and August 2009 costs and had
no additional line item for these costs.
However, the August 2009 Regional Project has removed $13,130,000 in Contractors
Overhead and Profit, and Mobilization line item costs (August 2009 costs of $1,600,000
versus the June 2009 total of $14,730,000). The assumption is that these costs are
included in the CAW unit costs utilized. Although no details were provided, this appears
reasonable assuming the CAW unit costs actually do include Contractors Overhead and
Profit.
3.9 Implementation Costs
For the non-desalination facilities, the Implementation Costs for Design/Bid/Build for
project administration, environmental documentation, engineering, property acquisition
services, legal services and construction management and administration are added at
30% of the construction costs which is an increase from the 24% used previously in the
June 2009 estimates. The 30% value falls within the typical BOR (25% to 40%) utilized
for similar sized BOR projects at this estimate level.
29
For the desalination facilities, the Implementation Costs for Design/Build are included at
15% for CAWs Moss Landing and North Marina Projects, and also 15% for the
MCWDs Regional Project. This is a 5% reduction from the 20% used in June 2009 for
the North Marina and RP Projects. See further comments below in Section 3.9.2.
3.9.1 North Marina Project Pilot Plant
For the June 2009 costs the workshop indicated that the extra 5% was included for the
Implementation Costs for a total of 20% (or approximately $4 million) for the North
Marina Alternate for the Pilot Plant construction and associated engineering and
operations. For the 2009 August costs the total percentage for the Implementation Costs
have been reduced to 15% which appears low when compared to the earlier estimate
(early 2008) for the Moss Landing Pilot Plant which was about $4 million in 2005
dollars.
It appears that a higher percentage than the 15% utilized for the Implementation Costs
would be required for the North Marina Project as well as the MCWDs Regional Project
plant since no pilot plant has been initiated for either project and no costs are specifically
included for a pilot plant in the August 2009 costs. Please refer to Section 2.1.3 for a
further discussion on pilot plant costs.
Also at the Cost Workshop it was indicated that the California Coastal Commission
(CCC) may require 12 months of pilot testing. It is unclear whether this has been
verified. See Section 2.1.3 for additional information regarding pilot testing.
3.9.2 General
For the Design/Build Implementation costs of the 15% (or 20% in June 2009) adder for
the desalination plants, the assumption is that the specialized contractor will design the
plant. An additional 15% has been added to the Desalination Plants for Contractor Design
Build Engineering, when combined with the Implementation gives approximately a 30%
total which appears to fall in the typical range for BOR projects. Please refer to Section
2.6.1 for a discussion of a competitive bidding process.
3.10 Project Contingency
For Contingencies, 25% is added to all costs for all three projects and is intended to cover
both design and construction contingencies. The 25% value is an increase over the 20%
value utilized in the June 2009 estimate.
Reclamation utilizes two categories for contingencies, Design and Construction
Contingencies. The Design Contingencies for an appraisal level estimate typically are
30
included at least 10% (typically 15%), while the Construction Contingencies are included
at 25%. These percentages are compounded when applied. Therefore, Reclamation
contingencies (compounded) range from approximately 37.5% to 44% versus 25% shown
in the estimates. For these projects (for which preliminary and final designs have not
been initiated)
33
a higher percentage to cover contingencies appears warranted.
3.11 Mitigation Measures
Mitigation costs are included at 1% resulting in $2,800,000 for the Moss Landing Project;
$2,700,000 for the North Marina Project and $2,500,000 for the Regional Project. The
ALJ ruling of 11/5/09 stayed the procedural schedule by 60 days, so mitigation cost
estimates have not yet been developed by either CAW or MCWD. A preliminary review
of the FEIR impact and mitigation summary (found on pages ES-21 through ES-54)
indicates that it is unlikely that the proposed mitigations measures will be a significant
cost driver of the project. It is recommended that mitigation cost estimates be generated
based upon the FEIR impact and mitigation summary. Once cost estimates are prepared,
it will be possible to conduct a reasonableness review and determine if the current
mitigation cost allocation (1% of construction costs) is appropriate.
Recommendation: Generate mitigation cost estimates based upon the FEIR impact and
mitigation summary.
3.12 Accuracy Range of Estimates
All three estimates provide a High End of the Accuracy Range at +25% and a Low End at
-15% of the Accuracy Range. As stated in the workshop, the estimates are considered
Class 3/Class 4 based on the Association for Advancement of Cost Estimating (ACCE)
Classifications. This would be similar to BORs feasibility level estimate, which can be
used for Congressional Authorization.

Based on the workshops indication that very limited or no subsurface investigations have
been performed for the water sources, the estimates appear to be at a lower level such as
BORs appraisal estimate level. Therefore, the Accuracy Range would be towards the
high end provided by the AACE as opposed to the low end of the range. In other words,
for a Class 4 estimate the Expected Accuracy Range for the low range is shown as -15%
to -30% and for the high range is +20% to +50% of the estimated costs. The three
estimates utilize -15% for the low range and +25% for the high range. At the lower level
of estimate these values may be anticipated to be in the higher value end of the Expected
Accuracy Range as opposed to the lower value end as utilized.
An alternate option to provide a cost range is to develop three estimates: Most Probable
Low (MPL), Most Probable (MP), and Most Probable High (MPH). These three

33
Data Response #30
31
estimates account for variations in parameters and risks affecting the project. For
example, for the MPH, an additional source well might need to be drilled if the first well
did not pass. Also, these probable estimates can attempt to account for fluctuations in
material prices and sources, and any other potential factors affecting costs. These
estimates, with use of a statistical program (i.e., Crystal Ball), can help graphically
illustrate cost ranges.
3.13 Cost Summary
The August 2009 Most Probable Capital Costs with Contingency for the three Projects
are shown in the following table and are compared against the June 2009 costs presented
at the Cost Workshop:
August 2009 June 2009 Difference
Aug vs. June
CAW Moss Landing $ 290,000,000 * $ 270,000,000 $ 20,000,000
CAW North Marina Alt $ 270,000,000 * $ 250,000,000 $ 20,000,000
MCWD Regional Project $ 243,300,000 $ 251,100,000 ($ 7,800,000)
All totals include the CAW-Only Facilities and the Regional Project excludes the
MCWD-Only Facilities. The Regional Project total is developed from Sheet 1 of 18 by
summing Regional Project and CAW-Only costs. Totals exclude MCWD-Only costs for
August 2009 estimate, but it is unclear if the June 2009 estimate included MCWD-Only
costs.
* FromSheet 10 of 18 of the TM Exhibit.
The costs for the CAW projects have increased by 7.4% (Moss Landing) and 8.0%
(North Marina) while the MCWD Regional Project costs have decreased by less than
0.02%.
Major cost variations from June 2009 to August 2009 include:
i. RP removed $13,130,000 of line item Contractor Overhead and Profit, and
Mobilization costs (see Section 3.8)
ii. RP and NMA added $9,400,000 for MRWPCA Outfall Capacity Charge
(see section 3.5)
iii. RP and NMA reduced desalination plant Implementation Costs percentage
from 20% to 15% (see Section 3.9)
iv. ML reduced clearwell costs by $6,000,000 (see Section 3.2.1)
v. NMA reduced clearwell costs by $6,100,000 (see Section 3.2.2)
vi. RP reduced clearwell costs by $8,400,000 (See Section 3.2.3)
vii. All projects increased Project Contingency from 20% to 25% (see Section
3.10)
32
The primary goal of the TM was to provide an apples to apples comparison and
summary of costs of the three project alternatives. The scope of work outlined in the TM
appears to meet that goal. From the cost perspective independent development of prices
for the Regional Project by MCWD would be recommended in lieu of utilizing CAWs
unit costs. Please refer to Section 2.6.1 for a discussion on how competitive bidding
could have a substantial impact on actual construction costs.
Pilot Plant costs for the North Marina and Regional Projects are not specifically called
out in the TM and appear to be excluded. Please see section 2.1.3 for recommendations
regarding a potential pilot project.
33
4 Conclusion
Since the preliminary/final design of facilities will not commence until a project
alternative has been selected, there are many unknowns and uncertainties. As described
in Section 2, the pilot project currently running at Moss Landing will provide valuable
information which can be used to further refine the design of the proposed water
treatment components. Some of the data gathered at Moss Landing will be applicable to
the other alternatives, but additional site-specific pilot testing (including test wells) is
recommended if the North Marina or Regional Project is eventually selected.
As discussed in Section 2, there is continued uncertainty regarding the cost of the water
treatment equipment. As recommended in Section 2, the elimination of excess treatment
equipment (such as the reduction of the Moss Landing nominal capacity from 10 MGD to
8 MGD) and the removal of the second pass RO system could have a substantial effect on
project costs. The suggested use of a competitive bidding process introduces additional
cost uncertainties, but will most likely decrease the overall project cost.
As shown in Section 3, a review of the costs presented in the Joint Cost Exhibit was
performed. Unit costs were not reviewed at this time, although unit costs were deemed to
be reasonable during a previous review. The Overhead and Profit adders used in the
CWP cost estimates (18.5%) are significantly lower than the adders that Reclamation
would use at this level of design (32% - 40%). The Contingency adder used in the CWP
cost estimates (25%) is also significantly lower than the Contingency that Reclamation
would use at this stage of the project. At an appraisal level design, Reclamation would
typically include a 15% adder for Design Contingency and a 25% adder for Construction
Contingency. Due to a delay in the procedural schedule, mitigation cost estimates had
not yet been generated at the time of this report. It is not anticipated that mitigation
measures will be a significant cost driver in the CWP, but it is recommended that
mitigation costs be reviewed once they are made available.
A-1
Appendix A Documents Reviewed in 2008
Draft Coastal Water Project Conceptual Design Report (including appendices A and
B) [Conceptual Design Report]
Proponents Environmental Assessment for the Coastal Water Project Section 3.0
(Project Description) [PEA]
Direct Testimony of Lawrence E. Gallery, P.E. (Exhibit B of Amended Application
7/14/2005) [Gallery Testimony]
Estimate of Probably Construction Costs California American Water Coastal
Water Project Regional Project 2004 (Exhibit 2 of Gallery testimony, also
referred to as the Conkey Report) [Conkey Report]
Capital Cost Estimate Basis Summary (Exhibit 3 of Gallery testimony)
American Water Pridesa / CWP Preliminary Budget (Exhibit 5 of Gallery
testimony) [Pridesa Estimate]
California American Water Company Response CWP-29 (FL) (including Exhibits 1
10) [CWP-29]
California American Water Company Response CWP-30 [CWP-30]
CWP Capital Cost Excel Spreadsheet (engineering_cost_LW_042507.xls)
34

34
This spreadsheet was developed by DRA using data provided by Cal American in response to DRA data
request CWP 19-2. DRA did not change any of Cal Americans numbers. Rather, DRA added references
to the Cal Americans workpapers where the numbers originate. As explained in Section 1.3, Reclamation
used 2005 dollar figures in this report to assure consistency.
B-1
Appendix B - Determination of Fraction of Groundwater
in a Mixture of Seawater and Groundwater
Problem Analysis
A straightforward method of determining the fraction of groundwater in water extracted
by seawater wells is by chemical analysis of the solutions being mixed and of the
resulting mixture.
The mass balance of mixing seawater and groundwater to get well water gives us
gVg sVs mVm r + r = r (1)
In this equation, V is the volume of the water sample in liters and the lower case letters
m, s and g, are used to identify the mixture, seawater, and groundwater, respectively. It is
necessary to include the water density since during mixing volume is not necessarily
conserved, but mass (or weight) is. For solution densities of seawater, groundwater and
well water, we use s = 1.025 g/mL, g = 1.00 g/mL and assume m = 1.02 g/mL.
For each chemical component, such as calcium or sodium, a mass balance can be written:
VgCg VsCs VmCm + = (2)
in which C is the concentration of the component in milligrams per liter (mg/L).
We eliminate Vs from these two equations by rearranging equation (1) and substituting in
equation (2).
s
gVg mVm
Vs
r
r - r
= (3)
( )
VgCg
s
Cs gVg mVm
VmCm +
r
r - r
= (4a)
sVgCg gVgCs mVmCs sVmCm r + r - r = r (4b)
( ) ( ) mCs sCm Vm gCs sCg Vg r - r = r - r (4c)
The fraction of groundwater in the mixture, F (dimensionless), can be expressed at the
ratios of flows and can be extracted from values of concentrations of any of the
components.
B-2
r - r
r - r
=
gCs sCg
mCs sCm
Vm
Vg
F (5)
Using concentration values of several components that appear in either seawater or
groundwater in significant concentrations, we can calculate several independent values of
F.
Calculational Example
Table 1 below lists hypothetical data with the associated calculation results. The
concentrations from a published
35
analysis of seawater are provided. The groundwater
analysis represents a hard water that might present some scaling problems. The 85/15
mixture was calculated from the given seawater and the groundwater analyses. The
results from this calculation were rounded to show only 3 significant figures, which
would be characteristic of laboratory analyses. From this the value of groundwater in the
mixture (F) was calculated using equation (5).
Table 1.
Ion Symbol
Concentration in
Seawater,
mg/L
Concentration in
an Ordinary
Groundwater,
mg/L
85/15
mixture,
mg/L
Probable
Reported
Result,
mg/L
F
Chloride Cl
-
18,980. 675. 16,234.25 16,200. 15.06%
Sodium Na
+
10,556. 325. 9,021.35 9,020. 14.88%
Sulfate SO4
2-
2,649. 725. 2,360.4 2,360. 14.85%
Magnesium Mg
2+
1,262. 146. 1,094.6 1,090. 15.28%
Calcium Ca
2+
400. 275. 381.25 381. 14.79%
Potassium K
+
380. 4. 323.6 324. 14.76%
Bicarbonate HCO3
-
140. 350. 171.5 172. 15.31%
Strontium Sr
2+
13. 0.05 11.0575 11. 15.33%
Bromide Br
-
65. 0. 55.25 55. 15.27%
Boron B 4.8 0. 4.08 4. 16.58%
The calculational results shown above are a tighter group than one would reasonably
expect since the procedure eliminates the possibility of analytical or sampling error.
Even so, the divergence of F values from the average by components in low
concentration indicates that data on such components should be avoided.
Sampling Procedures
Good results in this method will only be obtained by use of careful procedures.

35
Typical Seawater provided at http://www.lenntech.com/composition-seawater.htm
B-3
The well should be pumped long enough to have come to close to steady state.
Monitoring of conductivity may be adequate for this determination.
A sample of seawater should be taken at about the same time as the sample of well water.
This should be taken neither from the surface nor fromthe bottom, but somewhere in
between. Periods of extreme weather (heavy rains, prolonged drought, high winds etc.)
should be avoided for sampling.
Getting a characteristic sample of groundwater is challenging. The sample should
represent the groundwater that is being taken into the well. If more than one monitoring
well is available, it would be informative to use several of them. Again, periods of heavy
precipitation or prolonged drought should be avoided.
Before testing, samples should be filtered. There should be no suspended solids from any
of the sources, but who knows. Samples should be measured for all of the major ions
(bicarbonate and above on Table 1). When received, each set of data should be tested for
anion/cation balance. I would use data from chloride, sodium, sulfate, magnesium,
calcium and potassium. Bicarbonate is in very mobile equilibrium with carbonate and
carbon dioxide, so its a little squirrely. This would provide six independent
measurements of the groundwater fraction. If one measurement is an outlier (more than
two standard deviations from the mean), be ready to discard it.
C-1
Appendix C Boron Concentration Data
The information received from Cal Am includes a number of data points on boron
concentration in the feed water. These data do not indicate a significant seasonal
variation. A curious feature is that one data point listed as <10 mg/L was plotted as 10
mg/L. This occurs in the graph labeled Boron Onsite Data located in Quarter 3 Report
APion (Bureau Confidential) Visually this look like a major jump in concentration,
when, in fact, it may not represent any change at all. Concentration data, excluding those
expressed as < or less than are shown in Figure C-1.
There seems to be some removal of boron in the membrane filtration step, as one can see
by comparing raw feed water shown in Figure B-1 with filtered feed water shown in
Figure C-2.
3.0
3.5
4.0
4.5
5.0
5.5
6.0
6.5
01 Jun 08 01 Jul 08 31 Jul 08 31 Aug 08 30 Sep 08 31 Oct 08 30 Nov 08 30 Dec 08 30 Jan 09 01 Mar 09 01 Apr 09 01 May 09 01 Jun 09 01 Jul 09
R
a
w

F
e
e
d

B
o
r
o
n

C
o
n
c
e
n
t
r
a
t
i
o
n

(
S
a
m
p
l
e

S
-
1
)
,

m
g
/
L
Total ICP 200.7 - Boron
Figure C-1. Concentration of Boron in Raw Feed
C-2
The boron concentration in the product water tends to be about 1 mg/L, with variation of
about 0.2 mg/L. This is shown in Figure C-3.
3
3.5
4
4.5
5
5.5
6
6.5
F
i
l
t
e
r
e
d

F
e
e
d

B
o
r
o
n

C
o
n
c
e
n
t
r
a
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Figure 0-1. Concentration of Boron in the Product Water Figure C-3. Concentration of Boron in the Product Water
Figure C-2. Concentration of Boron in the Filtered Water
D-1
Appendix D Base-Loading of a Desalination Plant
A frequently used method of minimizing, or at least limiting desalination costs is to base
load the plant. At the outset this provokes the question, "Why would one run a plant if
there is a source of cheaper water?" By cheaper is meant cheaper than one can get from a
desalination plant. One must remember that water from any source costs something if
only the pumping costs.
The following situation is posited: A water supplier has a demand on average of 25
million gallons per day (MGD). If he has a supply of cheap water of 25 MGD, there is
no problem. He turns to desalination only if he can't get water any cheaper. Suppose he
has a supply of cheaper water of an average of 15 MGD. He buys a 10 MGD desalting
plant and solves his problem. The difficulty is that we are talking annual averages. The
real world is trickier.
Suppose the demand curve is like the one in Figure D-1 below. These are totally
fictitious numbers, but they are not too far from what one might encounter in reality.
0
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Water Demand
Figure D-1. Hypothetical Water Demand
D-2
The data points are weekly water demand. They were generated so that they average 25
MGD over the year, and, for calculational simplicity, so that they never go below 15
MGD.
Figure D-2 shows the effect of base-loading the plant. The variation is taken in supply of
cheaper water. This averages out to 15 MGD of cheaper water.
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Cheaper Water
Desalted Water
Figure D-2. Effect of Base-Loading the Desalination Plant
As an alternative, suppose the manager base-loads the cheaper water supply. It would
look like Figure D-3.
D-3
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Figure D-3. Effect of Base-Loading the Cheaper Water
As before, 15 MGD is supplied by cheaper water and 10 MGD by desal. However, the
peak demand is 40 MGD. This leaves 25 MGD to be supplied by the desal plant during
that peak week. On average the desal plant supplies only 10 MGD. To meet the peak
requirement would require a much bigger plant, much of which would not be used much
of the time.
This is a simplistic explanation. It includes many assumptions, such as that the water to
make up the 15 MGD annual average is available at any time in any quantity at the same
price. In a specific situation, some or all of these may not be true. The biggest
assumption is that there is sufficient storage somewhere in the cheaper water supply
systemto allow for the required variation in supply. However, as long as the desal water
is substantially more expensive that water from other sources, one is probably better off
to come as close as one can to base-loading the desal plant.
E-1
Appendix E ASR Review
Note: This review was performed in 2008 using the documents listed in Appendix A. The
design of the proposed projects has progressed since this review was completed, thus
concerns outlined in this review are not necessarily still relevant to the current designs.
As stated in Section 5.1 of the Draft Coastal Water Project Conceptual Design Report,
Monterey Peninsula Water Management District (MPWMD) is pursuing a separate
independent ASR project at the same general location contemplated for the CWP ASR
facilities. Therefore, CAW has been actively coordinating with MPWMD during the
early stages of their ASR project design and permitting, to ensure that the two systems
are compatible. It is also possible that the MPWMD ASR system, if constructed in a
suitable and timely fashion, could be used to satisfy all or a portion of the CWP ASR
system requirements.
Several discrepancies in the facility descriptions are noted as indicated in the following
table.
Table 5-1. Comparison of well characteristics from identified references. N/A indicates
that the well characteristic was not addressed in the indicated reference.
Characteristic PEA Section 3.3 Conceptual Design Report
Total well
depth
720 feet 800 feet
Well design Telescoped: 36-32
inch to 480 feet, 24-
20 inch to 720 feet
N/A
Screen
Diameter
16-inch 24-inch
Screen material Stainless Steel Stainless Steel
Aquifer
Properties
N/A Assumed
Comparing the cost estimates in the Capital Cost Estimate Basis Summary against the
well characteristics as described in the PEA, the following discrepancies are noted:
Golf Course Site
The PEA indicates that the screen will be 16-inch diameter; Table 21 of the
Capital Cost Estimate Basis Summary lists the screen as 24-inch diameter.
The PEA indicates that the wells will have a total depth of 720 feet, Table 21 of
the Capital Cost Estimate Basis Summary lists the casing and screen lengths as
totaling 660 feet; this implies that each well will have a 60-foot sump below the
bottomof the screen, or will have 60 feet of backfill or gravel pack below the
bottomof the screen.
E-2
The combined linear footage of the gravel pack and grout seal equals 740 feet, 20
feet more than the total depth of the bore hole and 50 feet more than the 690 ft of
drilled and reamed bore hole line items.
Table 21 of the Capital Cost Estimate Basis Summary has a line item for drilling a
690 foot pilot hole, and a line item to Ream Pilot Hole 690 ft (32-in.); this
conflicts - both in size of the bore hole and the total depth of the bore hole - with
descriptions in the PEA that indicate a telescoped hole - i.e. 36-32 in. to 480 ft,
and then 24-20 in. to 720 ft.
Table 21 of the Capital Cost Estimate Basis Summary lists a line item for a 6-inch
PVC monitoring well, this line item needs to be broken down, also, no mention is
made in the PEA to a monitoring well at the Golf Course site.
School Site
The PEA indicates that the screen will be 16-inch diameter, Table 22 of the
Capital Cost Estimate Basis Summary lists the screen as 24-inch diameter.
The PEA indicates that the wells will have a total depth of 720 feet, Table 22 of
the Capital Cost Estimate Basis Summary lists the casing and screen lengths as
totaling 660 feet; this implies that each well will have a 60-foot sump below the
bottomof the screen, or will have 60 feet of backfill or gravel pack below the
bottomof the screen.
The combined linear footage of the gravel pack and grout seal equals 740 feet, 20
feet more than the total depth of the bore hole; if the bottom 240 ft of the bore
hole (720 minus 480) is 24-in diameter and a 24-in screen is installed, then there
is no room for a gravel pack to be placed, and the combined 740 ft of gravel pack
and grout seal is 260 linear feet more than is needed.
Table 22 of the Capital Cost Estimate Basis Summary has a line item for drilling a
690 foot pilot hole, and a line item to Ream Pilot Hole 690 ft (32-in.); this
conflicts - both in size of the bore hole and the total depth of the bore hole - with
descriptions in the PEA that indicate a telescoped hole - i.e. 36-32 in. to 480 ft,
and then 24-20 in. to 720 ft.
Table 22 of the Capital Cost Estimate Basis Summary lists a line item for a 6-inch
PVC monitoring well, this line item needs to be broken down.
Throughout most of the references, the plan calls for three ASR wells. However, in the
PEA Section 3.3.5.4 ASR Well Construction, mention is made of the need for acquiring 3
to 6 sites for wells. And in the Conceptual Design Report Page 5-5, Section 5.3.4 ASR
Well Field, 2nd paragraph, the term phase one is used but no mention is made of a
phase two.
Ignoring the discrepancies between documents, there are a multitude of details that are
missing from the descriptions, such as:
- drilling method (drilling technique, formation stabilizers i.e. drilling muds
development methods, testing, etc.)
- screen slot size
E-3
- filter pack gradation (presume that a filter pack will be used since casing/screen
diameter from the PEA is smaller than the borehole although from the CDR the
casing/screen diameter appears to be the same as the PEA borehole).
- how much screen will be used
- how much of the aquifer will be screened
- how much filter pack, if used, will be placed above the top of screen
- what type of sanitary seal will be used
The aquifer properties are only assumed - Page 5-5, Section 5.3.4 ASR Well Field, 2nd
paragraph: It is assumed that the Santa Margarita formation has a recharge rate of 2.1
mgd . . If the system design is based upon results from the existing Santa Margarita
Test Injection Well (SMTIW), then those results should be included or made available.
There were no well designs provided, nor were there any computations as to aquifer
properties, filter pack gradations, well yields, pump sizes, aquifer drawdowns, recharge
capacity of the aquifer as a whole, or any other specifics related to the wells or the wells
performance with which to evaluate the anticipated performance of the ASR System.
Acknowledging that the data collection necessary for even preliminary or appraisal level
designs has not been conducted, and that there are no field investigations or testing
completed on the Coastal Water Project ASR wells (Answer #40 of Response CWP-30),
it is understandable why the data requested in Questions 39 through 42 of Response
CWP-30 is not available at this time.
The as-builts, referenced in Answer #39 of Response CWP-30, have been provided. If
the proposed ASR wells were conceptually proposed to be of similar construction and
dimensions, unless actual field conditions at the select ASR well sites dictates otherwise,
and the existing wells function within the capacities proposed for the new ASR wells,
then conceptually the proposed ASR system could be anticipated to perform as desired.
However, without the requested data even in preliminary or conceptual form it is not
practicable, and would be inappropriate, to attempt to make any determination as to the
effectiveness or appropriateness of the ASR systems as currently proposed.
F-1
Appendix F Pipeline and Corrosion Review
Pipelines
Typical jack and bore installation appears to include a casing pipe. Installations of
this type are generally a bad practice. They are difficult to cathodically protect
against corrosion.
Details of the Moss Landing DWCS Pipeline (RBF dwg 0540-X-M005) of the Moro
Cojo Slough crossing shows a bore/jack installation. The Table 11 cost (Capital Cost
Estimate Basis Summary) appears to be the same, whether the installation is under a
roadway or under a waterbody. One would expect to need a boring machine which
can counter the water pressure when working below water. This would be more
expensive than working under highways.
Details of the Moss Landing DWCS Pipeline (RBF dwg 0540-X-M017) of the
Tembladero Slough crossing shows spanning existing highway bridge piers (span
approximately 100 feet). This probably is not practical without intermediate support.
Pricing on Table 11 (Capital Cost Estimate Basis Summary) appears to have used
installation of pipe through constructed bore/jack casing cost.
Details of the TAMC DWCS Pipeline (RBF dwg 0540-X-M032) of the Salinas River
Crossing shows usage of a pipe bridge attached to existing highway bridge piers.
This appears to have high potential of cost variation depending on the amount of
design and discussions with DOT of the acceptability of the plan. The pipe support
bridge is about 800 feet in length with 5 spans between 4 existing piers and two new
abutments.
Details of the Seaside DWCS Pipeline (RBF dwg 0540-X-M081) of the Del Monte
and Fremont Road Crossing show a bore/jack installation. The Table 13 costs
(Capital Cost Estimate Basis Summary) use 350 feet and 300 feet, respectively. The
drawings show approximately 500 feet and 475 feet, respectively.
Corrosion
Evaluation of the proposed CWP design shows quite a few deficiencies in the areas on
corrosion, coatings, and concrete.
Cathodic protection was taken in to account for the following pipelines: raw water
supply, ASR, crest to terminal reserve, Segunda to crest, desalinated water conveyance
(DWC) seaside section, desalinated water conveyance (DWC) TAMC section,
F-2
desalinated water conveyance (DWC) Moss Landing section, and return flow (Brine).
However, no cathodic protection was considered for the pumps, tanks, or wells. Also the
pipe types steel cylinder concrete pipe (SCCP), ductile iron pipe (DIP), mortar lined and
coated steel pipe (MLCSP), and reinforced concrete pipe (RCP) were mentioned as pipe
types to be considered for this project but no others were suggested. These include a
coated steel pipe, high density polyethylene (HDPE), and stainless steel. The HDPE, if
operational conditions permit, would offer a pipeline option which would not have a
corrosion issue other than any possible fittings. This would also reduce the amount and
cost of cathodic protection needed.
A testing program or at minimum a literature search should be done to support the types
of pipes proposed for the project. As is, there are a variety of pipe types being used to
transport salt or brine water (mortar lined welded metal pipe, reinforced concrete pipe,
etc). Some transport pipe will be in areas that impact the public if there is a failure due to
corrosion/weakening of the concrete.
The RCP, MLCSP, and SCCP all contain possible corrosion issues. Due to expansion
and contraction the concrete or mortar can form small cracks. While most of these cracks
will heal themselves during operation when the pipeline is dewatered or even when the
pressure decreases to a given amount the cracks will open up and chlorides and other
salts present in the raw water and brine will ingress and eventually reach the reinforcing
steel or steel cylinder and initiate corrosion. Once the corrosion starts the corrosion
products formed will create further cracking and spalling of the concrete and expose
more of the steel to the corrosive environment. Any sulfates in the water may also cause
damage to the concrete and eventually expose the steel. In this case the type of concrete
would be of concern.
The chemicals which would be added during the treatment process can create further
corrosion problems. The addition of chloride and salts (particularly the ferric chloride)
will increase the possibility of corrosion without a good coating. This is also true in the
case of the acids added. The addition of a corrosion inhibitor is mentioned however the
specific inhibitor is not mentioned.
Rock shielding for the pipe should be used and included in the design. There also was no
mention of select backfilling. In addition, in regard to the bore technique, HDD
tunneling requires special coatings and should be included in the design.
Some of the design deficiencies discovered in regards to coatings were items such as the
type of coatings to be used, what existing coatings were on some structures, and the
condition of the existing coatings. There did not appear to be any mention of the use of
the existing 16 inch diameter pipeline. The type and condition of the coating should be
determined. This is also the case with the existing crest tank. California has very strict
VOC regulations which will limit the type of coatings which can be used for this project.
The design did not mention the type of coatings to be used for the new pressure reducing
valve, siphons (in addition to no mention of the type of pipe), intake pipe (in addition to
F-3
no mention of the type of pipe), and pumps. There was no mention of what material was
to be used for the screening system and depending on the material if it needs to be coated.
There is mention of the need for minimal maintenance in regards to coatings and
longevity but the type of coatings is not discussed. Mortar coatings do not work well
with high flows or high chloride water. Chlorides can be hard on concrete pipe.
Maintenance painting is not defined in the design and the cost estimate tables did not
discuss coating or field painting costs. An anticipated annual repairs and equipment
replacement cost of $1,448,000 is given but it does not state what this covers. There is no
breakdown for this cost estimate. There was little to no mention of maintenance coating
in the design.
The Raw Water Equalization Basin (RWEB) has 12" concrete liner. Based off of the cost
estimate pricing it appears that the design uses a normal concrete mixture and 4x4 or 8x8
wire-mesh. A high strength concrete mixture most likely utilizing waterproofing
admixtures will be necessary due to the salinity of the water and the potential for erosion
at the water fluctuation levels (expected fluctuation with tide inflow). It will also need to
be more heavily reinforced; temperature steel for shrinkage at a minimum. This
comment also applies to other concrete structures.
G-1
Appendix G Moss Landing Unit Cost Review
1 Project Costs
1.1 Review Summary
Review of the 2005 costs as provided in the Capital Cost Estimate Basis Summary
(Tables 1 through 23) was performed and is summarized as follows:
Percentage Adders: The adders utilized in the estimate were compared to typical
Reclamation adders and were summarized in Appendix A, Table 1. The table illustrates
that when the various adders are applied to the same 2005 estimated raw costs subtotal
there is a significant difference in the Total Project Costs. Total Project Costs are $102
million higher when utilizing Reclamation adders with a Total Project Cost of $280
million versus $178 million of Total Project Cost for the estimate provided with its
adders.
Escalation: Although the review of projected costs was not specifically part of the scope
of the review, it should be noted that the escalation of 4 percent per year utilized for
projecting costs to the year 2012 appears to be low for this project based in California.
Materials prices for steel (e.g. pipe and reinforcing steel), concrete, and cement have
risen dramatically in the past 3 years. Also, fuel prices and labor rates have increased
significantly in California the past 3 years. An assumed escalation in the range of 6 to 8
percent could increase the Construction Costs in the range of $10 to $25 million above
that shown in the Summary Table Estimated Nominal Costs on the CWP Capital Cost
Excel Spreadsheet (see Section 9.2).
Raw Costs: Approximately $47 million of the approximately $108 million total 2005
raw costs were reviewed. In general, the raw costs appear reasonable although there are
some tables (in the Capital Cost Estimate Basis Summary) that had lump sum
components that were not clearly defined and could not be reviewed. The enclosed detail
review highlights the following major items of concern:
Missing costs approximately $400,000 in costs listed were not included in the
totals (fromTables 2, 8 and 16).
Concrete work unit prices appear to be low throughout the estimate. In particular,
the 4.8 MG equalization basin reinforced concrete lining (Table 3) appears to
show discrepancies between concrete volumes and productions; resulting in costs
that appear short in the range of $600,000 to $750,000 assuming a higher revised
unit price.
G-2
Pump material costs the costs for the smaller pumps appear reasonable, but for
the larger (200 and 300-HP) pumps the costs included appear low by about
$400,000 (see Tables 10, 15, 16 and 17).
The sizes of the buildings in Tables 10 and 16 for the pumping plants are listed as
7,500 SF versus the approximate 2,300 and 2,800 SF shown on the conceptual
design drawing (see Sections 2.6 and 2.9). If the 2,500 SF quantity is correct, then
this may reduce raw costs of the buildings by about $1,000,000
For the pipe installation details are missing on the backfill types (e.g. bedding,
common, etc), quantities and cost, which can be significant pipe trench cost
drivers.
Dewatering and unwatering costs are not included in the estimate, except for the
bore pit dewatering wells, and have the potential of being a significant cost driver.
1.2 General Comments
At this time the estimate level is assumed to be at an appraisal level and will be reviewed
as such. Per the introductory paragraph in CWP-30 the preliminary and final design of
all CWP facilities has not been initiated and will not be initiated until the final EIR,
CPCN and permitting is completed, this indicates this project is in a planning phase. The
cost estimate level information provided implies that this is an early planning phase, for
which Reclamation normally develops appraisal cost estimates. The cost review will be
limited to the 23 Tables listed in the Capital Cost Estimate Basis Summary.
1.3 Estimate Cost Components
Review of the estimate costs (2005 dollars) indicates that the following components are
used:
Raw Costs; which appear to be the Direct Costs (labor, equipment, material and
subcontract costs) for the work.
Cost Including 18.5%; the 18.5% is an adder as a percentage of the Raw Costs
to cover General Conditions and Construction Overhead and Profit (3% and
15.5% respectively).
Implementation Costs; which is added as a percentage of the total of the raw
costs, general conditions, construction overhead and profit costs combined. Based
on Table 6-3 of the Conceptual Design Report, 24% was assumed for the
Implementation Costs which include engineering, environmental documentation,
legal, property acquisition services, construction management and administration.
Land Acquisition/Property; added as lump sum cost.
Contingencies; which is added as a percentage (10%) of the total of the raw
costs, general conditions, construction overhead and profit, implementation and
land acquisition costs combined.
G-3
Pilot Plant; this cost has been carried at a constant $2,585,000 in the 2005
Estimated Capital Costs Summary tables. See CWP Capital Cost Excel
Spreadsheet and Table 6-3 of the Conceptual Design Report.
These components are described in more detail and commented on in the following
paragraphs.
1.3.1 Raw Costs
These are the estimated costs for the direct labor, equipment, material and subcontract
costs for construction of the project components, and are reviewed in more detail in
Section 9.4
1.3.2 General Conditions, Construction Overhead and Profit
The General Conditions cost, as described in the Conceptual Design Report, include (but
are not limited to) insurance, bonding, equipment moves, supervision, project
management, temporary facilities, general safety equipment, etc. and is included at 3%
of the raw costs.
Construction Overhead and Profit, as described in the Conceptual Design Report, is
15.5% of the raw costs. The Construction Overhead is for Home Office G&A costs
(CWP-30, Q&A 13ii). The project supervision and management cost, sometimes referred
to as Project Overhead or Field Office Overhead is included in the General Conditions
above.
The General Conditions 3% adder appears low when compared to the Reclamation
typical percentage utilized at this level of estimate. Reclamation typically includes 5% for
mobilization and preparatory work. For on-site supervision, project management and
temporary facilities (a.k.a., Project or Field Office Overhead), a percentage in the range
of 10 to 15% is typical. The combined simple total for these two components would be in
the range of 15 to 20%. This is approximately 12 to 17% higher than the percentage
assumed in the estimates. Also, note that Reclamation adders are typically compounded.
The Construction Overhead (assumed for be Home Office G&A) and Profit combined
15.5% adder is not broken down further into the two components. However, for projects
of similar size at this estimate level, ranges for Home Office G&A of 7 to 8% and profit
of 7 to 8% appear reasonable. Therefore, the 15.5% total for the Construction Overhead
and Profit included in the estimates appears reasonable.
In summary, the combined total 18.5% included in the estimates for the General
Conditions, Construction Overhead and Profit appears low compared to typical
Reclamation percentages.
G-4
1.3.3 Implementation Costs
The Implementation Costs, as described the Gallery testimony and CWP-29, include
project administration, environmental documentation, engineering, property acquisition
services, legal services and construction management and administration. An adder of
24% was applied.
Reclamation typically identifies these costs as Non-Contract Costs which are added as a
percentage as the last component of the estimate to provide the Total Project Cost.
The 24% utilized in the estimate falls outside the lower end of the typical Reclamation
range (25% to 40%) utilized for similar sized Reclamation projects at this estimate level
for non-contract costs.
In the Gallery testimony, the answer to Question 25 indicates that these implementation
costs are not escalated, particularly if the start of construction is delayed after the design
work has been completed. In this estimate the Implementation Costs have been held
constant at $30,456,000 in the CWP Capital Cost Excel Spreadsheet, while showing costs
in later years of 2007 and 2008. As noted, Implementation Costs are added as a
percentage of the raw costs, general conditions, construction overhead and profit costs
combined, therefore as these components vary (escalate) it would be expected that the
Implementation Costs would adjust accordingly. Although the design work may be
completed earlier, the remaining components of the Implementations Costs occur at later
dates (for example, project administration and construction management) which typically
would reflect some increase.
Note, that as the construction costs (raw costs, General Conditions, Project Overhead and
Profit combined) are escalated, the Implementation Costs would adjust accordingly since
they are based on a percentage of these costs.
1.3.4 Land Acquisitions
The land acquisition costs of $2,000,000 for the project include land acquisition/property
as outlined in Table 6-3 of the Conceptual Design Report as follows:
Desalination SystemROW/Easement/Land
Desalination Water Pipelines ROW/Easement/Land
Terminal Reservoir ROW/Easement/Land
Segunda-ARS System ROW/Easement/Land.
There are approximately 120,000 feet of pipeline to be installed (plus other structures).
The total acquisition costs appear low for this size of project.
G-5
1.3.5 Contingencies
The contingencies, as described in CWP-29 Answer 5, is to account for project risk and
unforeseen circumstances during design and construction, while the Gallery testimony
(Answer 25) states it is included for unforeseen circumstances during construction.
Additionally, CWP-29 Question and Answer 3 indicates that a category for items too
small to specify but not entirely negligible in cost is not included.
The Contingencies in the estimates are included as a single cost at 10%.
Reclamation utilizes two categories for contingencies, Design and Construction
Contingencies. The Design Contingencies for an appraisal level estimate typically are
included at least 10% (typically 15%), while the Construction Contingencies are included
at 25%. These percentages are compounded when applied. Therefore, Reclamation
contingencies (compounded) range from approximately 37.5% to 44% versus 10% shown
in the estimates. For this project for which preliminary and final designs have not been
initiated (CWP-30) a higher percentage to cover contingencies appears warranted.
Similarly, as with the implementation costs of Section 9.3.3, as the construction costs
(raw costs, General Conditions, Project Overhead and Profit combined) are escalated, the
Contingencies would adjust accordingly since they are based on a percentage of these
costs.
1.3.6 Pilot Plant
The Pilot Plant costs in the estimates have been separated out and appear to have none of
the above adders applied to them. The CWP Capital Cost Excel Spreadsheet lists the Pilot
Plant costs and shows a 10% Contingency, but this 10% adder appears to be removed
from the summary contained in the CWP Capital Cost Excel Spreadsheet. Additional the
18.5% adder for the General Conditions, Construction Overhead and Profit is also not
applied to the Pilot Plant costs.
The Pilot Plant costs appear to be Raw Costs and it would be anticipated that the
percentage adders would also be applied to these costs. Per CWP-30 the Pilot Plant is to
be commissioned by March 31, 2008, and its costs should probably be removed.
However, for this review it will remain in the costs to provide comparison.
1.3.7 Application of Percentage Adders
The attached Appendix A Table 1 California Water Project Application of
Percentage Adders illustrates the application of the percentage adders as applied in these
estimates compared with the Reclamation percentage adders typically used (described
above) and as applied by Reclamation. The table illustrates the Total Project Costs ($178
million versus $ 280 million) for the two methods applied to the same Raw Costs (2005
dollars).
G-6
1.4 Review of Raw Costs
The Raw Costs (2005 dollars) to be reviewed are shown in Tables 1 through 23 of the
Capital Cost Estimate Basis Summary. The percentage adders, for General Conditions
and Construction Overhead and Profit, have been discussed above in Section 9.3 and are
not part of this sections review. All Raw Costs noted within Section 9.4 will not
include pennies for simplicity of showing data purposes.
The Total 2005 Raw Cost as summarized on the CWP Capital Cost Excel Spreadsheet
and the new attached Appendix A Table 2 California Coastal Water Project
Summary of Raw Costs is $108,617,538 (or $111,456,538 including the Pilot Plant).
The Tables 1 through 23 subtotal for 2005 Raw cost accounts for $47,435,483 (2005
dollars) of the total.
The remaining $64,021,055 cost, which is not reviewed (see Section 6.6), includes the
Desalination Facilities Pretreatment Process, Reverse Osmosis Process, and Post
Treatment Process. Also, the Pilot Plant cost is not reviewed. The Clearwell Tanks and
Pump Station (Table 9) and the Desalinated Water Pump Station (Table 10) listed under
the Post Treatment Process are part of the review.
1.4.1 Review of Labor Rates
The documents state that labor rates reflect the latest local prevailing wage rates. The
website www.dir.ca.gov/DSLR for the California Department of Industrial Relations
Division of Labor Statistics and Relations (DSLR) list the latest prevailing wage rates as
well as those for previous years.
The labor rates utilized in the 2005 estimate are the same as the 2004 Conkey Report
labor rates. For this review fully burdened labor rates were developed for 2005 (and
2008) from rates obtained from the above DSLR website and compared to the 2005
estimate labor rates. Appendix A Table 3 California Coastal Water Project Review
of Labor Rates summarizes this reviews developed 2005 and 2008 rates and their
comparison to the 2005 estimate rates.
The 2005 estimate labor rates appear reasonable with the possible exception of the
carpenter rate which appears to be about 15% low. Subcontractors labor rates were not
reviewed since no details are available.
1.4.2 Review of Equipment Rates
The rates for the major pieces of equipment utilized in estimate Tables 1 through 23 of
the Capital Cost Estimate Basis Summary were reviewed and compared to rates based on
G-7
equipment ownership per the Cost Reference Guide for Construction Equipment by
Equipment Watch (February 2008). Appendix A Table 4 California Coastal Water
Project Review of Equipment Rates summarizes this reviews developed 2005 and
2008 rates and comparison to the 2005 rates.
The 2005 estimate equipment rates appear reasonable with the exceptions of the Cat 623F
scraper and Cat 825G compactor that appear to be approximately 40 and 30 percent too
low respectively. Subcontractors equipment rates were not reviewed since no details are
available.
1.4.3 Review of Tables 1 Through 23 (Capital Cost Estimate
Basis Summary)
The costs in these tables are 2005 costs. The work days are based on 8 hours per day, 5
days per week. Note, the quantities (when listed) are not being reviewed as part of the
cost review.
The tables do not provide any unit costs for various installed components within each of
the tables, therefore Appendix A Table 5 California Coastal Water Project
Developed Raw Cost Units Prices has been developed to assist in the review.
1.4.3.1 Table 1 - Raw Water Connection at Duke Disengagement Basin
The total cost shown equals $305,379 with $287,960 (94%) being for material cost.
Figure 2-3 MLPP Disengagement Basin Connection of the Conceptual Design Review
shows a schematic of the setup but no specific quantities or descriptions.
No pipe thickness (or weight per foot of pipe) was provided to allow for easy price
comparison to be made. No structural and miscellaneous metals quantities were provided
to check Lump Sumcosts given.
The crew time allowed of 36 crew hours (4.5 days) appears low; no excavator nor
operator for buried wye section are included.
1.4.3.2 Table 2 Raw Water Supply Pipeline (7,000 feet of 54-Inch
RCP)
The total raw cost shown equals $1,617,158.
The pipeline indicated is 54-inch diameter RCP (Reinforced Concrete Pipe, class not
identified) and 7,000 feet of pipe to be installed at 200 feet per day. The alignment of the
pipeline is indicated to be along Dolan Road as shown on Figures 2-4 and 2-5 of the
Conceptual Design Report, which show the alignment and profile respectively.
G-8
ROW Preparation: (total raw cost of $28,382) ROW Preparation appears to include
asphalt pavement removal but not to the extent required. Only 25 loads are hauled out.
The actual removal requirement is not defined. If asphalt removal is required along the
whole alignment, then the total cost appears low. No actual area was provided to check a
unit cost.
Pipe Installation: (total raw cost of $1,507,478) Raw cost as shown equates to
approximately $215/foot including excavation, pipe material and installation, and
backfill. The pipe material cost totals $1,260,000 or $180/foot, approximately 84% of the
pipe installation cost. The material costs of the pipe appear reasonable for 2005. Note,
that the market increases due to escalation in the last 3 years have been higher than the
4% per year assumed.
Total crew hours are shown at 200 hours which appears to be 80 hours short based on the
stated 200 feet per day production (7,000 feet / 200 feet per day = 35 days. If 8 hours per
day x 35 days = 280 crew hours). A shortage of approximately $140,000 (or $20 per foot)
results. Therefore, the unit cost appears low.
Details are missing on backfill types (e.g. bedding, common, etc), quantities and cost,
which can be significant pipe trench cost drivers.
No details for the aggregate base and concrete requirements provided. Material prices for
2005 appear reasonable.
No details how excess excavated materials are handled and disposed of.
Appears that the cost of the listed pre-cast vault with flow meter and the control valve
(Figure 2-5, Conceptual Design Report) totaling $215,000 for materials are not included
in the total costs and also the installation costs.
Based on the above comments there appears to be significant missing or low costs.
Testing: The 40 crew hours included appear reasonable.
Cathodic Protection: No details to be provided until next design phase, therefore cannot
comment.
Pipe/Equipment Storage Facility: No details provided, therefore cannot comment.
Asphalt Pavement: The table shows 100 Ton at approximately $135 per ton for this
small amount. This unit price appears low. Typically this is subcontract work. Unclear if
100 tons is enough or what this quantity is based on. Costs could be significantly more if
the whole length requires repaving above the trench cut.
G-9
Erosion Control: No details; therefore cannot comment.
1.4.3.3 Table 3 Equalization Basin (4.8 MG)
The total cost shown equals $1,139,161.
Excavation / Sitework: The unit cost of $0.90 per CY for the 45,550 CY of earthwork
($40,560 total) appears low. As outlined in Section 9.4.2, the equipment rates used for the
scrapers and compactor appear to be low.
The production based on the yardage and 3 scrapers equates to 380 CY per hour per
scraper. This appears to equate to ideal production rates at 100% efficiency from the
Caterpillar Handbook. It appears a watertruck and a driver are missing in the crew.
Appears this work assumes no rock to be dealt with.
By assuming a lower production rate of 250 CY per hour per scraper to account for
operator and equipment efficiencies, the unit cost would be in the range of $ 2.00 to
$3.00 per CY.
Levee Top (Aggregate Base): The unit cost of $ 47.17 per ton for 450 tons appears
reasonable.
Welded Wire Fabric Reinforced Concrete Lining (12 Thick): The total concrete
quantity shown is 6,990 CY. Based on the total concrete costs results in a unit price of
$123.40 per CY. This appears to be low. These costs also include 250 CY of formed fill
structure.
Reviewing the table there seems to be a disconnect between quantities and crew hours as
shown which need to be clarified and the costs recalculated. For example, the 121,330 SF
of lining at 12-inch thick equates to 4,494 CY (excluding waste factor) versus the 6,740
CY shown. The total crew hours shown at 88 hours equates to 11 days, which at the 200
CY per day production shown would mean only 2,200 CY are placed for this table.
Table quantities and costs need to be clarified. For reference, typical Reclamation
historical reinforced concrete lining raw costs range between $300 to $400 per CY. For
structural concrete (small quantities) historical unit price range is between $750 to $1000
per CY. Based on the lower end of the ranges and quantities shown on the table the
weighted unit cost would be approximately $320 per CY.
Yard Piping: Although the table shows a crew, we cannot comment since the pipe
material to be installed is not defined.
G-10
Electrical and Instrumentation: Shows lump sum cost of $50,000, but cannot comment
since there are no details.
1.4.3.4 Table 4 Plant Inlet Screens and Pumping Pit
Excavation / Sitework: The unit cost of $225 per CY for 180 CY appears high.
Reinforced Concrete Lining W/Top: Based on Figure 2-6 of the Conceptual Design
Report, the concrete work is actually for a structure. So the unit cost of $1,058 per CY for
the 80 CY appears reasonable.
Plant Inlet Pit Equipment: The total subcontractor cost shown is $866,976, including
$830,000 for pumps and screens and approximately $27,000 for installation costs. No
details are provided on the screens, therefore we cannot comment on the $530,000. The
pumping units per Section 2.2.4 of the Conceptual Design Report indicate 4 x 50-HP
variable speed pumps (vertical axial or mixed flow) are required and are included at
$75,000 per each (assuming with motor). The unit cost appears reasonable.
Install Piping: The total costs of $69,684 include 80 crew hours and $20,000 for pipe
materials. No further details are provided, therefore cannot comment.
Electrical and Instrumentation: Shows lump sum cost of $75,000, but cannot
comment since there are no details.
1.4.3.5 Table 5 Return Flow (Brine) Pipeline (8,000 feet of 24-Inch
RCP)
The pipeline indicated is 24-inch diameter RCP (Reinforced Concrete Pipe) (class not
identified) and 8,000 feet of pipe to be installed at 300 feet per day. The alignment of the
pipeline is indicated to be along Dolan Road as shown on Figure 2-4 and 2-7 of the
Conceptual Design Report, which show the alignment and profile respectively.
Disengagement Basin Connection: Total raw cost equals $143,688. No details are
provided, therefore we cannot comment.
asphalt pavement removal but not to the extent required. It appears 100 loads are hauled
out. The actual removal requirement is not defined. If asphalt removal is required along
the whole alignment, then the total cost appears low. No actual area was provided to
check a unit cost.
G-11
Pipe Installation: (total raw cost of $746,176) Raw cost as shown equates to
approximately $93/foot including excavation, pipe material and installation, and backfill.
The pipe material cost totals $480,000 or $60/foot, approximately 65% of the pipe
installation cost. The material costs of the RCP pipe appear reasonable. Note, that the
market increases due to escalation in the last 3 years have been higher than the 4% per
year assumed.
Testing: The 40 crew hours included appear reasonable.
comment.
Pipe/Equipment Storage Facility: No details are provided, therefore cannot comment.
small amount. This unit price appears low. Typically this is subcontract work. Unclear if
100 tons is enough or what this quantity is based on. Costs could be significantly more if
the whole length requires repaving above the trench cut. Note, that ROW preparation
hauled 100 loads offsite.
Erosion Control: No details are provided, therefore cannot comment.
1.4.3.6 Table 6 Residuals Handling and Treatment.
The table shows three components and the combined total raw cost is $920,000,
consisting of lump sums for the components. No further details are provided, therefore
cannot comment.
1.4.3.7 Table 7 Treated Washwater Pump Station
The total cost shown equals $59,591.
Pump Station Structure: Cost for concrete structure is at $573 per CY for 15 CY.
Since formed and small quantity and only 8 crew hours, this seems low. For the formed
concrete typically we would expect a unit cost to be in the $750 to $1000 per CY range.
G-12
Pump Station Equipment (Pumps/Pipe): The total cost is shown as $50,988 for 2
pumps and piping. No details are provided, therefore cannot comment.
1.4.3.8 Table 8 Dried Solids Storage
The total cost shown equals $74,972. No details are provided. Note that the grading total
cost of $20,163 is not included in the totals and needs to be added.
Grading: The unit cost of $50.40 per CY for 400 CY appears reasonable for structure
earthwork.
Aggregate Base (8 Thick)(10,000 SF): The unit cost of $38.16 per ton for 500 ton
appears reasonable.
Asphalt Paving (4 Thick)(10,000 SF): The unit cost of $83.75 per ton for 250 ton
appears low for this small quantity. We would expect a unit cost to be double that shown.
Install Piping: Shows $14,790 for installation of piping. No pipe material cost is
included, and no other details are provided, therefore cannot comment.
Note, the table includes no electrical cost component.
1.4.3.9 Table 9 Clearwell Tanks (2 1.5 MG) and Clearwell Pump
Station (CWPS)
Excavation / Sitework: Shows 24 crew hours for $10,570, but no details are provided,
therefore cannot comment.
Prestressed Concrete Tanks (2 1.5 MG): Figure 4-1 of the Conceptual Design
Report shows the location of the required two tanks having a total capacity of 3,000,000
gallons. The cost for subcontractor is shown at $0.70 per gallon for total cost of
$2,100,000. The unit cost appears reasonable, however, note that the market increases
due to escalation in the last 3 years have been higher than the 4% per year assumed.
Pump Station Equipment (Pumps/Pipe): Total cost shown is $349,489, however no
details are provided, therefore cannot comment.
Electrical and Instrumentation: Shows lump sum cost of $ 250,000, but cannot
G-13
1.4.3.10 Table 10 Desalinated Water Pump Station:
The total cost shown equals $2,385,260. Figure 4-4 of the Conceptual Design Report
shows the conceptual layout of the plant. Note: Appears there is no earthwork/site work
included in the costs, which may need to be added.
Pump Station Building: The 7,500 SF building area shown on the table is larger than
the building shown in the referenced Figure 4-4 above (approximately 79 feet by 30 feet
equals 2,370 SF). However, the unit cost of $190.00 per SF for standard pre-engineered
building appears reasonable for total cost of $1,425,000.
Pump Station Structure: The building structure includes the concrete foundation slab
and pit for the piping and pumps. Overall concrete unit cost is $515 per CY for 300 CY
for a total cost of $154,794. The unit cost appears low considering the pit formwork
required. Since no quantities are provided separately for slab and walls, we would expect
the unit cost to be in the range of $650 to $800 per CY.
Miscellaneous Metals: Shows lump sum cost of $ 25,000, but cannot comment since
there are no details.
Pump Station Equipment: Total cost shown as $680,462 includes pumps, piping and
pre-cast vault with flow meter. Piping materials and pre-cast vault are included as lump
sumcost, therefore we cannot comment. No quantity details are provided. The pumping
units per Table 4-1 of the Conceptual Design Report indicate 4 x 300-HP variable speed
pumps (vertical turbine) are required and are included at $75,000 per each (assuming
with motor). The unit cost appears low; for 300 HP motor/pump costs would expect a
unit price range of $150,000 to $175,000 per each.
Electrical and Instrumentation: Shows a lump sum cost of $ 100,000, but cannot
1.4.3.11 Table 11 Desalinated Water Conveyance (DWC) Pipeline
Moss Landing Section (26,000 feet of 30-inch (250 psi) SCCP,
MLCSP, or DIP pipe)
The pipeline indicated in the table is 30-inch diameter (250 psi) pipe and 26,000 feet of
pipe to be installed at 300 feet per day.
asphalt pavement removal but not to the extent required. Only 50 loads are hauled out.
The actual removal requirement is not defined. No actual area was provided to check a
unit cost.
G-14
pipe installation cost. The material costs of the pipe appear reasonable. Note, that the
year assumed.
Testing: The 80 crew hours shown on the table appear low when compared to 40 hours
used for 7,000 and 8,000 feet pipelines (Tables 2 and 5).
comment.
amount appears reasonable. Typically this is subcontract work. Unclear if 150 tons is
enough or what this quantity is based on. Cost could be significantly more if the whole
length requires repaving above the trench cut.
The table includes four crossings by jack and bore methods for a total of 1,750 feet.
Further details are not provided and costs summarized as follows:
Bore Pits: Eight pits are included at approximately $26,500 per each, which appears
reasonable.
Dewatering Wells: The table shows 4 wells per pit at a unit price of $4,000 per well or
$16,000 per pit which appears reasonable.
Bore and Jack: The total raw cost for the four bores at a unit cost $950 per foot for
1,750 feet is $1,662,500. The unit cost includes the casing as indicated in the table, but
the references and table do not indicate the diameter of the casing.
G-15
TAMC Section (51,300 feet of 30-inch (250 psi) SCCP,
MLCSP, or DIP pipe)
The pipeline indicated in the table is 30-inch diameter (250 psi) pipe and 51,300 feet of
pipe to be installed at 300 feet per day.
ROW Preparation: (total raw cost of $163,675) This appears to include asphalt
pavement removal but not to the extent required. It appears 50 loads are hauled out. The
actual removal requirements are not defined, so cannot comment. No actual area was
provided to check a unit cost.
year assumed.
Testing: The 120 crew hours shown in the table appear low when compared to the 40
hours used for 7,000 and 8,000 feet pipelines (Tables 2 and 5).
comment.
small amount. This unit price appears high. Unclear if 100 tons is enough or what this
quantity is based on. Cost could be significantly more if the whole length requires
repaving above the trench cut.
G-16
The table includes two crossings by jack and bore methods for a total of 950 feet. Further
details are not provided and costs summarized as follows:
Bore Pits: Four pits are included at approximately $26,500 each, which appears
reasonable.
Dewatering Wells: Included at 4 wells per pit at $4,000 per well or $16,000 per pit
which appears reasonable.
Bore and Jack: The total raw cost for the four bores at $950 per foot for 950 feet is
$902,500. The unit cost per table includes the casing but the references and table do not
indicate the diameter of the casing.
The table includes costs for the Salinas River Crossing (Monte Road Bridge Crossing) for
a lump sum of $1,700,000. No details are provided for these developed costs, therefore
cannot comment.
Seaside Section (18,700 feet of 30-inch (150 psi) SCCP,
MLCSP, or DIP pipe)
The pipeline indicated is 30-inch diameter (150 psi) pipe and 18,700 feet of pipe to be
installed at 250 feet per day.
asphalt pavement removal but not to what extent required. It appears 150 loads are hauled
out. The actual removal requirements are not defined, therefore cannot comment. No
actual area was provided to check a unit cost.
year assumed.
G-17
Testing: The 120 crew hours used appear reasonable when compared to Tables 2 and 5.
comment.
amount. The unit price appears low. We would expect a unit cost to be approximately
double that shown. Typically this is subcontract work. Unclear if 750 tons is enough or
what this quantity is based on. Cost could be significantly more if the whole length
requires repaving above the trench cut.
The table includes two crossings by jack and bore methods for a total of 650 feet. Further
details are not provided and costs summarized as follows:
Bore Pits: Four pits are included at approximately $26,500 each, which appears
reasonable.
Dewatering Wells: Included at 4 each per pit at $4,000 per well or $16,000 per pit which
appears reasonable.
Bore and Jack: The total raw cost for the four bores at $950 per foot for 650 feet is
$617,500. The unit cost per table includes the casing but the references and table do not
indicate the diameter of the casing.
1.4.3.14 Table 14 Terminal Reservoir (2 3.0 MG)
Excavation / Sitework: The unit cost of $1.80 per CY for the 120,000 CY of earthwork
($215,692 total) appears low but closer to the range outlined in Section 9.4.3.3 of $2.00
to $3.00 per CY. As outlined in Section 9.4.2 above the equipment rates used for the
scrapers and compactor appear to be low.
The production based on the yardage and 4 scrapers equates to 200 CY per hour per
scraper which appears reasonable. A watertruck and a driver is included that was missing
in Section 9.4.3.3. It appears this work assumes no rock is to be dealt with.
G-18
When the above adjustments are taken into account, the unit cost would be in range of
$2.00 to $3.00 per CY outlined.
Aggregate Base Surface: Unit cost of $31.58 per ton for 300 ton appears reasonable
(minor cost).
Prestressed Concrete Tanks (2 3.0 MG): Figures 4-7 and 4-8 of the Conceptual
Design Report show the location of the required two tanks having a total capacity of
6,000,000 gallons. The table shows the unit price for the subcontractor at $0.65 per
gallon for a total cost of $3,900,000. The unit cost appears reasonable, however, note
that the market increases due to escalation in the last 3 years have been higher than the
4% per year aasumed.
1.4.3.15 Table 15 ASR Pump Station:
The total cost shown equals $370,580. Figures 4-7 and 4-8 of the Conceptual Design
Report show the location of the pump station next to the 2 3.0 MG tanks. Note, no
earthwork/site work costs are included.
Pump Station Building: No cost is included for a building, but it appears from Figure
4-8 that a building may be required.
Pump Station Structure: The building structure appears to include concrete foundation
slab and pit for the piping and pumps. Overall concrete unit cost is $637 per CY for 100
CY for a total cost of $63,700. The unit cost appears low considering the pit formwork
required and since no quantities provided separately for slab and walls, we would expect
the unit cost to be in the range of $650 to $800 per CY.
Miscellaneous Metals: Shows lump sum cost of $ 25,000, but cannot comment since
Pump Station Equipment: The total cost shown as $240,883 includes the pumps,
piping and pre-cast vault with flow meter. Piping materials and pre-cast vault are
included as lump sum costs, therefore cannot comment, since no quantity details are
provided. The pumping units per Table 5-4 of the Conceptual Design Report indicate 3 x
50-HP variable speed pumps (end-suction centrifugal or horizontal split case) are
required and are included at $25,000 per each (assuming with motor). The unit cost
appears low. We would anticipate a cost range between $35,000 to $50,000 depending on
requirements.
Chain Link Fence: Small cost; unit cost appears reasonable at $30 per foot.
G-19
Electrical and Instrumentation: Shows a lump sum cost of $ 50,000, but cannot
1.4.3.16 Table 16 Tarpy Flats Pump Station (TFPS):
The total cost shown equals $3,209,097. Figure 4-12 of the Conceptual Design Report
shows a conceptual plan of the pump station.
Note that the Excavation/Sitework cost of $28,303 in the table is not included in the
summaries and needs to be added to the Table total and summaries.
Excavation / Sitework: The table shows 40 crew hours for $ 28,303. No quantities are
provided, therefore cannot comment.
Pump Station Building: The 7,500 SF building area shown on the table is larger than
the building shown in the above referenced Figure 4-12 (approximately 100 feet by 30
feet equals 3,000 SF). However, the unit cost of $190.00 per SF for standard pre-
engineered building appears reasonable for total cost of $1,425,000.
Pump Station Structure: Same comments as provided for Section 9.4.3.10 for Table
10.
Miscellaneous Metals: Shows lump sum cost of $25,000, but cannot comment since
Pump Station Equipment: The total cost shown as $592,303 includes pumps, piping
and pre-cast vault with flow meter. Piping materials and pre-cast vault are included as
lump sum costs, therefore cannot comment, since no description or quantity details are
provided. The pumping units per Table 4-7 of the Conceptual Design Report indicate 5 x
200-HP variable speed pumps (vertical turbine) are required and are included at $50,000
per each (assuming with motor). The unit cost appears low. We would expect a cost in
the range of $75,000 to $100,000 depending on requirements.
Chain Link Fence: Small cost; unit cost appears reasonable at $30 per foot.
Electrical and Instrumentation: Shows lump sum cost of $ 1,000,000, but cannot
1.4.3.17 Table 17 Segunda Pump Station (SPS) Expansion:
The total cost shown equals $301,726. Figure 5-1 of the Conceptual Design Report
shows minor details.
G-20
Excavation / Sitework: Sitework included at $24,143 for 32 crew hours. No quantity
Pump Station Building: No building is included.
Pump Station Structure: The building structure appears to include concrete foundation
slab and pit for the piping and pumps. Overall concrete unit cost is $718 per CY for 100
CY for a total cost of $71,800. The unit cost appears to be reasonable within the $650 to
$800 per CY range previously outlined.
Miscellaneous Metals: Shows lump sum cost of $25,000, but cannot comment since
Pump Station Equipment: The total cost shown as $74,726 includes pumps, piping and
pre-cast vault with flow meter. Piping materials and pre-cast vault are included as lump
sumcosts, therefore cannot comment, since no quantity details provided. The pumping
unit per Section 5.3.1 of the Conceptual Design Report indicates 1 x 200-HP pump (type
not specified) is required and is included at $25,000 per each (assuming with motor). The
unit cost appears low. We would expect a cost in the range of $70,000 to $85,000
depending on requirements.
Chain Link Fence: Small cost; the unit cost appears reasonable at $30 per foot.
1.4.3.18 Table 18 Segunda to Crest Pipeline (3,500 feet of 30-inch
(150 psi) SCCP, MLCSP, or DIP pipe)
The total raw cost shown equals $514,162.
out. The actual removal requirements are not defined, therefore cannot comment. No
Pipe Installation: (total raw cost of $420,159) Raw cost as shown equates to
backfill. The pipe material cost totals $245,000 or $70/foot, approximately 58% of the
G-21
year assumed.
Testing: The 40 crew hours used appear reasonable.
comment.
Asphalt Pavement: The table shows 75 Ton at approximately $104 per ton for this small
amount. The unit price appears low. Typically this is subcontract work. Unclear if 75 tons
is enough or what this quantity is based on. Cost could be significantly more if the whole
length requires repaving above the trench cut.
1.4.3.19 Table 19 Crest To Terminal Reservoir Pipeline (24,500
feet of 36-inch (150 psi) SCCP, MLCSP, or DIP pipe)
out. The actual removal requirements are not defined, therefore we cannot comment. No
year assumed.
G-22
The total crew hours are shown as 784 hours which appears to be 200 hours short based
on the stated 200 feet per day production (24,500 feet / 200 feet per day = 123 days. If 8
hours per day x 123 days = 984 crew hours). A shortage of approximately $234,000 (or
$9.50 per foot) results. Therefore, the unit cost appears low.
Testing: The 40 crew hours used appear low when compared to the 40 crew hours used
for 7,000 and 8,000 feet in Tables 2 and 5.
comment.
small amount. The unit price appears low. Typically this is subcontract work. Unclear if
175 tons is enough or what this quantity based on. Cost could be significantly more if the
whole length requires repaving above the trench cut. Note, for ROW preparation 200
loads were hauled out.
1.4.3.20 Table 20 ASR Pipeline (10,000 feet of 30-inch (150 psi)
SCCP, MLCSP, or DIP pipe)
installed at 300 feet per day. Note, the actual crew hours shown are for a production rate
of 250 feet per day.
out. The actual removal requirements are not defined, so we cannot comment. No actual
area was provided to check a unit cost.
G-23
Pipe Installation: (total raw costs of $ 1,092,464) Raw cost as shown equates to
backfill. The pipe material cost totals $700,000 or $70/foot, approximately 64% of the
year assumed.
Testing: The 40 crew hours used appear reasonable when compared to Tables 2 and 5.
comment.
Asphalt Pavement: The table shows 175 Ton at approximately $96 per ton for this small
amount. This unit price appears low. Typically this is subcontract work. Unclear if 175
tons is enough or what this quantity is based on. Cost could be significantly more if the
whole length requires repaving above the trench cut.
Erosion Control: No details are provided, therefore we cannot comment.
1.4.3.21 Table 21 ASR Well Site Golf Course Site and Table 22
ASR Well Site School Site
The cost breakdowns included in these two tables are very similar with the unit costs
shown being the same. Some quantities did vary.
The total costs shown equal $1,750,000 for Table 21 and $1,680,000 for Table 22 which
includes the 18.5% for general conditions, overhead and profit per notes on both tables.
It is should be noted that it appears that the adder as stated is for the subcontractor costs
where the subcontractor acts as the prime contractor directly under the Owner. However,
if the work is performed as a subcontractor for a Prime Contractor then the Prime
Contractor general condition, overhead and profit should be added on top of the costs
shown. At this time the summaries do not include a prime contractor adder, therefore we
assume the work to be performed under separate contracts.
G-24
Review of the following is for items that are included in either Table 21 or Table 22,
but not both:
Grading (Table 22 only): Includes two lump sum costs of $40,000 per each for total of
$80,000. No details are provided for work required, therefore we cannot comment.
Monitor Well (Table 22 only): (6-inch PVC to 720 feet, 304 S.S. screen) Cost is
included at a lump sum total of $80,000. No details are provided, therefore cannot
comment.
Equip Monitor Well (Table 22 only): Cost is included at a $20,000 lump sum total. No
Settling Basin (1.2 MG) (Table 21): The Conceptual Design Report indicates that there
would be one settling basin for the two well sites. The costs for clearing, earthwork and
landscaping are included as one lump sum total of $200,000 with no other details and
quantities are provided, therefore cannot comment.
Review of the following is of items that are included in both Table 21 and Table 22:
Land Acquisition: Unit cost is shown as $35,000 per acre. Table 21 is for 6 acres for
$210,000 total and Table 22 is for 5 acres for $175,000 total. The combined cost of
$385,000 for the land acquisition would typically not be included in the raw costs but
as a non-contract cost.
Wellfield Piping (Discharge Piping to settling Basin, 16-inch RCP): Table 21 includes
200 feet while Table 22 includes 1000 feet. See comments for the wellfield piping in
Section 9.4.3.22 which also apply to these Tables.
Review of the following is for items that are included in both Table 21 and Table 22:
Note, the cost listed for the components are included in each Table.
Mobilization: The $65,000 cost equals approximately 5% of total costs and appears
reasonable.
Sound Barrier: Costs are included at a $50,000 total lump sum. No details are provided,
therefore cannot comment.
Well Development/Construction: The total cost for the well construction (excluding the
mobilization, sound barrier, and grading) is $534,850 which equates to $775 per foot
based on a depth of 690 feet. The total cost appears reasonable, when compared to the
range of $ 550,000 to $700,000 for 2008 costs based on discussions with casings
supplier.
G-25
The unit cost for the pilot hole is shown as $135 per foot along with the $110 per foot for
reaming pilot hole giving a total of $245 per foot for the 32-inch diameter drilled hole.
The cost appears reasonable.
The stainless steel materials unit costs for casing (24-inch), screens - wire wrapped (24-
inch), gravel feed line (3-inch), and water level monitor tube (3-inch) appear a little low
for the 24-inch lines (approximately 25% low) and a little high for the 3-inch lines
(approximately 25% high). The costs shown on the tables are for material costs, and it is
unclear whether the installation costs are included. For reference, 2008 material supplier
list prices (FOB Manufacturer) for the 24-inch lines are $410 to $450 per foot and for the
3-inch lines are in the range of $35 to $40 per foot. Note these costs do not reflect
contractor discounts or freight. Note, that the market increases due to escalation in the
last 3 years have been higher than the 4% per year assumed.
The gravel pack and grout seal material unit costs appear reasonable at $75 per foot and
$50 per foot respectively. It is unclear if the installation costs are included.
The total costs of $64,000 to cover the Geophysical Logging, Downhole Velocity Profile
Survey, Well Development, pump Test and Disinfection appear reasonable.
Overall the well construction 2005 costs appear reasonable. However it is not clear
whether the work is performed for the owner directly or as a subcontractor for the overall
Prime Contractor.
ASR Well Completion: The total costs for the Vertical Turbine Pump, motor, VFD,
SCADA, wellhead piping, electrical and flow control are shown as a lump sum of
$575,000. These costs have no details, therefore cannot comment.
At this appraisal level estimate the cost appear reasonable however note, that the market
increases due to escalation in the last 3 years have been higher than the 4% per year
assumed.
1.4.3.22 Table 23 ASR Well Site SMTIW Site
The total cost shown equals $125,000, and is rounded to $130,000, which includes the
18.5% for general conditions, overhead and profit per note on Table 22. See comment
regarding 18.5% adder under the above section.
There are two components for the total costs as follows:
Wellfield Piping: Cost is for discharge piping, 16-inch RCP, to the settling basin for
1,000 feet at $65 per foot for a total of $65,000. (Note by backing out the 18.5%, the raw
cost equals $54.85 per foot).
G-26
The shown cost is included under the materials category and the unit price appears high
for just material cost. However, it is unclear if the unit cost is intended to include
installation costs or not. No further are details provided, therefore no further comment.
Electrical Power Supply: Shows lump sum cost of $ 60,000, but cannot comment since
1.5 Summary Comments
The costs on Tables 1 through 23 will require review and adjustment based on the above
comments. It is suggested that the costs are updated using current material and
subcontractor quotes, and labor and equipment rates and to incorporate any further design
details available.
The CWP Capital Cost Excel Spreadsheet indicates that for the Electrical and
Instrumentation & Controls cost of $10,754,251 (cost not reviewed) for the Desalination
Plant the 18.5 % adder for the General Conditions, Construction Overhead and Profit, is
not added to the total costs. A review of this is suggested, since if assuming the electrical
subcontractor would be performing its work under the Prime Contractor contract, then the
Prime Contractor would be entitled to its percentage adders. This is similar to the
comment regarding the ASR wells above in Section 9.4.3.21.
It is suggested that the escalation applied to the costs be reviewed since increases due to
escalation in the last 3 years have been higher than the 4% per year assumed.

Exhibit 4
Technical Memorandum
Updated Capital Cost Estimate
for the
Coastal Water Project
May 20, 2009

OBJECTIVE

The objective of this technical memorandum is update the capital cost estimates for the
Coastal Water Projects Proposed Project at Moss Landing (Moss Landing Project) and
the North Marina Alternative (North Marina Project). These updated capital cost
estimates are referenced in testimony provided by Mark Schubert of California American
Water in the matter of the application of California American Water Company for a
Certificate of Public Convenience and Necessity from California Public Utilities
Commission.

BACKGROUND

Previous capital cost estimating work on the Coastal Water Project includes:

A report prepared by JR Conkey & Associates entitled Estimate of Probable
Construction Costs - California American Water - Coastal Water Project
Regional Project - 2004 (Conkey Report);
A cost estimate for a desalination plant at Moss Landing prepared by Pridessa in
2004 and incorporated into the Conkey Report;
Cost estimates prepared by RBF Consulting to compare the Proposed Project at
Moss Landing to the North Marina Site Alternative, provided as a technical
memorandum appended to the Proponents Environmental Assessment (PEA) in
July of 2005; and
A cost estimate for the Moss Landing Project provided in the Conceptual Design
Report (CDR), RBF Consulting, September 2005

The Conkey Report was prepared for a larger (18 mgd) Regional project at Moss
Landing and resulted in a construction cost estimate of $185 million, in 2004-dollars.
Contingencies and implementation costs were not addressed in the Conkey Report. In
that report, construction equipment and building materials (concrete, aggregate, form
material, rebar, etc.) were sized and estimated for local (Monterey) conditions and
contractor capabilities. However, much of the work in the Conkey Report for the
desalination plant was based on the estimate by Pridessa, a Spanish company, and the
Pridessa estimate was not calibrated to local conditions and contractor capabilities.

In the subsequent cost estimates prepared by RBF Consulting in 2005 for the PEA and
CDR, the Conkey estimate was adjusted to account for the size of the smaller (10 mgd)
project as well as one year of inflation. Generally, the adjustment method involved
reducing the 2004 estimates by a percentage (the percentage varied according to
component) to account for project size reduction, and then that cost was inflated 4% for
current 2005-dollars. Other adjustments were also made to adjust for inaccuracies in
the Pridessa estimate, and to incorporate quotes that were obtained after the Conkey
Report was completed, or to add features that were not known at the time of Conkeys
work. Details on how the Conkey Report was used to generate the 2005 estimate can
be found in the Coastal Water Project Conceptual Design Report (RBF Consulting,
2005). The result was that a capital cost estimate was generated in 2005 in the CDR
for the Moss Landing Project, in 2005 dollars, as shown from Table 6-1 of the CDR:

METHODOLOGY AND GENERAL NOTES

This cost estimate is builds on the previous work done in the Conkey Report and
Conceptual Design Report, incorporating additional project information and detail that
has been developed since 2005. Unit quantities and unit costs have been checked
and/or developed and have been revised or updated to current conditions.

In general, construction equipment, methods, and labor hours were generated on the
basis of data obtained from the Conkey Report. Labor costs were estimated on the
basis of State Department of Labor prevailing wage rates for Monterey County. If a
labor classification was not covered by the Monterey County prevailing wage rates, the
State-wide rate was used for the nearest matching category.

All raw costs for materials, labor, and equipment were estimated as subcontracts to a
prime contractor, and all such raw costs were increased by 18% to account for prime
contractor administration, overhead and profit.

In addition to the information in the Conkey Report and previous CWP estimates,
sources and references used to prepare this estimate include quotes from material
suppliers and equipment vendors, recent estimates for projects with similar components,
recent bid tabulations, and professional judgment based on experience. Unless
otherwise stated, prices for materials and equipment are inclusive of sales tax at 8.25 %.

Allowances for implementation costs, land and right-of-way acquisition costs, and
contingencies have been carefully considered and adjusted to reflect the value of work
accomplished to date, current California American Water (CAW) budgeting practices,
and professional cost estimating practices as defined by the Association for the
Advancement of Cost Engineering (AACE).

This cost estimate is for future work on the project and does not include implementation
costs (pre-construction capital costs) that have occurred prior to January 1, 2009.

SUMMARY OF UPDATED ESTIMATES

The updated capital cost estimates for the two projects are summarized in the attached
Table 1. Capital costs include construction costs, Land and ROW acquisition, and
allowances for implementation and contingencies.

The capital cost of the Moss Landing Project is estimated to be $270,000,000, with an
accuracy range of $230,000,000 to $340,000,000, in current (2009) dollars. The capital
cost of the North Marina Project is estimated to be $250,000,000, with an accuracy
range of $210,000,000 to $310,000,000, in current (2009) dollars.

Comparing the two projects, the Moss Landing Project has a $17M construction cost
advantage in the area of Off-site Feedwater and Brine Disposal Facilities, but has higher
construction costs for the Desalination Plant ($96M versus $81M) due to higher
pretreatment costs, and Desalinated Water Conveyance ($54M versus $38M) due to the
longer product water pipeline that is required. The Moss Landing Project is further along
in development, so it has lower future implementation costs ($39M versus $42M), but it
has higher costs for Land and ROW acquisition ($7.2M versus $4.9M).

OFF-SITE FEEDWATER AND BRINE DISPOSAL FACILITIES
Moss Landing Project Estimated 2009 Construction Cost of $2,800,000
North Marina Project Estimated 2009 Construction Cost of $20,000,000

Moss Landing Project

Source Water Diversion System

The source water diversion system consists of dual 30-inch vacuum-actuated,
automatically operated siphons to be installed overhanging the existing wall in the MLPP
disengaging basin.

The estimated construction cost for these facilities is $500,000, including costs for
construction equipment, materials (pipe, valves, etc.) and labor for installation and
testing.

Source Water Pipeline

The source water pipeline consists of 7000 LF of 54-inch diameter high density
polyethylene (HDPE) feedwater pipeline from the feedwater diversion system at the
MLPP disengaging basin to the desalination plant site, to be installed underground in the
ROW of Dolan Road.

The estimated construction cost for this pipeline is $1,300,000, including costs for
construction equipment, materials, and labor for installation and testing. The unit cost
for this pipeline is approximately $190 per lineal foot.

Return Flow (Brine) Pipeline

The return-flow pipeline consists of 7000 LF of 24-inch to 36-inch diameter (final
diameter to be determined during design) HDPE pipeline from the desalination plant site
to the disengaging basin, to be installed underground in the ROW of Dolan Road. The
pipeline would be installed in a separate trench from the 54-inch diameter source water
pipeline. However, approximately 5% cost savings have been assumed if this pipeline is
installed by the same contractor that installs the source water pipeline.

The estimated construction cost for this pipeline is $1,000,000, including costs for
for this pipeline is approximately $140 per lineal foot.

North Marina Project

Test Well

A test slant well will be constructed and, if it successfully produces its targeted flow,
ultimately converted to a production well. The estimated construction costs of
$2,300,000 include approximately $2,000,000 for drilling a 12-inch diameter, 700-foot
well; and approximately $300,000 for development and testing including the test pump
and facilities for disposing of development water and test water.

Production Wells

Five slant wells will be constructed, each 12-inch diameter and 700 feet long. The
estimated construction costs of $9,100,000 include approximately $8,300,000 for drilling
five 12-inch diameter, 700-foot wells; and approximately $800,000 for development and
testing including the test pumps and facilities for disposing of development water and
test water.

Well-Head Facilities

The cost to equip the 6 slant well is estimated at $1,900,000. This includes
approximately $ 1,500,000 to furnish and install six 2,500 gpm, 250 hp, variable speed
submersible pumps, and approximately $400,000 for concrete vaults, valves and
interconnecting site piping.

Well Electrical and I&C

This item includes electrical switchgear, electrical conduit and conductors from the
switchgear to the well heads, motor control and instrumentation and control equipment.
The construction cost is estimated at $500,000, which is approximately 25% of
equipment cost, in accordance with budget recommendations by DTN Engineers.

Source Water Pipeline

16,000 lineal feet of 36-inch diameter HDPE source water pipeline will be constructed
from the slant well site at the Marina State Beach to the North Marina Desalination Plant
(NMDP). 1400 lineal feet of the pipeline will be constructed using trenchless technology
(jack and bore) to cross Highway 1 and Del Monte.

The estimated construction cost for this pipeline is $5,900,000, including costs for the
jack and bore sections, construction equipment, materials, and labor for installation and
testing. The jack and bore costs increase the average unit cost for this pipeline to
approximately $370 per lineal foot.

Return Flow (Brine) Pipeline

The return-flow pipeline consists of 2000 LF of 24-inch to 36-inch diameter (final
diameter to be determined during design) HDPE pipeline (buried) from the desalination
plant site to the Monterey Regional Water Pollution Control Plant (MRWPCA) outfall
pipeline.

The estimated construction cost for this pipeline is $300,000, including costs for
for this pipeline is approximately $150 per lineal foot. This estimate does not include fees
to connect to or use the outfall.

DESALINATION PLANT
ML Project Estimated 2009 Construction Cost of $96,400,000
NM Project Estimated 2009 Construction Cost of $80,600,000

Moss Landing Desalination Plant (MLDP)

Plant Inlet Facilities

The MLDP inlet facilities consist of the feedwater equalization basin and the plant inlet
pump station.

Source Water Equalization Basin. The MLDPs feedwater equalization basin is a 5
million-gallon uncovered equalization basin, equipped with a gunnite protected plastic
liner. The estimated construction cost for this facility is $570,000, excluding costs for
earthwork, which is included in the site work line item.

Plant Inlet Screens and Pumping Pit. The MLDP feedwater pump station is a 23 mgd
plant inlet pump station, located adjacent to the equalization basin, which includes a
1000 square foot building, four 50 hp vertical wet pit pumps, and two vertical traveling
screens. The total estimated construction cost for this item is $590,000, which includes
$280,000 to furnish and install the pumps, $200,000 to furnish and install the vertical
traveling screens, and $110,000 for concrete work and building.

Pretreatment Facilities

The MLDP pretreatment facilities consist of chemical storage and feed equipment,
automatic cleaning fine screens, initial mix and flocculation facilities, membrane filter
feed pump station, membrane filtration system, and associated structures, buildings, and
appurtenances.

Chemical Storage and Feed Equipment. Costs have been estimated for storage and
feed facilities for 5 chemicals (liquid ferric chloride, calcite, carbon dioxide, gaseous
chlorine, and liquid sodium bisulfite). The estimated cost of $600,000 for this line item
are for equipment only (costs for the chemical building are included with Structures,
Building, and Misc. Piping & Equipment) and includes $110,00 for calcite equipment,
$50,000 for ferric chloride equipment, $320,000 for carbon dioxide equipment, $70,000
for gaseous chlorine equipment, and $50,000 for sodium bisulfite equipment.

Automatic Cleaning Fine Screens. Four fine screens will be installed (three in service
and one in standby.) The estimated construction cost is based on a vendor quote of
$100,000 per screen, plus 25% for taxes, installation labor and materials. The installed
equipment cost was then marked up by 18% to allow for contractor overhead and profit
to produce a construction cost estimate of approximately $600,000.

Initial Mix and Flocculation. The total estimated construction cost for a three train, three-
stage system this item is $450,000 for installed equipment only. Three 20 hp flash
mixers pump and nine 10 hp vertical turbine flocculation mixers would be installed. The
concrete flocculation basins are included with Structures, Building, and Misc. Piping &
Equipment.

Membrane Filter Feed Pump Station. The membrane filter feed pump station was
assumed to be a 300,000 wet well sump, four 75-hp vertical wet pit variable speed
pumps and an 800 square foot building. The total estimated construction cost for this
item is $960,000, including equipment, wet well, and building. The assumed equipment
cost for variable speed vertical pumps in this size range is estimated on the basis of
horsepower, at $1500/hp, to be $450,000. This was marked up by 25% to account for
taxes, installation labor and materials. The installed equipment cost was then marked
up by 18% to allow for contractor overhead and profit to produce an installed equipment
cost estimate of approximately $660,000. To this result, $210,000 was added to
construct a 300,000 gallon membrane filter feed wet well sump, consisting of 300 cu.
yds. of concrete at $700/cu.yd., and an 800 square foot building at $110/ sq. ft.

Membrane Filters. The membrane filtration system cost estimate of $15,300,000 is
based on an estimate provided by Siemens for a pressurized UF system similar in size
and design to a recently bid project. The equipment cost of $10M is for a 12x240P
installation, and includes an assumed $1M materials upgrade for seawater service.
$3M was added for sales tax, installation equipment, installation labor and installation
materials, and the total installed equipment cost was marked up by 18% for contractor
overhead and profit.

Structures, Building and Miscellaneous Piping and Equipment. The estimated
construction cost for this item is $2,400,000, which includes a 9000-square foot building
to house the membrane equipment (at $120/sq foot), a 6000-square foot building to
house the chemical equipment (also at $120/sq ft.), a 300,000-gallon uncovered
flocculation basin (for $200,000), and $400,000 for miscellaneous piping and equipment.

Reverse Osmosis Facilities

Process Equipment. The membrane filtration system cost estimate of $24,000,000 is
based on an estimate provided by Membrane Systems, Inc. specifically solicited for this
project. The equipment cost of $20M, which includes sales tax, is for six single pass
arrays, each having a permeate production capacity of 2 mgd, and includes high
pressure pump equipment, vessels and vessel racks, membranes, energy recovery
systems, CIP system, valves, instruments, and interconnecting piping, as well as vendor
services for training and assistance during startup. 20% was added for sales tax,
installation labor, and contractor overhead and profit. A lower percentage (10%) was
used for contractor overhead and profit on this item.

Structures, Building and Miscellaneous Piping and Equipment. The estimated
construction cost for this item is $3,400,000, which includes a 19,000-square foot
building (at $120/sq foot), a 500,000-gallon filtrate storage well which is integral with the
building (for $350,000), $150,000 for a crane system, and $600,000 for miscellaneous
piping and equipment.

Post-Treatment Facilities.

The post-treatment facilities consist of carbon dioxide, calcite contactors, and
chlorination facilities. The costs for most of these facilities are included in the chemical
building cost estimate, which is included in the pretreatment facilities estimate. The
estimated cost of the calcite contactors is $400,000, to construct a 15,000 cu ft covered
basin, and 3,000 sq ft of basin covers.

Residuals Handling and Treatment Facilities.

The total construction cost for residuals handling and treatment facilities is $760,000,
which includes $200,000 for a 60,000 gallon wash water treatment and recovery basin,
$50,000 for a 2 mgd treated wash water pump station, $300,000 for a one-half meter
filter belt press, $100,000 for a 1600 sq ft. canopy to cover the filter press area, $30,000
for a 5000 sq foot asphalt pad to store dewatered solids, and $80,000 for a storage
sump to store waste CIP solution from the RO process.

Product Water Facilities

The product water facilities at the MLDP include the clearwell pump station, clearwell
reservoirs and the desalinated water pump station.

Clearwell Pump Station. The MLDP clearwell pump station capacity would be a
10 mgd station equipped with three 40 hp vertical wet pit pumps mounted on a
200,000 gallon concrete wet well in an 800 square foot building The total
estimated construction cost for this item is $500,000, which includes $240,000 to
furnish and install the pumps, $140,000 to construct the concrete sump, and
$120,000 for the building.

Clearwell. The two 1.5 MG clear well tanks will be built using pre-stressed
concrete construction provided by DYK Incorporated. A constructed unit cost of
$1.50/gal was used to estimate the $4.5M construction cost for the two tanks.

Desalinated Water Pump Station (DWPS). The MLDP desalinated water pump
station capacity would be a 10 mgd station equipped with four 300 hp vertical
turbine pumps mounted in pump cans (connected to the clearwell) in a 2500 sq
foot building. Two 20,000 gallon surge tanks would be located exterior to the
building. The total estimated construction cost for this item is $2,600,000, which
includes $1,400,000 to furnish and install the pumps, $200,000 to construct the
pump cans, $300,000 to furnish and install surge tanks, and $700,000 for the
building and miscellaneous equipment.

Plant Infrastructure

Administration/Operations/Laboratory Building. The two story 15,000 square foot
administration, operations, and Laboratory building was estimated at $200/sq
foot, for a total of $3,000,000.

Site Work and Yard Piping. This item was estimated on a rule-of-thumb basis,
using $5 per sq foot of site area. This item covers site preparation, excavation
and backfill, rough grading, fine grading, paving, landscaping and irrigation, site
lighting, and fencing.

Electrical, Instrumentation, and Controls. This item includes electrical
switchgear, electrical conduit and conductors from the switchgear to the plant
motor control centers, electrical work within all process and non process
buildings, site electrical, security systems, and instrumentation and control
systems, equipment, and programming. The construction cost is estimated at
$16,400,000, which is approximately 25% of the rest of the plants construction
cost ($65,600,000), in accordance with budget recommendations by DTN
Engineers.

Engineering, Construction, and Startup Services. Engineering, construction and startup
services to be provided by the Design Build Contractor were estimated at 15% of the
construction cost of the plant, i.e., 0.15 x $83,100,000 = $12,500,000. These services
were then deducted from the project implementation budgets.

North Marina Desalination Plant (NMDP)

Plant Inlet Facilities. The NMDP will receive water directly from the off-site slant well
system, and will not require inlet facilities prior to the granular media pressure filters.

Pretreatment Facilities. The NMDP pretreatment facilities consist of twenty 10-foot
diameter 20-foot long horizontal multi-media pressure filters that will receive flow directly
from the inlet pipeline, at a pressure supplied by the slant well intake pumps. The
pressure filters will be designed to filter 22 mgd of feedwater at a filtration rate of 4
gpm/sq ft with one filter off-line for backwashing. Periodically, the filters will be
individually backwashed at approximately 4000 gpm using backwash pumps located at
the filtered water storage sump. The cost for the filtration and backwash system
equipment was estimated to be $5.7M, on the basis of a vendor quote for a similar sized
system on another project. $2.1M was added for installation equipment and labor, and
contractor OH&P.

In addition, $2.2M was included for a 6,000 square foot chemical building and a 10,500
square foot fiIter building, and $600,000 for chemical storage and feed equipment.

RO Process Facilities. The NMDP RO process facilities would be similar to the MLDP
RO facilities, except that each array would be designed to produce 2.2 mgd of permeate
instead of 2 mgd. The estimated cost ($26.4 M) was developed by multiplying the
MLDP estimate by a factor of 1.10.

Residuals Handling and Treatment Facilities. The total construction cost for residuals
handling and treatment facilities is $580,000, which includes $200,000 for a 60,000
gallon wash water treatment and recovery basin, $50,000 for a 2 mgd treated wash
water pump station, $120,000 for a gravity belt thickener, $100,000 for a 1600 sq ft.
canopy to cover the belt thickener area, $30,000 for a 5000 sq foot asphalt-lined basin
to dry the thickened solids, and $80,000 for a storage sump to store waste CIP solution
from the RO process.

Product Water Facilities.

The product water facilities at the NMDP include the clearwell reservoirs and the
desalinated water pump station. A clear well pump station is not required, but a pump
station is required to deliver desalinated water to the CSIP system.

Clearwell . The two 1.5 MG clear well tanks will be partially buried, and the cost
was based on using pre-stressed concrete construction provided by DYK
Incorporated. A constructed unit cost of $1.75/gal was used to estimate the
$5.2M construction cost for the two tanks.

Desalinated Water Pump Station (DWPS). The NMDP desalinated water pump
station capacity would be a 10 mgd station equipped with four 250 hp vertical
turbine pumps mounted in pump cans (connected to the clearwell) in a 2500 sq
foot building. Two 20,000 gallon surge tanks would be located exterior to the
building. The total estimated construction cost for this item is $2,500,000, which
includes $1,300,000 to furnish and install the pumps, $200,000 to construct the
pump cans, $300,000 to furnish and install surge tanks, and $700,000 for the
building and miscellaneous equipment.

CSIP Delivery Pump Station. The CSIP Delivery Pump Station would be a 2
mgd station equipped with three 10 hp vertical wet pit mixed flow pumps
mounted on a 200,000 gallon sump without a building. The total estimated
construction cost for this item is $400,000, which includes $80,000 to furnish and
install the pumps, $140,000 to construct the concrete wet well, and $180,000 for
miscellaneous piping, valves, and meters.


Administration/Operations/Laboratory Building. The two story 15,000 square foot
administration, operations, and laboratory building was estimated at $200/sq foot,
for a total of $3,000,000.

Site Work and Yard Piping. This item was estimated on a rule-of-thumb basis,
using $5 per sq foot of site area. This item covers site preparation, excavation
and backfill, rough grading, fine grading, paving, landscaping and irrigation, site
lighting, and fencing.

Electrical, Instrumentation, and Controls. This item includes electrical control
centers, electrical work within all process and non process buildings, site
electrical, security systems, and instrumentation and control systems, equipment,
and programming. The construction cost is estimated at $13,900,000, which is
approximately 25% of the rest of the plants construction cost ($55,600,000), in
accordance with budget recommendations by DTN Engineers.

Engineering, Construction, and Startup Services. Engineering, construction and startup
services to be provided by the Design Build Contractor were estimated at 15% of the
construction cost of the plant, i.e., 0.15 x $69,500,000 = $10,400,000. These services
were then deducted from the project implementation budgets.

DESALINATED WATER CONVEYANCE
Estimated 2009 Construction Cost of $54,500,000 for Proposed Project
Estimated 2009 Construction Cost of $38,300,000 for North Marina Alternative

Pipelines

Proposed Project- North of Reservation Road Desalinated Water Conveyance Pipeline
(DWCP) Moss Landing Section:

This pipeline is a 36-inch diameter, 250 psi, mortar lined and coated steel pipe (ML/CSP)
about 47,700 linear feet in length. The estimated construction cost (in 2009 dollars) is
$21,600,000 and is inclusive of 1,800 lineal feet of special construction at $4,200,000.
The costs of trenchless construction are included for the following crossings: Moro Coro
Slough, Merritt Street in Castroville, Highway 156, Tembladero Slough and the El Monte
Bridge.

The estimated construction cost for this pipeline includes costs for the jack and bore
sections and bridge crossing locations, construction equipment, materials, and labor for
installation and testing. The assumed pace of pipe installation is 240 lineal feet per day.
The jack and bore costs increase the average unit cost for this pipeline to approximately
$450 per lineal foot.

North Marina Alternative- North of Reservation Road Desalinated Water Conveyance
Pipeline (DWCP) Moss Landing Section:

This pipeline is a 36-inch diameter, 250 psi, mortar lined and coated steel pipe (ML/CSP)
about 13,000 linear feet in length. The estimated construction cost (in 2009 dollars) is
$4,900,000.

The estimated construction cost for this pipeline includes costs for the construction
equipment, materials, and labor for installation and testing. The assumed pace of pipe
installation is 240 lineal feet per day. The average unit cost for this pipeline is
North Marina Alternative Only- CSIP Delivery Pipeline:

This pipeline will be 12 to 16-inch diameter (to be confirmed during final design), class
200 PVC pipe about 6,000 linear feet in length to be installed across open land to the
MRWPCA 80-acre foot CSIP storage pond. The estimated construction cost (in 2009
dollars) is $500,000 and is based on an installation unit cost of $80 per lineal foot of 16-
inch diameter PVC pipe. The unit cost is inclusive of costs for the construction
equipment, materials, labor for installation and testing, and construction overhead and
profit.

Both Projects - Reservation Road to Auto Parkway Desalinated Water Conveyance
Pipeline (DWCP) TAMC Section:

This pipeline is a 36-inch diameter, 250 psi ML/CSP about 30,300 linear feet in length.
The estimated construction cost (in 2009 dollars) is $11,100,000.

The estimated construction cost for this pipeline includes costs construction equipment,
materials, and labor for installation and testing. The assumed average pace of pipe
installation is 240 lineal feet per day. The average unit cost for this pipeline to

Both Projects- Seaside Pipeline Desalinated Water Conveyance Pipeline (DWCP):

This pipeline is a 36-inch diameter, 250 psi ML/CSP about 13,000 linear feet in length.
The estimated construction cost (in 2009 dollars) is $8,700,000 and is inclusive of 1,000
lineal feet of special construction at $1,900,000 for the Del Monte Blvd and Freemont
Street crossings.

sections, construction equipment, materials, and labor for installation and testing. The
assumed average pace of pipe installation is 100 lineal feet per day. The jack and bore
costs increase the average unit cost for this pipeline to approximately $670 per lineal
foot.

Both Projects- Monterey Pipeline:

This pipeline is a 36-inch diameter, 150 psi ML/CSP about 28,700 lineal feet in length.
The estimated construction cost (in 2009 dollars) is $12,800,000 and is inclusive of 750
lineal feet of jack-and-bore trenchless construction at $1,700,000 at the Laguna Grande
bridge crossing, Del Monte Blvd and Canyon Del Rey/ Hwy 218.

sections, construction equipment, materials, and labor for installation and testing. The
assumed average pace of pipe installation is 150 lineal feet per day. The jack and bore
costs increase the average unit cost for this pipeline to approximately $450 per lineal
foot.

Both Projects- Valley Greens Pump Station:

The 3-mgd capacity Valley Greens Pump Station would be located near Valley Greens
Drive and Carmel Valley Road in Carmel Valley. The pump station would be housed in a
800-square foot building This rated capacity would be met through the use of four
pumps, each with a rated pumping capacity of 0.75 mgd, and equipped with 25
horsepower motors. The estimated construction cost (in 2009 dollars) of $300,000 is
based on a unit cost of $1,400/ HP for materials, construction equipment, labor, and
contractor OH&P for installation of the pumping equipment and motors; and $200 per
square foot for materials, construction equipment, labor and contractor OH&P to
construct the building. Site acquisition costs were developed separate of this estimate
and are included in the Land and ROW costs estimate.

TERMINAL RESERVOIR AND ASR PUMP STATION
Estimated 2009 Construction Cost of $14,600,000

Terminal Reservoir

This facility is planned to be two pre-stressed concrete tanks, each with a storage
capacity of 3 MG, for a total volume of 6 MG. A unit cost of $1.75 per gallon was
assigned for reservoir structures that will be completely buried. The estimated
construction cost (in 2009 dollars) is $10,500,000 and includes costs associated with
construction equipment, labor, electrical equipment (SCADA, I&C, etc.), and materials
(concrete, rebar, pipe, valves, etc.) related to excavation, construction, and installation,
The estimate includes contractor overhead and profit. Site acquisition costs were
developed separate of this estimate and are included in the Land and ROW costs
estimate.

ASR Pump Station

This facility would be located adjacent to the two reservoirs and be capable of a total
pumping capacity of 8.4 mgd. This rated capacity would be met through the use of four
pumps, each with a rated pumping capacity of 2.1 mgd, and equipped with 50
horsepower variable speed drive motors. The ASR pump station will require a complete
building structure of an area of approximately 1200 square feet. The pumps will sit in
cans and the motors with variable speed drives will be installed on a concrete pad at
grade. The ASR pump station construction cost estimate contains costs associated with
construction equipment, labor, electrical equipment (SCADA, I&C, etc.), and materials
(concrete, rebar, pipe, pumps, etc.) related to construction, and installation. The
estimated construction cost (in 2009 dollars) is $1,500,000, including contractor
overhead and profit.

Earthwork, Site Work, and Piping

The Terminal Reservoir and ASR Pump Station are proposed to be located
approximately 3,000 feet east of Hilby Avenue and General Jim Moore Blvd. The
construction estimate includes for 100,000 cubic yards of earthwork at $7.00 per cubic
yard; 60,000 square feet of site finishing work at $5.00 per square foot; and 4,000 lineal
feet of onsite and offsite piping up to 36-inches in diameter, priced at an average
installed unit cost of $400 per lineal foot. The estimated total construction cost of this line
item (in 2009 dollars) of $2,600,000 and is inclusive of all materials, construction
equipment, labor and contractor overhead and profit.

ASR SYSTEM
Estimated 2009 Construction Cost of $10,000,000

CWP ASR Wells

An updated estimate of costs for the ASR facilities was developed by ASR Systems in
2009 for the revised two locations of the CWP ASR wells in Fitch Park. The updated
estimate of construction costs includes a monitoring well, coring and test well at the
ASR-3 site, and test well at the ASR 4 site. If the test program is successful, the test
facilities will be converted into full scale production facilities and the remaining site work
and well equipping will be completed. Site acquisition costs were developed separate of
this estimate and are included in the Land and ROW costs estimate.

ASR 3 Site

A monitoring well at $200,000, potential core hole and CAW- Test Well -3 at $2,200,000
would be located at the ASR-3 site. The monitoring well and test well would be drilled to
a depth of approximately 1,050 feet below ground surface. The construction cost
estimate contains costs associated with well construction, testing and installation of
temporary pump for the test well.

Test Well at ASR 4 Site

The estimated construction cost (2009 dollars) of the test well located at the ASR-4 site
is $2,000,000. The construction cost estimate contains costs associated with well
construction, testing and installation of temporary pump for the test well.

Well Head Facilities at ASR 3 Site

It is assumed that the ASR test program will be successful and the test well at the AS-3
site will eventually be equipped with permanent facilities to become production facilities,
estimated at $1,100,000.

The construction cost estimate contains costs associated with well completion (pump
installation, etc.), wellfield piping, electrical equipment (SCADA, I&C, etc.). ASR Systems
(subconsultant) generated the construction costs (already including 18.5% for
construction overhead and profit) associated with the ASR Wells.

Well Head Facilities at ASR 4 Site

It is assumed that the ASR test program will be successful and the test well at the ASR-4
site will eventually be equipped with permanent facilities to become production facilities,
estimated at $1,100,000.

The construction cost estimate contains costs associated with well completion (pump
installation, etc.), wellfield piping, electrical equipment (SCADA, I&C, etc.). ASR Systems
(subconsultant) generated the construction costs, including 18.5% for construction
overhead and profit associated with the ASR Wells.

ASR Pipelines and Backflush Disposal Facilities

ASR Pipeline

The CWP-ASR Pipeline is expected to be 5,000 linear feet of 30-inch diameter ML/CSP.
The ASR pipeline construction cost estimate contains costs associated with construction
equipment, labor, and materials (pipe, valves, etc.) related to right-of-way preparation,
installation, and testing. The assumed average pace of pipe installation is 150 lineal feet
per day. The estimate includes 18.5% for construction overhead and profit.

The total estimated construction cost (in 2009 dollars) of $1,900,000.

Recirculation Pipeline

The Recirculation Pipeline is expected to be 5,000 linear feet of up to 12-inch diameter
PVC. The pipeline construction cost estimate contains costs associated with
construction equipment, labor, and materials (pipe, valves, etc.) related to right-of-way
preparation, installation, and testing. The assumed average pace of pipe installation is
150 lineal feet per day. The estimate includes 18.5% for construction overhead and
profit.

The total estimated construction cost (in 2009 dollars) of $800,000.

Backflush Pipeline and Backflush Reclamation Basin

Approximately 3,000 lineal feet of up to 20-inch PVC pipeline would be installed from the
CWP ASR wells sites to a 0.4 MG off-site backflush reclamation basin. A small pump
would be installed at the backflush reclamation basin in order to allow delivery of settled
backflush water to a beneficial use (TBD). The pipeline construction cost estimate
contains costs associated with construction equipment, labor, and materials (pipe,
valves, etc.) related to right-of-way preparation, installation, and testing. The assumed
average pace of pipe installation is 150 lineal feet per day. The estimate includes 18.5%
for construction overhead and profit.

The total estimated construction cost (in 2009 dollars) of these facilities is $700,000.

IMPLEMENTATION COSTS
Estimated 2009 Cost of $39,100,000 for the Proposed Project
Estimated 2009 Cost of $42,000,000 for the North Marina Alternative

The Implementation Costs budget was developed as a percentage of the construction
cost estimate, understanding that a portion of the environmental documentation and
preliminary engineering (including installation of the pilot plant) has already occurred.
The Implementation Costs budget will be utilized to complete the remaining necessary
permitting, environmental, preliminary and detailed design, legal, project administration,
land acquisition and right-of-way, and construction administration services.

The Implementation Costs estimate consists of two sub-line items based on assumed
design/construction strategies for CWP facilities: implementation costs for the
Design/Build Facilities, which is a percentage of the desalination plant cost; and
implementation costs for the Design/Bid/Build Facilities, which is percentage of the base
construction cost of all remaining CWP facilities.

Implementation Costs for Design/Build Facilities

Proposed Project

The estimated cost of the Design/Build Implementation is $14,500,000, and is 15
percent of the base construction cost of the desalination facility. The implementation
estimate for the design/build facilities for the desalination plant, was identified separately
because of the specialized activities that will take place specific to the desalination plant.
The specific activities include, but are not limited to the following: completing the pilot
plant operations and preparing the final report; completing additional specialized studies
specific to desalination, such as the planned Corrosion Study; applying for permits
specific to the desalination plant such as the RWQCB Waste Discharge Requirements
and NPDES permit; procurement of a qualified engineer (i.e., Owners Agent) to prepare
the design specification for the treatment equipment and prepare the Basis of Design
Report for the desalination plant; prequalification of design/build teams; preparation of
bid documents and solicitation of bids from Design/Build teams; and administrative
oversight and construction management during the detailed design and construction
phase.

The breakdown of Implementation costs for D/B is as follows:
Preliminary Design 5%
Project Admin 3%
Construction Services 8%

North Marina

The Implementation Cost estimate for the design/build facilities; i.e., desalination plant,
is $16,100,000, which is 20% of the base construction cost estimate of the desalination
plant. The implementation cost allowance for the North Marina desalination plant is
higher than the MLDP Implementation cost because the NMDP would require a pilot
study and additional administrative work to advance the project beyond concept level

The breakdown of Implementation costs for D/B is as follows:
Preliminary Design 8%
Project Admin 4%

Implementation Costs for Design/Bid/Build Facilities

Proposed Project

The Design/Bid/Build Implementation cost estimate is $24,600,000, and is 30% of the
base construction cost of all remaining CWP facilities (excluding the desalination plant).

The breakdown of Implementation costs for D/B/B is as follows:
Design 10%
Permitting 3%
Project Admin 5%
Legal- 2%

North Marina

The Implementation Cost estimate for Design/Bid/Build Facilities in the NMA is
$25,900,000, which is 30% of the construction cost for all non-desalination plant items
plus 35% of the construction cost for the slant well intake system.

The breakdown of the 30% for Implementation costs for D/B/B is as follows:
Design 10%
Permitting 3%
Project Admin 5%
Legal- 2%

The Implementation Cost percentage adds an additional 5%, for a total of 35% to
account for the slant well system requirements for additional hydro-geological
investigations and a test well program.

LAND AND RIGHT OF WAY COSTS
Estimated 2009 Cost of $7,200,000 for the Proposed Project
Estimated 2009 Cost of $4,900,000 for the North Marina Alternative

The cost for land and right-of-way is estimated to be $7,200,000 and $4,900,000 for the
Proposed Project and the NMA, respectively (2009 dollars) and was derived by
reviewing real estate trends and potential land values in the Monterey area for sites to
be purchased for the desalination plant, Terminal Reservoir and Valley Greens Pump
Station site. Estimates do not reflect the current depressed market value of real estate.
Right-of-way costs for pipelines were estimated by developing a 50-year present worth
value for 50-foot wide temporary construction easements and 25-foot wide permanent
easements for distinct segments of the pipelines.

The land value estimates used for the Terminal Reservoir and Valley Greens Pump
Station sites is $12.00 and $20.00 per square foot respectively and represents the lower
and higher end price range for residential land estimates provided Universal Field
Services.

The breakdown of Land and ROW acquisition costs is as follows for the Proposed
Project:

ROW EASEMENT AND LAND ACQUISITION
Desalination Plant Intakes 1 EA. Easement $200,000
Desalination Plant 1,100,000 SF Purchase $1,700,000
Private Property Easements for
Desalinated Water Pipelines
21,000 LF Easement $300,000
Pipelines in TAMC ROW (to
Monterey Bike Path)
59,000 LF Easement $2,500,000
Terminal Reservoir 80,000 SF Purchase $1,000,000
ASR Well Sites 2 EA. Lease $800,000
Pipelines in Bike Path 11,000 LF Easement $500,000
Pipelines through Presidio 3,000 LF Easement $50,000
Valley Greens Pump Station 9,000 SF Purchase $180,000
SUBTOTAL ROW/EASEMENT/LAND COSTS $7,200,000

The MLDP plant site was estimate at $1.50 per square foot based on information
provided by Universal Field Services. A present worth value for access to MLPP
disengaging basin was also included.

The breakdown of Land and ROW acquisition is as follows for the North Marina
Alternative:

Desalination Plant Intakes 1 EA Easement $600,000
Desalination Plant 440,000 SF Purchase $400,000
Private Property Easements for
Desalinated Water Pipelines 0 LF
Easement
$0
Pipelines in TAMC ROW (to
Monterey Bike Path) 33,000 SF
Easement
$1,400,000
Terminal Reservoir 80,000 SF Purchase $1,000,000
ASR Well Sites 2 EA Lease $800,000
Pipelines in Bike Path 11,000 LF Easement $500,000
Pipelines through Presidio 3,000 LF Easement $50,000
Valley Greens Pump Station 9,000 SF Purchase $180,000
SUBTOTAL ROW/EASEMENT/LAND COSTS $4,900,000

The MLDP plant site was estimate at $0.90 per square foot based on information
provided by Universal Field Services.

PROJECT CONTINGENCY ALLOWANCE
Recommended Allowance of $45,000,000 in 2009 Dollars for the Proposed Project
Recommended Allowance of $42,000,000 in 2009 Dollars for the North Marina
Alternative

The Contingency is derived as 20 percent of the base capital cost estimate for the
project. The Contingency allowance is included for unforeseen circumstances at this
time that may occur during design and construction, including such circumstances as
change of project scope as a result of these CPCN proceedings and potential permit
requirements, extensive project delays as a result of litigation, legal fees, changes in
market conditions including changes in land values and materials, changes in
regulations, and the like. For construction, the contingency accounts for unforeseen field
conditions that may result in change orders, and the like. This contingency allowance is
in line with recommendations from the Association for the Advancement of Cost
Engineering (AACE) for a project at this level of development.

Exhibit 5
A.0409019CoastalWaterProject
NotesfromWorkshopsonCostIssuesonJuly7and8,2009
Page1of20
Index
Section
I CaliforniaAmericanWaterCompany(CalAm)presentationson
costissuesonalternativesforCoastalWaterProject.
a. ClarificationstoCalAmstestimonyontheproposedDesalination
PlantatMossLanding(MLPP)
b. ClarificationstoCalAmstestimonyontheproposedNorth
Marina(NMDP)AlternativeDesalinationPlantSite
II ClarificationstoMCWDstestimonyontheproposedRegional
Alternative
III. RateDesignandFinancialissues
a. ClarificationstoCalAmstestimonyonFinancialissues
b. ClarificationstoMCWDstestimonyonFinancialissues.
IV. Miscellaneousissues
V. ParkingLotIssues.
Appendix
A Workshopagenda
B Listofparticipants
Page2of20
PursuanttoALJMinkinsrulingofJune26,2009
1
,informalworkshopswere
heldattheCaliforniaPublicUtilitiesCommissiononJuly7
th
and8
th
.Thegoalof
theworkshopswastofurtheranunderstandingoftheassumptionsandbasisof
thecostinformationprovidedbyCaliforniaAmericanWaterCompany(CalAm)
fortheproposedCoastalWaterProjectandtheNorthMarinaalternative,andby
MarinaCoastWaterDistrict(MCWD)fortheRegionalprojectalternative.The
workshopsprovidedanopportunitytointerestedpartiestoaskclarification
questionsoncostrelatedissuesastheyappliedtoalternativesfortheCoastal
WaterProjectdirectlyfromCalAmandMCWDwitnesses.Theslidespresented
byCalAmandbyMCWDhavebeenplacedintheCorrespondenceFileforthis
proceedingandwillalsobeplacedontheCommissionsWaterDivisions
website.
SectionIofthisreportdiscussesclarificationstothedirecttestimonysubmitted
byCalAmsF.MarkSchubertoncostissuesfortheProposedDesalinationPlant
atMossLanding(MLPP)andtheNorthMarinaDesalinationPlant(NMDP)
alternative.SectionIIdiscussesclarificationstothedirecttestimonyofLyndel
W.MeltonandThomasE.GaffneyonMCWDsRegionalProjectAlternative.
FinancialissuesarediscussedinSectionIIIwhileSectionIVdiscusessomeofthe
Miscellaneousissues.ParkingLotissuesthatneedfurtherdiscussionand
followupactionsarediscussedinSectionV.SeeAppendixAforAgendaand
AppendixBforlistofparticipants.
SectionI: CaliforniaAmericanWaterCompany(CalAm)presentationson
costissuesonalternativesforCoastalWaterProject.
CalAmfiledtestimonyonvariousalternativesfortheCoastalWaterProject.
2
CalAmdiscussedtheirproposedalternativefortheMossLandingPowerPlant
DesalinationPlantSite(MLPP)onJuly7
th
.andtheProposedNorthMarina
AlternativeDesalinationPlant(NMDP)onJuly8
th
.
SectionI.a: ClarificationstoCalAmstestimonyontheproposed
DesalinationPlantatMossLanding(MLPP)
CalAmdiscussedthecostissuescontainedindirecttestimonyofMr.F.Mark
SchubertfortheproposedDesalinationPlantatMossLanding(MLPP).The
MLPPproject,asproposedintheDraftEnvironmentalImpactReport(DEIR)
1
A.0409019;AdministrativeLawJudgesrulingregardingWorkshopsinPahse2.June26,2009.
2
A.0409019;DirectTestimonyofF.MarkSchubert,P.E.,Phase2Issues,May22,2009.
Page3of20
willprovide12,500acrefeetperyear(AFY)ofreplacementwatertoCalAm
customers.Thesupplycomponentsinclude10,900AFYfromtheDesalination
PlantnearMossLanding,1,300AFYfrom4(2Newand2existing)ASRWells
and,300AFYfromtherecentlyconstructedDesalinationplantatCityofSand
City.ThesourceofwaterfortheMLPPwillbefromtheMLPPCoolingWater
System.Thefollowingclarificationswereprovided:
1. Capitalcosts
Costestimatesaretypicallykeyedtothestageofdevelopmentofaproject.
Consistentwithindustrypractices,CalAmbelievesitscostestimatesare
accuratewithinarangeof15%to+25%.Thisisbasedonarecommendationby
theAssociationfortheAdvancementofCostEngineering(AACE)Class4study
andCalAmsexperiences.
EstimatesforPipecostsarebasedonbidsreceivedfromcontractors.For
purposesofpipecostestimates,CalAmevaluatedlongtermpricetrendsand
thefactthatpricesofmaterialshavegonedownsince2008.Allquotedamounts
areincurrent2009dollars.Realisticcostswouldbeavailableaftertheproject
reachesthebiddingstage.Anyincreaseincostsduetounanticipateddelaysor
forinflationwouldbecoveredbythecontingencyamounts.
LaborcostsarefixedandwerebasedonevaluationofexistingcostdataandCal
Amscurrentstaffcompensation.Nocapitalcostswereincludedforthe
Segundapumpstation.Intentwastotakeallcapitalcostoutoftheproject.
Concernswereraisedthatcostestimatesarebasedontoomanyassumptionsand
howandwhenmoreaccuratecostestimatescouldbedeveloped.
2.AllowanceforContingencies
Contingenciescoverunanticipatedchangesinprojectscopeorschedulesdueto
unforeseenchangesinsiteconditions;regulatoryorinstitutionalrequirements,
includingmitigationimplementationandpermitcompliance;andactsofnature.
CalAmexplainedthemethodologyusedtodevelopanestimateforthe
contingencyallowance.Theamountsallocatedforcontingenciesareapolicycall
andarebasedontheexperienceswitheachitemintheCapitalCostEstimate.
Eventually,thetotalchargesagainstthecontingencyamountwilldependon
howmuchaparticularcontributingelementisaboveorbelowtheestimated
amount.Thecontingencyamountincludesallowancesforallelementsofthe
Page4of20
projectincludingapossiblelitigationallowance.However,theimpactof
probabilityofoccurrenceofvariousitemsandtheirimpactonthecontingency
amountwasnotconsidered.Neitherwerethecostsassociatedwithland
acquisitionandROWeasementcosts.ThisitemwasidentifiedasaParking
Lotissuerequiringfurtherclarification.
Typically,thecontingencyamountwillcontinuetoshrinkasbettercost
informationbecomesavailableonaproject.Mostofthespecificationsareknown
atthebiddingstageofaproject.Thereforethecontingencyamountwillgo
downandmaybeaslowas23%rangeaccordingtooneworkshopparticipant.
However,thecontingencywillnotgodowntozeroassomethingwillneedtobe
setasidetotakecareofchangeorders.
CalAmdeterminedthattheprojectisintheconceptualdesignphase.Since
theconceptualdesigndoesnothavedetaileddesignparametersavailablesoa
rangeisusedforcosts.CalAmallocated20%ofcapitalcostsforcontingencies
basedonAACEIrecommendations.Concernswereraisedregardingwhat
elementsareincludedintheconceptualdesignphaseoftheproject.
InexhibitK,Table1,the%shownforcontingenciesisincorrectandwillbe
modified.
3. Mitigationcosts
CalAmindicatedthatthemostprobablecostoftheprojectcostwillbearound
$270million.Thefinalprojectcostswillbeimpactedbythecontentsofthefinal
EnvironmentalImpactReport(EIR).CalAmwillwaitforthefinalEIRtobe
issuedbeforefinalizingitslistofitemsrequiringmitigation.Allmitigationcosts
willbechargedagainstthecontingencyallowance
Concernswereraisedregarding:thetimewhenmoreaccurateengineeringcosts
willbeavailableandtheirmagnitude;theavailabilityofthefinallistofitems
thatneedtobemitigatedandthecorrespondingcostprojections.Concernswere
alsoraisedregardingnotincludingmitigationcostsinthecostestimatesandthe
adequacyofthecatchall20%contingencyamountinviewoftheuncertaintiesin
theprojectcostestimates.TheseitemswereaddedtotheParkingLotissues
list.
4.Membranereplacementcosts
Page5of20
CalAmassumedthatafifthofthemembraneswillbereplacedeveryyear
startingin2021.Itwasrecommendedthatthecurrentlyassumedreplacement
costsof15%shouldbechangedtoaround20%basedonareplacementcycleof
510years.
Aconcernisthattherewouldbenomembranereplacementinthefirst5years
andCalAmisbankingonmembranespotentiallylasting10years.Itwas
suggestedthatthereplacementcycleformembranesshouldbeconsistentwith
themanufacturerwarrantyformembrane.
Concernswereraisedregardingusingtwooperatorsintheplantatanyperiodof
time.CalAmbelievesthatthisisquiteadequatebasedonitsexperienceson
similarprojects.
5.Powercosts
CalAmreportedthatithasnobindingcontractforpowertotheplant.Rather,it
onlyhasaletterofsupport.Itsestimatesforpowercostswerebasedoncurrent
ratesfromPG&Estariffs.ThepowerneedsfortheNorthMarinaalternative
wouldbemuchlowerthanthoseoftheMLPPalternative
Concernswereraisedthattheprojectreliesononcethroughcooling(OTC)
powerplantswhentheyarepossiblygettingphasedout.Possiblecostsharing
arrangementsforthepowerplantfortheretrofittinganditsimpactoncostsneed
tobeevaluated.
Thereisanerroronslide#25.Theunitcostforenergyshouldbecorrectedto
$0.112/Kwh.
6.Meetingwaterqualitystandards
ConcernswereraisedregardinghighlevelsofBoronintheeffluent.CalAm
believesitcanmeetCaliforniaDepartmentofPublicHealth(CDPH)
requirementsforBoron.However,thecostestimatewasbasedonasinglepass.
IfBoronbecomesanissue,apartialsecondpassandPHadjustmentsmaybe
needed.Asecondpassisexpectedtoaddbetween3and4milliondollarsto
capitalcosts.ThisissuewasaddedtotheParkingLotissueslist.
7. Waterdemand
CalAmindicatedthatitssystemdemandis14,500AFY.However,itused15,200
AFYdemandtodevelopO&Mcosts.Thisrepresentsa5%increaseindemand
fromnowuntil2015whentheprojectisoperationalandgoesonline.This
Page6of20
increaseddemandisclosetotheamountofwaterthatisgoingintothesystem
today.However,thedemandisillustrativeandisusedforpurposesofanalysis
only.TheO&Mcostsneedtobebasedonactualsystemdemand.
8. Unaccountedforwater
UnaccountedforwaterisnotincludedasasourceofsupplyinCalAms
projections.Itwasfeltthatanysavingsfromreductioninunaccountedwater
couldbeusedtooffsetwaterdemandrequirements.Thecostsofrepairingleaks
comparedtotheDesalinationprojectplantwerenotconsidered.Similarly,the
availabilityandaccountingforgroundwaterwerenotconsideredinwater
supplycomputations.ThesetwoitemswereaddedtotheParkingLotissues
list.
9.ImpactofPilotPlantProject
CalAmreportedthatthePilotPlanthasbeendelayedanumberoftimesmostly
becauseofperiodicshutdownsofthepowerplantsystemandnotforanyissues
relatedwithfeedwater.Thosedelayshavenotinterferedwithanyoperational
protocolsandonlythetiminghasbeenimpacted.
TheoperationatMossLandingislikelytobeaffectedifthecoolingwatersystem
isnotoperating.ThePowerPlantoperationsarenotunderCalAmscontrol.
Availabilityoffeedwater,basedonrecenthistory,iswellabove75%,sothere
shouldbenoconcern.
TestingofthePilotPlantisexpectedtobecompletebyDecember2009.
However,ifredtideorsomethingunexpectedoccurs,thetestingtimewouldbe
extended.Noadditionalcostsforadditionalequipmentareincludedinthecosts
forsuchaneventuality.Withoutavailabilityoftestdata,CWAwouldoptfora
moreconservativeplan.
IssuesrelatedwiththeresultsoftestingfromthePilotPlantanditsimpactonthe
projectaswellasschedulingtestimonywereaddedtotheParkingLotissues
list.
10.Riskanduncertainties
Recentlythepowerplantwasshutdownfor15daysinJune.Concernwas
raisedifCalAmcouldmanageitsdemandundersuchcircumstances.An
additionalconcernwasraisedwhetherCalAmwouldbeabletomeetdemandif
theyoverpumpandranoveroftheirallowedwaterallotment.CalAmbelieves
Page7of20
thattheywouldbeabletomeetdemandsiftheASRwellandseasidewellsare
available,andtherewassufficientASRwaterinreserve.
CalAmreportedthatanexistingbridgewillbeusedtoaccommodatethe
pipeline.ATrussbridgemayalsohavetobeconstructedbut,thatdoesnotseem
topresentanyinsurmountableproblems.TheBridgehasnotbeendesignedyet.
CalAmreportedthatits2005testimonycontainedanassessmentofrisksforthe
project.Thatassessmentwasnotupdatedinthecurrenttestimony.Risksand
uncertaintiesexistbecauseof:Issuesrelatedtoreliabilityofwatersupply;
Problemswithacquisitionoflandfortheplant,localPoliticsandassociated
additionallegalandregulatorycosts;Analysisforstrandedcostforthe
alternativethatisrejectedinfavoroftheselectedalternative,and;paymentsfor
additionalwaterrights;TheseitemswereaddedtotheParkingLotissueslist.
11. Optimizationofplantproduction
TherewasdiscussionregardingCalAmsphilosophyonmanagingplant
operationsoastominimizethecapitalandoperatingexpenserequirements
whilemaintainingtheflexibilitytomeetseasonalandpeakdaydemand.
ThenominalcapacityoftheDesalinationplantis12MGDbasedon6arraysof2
MGDeach.Thiswillpermittheplanttosatisfydemandrequirementswhenone
arrayisnotavailable.Thenominalplantcapacityisadequatetomeetseasonal
dailydemand.Thepeakdemandisestimatedinlow20s.CalAmplanstomeet
peakdemandbypumpingfromwellsandfromtheDesalinationplant.
PertheDEIR,Regionalprojectrequiresadditionalwells,ASRwells(3additional)
(MLPPandNMDPrequire2additionalASRwells)
Theamountofwaterismorethan3376bytheamountthattheywillbestoring.
Needtotakeanotherlookatthenumbers.IntentattachLshowstohave
consistentamountis1300CarmelriverwaterviaASR,plus700foratotalof2000
ASR.
12 AvoidedCosts
Inslide29,theestimatedavoidedcostsforSeasidewellsaregivenforYear2021
.
13. Contractingissues
Page8of20
CalAmindicatedthatthecontractingprocesswillbeopenandcompetitive.
ParticipantssuggestedthatCalAmshouldformulateanevaluationfactorfor
superiorperformanceofmitigationmeasures.CalAmbelievesthatthisis
prematureatthisstageoftheprojectsincethisisbuiltintotheprice.Mitigation
measuresareclearlyidentifiedanddealtwithinprojectspecificationsasare
performanceorspecificsofdesignthatareincludedinthescopeofwork
14. Homelandsecuritycosts
CostsformeetinghomelandsecurityrequirementswerenotconsideredbyCal
Aminitscostprojections.Thisitemwasaddedtothe.ParkingLotissueslist.
SectionI.b.ClarificationstoCalAmstestimonyontheproposedNorth
Marina(NMDP)AlternativeDesalinationPlantSite
TheNorthMarinaProject(NMDP)alternative,asproposedintheDEIRwill
provide12,500acrefeetperyear(AFY)ofreplacementwatertoCalAm
customers.Thesupplycomponentswillinclude10,900AFYfromthe
DesalinationPlantnearinNorthMarina,1,300AFYfrom4(2Newand2
existing)ASRWells,300AFYfromtherecentlyconstructedDesalinationplantat
CityofSandCity.TheDesalinationPlantinNorthMarinawillbesourcedfrom
SlantWells.Theprojectproposestoreturnupto800AFYofwatertousersn
SalinasValley.TheBrinedisposalistoMRWPCAOutfall.CalAmdiscussed
thecostissuescontainedindirecttestimonyofMr.F.MarkSchubertforNMDP
Alternative.Thefollowingclarificationswereprovided:
1.Capitalcosts
Allcostestimatesarein2009dollarsanddonotincludeinflation.Theimpactof
Inflationwillberecognizedwhentheprojectreachesthefinancingstage.The
projectedproductiondatefortheNMDPis2016versus2015fortheMLPP
alternative.Theadditionaltimeforprojectdevelopmentwillresultinhigher
costs.
RangesaresimilartoMLPPalternative.CalAmisunsureabouttheimpacton
costsintheProponentsEnvironmentalAssessment(PEA)reportforrunninga
pipebacktoMossLanding.TheNMDPhasapossibledoublepassfiltration,
samelevelofintakesasMLPP,andsomeofthesameconcernsasMLPP.
Conservativeassumptionsweremaderegardingwatersupply.Sothisissue
shouldnthaveagreatimpactoncost.CalAmiscomfortablewithaccuracyof
predictions.
Page9of20
Duetodifferencesinavailableactualcapacityandlevelsofutilization,thesizeof
theDesalinationPlantcouldconceivablybereducedifadequateprogresson
ASRphase2,informationwereavailable.Thiswouldreducethetotalcostofthe
project.
2. Allowanceforcontingencies
Anumberofitems,thatwerenotincludedinCalAmscostestimateswould
haveasignificantimpactoncosts.Asaresult,CalAmscontingencyallowance
of20%mightbeinadequate.SomeitemsthatwerenotincludedinCalAms
costestimatesinclude:Ownershipissues;Acquiringwaterrightsforadditional
suppliesfromtheCarmelriver;Opportunitycostforuseoffundswhilethe
projectisunderconstructionand/orinlitigation;and,accuracyoftimelineinthe
projectinservicedateand,landacquisitions.Theseitemswereaddedas
ParkingLotissues.
3. SlantWells
Drillingcostswerereceivedfromthesamecontractorwhodrilledslantwellat
DohenyStateBeachinSouthernCalifornia.Thatcontractorisinvolvedwith
modelingofthisslantwell.Limitedinformationisavailableabouttheslant
wellsbut,goodhydrogeologicalinformationisavailableatthewellsite.Some
testinghasbeendonebut,moretestingisrequired.Thecostestimatesinclude
expensesforadditionaltesting.
Thecapitalcostsassumedfortheslantwellincludesanallowanceforrepairand
replacements.Wellreplacementswillbechargedtotherepairandreplacement
fund.
CalAmproposestoeventuallyconverttheslanttestwelltoaproductionwell.If
thetestwellisfoundtobeinadequateorisdry,additionalwellwillbedrilled
andtheassociatedcostswillbecoveredincontingency
CalAmproposestoincreasepartofimplementationcostfortheDesign/Build
(DB)facilitiesto20%(exhibitK,table1)oftheDesalinationPlantcostof$80
million.Theextra5%isprimarilyforthepilotplantandengineeringservicesfor
theslanttestwelltobringtheprojecttotheconceptualdesignphase.
4. OperationandMaintenancecosts
Page10of20
TherearesomedifferencesinmaintenancecostsbetweenNMDPalternativeand
theMLPPproject.ForNMDPandMLPPTotalgrossOperationand
Maintenance(O&M)costsareprojectedtobe$10.2millionand$10.3million
respectivelyfor2021,in2009dollarsat10,900AFYand10,100AFYrespectively.
Estimatesarebasedonatotalsystemdemandof15,200AFY.TheNMDP
alternativeassumesthat800AFYwillbereturnedtowaterusersintheSalinas
valley.O&Misanongoingexpenseandshouldnothaveamajorimpacton
costs.
5. LandAcquisitioncots
ForwellslocatedonMarinacoastpropertyonArmstrongranch,costestimates
werebasedonagriculturallandvaluesandrecommendationsfromalicensed
realestateappraiser.Alternativesiteswerenotconsideredintheeventthatthe
landwasnotavailable.Anycostsoverrunsfromthoseestimateswouldcomeout
oftheallocationforcontingencies.ThisissuewasaddedtotheParkingLot
issues.
6. Waterquality
ThesamefacilitieswouldbeusedforbothASRWellsandforwaterrecovery.
ThewellcouldbeusedbothasasourceofwaterorfortheASR.Testingis
currentlyunderwayatthewells.Inthelongterm,amonitoringprogramwillbe
putinplace.ItisnotproposedtousetheDesalinationPlantwaterfortesting.
CalAmassumedcertaincostsforposttreatmentasaplaceholder.Thismaybe
anoverestimate.
Thescheduleassumesthatitwilltakebetween1and2yearstofullydevelopthe
testprogramfortheproject.Thetestprogramcanrunconcurrentlywithdesign
and planning of the full scale project. Testing of the slant well and the
Desalination system include pilot testing for six to twelve months. That time is
needed to develop enough confidence in the design and water quality. Work
papersareincludedonCDprovidedbyCalAm.
ThequalityofwellwaterfortheNMDPalternativeisexpectedtobemuchmore
consistentandstablethanMLPPsinceitisbeingdrawnfromdeepunderground
sources.UnlikeMLPP,thepretreatmentislargelytakencareofatthewellsite
andtestingwilltakelessthanafullyear.
Page11of20
ItisanticipatedthatrecoveryfortheDesalinationPlantprocesswillbearound
50%.Thus,every2galsofsourcewaterisexpectedtoproduce1galofproduct
water,and1galrunningwater.
7. Risksanduncertainties
Concernswereraisedthatanacceleratedriseinsealevelswouldresultin
possiblerelocationofthewellsinland.CalAmdidnotgiveconsiderationtoa
retreatstrategyinitsanalysis.ThisitemwasaddedtotheParkingLotissues.
TherewasconcernthatthehighrateoferosionoftheMontereycoastlinewould
resultinmodificationoftheintakestructureandimpacttheO&Mexpenses.Cal
Amindicatedthatincaseofextensiveerosion,anengineeredretreatwouldhave
tobeconsidered.However,basedondatacollectedtodate,thiswouldnotbea
majorconcern.ThisitemwasaddedtotheParkingLotissues.
OwnersintheSalinasValleywaterdistrictswillhavetobepaidbackincaseof
acquisitionoftheirland.CalAmhashaddiscussionswithMontereyCounty
(waterrightsowners)aboutthepossibilityofpayingtheownerswithupto800
AFYtowaterusersinSalinasvalleyfortheirinvestments.Theinvestmentbythe
ownersisunknown.ItisalsonotknowniftheownerswillagreewithCalAms
proposal.CalAmhasnotincludedadditionalcostsinitscostestimatesforthis
item.ThisitemwasaddedasaParkingLotissue.
SectionII. ClarificationstoMCWDstestimonyontheproposedRegional
Alternative
TheMarinaCoastWaterDistrict(MCWD)RegionalAlternativeisbasedona10
mgdDesalinationplant,noSurfaceWaterTreatmentPlant(SWTP),no
additionalASRwellsandsharingsomecommonfacilitieswithCalAm.The
alternativesupplysourceconsistsof8,800AFYofwater.Ofthatamount,700
AFYwouldbedivertedtotheASR.CalAmscostestimateswereusedforthe
NMDPalternativeandweresupplementedbyvendorquotes.Itsproposal
considersadesign/buildscenariofortheDesalinationplantandaDesignBid
Constructscenarioforotherfacilities.
MCWDdiscussedthecostissuescontainedindirecttestimonyofMr.LyndelW.
MeltonandMr.ThomasE.GaffneyfortheMontereyCountyRegionalProject
Page12of20
Alternative.
3
4
SeeAttachmentEforpresentationslides.Thefollowing
clarificationswereprovided:
1. Capitalcosts
TheRegionalprojectcostestimatesusethesamequantitiesastheNMDP
pipelineplusadditionalamountsforthesectionthattiesinthesouth.Thecostof
theSeasidepipelineisincluded.Thecostswouldbelowerwithouttheseaside
pipeline.
ConstructionassociatedwiththeRegionalProjectandCalAmneedstobe
identifiedsothereisnoduplicationofcosts.Intakesareatdifferentlevelsthan
theNMDPalternative.
Thepilotplantwillimpacttheoveralltimelineoftheproject.Projectcompletion
willdependonwhenthetestinggetsunderway.
Thecostsofdisposalofthebrinesolutionareunknownandhavenotbeen
includedinthecostestimates.Thefinalprojectcostsmustincludethesecosts.
2. Waterquality
TheRegionalProjectAlternativereliesonverticalwellsratherthanslantwells.
Asaresult,itreliesonusingintrudedgroundwater.Verticalwellsarecheaper
thanslantwells.Itisestimatedthateachverticalwellswillcostapproximately
$2million.Thecapitalcostsavingsbetweenthetwoalternativeswillbearound
$4million.Operationaldifferencesarecontractual.Litigationcostsare
unknown.
Treatmentofintrudedgroundwaterhasbeengivendueconsiderationinthe
RegionalProjectAlternative.Itisanticipatedthattherewillnotbemuch
variationinthequalityofwatercomingintheplantduringthefirstyearof
operation.
3
A.0409019;DirectTestimonyofLyndelW.Melton(Phase2ReginalProjectCostIssues),June
24,2009.
4
A.0409019;DirectTestimonyofThomasE.Gaffney(Phase2ReginalProjectCostIssues),June
24,2009.
Page13of20
Intrusionofseawateralongthecoastisaconcern.Itwasrecommendedthat
about15%ofthewaterthatistakeninshouldstayinthebasin.Groundwater
modelingconsideredthedifferencesbetweengroundwaterandsaltwater.
3. Waterallocation
Totalprojectcapacityisassumedtobe12MGD.Thenominalcapacityis10MGD
leavingareservecapacityof2MGD.
15,200AFYisusedfortotalsystemdemandfortheprojectforcomputingthe
O&Mcosts.Forapropercomparisonofalternatives,thedemandamountneeds
tobecoordinatedwithCalAmandthecostcomputationsshouldbererun.
Ifthereisachangeinthepercentageandmorewaterhastostayinthebasin,less
amountwillbeavailableforCalAm.Balancecouldberestoredtothebasin.
ThereisnoguaranteethatCalAmneedsthatfullamount,onlythattheyhaveit
availableiftheyneedit.AllwaterprovidedtoCalAmwillbemeteredand
trackedthro8ghaproperlydevelopedaccountingsystem.Similarly,monitoring
willbescheduledbuttheflexibilityallowsforsomeroomonthosepeakdays
4. Landacquisitioncosts
TheRegionalprojectdoesnotincludeestimatedcostsforacquisitionofland.
ThisisbecausetheMarinaCoasthasanoptionagreementthatallowsaccessto
eitherlandorwater(abilitytousewaterforirrigationofcrops,currentlythey
onlyhaveaccesstogroundwater).
Thecurrentoptionagreement,asmodified,allowsexerciseoftheoptionaslate
asDecof2020,intheinterim,MarinaCoasthasbeenmakingpayments,which
wouldbecreditedtothepurchaseprice.However,beforethedistrictcanmake
decisionaboutexercisingtheoptionthereneedstobeanapprovedCEQA
document
5. Permitingrequirements
EX.LWM12showstimelinesforobtainingrequiredpermitsontheproject.The
projectimplementationschedulewilldependonwhentheCPUCcertifiesthe
EIR.
TheprojectscheduledoesnotincludeCEQAreview.Thisisbecauseafterthe
finalEIRhasbeenissued,localagenciescanuseandadoptthatdocument
therebyobviatingtheneedforaseparateCEQAreview.
Page14of20
Itisunclearwhetheradditionalmitigationmeasureswillberequiredbythe
CaliforniaCoastalCommission,butsomeanticipatethatnomitigationmeasures
areexpectedbecauseallCaliforniaCoastalCommissionpermitswillbeobtained
consistentwiththefinalEIRrequirements.
Overheadswillneedtobemodified.Thiswillaffectthecapitalrequirementsfor
Seaside.Thetestimonyneedstobeupdatedrevised.
SectionIII. RateDesignandFinancialissues
SectionIIIa. ClarificationstoCalAmstestimonyonRateDesignand
Financialissues
CalAmdiscussedtheRateDesignandFinancialissuescontainedindirect
testimonyofMr.DavidP.Stephenson.
5
Thefollowingclarificationswere
provided:
1. Riskstoreceivingarateofreturn
CalAmisatriskfornotreceivingitsauthorizedrateofreturndueto:Revenues
notflowinginasprojected;Unrecoveredorhigherlitigationexpenses;Higher
chemicalcosts.
2. Contributionsfortheproject
Phase1oftheprojectbeingfundedbyasurchargeoncurrentratepayers
(Surcharge1).Thatsurchargewillendaftercurrentcostshavebeenapproved.
However,therearestillpreconstructioncoststhathaveyettobedetermined.
Phase2oftheprojectwillbefundedbySurcharge2.Thissurchargeisa
contributionforfacilitycostsbycustomers.Thatsurchargewillendin2014after
theprojectisusedanduseful.Iftheprojectisnotusedanduseful,all
contributionswillbereturnedtothecustomers.Thesecontributionswillhelp
withmanagingrateshockresultingfromtheproject.
3.ClarificationsonAttachmentCofStephensonstestimony
i) Surchargeisappliedtoallrevenues.Thelabelisincorrectonattachment
C.
ii) Theauthorizedrateofreturnwouldbeapplicabletoamountthatis
includedintheratebaseperstandardCPUCrules
5
A.0409019;DirectTestimonyofDavidP.Stephenson,Phase2Issues,May22,2009.
Page15of20
iii) RateofreturnwouldbeapplicabletoAFUDCamounts.
SectionIIIb. ClarificationstoMCWDstestimonyonFinancialissues.
MCWDdiscussedFinancialissuescontainedindirecttestimonyofMr.Thomas
E.GaffneyontheRegionalProjectAlternative
6
.
1. CostofCapital
MCWDusedCalAmsanditsconstructionandproductionnumbersasitsbasis
forcostcomparison.MCWDusedacostofcapitalwas5.5%for30yearsthe
RegionalProjectversus8.55%forCalAmalternatives.Basedonthat,it
developedtheunitcostofwatertocompareallalternatives.
2. Financingalternatives
FortheRegionalProject,MCWDconsideredvariouscombinationsofprivate
equityandFederalandStategrantstofundtheproject.Itdidnotperforma
sensitivityanalysisforarangeofinterestratesorforaCEQAreview.
MCWDisconsideringissuingPrivateActivityBonds(PABs).PABsarebonds
thatareissuedbypublicentitiestoprovidelowcostfinancingforprivate
projectsthatserveapublicpurpose.PABspayprincipalandinterestand
matureattheendof30years.Suchbondsarenotgenerallytaxexempt.The
capitalreserverequirementswouldbesubjecttocontractualobligations.
Theavailabilityofgrantswilldependonhowtheprojectisfinanced.The
maximumamountofgrantsavailableforthisprojectis$40million.The
maximumgrantamountthatcanbereceivedunderTitle16iseither25%ofcosts
oramaxof$20m(Ref.Table1).MCWDbelievesthatgenerallyregionalprojects
haveabetterchanceofattractingfederalandstategrantsandPublicagencies
haveanadvantageasapposedtoprivateentities.Greatestopportunitiesare
regionalprojectswithapublicpartnershipinsomeway.
3. Additionalclarifications
Thefollowingadditionalclarificationswereprovided:
i) AnagreementwillberequiredwithCalAmtosecurethecontractual
paymentstreamassumedintheprojectproposal.
ii) Tocovercosts,atleast10,500ACFofwaterwillhavetobesold.
6
A.0409019;DirectTestimonyofThomasE.Gaffney(Phase2ReginalProjectCostIssues),June
24,2009.
Page16of20
iii) TheMarinaCoastprojectisexpectedtostartpayingin2023.Thepayment
canbeearlierorlater.
SectionIV:Miscellaneousissues
TheunderlyingassumptioninallalternativesconsideredisthatCalAmwill
build,own,andoperateallthecommonfacilities.
SchedulingoftheEIRcertificationshouldbedonetofreeupthepublicagency
discussionandmovethingsforward.CertifyingtheEIRdoesnotlockanyone
intoparticularprojects.AnEIRmustbecertifiedwithinsix(6)months.Any
extensionoftimebeyondsixmonthswillcreateastalenessandhighercosts.
ALJMinkinwilldiscussschedulewithCommissionerBohnandwillissueruling
ondatesforpreparationofacomparisonexhibitthatusesthesamesetof
assumptions,supplementaltestimonyandrevisedhearingdates
SectionV:ParkingLotIssues.
Duringtheworkshops,issueswereidentifiedthatwouldhaveasignificant
impactonprojectcosts.TheseissuesweredesignatedasParkingLotissues.
TheseissuesneedfurtherdiscussionandrequirearecordtobedevelopedThe
followingParkingLotissueswereidentified:
1. Projectedcapitalcosts
a. Whatarethecapitalcostsassociatedwitheachalternative?
b. Howwillthesecostsbedeveloped?
c. Whenwillthesecostsbeavailable?
2. Itemsrequiringmitigation.
a. Whataretheitemsthatneedmitigation?
b. Whatcostsshouldbeassignedtoeachitemthatneedsmitigation?
c. Howwillpartiesaddressthem.
3. Contingenciesthatimpactprojectcosts
a. Whatelementsshouldbeincludedinthecontingencyallowance?
b. Shouldtherebeaspecificcontingencyforlandacquisition?
c.Shouldtherebeacontingencyforunanticipatedlegalcosts?
4. Waterqualityrelatedissues:
a. Whatarewaterqualityissuesassociatedwitheachalternative?
b. Whatistheimpactofeachissueonoperationsandcosts?
c. ArethereanyCDPHrequirementslikesatisfyingBoronlevelsin
theeffluentthatshouldbesatisfiedforeachalternative?
Page17of20
5. Risksanduncertainties:
a. Whataretherisksanduncertaintiesassociatedwithcostsincluding
reliabilityofwatersupply,engineeringandnonengineering
impactoferosion,etc.
b. Howshouldthesefactorsbequantifiedandconsidered?
6. Treatmentofstrandedcosts
7. Timingofpilotprojectplantresultsandimplicationsforcostsaswellas
schedulingoftestimony
8. Homelandsecurityandassociatedcosts
9. Impactofpotentialphaseoutofoncethroughcoolingandassociated
costs
10. Unaccountedforwater
a. Whatistheextentofunaccountedforwater?
b. Howmuchunaccountedforwatercanberecoveredthroughleak
repairs?
c. Howdoesthecostofrepairingleakscomparewiththecostofthe
Desalinationplant
11. Quantityandaccountingofgroundwaterfromthebasinmustbe
addressed.
12. Howtoincorporate/consideradditionalcoststhatareunknownatthis
time,includingpaymentsforwaterrights,litigationcosts,ownershipof
project,andcostofdisposalofbrinesolutionfromeachalternative.
13. Theproponentsofcostshavetobecomfortablewithcostsprojectedfor
Commissionapproval.Acostcomparisontableandexhibitareneeded
usingthesamesetofassumptions.
Page18of20
AppendixA:WorkshopAgenda

A.04-09-019
Workshops on Cost Data
7/7/09
10:00 a.m.
CPUC - Golden Gate Room
505 Van Ness Avenue

Facilitator:
ALJ Minkin

Scribe/Resource
Person: Ravi Kumra
Note takers:
Jennifer Crockett
Ankush Sharma

Agenda topics
10:00 -10:15 Introductions and overview of agenda
10:15 - 10:25 Review of Ground-Rules
10:25 - noon Cal-Am Presentation MLPP/ Begin Q & A
Noon - 1:30 Lunch
1:30 - 3:00 Q & A and discussion on cost issues
3:00 -3:15 Afternoon Break
3:15 - 3:45 Continue Q & A
3:45 4:00 Plan for 7/8 workshop

Page19of20

A.04-09-019
Workshops on Cost Data
7/8/09
9:00 a.m.
CPUC - Golden Gate Room
505 Van Ness Avenue

Facilitator:
ALJ Minkin

Scribe/Resource
Person: Ravi Kumra
Note takers:
Jennifer Crockett
Ankush Sharma

Agenda topics

9:00 10:15 Cal-Am Presentation - NMA
10:15 10:30 Morning Break
10:30 - noon Begin Q & A and discussion on cost issues
Noon - 1:00 Lunch
1:00 2:30 MCWD Presentation Regional Project/ Begin
Q & A

2:30 2:45 Afternoon Break
3:30 4:30 Rates and financing
4:30 5:00 Parking Lot, PPHs, Wrap-Up

Page20of20
Appendix B: List of Attendees

Name Organization E-mail
Steve Leonard B+V Leonards@bv.com
Reed Schmidt BMA rschmidt@bartlewells.wa
Tom Gaffney BWA tgaffney@bartlewells.com
Dave Stephson Cal-Am dave.stephson@amwater
Tim Miller Cal-Am tim.miller@amwater.org
Tyla Montgomery Cal-Am (RBF) tmontgomery@rbf.com
Dave Berger CAW david.berger@amwater.com
John Klein CAW johnklein@amwater.com
Len Weiss CAW Iweiss@mannat.com
Mark Schubert CAW fshubert@mwater.com
Rob Maclean CAW Robert.Maclean@amwater.com
Tom Bunosky CAW Tom_Bunosky@Amwater.com
Monica McCrary CPUC mlm@cpuc.ca.gov
Adam Levitan CPUC/DRA al3@cpuc.ca.gov
George Riley CPW georgeriley@hotmail.com
Diana Brooks DRA dsb@cpuc.ca.gov
Max Gomberg DRA mzx@cpuc.ca.gov
Eric Zigas ESA ezigas@esassoc.com
Jim Heitzman MCWD Jim@mcwd.org
Lloyd Lowrey MCWD llowrey@nheh.com
Mark Fogelman MCWD mforgelman@freedumspring.com
Dan Carroll MCWRA dcarroll@downeybrand.com
Andrew Bell MPWMD andy@mpwmd.dst.ca.us
Dave Stoldt MPWMD stoldt@comcast.net
David Laredo MPWMD dave@leredolaw.net
Stan Williams Poseidon swilliamsdposeidon1.com
Michael Warburton Public Trust Alliance michael@RRI.org
Pat Nelson Public Trust Alliance nelsonp34@hotmail.com
Lyndel Melton RMC lmelton@rmcwater.com
Ryan Alameda RMC ralameda@rmcwater.com
Charles Hardy Schaaf & Wheeler chardy@swsv.com
Sabrina Veuskus Surfinder Foundation Venskus@lawsv.com
Steve Kasower Surfrider steve@seacompany.org
Sarah Corbin Surfrider Foundation scorbin@surfrider.org
Andrew Tiffinbach USBR atiffenbach@usbr.gov
Frank Leitz USBR fleitz@usbr.gov
Tom Hanke USBR thanke@usbr.gov
Michael Laredo pgfromaa77@gmail.com
A.04-09-019: Coastal Water Project
Workshop on Cost Issues - July 7 and 8, 2009

Exhibit 6
1717 West Park Avenue | Redlands, CA 92373 | Office: 909.390.2833| Fax: 909.390.6097 | layne.com
Richard C. Svindland, P.E.
Vice President Engineering
California American Water
4701 Beloit Drive

Dear Mr. Svindland,

In response to your request, the following cost estimate is for the installation of a test slant well located in
Marina, CA.

Option 1 12 inch diameter well
Item Qty Description Unit Cost Ext Cost
Slant Test Well Installation, 1 700 LF 12-inch Slant Well $2,000,000 $2,000,000
Slant Well Vaults with
Manifolding
1 Concrete Vault $ 200,000 $200,000
Slant Well Equipping 1 Pump & Motor $ 300,000 $300,000

Option 2 20 inch diameter well
Item Qty Description Unit Cost Ext Cost
Slant Test Well Installation, 1 800 LF 20-inch Slant Well $3,000,000 $3,000,000
Slant Well Vaults with
Manifolding
1 Concrete Vault $ 200,000 $200,000
Slant Well Equipping 1 Pump & Motor $ 300,000 $300,000

The pricing shown is provided for budgetary purposes only based on our discussion of your requirements.

The following items are not included; electrical and controls, permitting, engineering, submittals, well testing
and analysis, geological exploration and well design.

Layne will provide detailed pricing in response to request for proposal and detailed specifications.

Sincerely,

Bob Ereth
General Manager, National Business Development

Exhibit 7

225 Bush Street
Suite 1700
415.896.5900 phone
415.896.0332 fax
www.esassoc.com
memorandum
date J une 13, 2012
to Rich Svinland, CalAm
J ohn Kilpatrick, CalAm
Kevin Thomas, RBF
from Eric Zigas, ESA
J ulia King, Senior Botanist, ESA
subject CaliforniaAmerican Water Company
Special Status Species within the Vicinity of the Proposed Test Well Sites, Marina, CA.
Summary
Special status plantsand animals are known to occur in the vicinity of the proposed CalAm Monterey Peninsula
Water Supply Project test well sites, and depend upon the habitat found in the sand dunes to the north and south
of the Cemex sand mining operation located in Marina, California. Several federally listed plants and two
federally listed animals areeither known to occur or have potential to occur in these dunes, as reported by
California Natural Diversity Data Base (CNDDB; CDFG, 2012), Point Reyes Bird Observatory (PRBO) staff
(personal communications with Kriss Newman, 2012), and through botanical surveys conducted by ESA in May
and J une 2012.
Methods
ESA botanist J ulia King and ESA biologist Michelle Giolli conducted general habitat mapping and botanical
surveys of potential test well sites in association with the CalAm Monterey Peninsula Water Supply Project on
May 1 and 16, 2012. J uly King conducted additional surveys on May 17 and J une 5, 2012.
ESA surveyors described general habitat conditions and noted potential habitat for special status species within a
portion of the proposed CalAm Monterey Peninsula Water Supply Project area(proposed Project Area), which
includes the proposed test well sites(test well survey area). ESA surveyors also conducted focused surveys for
special status plant species within the test well survey area by walking transects throughout the entire survey area.
Figures 1and 2show the extent of the proposed Project Area within the vicinity of the Cemex property (the area
of general habitat mapping and potential habitat for special status species) and the extent of the test well survey
area (the area of focused surveys for special status plants). Target plants within the test well survey areawere:
Monterey spineflower (Chorizanthe pungensvar. pungens), coast wallflower (Erysimumammophilum), Yadon's
wallflower (Erysimummenziesii spp. yadonii), sand gilia (Gilia tenuiflorassp. arenaria), Kelloggs horkelia
(Horkelia cuneatassp. sericea), coast buckwheat
1
1
Coast buckwheat is not currently a special status plant species; however, it was included as a target plant species during surveys because
it is a host species for the federally endangered Smiths blue butterfly (Euphilotes enoptes smithi).
(Eriogonumlatifolium), and sand-mat manzanita
(Arctostaphylos pumila).
Rich Svinland
J une 13, 2012
Page 2
2
Habitat Description
Sand dunes within the proposed Project Area support central dune scrub habitat on stabilized backdune slopes in
patches along much of the coastal strand, with central dune scrub being most developed on large dunes bordered
approximately by Salinas River to the north and Marina State Beach to the south. This uncommon plant
community has been substantially altered by the encroachment of seafig and iceplant (Carpobrotus spp.),
introduced to stabilize the shifting sands. However, some areas continue to support a dense, native scrub
dominated by mock heather (Ericameria ericoides) and live-forever (Dudleya caespitosa), with beach aster
(Corethrogyne filaginifolia), deerweed (Lotus scoparius), and coast buckwheat as important associates. On
windward slopes, dune bush lupine (Lupinus chamissonis) and beach sagewort (Artemisia pycnocephala) become
more prominent, while disturbed sites are colonized by coyote brush (Baccharis pilularis). Central dune scrub
transitions to an unstable plant association of cakile (Cakile maritima), sand verbena (Abronia spp.), and beach
primrose (Camissonia cheiranthifolia) on the active dune slopes to seaward.
Survey Results
Western Snowy Plover
The federally threatened western snowy plover (Charadriusalexandrines nivosus) nests along the coastline of the
proposed Project Area and test well survey area; plover nesting habitat generally occurs between the ordinary high
tide lines and the seaward side of the dunes or "cliff" face of the dunes. Figures 1 and 2 indicatethe location of
potential western snowy plover habitat within the Project Area and test well survey area. Plovers are documented
as nesting roughly at the base of the seaward side of the dunes to approximately 100 feet inland, as monitored by
PRBO(personal communications with Kriss Newman, 2012). Between the Salinas River and Marina State Beach,
approximately 40 pairs of snowy plover nest on a yearly basis and approximately 330 pairs of snowy plover use
the Monterey Bay coastal areas for breeding and wintering (personal communications with Kriss Newman, 2012).
Nesting areaswithin and adjacent to the Project Area and test well survey area are roped off with cables and signs
are posted that indicate sensitive resources for western snowy plover.
Currently-designated critical habitat for the western snowy plover (U.S. Fish and Wildlife Service [USFWS],
2005) does not occur within the proposed Project Area or test well survey area. However, proposed critical
habitat, which is expected to be finalized by the USFWS in 2012, occurs within the proposed Project Area and
test well survey area (USFWS, 2011).
The test well survey area along the beach frontage and the seaward side of the dunes providesboth nesting and
wintering habitat for snowy plover; and therefore, impacts to snowy plover habitat, including impacts that would
potentially occur during the non-breeding season (wintering habitat), may require consultation with the USFWS
under Section 7 or Section 10 of the federal Endangered Species Act (FESA).
Smith's Blue Butterfly
The federally endangered Smith's blue butterfly (Euphilotes enoptes smithi) feed, mate, and lay their eggs
exclusively on the flower heads of coast buckwheat and seacliff buckwheat (Eriogonumparvifolium), of which
coast buckwheat occurs in moderate density throughout dune habitat within theproposed Project Area and test
well survey area. Therefore, the proposed Project Area and test well survey areabothhavepotential to support the
endangered Smith's blue butterfly. There is no finalized critical habitat designation for Smiths blue butterfly.
The consistency between the density of coast buckwheat observed during botanical surveys and CNDDB
occurrence mapping indicate thedune habitat within the proposed Project Area and test well survey area is
suitable habitat for Smith's blue butterfly. Removal of coast buckwheat in association with test well construction
activity may result in the take of eggs and larvae of the Smith's blue butterfly and would require consultation with
the USFWSunder Section 7 or Section 10 of FESA.
Rich Svinland
J une 13, 2012
Page 3
3
Plants
Three special status plant species were observed during the focused botanical surveys conducted in May and J une
2012 within the test well survey area. Species included federally threatened and CNPS 1B listedMonterey
spineflower (Chorizanthe pungensvar. pungens), CNPS 1B listed coast wallflower (Erysimumammophilum), and
federally and state threatened and CNPS 1B listed Yadon's wallflower (Erysimummenziesii spp. yadonii).
Monterey spineflower and coast wallflower were observed throughout dune habitat within the test well survey
area. Yadons wallflower was observed along the seaward side of the dunes, north of the Cemex operations area.
A large population was mapped between the cliff face of the dune to approximately 100 feet inland. Yadons
wallflower was also observed at the southern end of the Cemex property. It occurs along the north and south
sides of the beach access path between the Cemexpropertyand Marina State Beach. To the south of the beach
access path, a large population of Yadons wallflower was observedin association with adune restoration and
stabilization project on the Marina State Beach lands.
In addition to the three special status plant species observed within the test well survey area described above, the
federally endangered, state threatened and CNPS 1B listed sand gilia (Gilia tenuiflorassp. arenaria) was
observed during separate field efforts conducted by ESA in April 2012. During thoseefforts (which included
reconnaissance surveys being conducted in preparation for the test well surveys), sand gilia was observed within
Marina State Beach lands, and specifically within the southern edge of the test well survey area, as shown on
Figure 2.
Coastal dune habitat outside of the test well survey area, but within the proposed Project Area, also contains
suitable habitat for Monterey spineflower, coast wallflower, Yadons wallflower, and sand gilia. Maps showing
the location of special-status plantsare presented in Figures 1 and 2.
References
California Department of Fish and Game, 2012, California Natural Diversity Database RareFind version 3.1.0,
Search for Occurrences within Monterey County.
Kriss Newman, Avian Biologist, Point Reyes Bird Observatory, personal communication with J ulia King,
Wetland Regulatory Specialist/Senior Botanist, Environmental Science Associates, May 23, 2012.
U.S. Fish and Wildlife Service (USFWS), 2005, Designation of Critical Habitat for the Pacific Coast Population
of the Western Snowy Plover (Charadrius alexandrinus nivosus). Federal Register Vol. 70 (188): 56969-57018.
USFWS, 2011, Revised Critical Habitat for the Pacific Coast Population of the Western Snowy Plover
(Charadrius alexandrinus nivosus), Proposed Rule. Federal Register Vol. 76 (55): 16045-16165.
5,000 to 8,000 plants
100 to 150 pl ant s
175 plants
100 plants
9 plants
5 plants
15 plants
25 plants
Monterey Regional Water Supply Project . 205335
Fi gure 1
Special Status Species Observations and Habitat within the Proposed Project Area and Test Well Survey Area (North)
SOURCE: ESA, 2012; ESRI, 2012
0 500
Feet
Proposed Project Area
Proposed Test Well Survey Area (Surveyed May 2012)
coast wallflower ( )
Yadon's wallflower ( ssp. )
Monterey spineflower ( var. )
Western snowy plover habitat
occurs within the entire
proposed project area from
the ocean east to the eastern
edge of the foredunes.
Coast buckwheat is the host plant for
Smith's blue butterfly. Since coast buckwheat
occurs in high densities throughout
the proposed project area, Smith's blue
butterfly habitat occurs throughout the entire
proposed project area.
Coast wallflower, Monterey spineflower,
Yadon's wallflower, and sand gilia
( ssp. )
habitat occur throughout the
Erysimum ammophilum
Erysimum menziesii yadonii
Chorizanthe pungens pungens
Gilia tenuiflora arenaria
300 plants
200 plants
80 plants
200 plants
20 plants
150 plants
1 plant
1 plant
3 plants
2 plants
3 plants
9 plants
1 plants
7 plants
5 plants
3 plants
3 plants
2 plants
4 plants
4 plants
10 plants
10 plants
10 plants
11 pl ants
Monterey Regional Water Supply Project . 205335
Fi gure 2
Special Status Species Observations and Habitat within the Proposed Project Area and Test Well Survey Area (South)
SOURCE: ESA, 2012; ESRI, 2012
0 500
Feet
Proposed Project Area
Proposed Test Well Survey Area (Surveyed May 2012)
coast wallflower ( )
Yadon's wallflower ( ssp. )
Monterey spineflower ( var. )
Western snowy plover habitat
occurs within the entire
proposed project area from
the ocean east to the eastern
edge of the foredunes.
Coast buckwheat is the host plant for
Smith's blue butterfly. Since coast buckwheat
occurs in high densities throughout
the proposed project area, Smith's blue
butterfly habitat occurs throughout the entire
-Monterey spineflower is scattered throughout this
polygon.
-Yadon's wallflower is present within this
polygon with densities higher at the west end
of the polygon compared to the east end.
-This polygon was also surveyed in April 2012
as part of a reference survey and sand gilia
( ssp. ) was observed
within this polygon at that time.
-Marina State Beach/dunes preservation area
(restored dunes with windbreaks for sand
stabilization)
-Monterey spineflower and Yadon's wallflower
occur in high densities through this polygon.
Either species of plant occurs approximately
every 5 to 10 feet.
Erysimum ammophilum
Erysimum menziesii yadonii
Chorizanthe pungens pungens
Coast wallflower, Monterey spineflower,
Yadon's wallflower, and sand gilia
( ssp. )
habitat occur throughout the

Exhibit 8

Subject Area: Test Slant Well
DRA QUESTION:
1. Please provide a detailed cost estimate breakdown for the test well design with
Pump-to-Waste Pipeline. For each line item on the cost breakdown, please provide
support and justification for all unit costs and contingencies. The cost breakdown
should also include details on what is included in costs for activities such as well
installation, pipeline installation and Engineering, Permitting, Misc.
COMPANY RESPONSE:
The estimates in Tables 1 and 2 from your Data Request were created based on
California American Waters (and our consultant) judgment and experience as it relates
to costs and unit costs for these items. Additionally, California American Waters
estimates are classified as Class 4 estimates in guidelines provided by the Association
of the Advancement of Cost Estimating International. Therefore, California American
Water does not have other information to submit in this regard except for a letter from
Layne Water Resources, attached hereto as Attachment R1 - Layne Letter, which
confirms that the budget set aside for the drilling and equipping of the well is
appropriate.
With the exception of the Engineering, Permitting, Misc. line in both tables, it is
important to note that all of the costs will be competitively procured and California
American Water will provide the bidding results to DRA. California American Water also
used a range of approximately 15% - 18% for this line item. This amount was based on
experience and was adjusted slightly higher than typical engineering-related projects
due to the heavy permitting requirements for this slant well.
Furthermore, California American Water is committed to working within the total budget
established in Tables 1 and 2.
DRA Request: DRA- A.12-04-019
DRA QUESTION:
2. Please provide a detailed cost estimate breakdown for the test well design with
below grade diffuser. For each item on the cost breakdown, please provide
support and justification for all unit costs and contingencies. The cost breakdown
should also include details on what is included in costs for activities such as well
installation, pipeline installation and Engineering, Permitting, Misc.
COMPANY RESPONSE:
See response to Question 1.
DRA QUESTION:
3. Please elaborate on Cal Ams plan for the operation of the test well, as well as
the duration of the test well operation. In addition, please explain how Cal Am will
ensure that test well data represents year-round condition and/or worst case scenario.
COMPANY RESPONSE:
California American Water plans to operate the test well for a 3 to 12-month period.
Final determination of the testing time will be determined upon the completion of the test
well and completion of the groundwater modeling. California American Water also
plans to allow the test well to be used by the selected Design-Build firm to perform
additional testing during the design portion of the project to fine tune their design. As
such, the test well could be operated for a 18 to 24-month duration.
Subject Area: Slant Test Well
DRA QUESTION:
4. In Appendix B of its application, Cal Am provided a schedule for MPWSP. Since
restrictions have been established from appropriate environmental review of the site,
Please provide a timeline for the new test well schedule. For the thoroughness of this
data request, please summarize the results of the environmental review and the
restrictions that it concludes on construction activities.
COMPANY RESPONSE:
California American Water received a memo, attached hereto as Attachment R4 -
CalAmNoMarina-TestWell_SS_6-13-12, from the Commissions CEQA consultant on
June 13, 2012 which described the Special Status Species within the Vicinity of the
Proposed Test Well Sites in Marina, CA. The memo does not tell us how to mitigate
any of the findings, but we understand that the presence of Snowy Plover along the
beach may limit construction activities to non-nesting seasons. As such, California
American Water is working towards a start date beginning no earlier than November 1
,
2012 for the implementation of the slant test well. We are currently working on two
key permits (State Lands Commission and California Coastal Commission) that will
ultimately drive the schedule. Until we receive these two permits we are unable to
provide a final schedule.

Exhibit 9


APPLICATION NO. 12-04-019

Response Provided By: Richard Svindland
Subject Area: Test Well
DRA QUESTION:
1. Cal Am stated that as part of the test well program it plans to install screens in
the shallower sand dunes aquifer to further analyze the feasibility of contingency
plans for the slant wells intake system (California-American Water Company
Contingency Plan Compliance Filing, page 3). Please provide a cost breakdown
of this modified test well. In your cost breakdown, please itemize all estimates
for contingency, engineering, and permitting.
COMPANY RESPONSE:
There is no change in cost for the test slant well that is currently configured to have
screens in both the shallow dunes and in the 180-foot aquifer. The reason for this is
that the length of screen currently proposed is the same that was originally proposed in
this application.


Subject Area: EIR Scoping Report
DRA QUESTION:
2. The MPWSP EIR Scoping Report includes Cal Ams comments on its flexibility to
deliver water supplies to Ryan Ranch, Bishop, and Hidden Hills distribution
systems. Cal Am also suggested that the EIR evaluate pipeline alignments that
would account for these developments (EIR Scoping Report, page 9). Please
describe how these alignments were proposed in Cal Ams application for the
MPWSP CPCN. Were these developments included in the capital cost estimates
of the project? Please provide all references.
COMPANY RESPONSE:
These alignments and the capital costs for the pipeline alignments are not included as
part of this application. California American Water had requested that the EIR cover
these pipelines to preserve the option of installing these pipelines if and when they are
needed. The required authorization (e.g., recovery of costs) for these pipelines would
be requested in a future General Rate Case filing.

Exhibit 10

Monterey Peninsula Water Supply Project of DRA

Title: Vice President of Engineering
DRA Request: DRA-DR001 A.12-04-019 001
Company Number: CAW1-DRA-DR-001 Q001
Subject Area: Slant Well Cost
DRA QUESTION:
As part of the updated CEQA project description, appendix H of Cal Ams application
describes the need of a pump-to-waste system to pump water from slant wells to waste
to avoid introducing suspended solids into the feedwater line. Since the presence of a
pretreatment process essentially serves the same purpose, please describe the
necessity of the pump-to-waste pipeline in addition to the pretreatment process of the
plant.
COMPANY RESPONSE:
As discussed over the phone, it is somewhat premature to determine if a pump to waste
line and/or pretreatment are needed. Part of the test well program will be to determine
the most cost effective way to handle suspended solids that may or may not be present
when a well is started after a period of rest. Generally speaking, pump to waste lines
are common on all wells to blow-off the initial contents of the casing and to allow the
water quality to stabilize over time. Additionally, pretreatment at the desalination plant
may also be needed to handle items other than suspended solids such as iron and
manganese.
Because we need to be able to route the test well water to a disposal point, the pump-
to-waste line was shown in our project description to disclose, from an environmental
perspective, the worst-case items and as a way to avoid designing and building
stranded assets.

DRA Request: DRA-DR-001 A.12-04-019 001
DRA QUESTION:
Please describe the approach taken to determine the linear footage of the pump-to-
waste pipeline at this stage of preliminary design. Is the approximated pump-to-waste
pipeline configuration intended to correspond with one of the project intake option
figures in Appendix H of the application?
COMPANY RESPONSE:
As discussed over the phone, we computed the estimated length of the pump-to-waste
line by drawing a diagonal line from the south west corner of the Cemex property to the
southeast corner of the Cemex mining area. This length is approximately 2,400 feet
and extends under the sand dunes. The remaining 1,200 feet is the length from this
southeast corner to the location of the MRWPCA outfall. The estimate used for this test
well cost is a little different than the figures found in Appendix H, which are more
graphical in nature. It is important to note that the figures in Appendix H were
completed prior to the biological review of the Cemex property, and that ultimately the
final configuration of any pipeline through this area will need to avoid sensitive habit
area.

DRA QUESTION:
Please describe the general location where Horizontal Directional Drilling (HDD) is
proposed. Moreover, please provide a justification for the use of HDD instead of an
open trench method.
COMPANY RESPONSE:
As discussed over the phone, HDD will be used to avoid sensitive sand dune areas.
The sand dunes are approximately 60 feet tall and the pipelines from the wells should
be installed on a gradual rise in grade so as to avoid air binding issues. Thus, the
pipelines through the dunes could be as deep as 60 70 feet. In sandy soils, a trench
width greater than 140 feet in width would be needed to install this pipe which would
lead to very large disturbed area of coastal dunes. We do not believe this would be
permitted and thus have anticipated the use of HDD.

DRA QUESTION:
Cal Am presented two options for its test slant well configuration. One option is to use a
beach diffuser as a means of water disposal instead of a connection to the PCA outfall.
If a below grade diffuser is to be used in the test well configuration, please describe its
function in the final project design.
COMPANY RESPONSE:
As discussed over the phone, the below grade diffuser is also a part of the test well
program. The effectiveness of this diffuser in the test well program will be evaluated if it
is permitted to be constructed and this effectiveness will be weighed against the need to
install a pump to waste line that connects to the MRWPCAs outfall. It is important to
note, that these items are not permitted and it is premature at this point in time to know
which test water disposal system will be permitted and built.


DRA QUESTION:
Please clarify the line item where the cost of operation and maintenance (O&M) is
estimated. Is O&M included in the estimate of $5 million for the test well project?
COMPANY RESPONSE:
As discussed over the phone, the operation and maintenance (O&M) cost for the test
well is included under the Engineering, Permitting, Misc line item for each Option.
Thus, the O&M cost is included the $5 million estimate for the test well.


DRA QUESTION:
Please provide a justification for the higher estimate of Engineering, Permitting and
Miscellaneous item under Option 2 of the slant test well estimate (disposal via diffuser).
COMPANY RESPONSE:
As discussed over the phone, the main reason for the difference in cost for Engineering,
Permitting and Miscellaneous in Option 2 versus Option 1 is that we are anticipating that
the cost to design and permit the below grade beach diffuser will be greater than the
connection to the MWPCA outfall used in Option 1.

Exhibit 11



Sacramento, Ca 95838
Subject Area: Land Acquisition
DRA QUESTION:
1. Land Acquisition

a. Please provide more details on Cal Ams estimate of the land purchase and
easement for the desalination plant intakes and pipelines. This item was
estimated to be $1,000,000 for the 9.0 and 5.4 MGD plant options and
$1,100,000 for the 9.6 and 6.4 MGD plant options. In its response, Cal Am
should provide the basis of the higher estimate.
COMPANY RESPONSE:
California American Water included an additional $100,000 for purchase of a site for the
intake pump station. California American Water estimates that the additional requested
amount should be adequate to purchase an estimated 1 to 2 acre site for this facility.
The intake pump station was mentioned as a possibility in the previous project
descriptions, but is now assumed to be a required element.


Company Number: MPWSP-CAW 024 Q 002(a)
Subject Area: CAWOnly Facilities
DRA QUESTION:
2. CAW-Only Facilities

a. Please provide updates regarding the status of CAW Only Facilities terminal
reservoirs design. If Cal Am was able to come to an agreement with the City
of Seaside to have the reservoirs partially buried, please include the
agreement and the updated costs.
COMPANY RESPONSE:
Detailed design of the terminal reservoir will begin after the California Public Utilities
Commission approves the above-captioned application. At this point no written
agreement is in place between California American Water and the City of Seaside with
respect to the burial of the reservoirs. It is anticipated that mitigation measures for the
visual impacts of the reservoir (for example, partially buried or use of berms) will be
specified in the Coastal Development Permit issued by the California Coastal
Commission and the Use Permit issued by the City of Seaside.



Subject Area: Slant test Well
DRA QUESTION:
3. Previously, unit costs for slant test well installation, slant well vaults with
manifolding, and slant well equipping were confirmed by Layne Christensen, a
slant well designer and driller. Please describe which items in the capital costs of
9.6 MGD and 6.4 MGD plants are confirmed by Layne Christensen. In your
response, please include any correspondence between the well designer and Cal
Am. If costs under the Desalination Plant Supply and Return Facilities section
of the capital cost spreadsheet are not yet confirmed by the well designer/driller,
please provide the basis of the cost estimate of these items.
COMPANY RESPONSE:
California American Water met with Layne Christensen in late October of 2012 to
confirm revised approach and budgetary estimates; however, Layne Christensen has
not provided California American Water any new or revised cost estimates, in writing, on
the capital costs for the gravity slant wells that are now a part of the 9.6 MGD and 6.4
MGD plant sizes. Rather, the existing Layne Christensen confirmation was used to
validate our Consultants original cost estimates which have now been updated to
reflect the recent changes in scope and configuration.


DRA QUESTION:
4. In the new model supplied by Cal Am (2013 Monterey Desalination Model v6 1),
the test slant well is described as 790 LF, 29-deg, 12-inch diam., 1000 gpm
while the slant production well installation is described as 580 LF, 22-deg, 12-
inch diam., and 1880 gpm for the 9.6 MGD plant size and 580 LF, 22-deg, 12-
inch diam., and 1600 gpm for the 6.4 MGD plant size. Please describe how Cal
Am is going to account for the smaller angle and the larger pumping rate of the
slant production wells. It is important that the test slant well results represent the
most accurate conditions of the final slant wells.
COMPANY RESPONSE:
The final angles and depths of wells are initial estimates based on existing limited
information. The final well angles and lengths will not be confirmed until monitoring
wells are drilled and geologic stratigraphy at each site is confirmed. That being said,
the test well will be designed to penetrate both the Shallow or Sand Dunes Aquifer and
the 180-foot Aquifer so that both can be tested to determine their hydraulic properties
and production capabilities. The test well will have screens in both formations that can
be independently pumped to determine the productivity of each aquifer. The steeper
angle is required in order to allow full penetration to the bottom of the 180-foot Aquifer
without exceeding a targeted maximum drill length of 800 LF. Hopefully, the testing will
demonstrate that the Sand Dunes Aquifer alone will be sufficiently productive, and the
lower portions of the well in the 180-foot Aquifer can be blocked off.



The results obtained from the test well are used in calculations and modeling that can
then predict the productivity of other wells in the same formation that are drilled at
shallower angles. The steeper angle of the test well means that it will have less well
screen length in the targeted Sand Dunes Aquifer than future wells that are drilled at a
shallower angle through the same formation. The productivity of the wells is roughly
proportional to screen length, particularly since all of the wells will eventually operate as
gravity wells and will have essentially the same driving head. The estimates of 1,000
gpm for the 29 degree test well and 1,600-1,880 gpm for the other 22 degree wells are
roughly proportional to the estimated well screen lengths for the two well angles in the
Sand Dunes Aquifer.



DRA QUESTION:
5. Please explain the 50% mark-up for site and schedule conditions added to the
unit cost of slant production well installation in the capital cost estimates of the
9.6 and the 6.4 MGD plants.
COMPANY RESPONSE:
The previously submitted estimates for the slant wells were based on construction of the
slant wells above the water line on the beach, with construction access and delivery of
materials coming from the land. The proposed slant well sites are to be constructed
within a temporary coffer dam structure in the swash zone, with three or four wells being
drilled at the same time so that the construction for each well cluster can be finished in a
single 5-month construction season. Construction access for equipment, material, from
the land side will be limited, and it is anticipated that a significant portion of the
equipment and material will be delivered to the sites by barge. RBF could not identify
any comparable project having this combination of difficult site conditions. The 50
percent increase to the previously estimated slant well costs is intended to cover the
following conditions of the project that will likely increase costs:

Requirement for two or three labor shifts during construction. Labor costs will
increase to cover over-time charges, additional crew, and additional per-diem. It
is believed that this factor alone will increase total costs by 20 to 30 percent.
Increases in mobilization costs as equipment and materials are mobilized to the
beach sites via travel along shoreline routes or via barge.


Unavoidable inefficiencies and associated increases in labor costs as a result of
operating three or four drilling rigs in close quarters.
Costly delivery and haul-out of materials and equipment via barges.
Management and scheduling of deliveries of material and equipment in and out
of the coffer-dam areas will also interrupt drilling activities, with resulting impacts
on productivity and associated increase in labor costs.
Limited availability of specialized drilling equipment. This will have an effect
upon the number of bidders, and an unknown effect on price.
Increases in project risk and bid cost associated with construction in near-shore
marine environment with increased potential for storm and wave damage.
Possible costs of environmental monitoring during construction and increased
risk that construction would be interrupted by the environmental monitors.



DRA QUESTION:
6. Monitoring Well

a. Please explain the basis of $80,000 estimated for a monitoring well. This was
added to the estimate of slant well caissons with manifolding.
COMPANY RESPONSE:
California American Water assumed a monitoring well would be needed at each well
site that would monitor both the Shallow or Sand Dunes and the 180-foot aquifer.
Based on a recent (2011) RBF project in southern California for the San Diego County
Water Authority, California American Water used a unit cost plus an additional $10,000
for difficult mobilization, demobilization and site conditions.


DRA QUESTION:
7. Please explain the basis of the extra $250,000 per barrier added to the estimate
of temporary sheet piling and wave protection. Please include the sources of this
estimate. If this estimate is based on Cal Ams or RBFs experience in a similar
project, please include an example or an estimate of said project.
COMPANY RESPONSE:
The estimate for the wave protection barrier is based on RBFs experience and based
on installing a 10 to 15 foot high barrier that is 150 feet long by 30 feet wide using 80
concrete tetrapod units at $2,000 each, plus $90,000 for crane, barge and labor costs to
place and remove the tetrapod units.


DRA QUESTION:
8. Please explain the basis of the extra $100 per gpm added to the estimate of the
slant well caissons with manifolding. Please include the sources for this
estimate. If this estimate is based on Cal Ams or RBFs experience in a similar
project, please include an example or an estimate of said project.
COMPANY RESPONSE:
The question appears to be in reference to the cost estimate for the intake pump
station, not for the slant well caissons which is the next row down on the cost estimate.
The formula is for estimating the mechanical and electrical system components of a
pump station. The formula is:

Base Construction Cost = ($2,000 x installed HP) + ($100 x pump station capacity in
gpm)

This formula is an empirical formula developed by RBF based on experience with
numerous pump stations of this type.



Subject Area: Clear well and Pump Station
DRA QUESTION:
9. Clearwell and Pump Station

a. Please explain the basis of the extra $100 per gpm added to the estimate of
clearwell pump station equipment. Please include the sources of this
estimate. If this estimate is based on Cal Ams or RBFs experience in a
similar project, please include an example or an estimate of said project.
COMPANY RESPONSE:
Please see California American Waters response to Question No. 8.


Company Number: MPWSP-CAW 024 Q 009(b)
Subject Area: Clear well and Pump Station
DRA QUESTION:
9. Clearwell and Pump Station

b. Please explain the basis of the extra $100 per gpm added to the estimate of
desalinated water pump station equipment. Please include the sources of
this estimate. If this estimate is based on Cal Ams or RBFs experience in a
similar project, please include an example or an estimate of said project.
COMPANY RESPONSE:
Please see California American Waters response to Question No. 8.



Subject Area: Trenchless Technology for Feedwater Pipeline

DRA QUESTION:
10. Trenchless Technology for Feedwater Pipeline

a. Please explain the difference between the trenchless technology planned for
the feedwater pipeline between well clusters and the feedwater pipeline under
Highway 1.
COMPANY RESPONSE:
The basis of the estimate for both situations is a technique called jack-and-bore. This
technique involves jacking a casing from an entrance portal on one end to an exit portal
on the other end, and then installing a second carrier pipe inside the casing. The
construction under Highway 1 is assumed to be a 42-inch diameter carrier pipe installed
inside a 60-inch diameter casing. The construction in the beach is assumed to be a 36-
inch diameter carrier pipe installed inside a 54-inch diameter casing. The actual design
and techniques used will be determined during design and bidding of the project, and
may be different for the two situations.


Subject Area: Trenchless Technology for Feedwater Pipeline

DRA QUESTION:
10. Trenchless Technology for Feedwater Pipeline

b. Please explain the basis of the unit costs ($/LF) of these pipelines.
Feedwater pipeline between well clusters is estimated at $1,140/LF and
feedwater pipeline under Highway 1 is at $1,000/LF. If these estimates are
based on Cal Ams or RBFs experience in a similar project, please include an
example or an estimate of said project.
COMPANY RESPONSE:
The estimated unit costs for the two situations include different items. The unit cost of
$1,000/ LF under Highway 1 includes the casing and the portals at either end, but does
not include the carrier pipe, which is accounted for in the feedwater pipeline cost line
item above it in the estimate. The unit cost of $1,140/LF for the feedwater pipelines
between the clusters includes the casing and the carrier pipe, but does not include the
portals at either end. These portals are included in the Tunnel Caissons and Slant Test
Well Installation line items.

These unit costs were developed by RBFs in-house tunneling experts in consultation
with tunneling contractors.



DRA QUESTION:
11. Please describe the test well pipeline tunnel included in Figures 4 and 5 in
Attachment 11 of Richard Svindlands MPWSP Supplemental Testimony. In your
response, please also describe the cost impact of this item on the overall capital
cost estimate.
COMPANY RESPONSE:
The test well pipeline tunnel is a 24-inch diameter conduit that will be installed under the
coastal dunes using trenchless technology. This conduit will be equipped with two
interior conduits: 1) a 4-inch diameter electrical conduit and; 2) a 12-inch diameter
recirculation pipe. The electrical conduit will be used to supply power to the test well
pump. The recirculation pipe will be used to convey pumped flow from the test well to a
site east of the dunes where the flow will be measured and sampled. The flow will then
be returned to the test well site for disposal using the annular space in the 24-inch
diameter conduit. The separate cost estimate for the test well pipeline tunnel has not
been developed, but it has been assumed that it will be covered under the $5,000,000
Slant Test Well Installation line item.



DRA QUESTION:
12. Please explain the basis of the unit cost ($/LF) of the tunnel under the dunes
(Beach Access Tunnel). This item is estimated at $2,000/LF. If these estimates
are based on Cal Ams or RBFs experience in a similar project, please include
an example or an estimate of said project.
COMPANY RESPONSE:
This estimate is based on constructing a 72-inch diameter concrete-lined tunnel using a
tunnel-boring machine (TBM). Flow would be conveyed through the tunnel without use
of an interior carrier pipe. The unit costs include the entrance portal at the east end, but
do not include the exit portal at the west end, since this has already been included in the
estimate under Tunnel Caissons. The unit costs were developed by RBFs in-house
tunneling experts in consultation with tunneling contractors.

Exhibit 12



Subject Area: Capital Cost
DRA QUESTION:
1. In regards to the capital cost spreadsheets of the updated 2012 Monterey
Desalination Model (either the 9.0 MGD or 5.4 MGD capital cost spreadsheets)
provided in Data Request DRA-A.12-04-019-CAL AM 016
a. Please elaborate on and list each component of the metering structure and
the outfall connection for the brine connection to outfall (please refer to row
20 of either the Capital 9.0 MGD or Capital 5.4 MGD spreadsheets)?
COMPANY RESPONSE:
California American Water cannot elaborate on and list the components of the metering
structure and the outfall connection since these have yet to be designed. Based on our
experience and that of California American Waters Consultant, we believe the cost
estimate to be reasonable for this type of work.



DRA QUESTION:
b. Please provide a cost component breakdown for the items mentioned in
response to question 1 (a) for the brine connection to outfall.
COMPANY RESPONSE:
As discussed in Answer 1(a), a more detailed cost breakdown is not available as
California American Water has not yet designed the components of the metering
structure and the outfall connection.



Company Number: MPWSP-CAW 020 Q 001(c)
DRA QUESTION:
c. For the one-time charge for outfall connection of $2.5 million (please refer to
row 119 of the Capital 9.0 MGD spreadsheet), was this cost estimate based
on the capacity charge from the outfall agreement between Marina Coast
Water District (MCWD) and the Monterey Regional Water Pollution Control
Agency (MRWPCA)?
COMPANY RESPONSE:
The capital cost estimate for the one-time charge for outfall connection was estimated at
$3,000,000 in the April 6, 2010 Water Purchase Agreement between MCWD, MCWRA
and California American Water. California American Waters Consultant used the ratio
of the desalination plant production for the MPWSP (9,006 AFY) to the desalination
plant production of the Regional Project (10,900 AFY) to prorate the $3,000,000 one-
time connection cost to $2,500,000.



Company Number: MPWSP-CAW 020 Q 001(d)
DRA QUESTION:
d. If the cost of the one-time charge for outfall connection mentioned in question
1(c) was not based on the capacity charge from the outfall agreement
between MCWD and MRWPCA, then how was this cost calculated?

COMPANY RESPONSE:
Please see response to 1(c).



DRA QUESTION:
2. a. What is the current status (and details) of the outfall agreement between
California American Water Company and MRWPCA? Please address the
following topics in your response.
a. Brine disposal study;
b. Brine receiving facility costs (including but not limited to permitting,
operation, maintenance, monitoring, repair, and replacement) associated
with the brine effluent from this project;
c. Schedule for design and construction of the brine facility;
d. Cost estimate of the brine facility;
e. Contingency plan(s) in the event the outfall is considered infeasible for
brine discharge;
f. Final draft of the outfall agreement.
COMPANY RESPONSE:
California American Water objects to this request to the extent that it asks for a
speculative response.

It is California American Waters understanding that the Brine Disposal Study will be
completed by the Commissions staff members who are currently working on the EIR
and that any information required to complete such a study would be requested as
needed.



At this point in time, it is premature to speculate on the brine receiving facility costs as
this will be finalized during the final design stages on the project. As to schedule,
California American Water is working with the MRWPCA to have all facilities built and in
service at the same time that the proposed desalination plant comes on-line. California
American Water is currently working on a contingency plan in case the outfall is found
insufficient for brine discharge. California American Water will submit this Contingency
Plan to the Commission, as requested in the assigned administrative law judges August
29, 2012 ruling.



DRA QUESTION:
2. b. If you are unable to provide information that is responsive to any one of the
topics identified in question 2 (a), please indicate when Cal-Am will be able to
provide such information.
COMPANY RESPONSE:
California American Water will be able to provide additional cost information upon the
execution of an outfall agreement with MRWPCA and upon completion of detailed
design of the Brine Receiving Facility.



Company Number: MPWSP-CAW 020 Q 002 (c)
DRA QUESTION:
2. c. Please provide a copy of the most updated outfall agreement. If a draft of the
outfall agreement does not exist, then when does Cal-Am expect that a draft
outfall agreement will be completed?

COMPANY RESPONSE:
Due to the confidential nature of this request, California American Water will provide
DRA the latest draft version of the outfall agreement separately from these responses.
In accordance with section 583 of the Public Utilities Code and General Order 66-C,
DRA is prohibited from disclosing the latest draft version of the outfall agreement that
California American Water is providing.

Exhibit 13


Subject Area: Facility
DRA QUESTION:
1(a) Elaborate and list the purpose of each component of the brine facility.
COMPANY RESPONSE:
It is important to note that the brine facilities have yet to be designed and that we have
based our cost opinions and project description on what we believe will be necessary to
convey brine waste to the Monterey Regional Water Pollution Control Agencys
(MRWPCA) wastewater treatment plant. Final configuration will be based on what is
determined to be needed upon completion of the environmental permitting process.

The three main components and the preliminary purpose of each are listed below:

1. Brine Storage Pond Estimated at 3 MG, it will be used to store brine waste in
the event that brine cannot be conveyed to the MRWPCAs outfall and to
potentially adjust dissolved oxygen levels. May also be used to store brine so
that it may be sent to the outfall in large batches so as to improve outfall diffuser
port mixing velocities.

2. Brine Pipeline Pipe needed to convey brine to MRWPCAs outfall.

3. Connection to Outfall (aka Brine Receiving Station) Structure needed to
allow for the connection of the pipeline in item 2 to MRWPCAs outfall pipeline.
This structure will likely include a device(s) to meter flows, measure water quality,
and may need to include a cascading aerator or mechanical aerator to increase
dissolved oxygen levels.


DRA QUESTION:
1(b) Who will be responsible for the construction, operation and maintenance of the
brine facility?
COMPANY RESPONSE:
California American Water will construct, operate and maintain items 1 and 2 to the
items listed in response to question 1. The only exception to this is the portion of the
pipeline in item 2 located within MRWPCAs property. This pipeline will be owned,
operated, and maintained by MRWPCA. Until the final design is complete we are
unable to ascertain this amount.

Item 3 will be constructed, operated and maintained by MRWPCA. California American
Water anticipates that it will enter into an agreement with MRWPCA which will spell out
the costs and responsibilities of all parties.



DRA QUESTION:
1(c) What water quality (WQ) standards apply to this facility?
COMPANY RESPONSE:
It is premature to list all the WQ standards as we have yet to complete the
environmental review and permitting process for this facility and for the entire project.
However, we can say that in the FEIR certified by the CPUC in 2009, dissolved oxygen
(DO) was the major WQ item that needed to be mitigated. As such, we envision the
need for at least a DO probe and will likely need multiple WQ probes and to measure
and record other WQ parameters that will be required by the permitting agencies.



DRA QUESTION:
1(d) What precautions are taken in the event the mixed brine/wastewater treatment
plant effluent does not meet the water quality discharge standards listed in question
1(c)?

COMPANY RESPONSE:
The final facilities have yet to be designed, and the engineer of record will be required to
design the facilities to meet the effluent standards imposed by the various regulatory
agencies. The design will be based on proven standards with appropriate reliability and
redundancy. As such, we do not plan on installing a facility that will not meet the
discharge standards that we are required to meet.

It is also important to note, in general most, wastewater effluent WQ parameters are not
monitored or reported on a continuous basis but rather on a weekly or monthly basis.
As such, small deviations in WQ effluent can be handled and treatment adjustments
made to ensure continued compliance.



Company Number: MPWSP-CAW 003 Q 001(e)
DRA QUESTION:
1(e) Provide a proposed cost estimate for the major components of the brine facility.

COMPANY RESPONSE:
These components are listed in the spreadsheet that will be attached to DRAs Date
Request No. 4.



DRA QUESTION:
2. On page 10 of the CEQA Project Description (Attachment B of the application), it
states concerning the amount of effluent available to dilute the brine effluent that
the amount of Regional Treatment Plant (RTP) effluent available for blending
with the brine is expected to be highly variable throughout the year and may be
zero for extended periods during the summer months when all of the RTPs
effluent is reclaimed for agricultural purposes.

(a) How will the brine be diluted or disposed during the periods of time when
there is an insufficient amount of RTP effluent available?

COMPANY RESPONSE:
The FEIR certified by the CPUC in 2009 evaluated the scenario where no wastewater
effluent would be available for dilution of the brine waste. Please refer to that document
for the summary of the finding. However, it is California American Waters
understanding that wastewater effluent is not required to dilute the brine waste and that
due to the existing configuration of the MRWPCAs outfall, sufficient mixing without tidal
influences is available to ensure a proper disposal.



DRA QUESTION:
2. On page 10 of the CEQA Project Description (Attachment B of the application), it
states concerning the amount of effluent available to dilute the brine effluent that
the amount of Regional Treatment Plant (RTP) effluent available for blending
with the brine is expected to be highly variable throughout the year and may be
zero for extended periods during the summer months when all of the RTPs
effluent is reclaimed for agricultural purposes.

(b) Provide a cost estimate to mitigate the situation proposed in question 2(a)?

COMPANY RESPONSE:
We have not allocated a cost estimate to this issue as it has already been covered by
the FEIR.



DRA QUESTION:
3. Assume the construction of the groundwater replenishment system goes as
planned and the desalination plant is downsized to 5.4MGD.

(a) Will there be sufficient RTP effluent to dilute the brine?

COMPANY RESPONSE:
See response to question 2.



DRA QUESTION:
3. Assume the construction of the groundwater replenishment system goes as
planned and the desalination plant is downsized to 5.4MGD.

(b) If there is insufficient effluent available, then what steps would occur to
ensure that the brine is properly diluted?

COMPANY RESPONSE:
See response to question 2.



DRA QUESTION:
4. In the application, the proposed brine pipeline is 3300LF of PVC, HDPE, or
FPVC with a 24 diameter. The estimated cost of the brine pipeline is $900,000.

(a) Why is the size of the pipeline the same regardless of the capacity of the
desalination plant?
COMPANY RESPONSE:
It is important to note that the facilities have not been designed at this point; however,
California American Water has anticipated that with a smaller desal plant, it may need to
send brine waste to the outfall at a batch rate that is consistent with the larger plant to
ensure proper diffusion and mixing as analyzed in the FEIR.

Additionally, we hope to be able to have this line flow by gravity. If that is the case, the
size of the pipe is based on available grade to ensure a minimum self cleaning velocity
and not based on flow.



DRA QUESTION:
FPVC with a 24diameter. The estimated cost of the brine pipeline is $900,000.

(b) What material was considered when the cost was estimated, and how does
the cost compare if one of the other materials was used?
COMPANY RESPONSE:
California American Waters initial estimate is based on the use of HDPE. It is our
judgment that a change in pipe material for this application will not alter our opinion of
the cost.



DRA QUESTION:
FPVC with a 24diameter. The estimated cost of the brine pipeline is $900,000.

(c) Please provide a cost breakdown of the brine pipeline.
COMPANY RESPONSE:
California American Water estimated the cost at $200 per LF, plus a contractor
implementation cost of 30%. We then rounded up this initial amount to arrive at
$900,000.



DRA QUESTION:
5. According to page 10 of the CEQA Project Description, it states that these
combined streams [brine effluent and decanted waste backwash] will flow by
gravity from the RO process through approximately 3,300 LF of 24-inch diameter
pipeline to the headworks of the Monterey Regional Pollution Control Authoritys
(PCA) outfall . . .

(a) Will the effluent in the brine pipeline be completely driven by gravity from the
desalination plant to the PCA outfall?

COMPANY RESPONSE:
This is our hope; however, until we can complete final surveying and design, it is
premature to know the final outcome. Additionally, this feed is just one of many that will
need to be designed and coordinated with the other aspects of the plant.



DRA QUESTION:
5. According to page 10 of the CEQA Project Description, it states that these
combined streams [brine effluent and decanted waste backwash] will flow by
gravity from the RO process through approximately 3,300 LF of 24-inch diameter
pipeline to the headworks of the Monterey Regional Pollution Control Authoritys
(PCA) outfall . . .

(b) If a pump is required, then how much total dynamic head is required?

COMPANY RESPONSE:
It is premature to answer the question since the final facilities have yet to be designed.
However, we should be able to keep the total dynamic head less than 20 feet based on
the assumption that the static lift is around 5 feet.



DRA QUESTION:
6. In the application, it states that the brine storage basin will have a 3 MG capacity
for both the 9.0 MGD and the 5.4 MGD desalination plant.

(a) Explain why the brine storage basin is designed to have a 3 MG capacity
regardless of the desalination plant size?

COMPANY RESPONSE:
The size of the brine storage pond is based on several factors all of which will be
finalized during plant design, but the main reason we choose to keep the brine storage
pond the same size for each desal plant was in case we needed to batch brine waste to
the outfall in larger quantities to ensure proper outfall disposal. We believe having the 3
MG brine storage tank will allow increased operational flexibility for dosing these larger
batch flows.



DRA QUESTION:
6. In the application, it states that the brine storage basin will have a 3 MG capacity
for both the 9.0 MGD and the 5.4 MGD desalination plant.

(b) In your testimony, it states on page 27 that the brine storage basin will be
able to retain excess brine for at least six hours before a plant shutdown.
Does this detention time take into account storing additional brine in order to
discharge a larger volume of brine during another time (i.e. during the
summer months)?
COMPANY RESPONSE:
During the summer months, we may need to batch loads for the smaller desal plant to
produce the same mixing results that were studied in the FEIR. For the larger plant, we
do not believe we will need to batch loads; however, this remains a possibility. The six
hours was based on the larger 9.0 MGD plant without the need to batch loads greater
than 9 11 MGD. Thus, for the smaller plant size there would be detention available to
increase batch loads on top of the six-hour period.



DRA QUESTION:
7. In the event the existing PCA outfall is considered infeasible for any period of
time due to legal or engineering constraints, is there any contingency plan in
place? If so, elaborate on the alternative design(s).

COMPANY RESPONSE:
Not at this time; however, California American Water is in the process of developing an
agreement with MRWPCA to address this issue.



DRA QUESTION:
8. In your testimony, a Technical Memorandum prepared by Trussell Technologies
claims that the current design of the PCA outfall will have sufficient capacity for
over 96% of the time. Due to the results of the memorandum, are there any
plans to retrofit the PCA outfall system? If so, explain what changes will be
implemented.
COMPANY RESPONSE:
No, in our opinion, it is premature at this time to retrofit the outfall since the 96% of the
time estimate includes accommodating 12.7 MGD of brine waste from MCWD which
is not moving forward at this time and because California American Waters proposed
desal plant may become smaller if GWR is successful.

The memo also points out that if a different friction factor is determined to be valid, the
capacity of the outfall will be higher without having to retrofit anything.



DRA QUESTION:
9(a) What criteria (e.g. Salinity, pH) are the limiting factors for the brine effluent?
COMPANY RESPONSE:
It is our understanding that DO is the limiting factor for the brine effluent. Please also
refer to the 2009 FEIR which investigated this topic.



DRA QUESTION:
9(b) What treatment is necessary to mitigate the problem prior to the brine being
discharged to the MRWPCA outfall?

COMPANY RESPONSE:
For DO, California American Water merely increased DO into the flow stream by either
cascade aeration, mechanical aeration, or a combination of the two.



DRA QUESTION:
9(c) Who will be responsible for the treatment and where will it be located?

COMPANY RESPONSE:
This has yet to be determined, but it will likely reside at MRWPCAs plant and would be
part of the Brine Receiving Station as called out in question 1.



DRA QUESTION:
9(d) What was the salinity limit (or guideline) adopted to ensure the brine effluent
does not have a negative effect on the environment?
COMPANY RESPONSE:
This was investigated as part of the 2009 FEIR and is part of the Ocean Plan that is
currently being worked on by the State. It is our understanding that a salinity limit of
less than 10% above ambient conditions is or will be the standard.



Company Number: MPWSP-CAW 003 Q 009(e)
DRA QUESTION:
9(e) Please explain why the guideline identified in question 9(d) was chosen?
COMPANY RESPONSE:
California American Water did not pick the guideline. This is the standard to which the
Company must demonstrate compliance.



DRA QUESTION:
10(a) Please elaborate on the PCA outfall agreement.
COMPANY RESPONSE:
California American Water is actively working on an Outfall Agreement with MRWPCA.



DRA QUESTION:
10(b) Identify what costs (if any) are associated with this agreement.
COMPANY RESPONSE:
The agreement is not yet complete, but California American Water envisions costs
related to ongoing operation and maintenance and potentially a connection or capacity
fee.



DRA QUESTION:
10(c) Describe how the costs mentioned in question 10(b) are calculated.
COMPANY RESPONSE:
It is premature to answer this question as the agreement has yet to be finalized.



DRA QUESTION:
10(d) Where are these costs accounted for in the cost estimate of the desalination
plant?
COMPANY RESPONSE:
Within the construction cost estimate for the Brine Receiving Station California
American Water assumed costs for the connection or capacity fee. Operations and
Maintenance costs for the outfall would fall under the Labor & Miscellaneous cost under
California American Waters O&M costs.

Exhibit 14


Subject Area: Energy efficiency measures for the Desalination plant

DRA QUESTION:
1. Energy efficiency measures for the desalination plant

(a) What energy efficiency measures have been incorporated into the cost
estimates for the proposed desalination plant? Are these energy efficiency
measures a part of the capital costs as well as the assumed energy
consumption used to calculate the O&M costs?
COMPANY RESPONSE:
The desalination plant cost estimates include capital costs for energy recovery systems
which will be installed on the high pressure concentrate stream produced by the 1
st
pass
of the RO process. These energy recovery devices provide a significant amount of the
energy required to pressurize the RO feedwater. The RO system energy consumption
used to calculate O&M costs is the net energy requirement for the RO system after
accounting for the energy recovery system.
The capital cost estimates and O&M cost estimates are based on a conceptual design
approach that uses variable speed forwarding pumps to deliver flow to constant speed
high pressure RO feed pumps. The use of constant speed drivers for the high pressure
pumps reduces capital costs and improves energy efficiency of these pumps by 2 to 4
percent.
The conceptual hydraulic profile of the intake and desalination plant has been
developed with energy efficiency in mind. Specific energy efficient features of the
hydraulic profile include the use of constant speed intake well pumps, a feedwater tank


that feeds water by gravity through the filtration step, and gravity flow of RO permeate
through the post-treatment process to the suction of the clear well pump station.




DRA QUESTION:

(b) What additional energy efficiency measures have been investigated by Cal-
Am? What would be the capital costs of these additional energy efficiency
measures? What would be the expected O&M savings associated with these
measures? If Cal-Am has not already investigated additional energy
efficiency measures, what plans do you have to perform future investigation
into these matters? Please include the specific measures you are intending
to investigate.
COMPANY RESPONSE:
Additional energy efficiency studies will be performed during detailed the design of the
desalination plant. The final selection of the RO membranes will be based in part on
their energy requirements, which varies from manufacturer to manufacturer.

With respect to additional energy efficiency programs applicable to the project,
California American Water anticipates that the amended EIR for this project will include
a mitigation measure, similar to Mitigation Measure 4.8-5c in Coastal Water Project
FEIR (See also response to CAW009 Q002 (a)):

The project sponsor(s) shall develop and implement an
Energy Minimization and Greenhouse Gas Reduction Plan
that documents an approach that would reduce the projects


carbon footprint to below 7,000 metric tons per year. The
plan may include a variety of measures to reduce the
combined carbon footprint of the intake, treatment, and
distribution components of the project, including the
installation of premium energy efficient equipment (i.e., state
of the art energy recovery systems), participation in PG&Es
Climate Smart Program, LEED compliant facilities, roof-top
or locally produced solar power, use of renewable energy
sources, etc. The carbon footprint for all components of the
approved project shall be established and reported each
year using real energy usage data for the previous year and
the most current PG&E power system emission factor for
greenhouse gases (or other emission factor deemed reliable
in the absence of a PG&E emission factor). All emission
reductions that would be associated with the efficiency
measures, etc., shall be substantiated in the plan. The plan
shall be reviewed and approved by the CPUC prior to the
commencement of project operations.




DRA QUESTION:

(c) What other possible energy efficiency measures could be incorporated into
the desalination plant? Would these measures be cost effective?
COMPANY RESPONSE:
Please see response 1(b).




DRA QUESTION:
2. Alternative energy generation onsite: Cal-Am has mentioned the possibility of
making use of landfill gases for on-site methane-to-energy production, and also
the possibility of on-site solar panels.

(a) To what level of detail has an on-site methane-to-energy system been
investigated? To what level of detail has the possibility of on-site solar panels
been investigated? Have any other alternative energy measures been
investigated by Cal-Am?
COMPANY RESPONSE:
The RDP investigated the use of power that would be generated by a methane-to-
energy system located at the neighboring Monterey Regional Waste Management
Landfill. California American Water anticipates that it will be investigating the feasibility
of this alternative as well as on-site solar panels and other alternative energy concepts
in the future and will report the results of those investigations to comply with an
anticipated mitigation measure similar to Mitigation Measure 4.8-5c in Coastal Water
Project FEIR.




DRA QUESTION:

(b) Are any costs associated with alternative energy generation included in the
cost estimate provided in the application? If so, please detail the capital costs
and expected O&M savings. If not, have costs been estimated for these or
other alternative energy measures? If so, please detail the capital costs and
expected O&M savings.
COMPANY RESPONSE:
California American Water has not studied or incorporated any alternative energy
generation facilities in the cost estimate at this time. It is anticipated that alternative
energy generation facilities will be evaluated in the future, and if feasible and approved,
may be implemented as part of the project. Implementation is likely to be in the form of
a purchase power agreement that would not require capital expenditure by the
Company.




DRA QUESTION:

(c) What state or federal credits might be available to Cal-Am for on-site
alternative energy production?
COMPANY RESPONSE:
Please reference responses 2(a) and 2(b). To date, California American Water has not
evaluated the technical or financial feasibility of implementing on-site alternative energy
production at the desalination plant or any of the other facilities in the MPWSP.
Typically with a power purchase agreement (PPA) as the vehicle for implementing an
alternative energy source, any state or federal credits or tax incentives would be
retained by the energy producer and would translate to a lower power cost through the
PPA.




DRA QUESTION:

(d) What other possible alternative energy or on-site energy generation
measures could be feasible for this project? Would these measures be cost
effective?
COMPANY RESPONSE:
Please reference California American Waters responses to questions 2(a)-2(c).
California American Water has yet to evaluate the technical or financial feasibility of
implementing on-site alternative energy production at the desalination plant or any of
the other facilities included in the proposed MPWSP, and can not speculate at this time
if it would be cost-effective.




DRA QUESTION:
3. Desalination Plant RO Membranes:

(a) Page 4 of Appendix 3 of Richards Svindlands testimony indicates the typical
replacement time for RO membranes is 5-10 years. What timeframe for
replacement of RO membranes was assumed in the O&M cost estimates?
COMPANY RESPONSE:
As reported on page 11 of Appendix E (Cost Estimate) to the Application, the O&M cost
estimate includes replacement of approximately 17 percent of the membranes each
year, or an approximate replacement cycle of 6 years. Because the plant will start with
all new membranes, membranes may not be replaced for the first 3 or 4 years, at which
time the annual membrane replacement cycle will start.




DRA QUESTION:
3. Desalination Plant RO Membranes:

(b) Is it expected that the membranes will have proprietary sizing? In what ways
can Cal-Am reduce the likelihood of proprietary sizing leading to high
membrane replacement costs?
COMPANY RESPONSE:
No. The plant will be equipped with standard 8-inch diameter RO vessels, which are
the standard of the industry, and can receive initial and replacement membranes from
all RO membrane manufacturers.




DRA QUESTION:
4. Salinas Valley Water offset: Two possible scenarios have been presented
regarding the return of Salinas Valley Water to offset the small amount of fresh
water in the feedwater from the desalination plants slanted coastal intake wells
(Richard Svindlands testimony, Appendix 3, page 4). One scenario involves
delivering finished water to Salinas Valley users. The other scenario involves
returning finished water to the Salinas Valley Groundwater Basin.

(a) Please provide details regarding these two scenarios and the facilities that
would be needed for each approach. Include the pipelines, pumps, wells, and
tie-ins necessary to accomplish each scenario, and describe where in the
process these facilities would be located.
COMPANY RESPONSE:
Facilities for delivery of desalinated water to Salinas Valley users via the Castroville
Seawater Intrusion Program (CSIP) system have been conceptualized and are
described in the Application. Facilities for returning desalinated water to the Salinas
Valley Groundwater Basin have not been conceptualized or developed, and are not
described in the Application. The Salinas Valley Return System (SVRS) includes the
Salinas Valley Return Pump Station (SVRPS) located at the desalination plant, and the
Salinas Valley Return Pipeline (SVRP) which would convey desalinated water from the
desalination plant to the CSIP storage pond located at the Monterey Regional Water
Pollution Control Plant. The preliminary design criteria for the SVRPS and the SVRP


are shown in Tables 1 and 2 of Appendix H of the Application, and the route of the
SVWRP is shown in several figures in Appendix H and also in the maps in Appendix C.



DRA QUESTION:

(b) Which of these two scenarios was assumed to be required when developing
the cost estimates for this project?
COMPANY RESPONSE:
The capital and O&M cost estimates include the Salinas Valley Return System (SVRS)
described in response 4(a).




DRA QUESTION:

(c) If not already included in spreadsheets to be provided in pending data
requests, please provide a detailed breakdown of the costs of each of these
two offset scenarios, preferably in the form of electronic spreadsheets.
COMPANY RESPONSE:
The capital and O&M costs for the SVRS are embedded in electronic spreadsheets that
California American Water provided in California American Waters responses to
questions 4 and 5 of Set 4 of DRAs data requests. Cost estimates have not been
prepared for facilities that would return desalinated water to the Salinas Valley
Groundwater Basin.



Company Number: MPWSP-CAW 009 Q 005(a)-(b)

DRA QUESTION:
5. Desalinated water to clear wells: Appendix H, page 13 of the application states
following post-treatment, desalinated water would flow by gravity to the on-site
storage tanks, called clearwells. On this same page, the application states a
clearwell pump station, located in the desalination building, will deliver flow from
the post-treatment process to the clearwells.

(a) These statements appear to be contradictory. Will the desalinated water flow
by gravity to the clearwells, or will the water be pumped to the clearwells?

(b) If the water will flow by gravity, what is the function of the clearwell pump
station included in the costs estimates.

COMPANY RESPONSE:
The first quoted statement is an error. Water will be pumped to the clearwells. The
clearwell pump station would receive gravity flow of desalinated water from the post-
treatment process and pump it to the on-site clearwells.

Exhibit 15


DRA QUESTION:
1. In regards to the O&M cost spreadsheet sent in response to Data Request DRA-
A.12.04.019-CAL AM 004 question 5, please explain why the flow rate is
multiplied by two when the flow rate is converted from acre-feet per year to
million gallons per day (for example, see cell G55). The O&M cost spreadsheets
of the 2012 Monterey Desalination Model provided in Data Request DRA-A.12-
04-019-CAL AM 005 also provides a simplified version of the same calculation by
multiplying the flow rate by 1/560 (for example, see cell E58).
COMPANY RESPONSE:
The conversion from acre-feet per year to million gallons per day is 1/1120 as illustrated
below:

_
1 Acrc t
ycor
] _
4S,S6u s
Acrc
] _
7.48 gollons
c
] _
ycor
S6S Joys
] _
H0
1,uuu,uuu gollons
] =
1
112u

Thus, to convert 10,100 AFY to MGD is (10,100) * (1/1120) = 9.0 MGD. The reason
some cells are multiplied by two (i.e., G55) is to convert the six-month flow volume to a
one-year flow volume.

Likewise dividing a six-month flow volume by 560 yields MGD.

Exhibit 16
Table 1
COASTAL WATER PROJECT
CAPITAL COST ESTIMATE (2009 DOLLARS)
Description Cost Description Cost
Off-Site Seawater Feed and Brine Disposal
Moss Landing Project (MLP)
Diversion at Disengaging Basin 1 LS Dual 30-inch Vac. Act. Siphons $500,000
Source Water Pipeline 7,000 LF 54 inch diam. HDPE $1,300,000
Return Flow Pipeline 7,000 LF 24-36 inch diam. HDPE $1,000,000
North Marina Project (NMP)
Test Well Installation 1 EA 700 LF 12-inch Slant Well $2,300,000
Production Well Installation 5 EA 700 LF 12-inch Slant Wells $9,100,000
Well Equipping 6 EA 2500 gpm, 250 hp $1,900,000
Well Electrical and I&C $500,000
Source Water Pipeline 16,000 LF 36 inch diam. HDPE $3,400,000
Source Water Pipeline Special Construction 1,400 LF Length included in line item above $2,500,000
Return Flow Pipeline 2,000 LF 24-36 inch Diam. HDPE $300,000
Subtotal Feedwater and Brine Disposal $2,800,000 $20,000,000
Desalination Plant
Plant Inlet Facilities
Equalization Basin 5.0 MG Hypalon/Gunnite-Lined Basin $570,000
Plant Inlet Pump Station 200 hp 4 x 50 hp pumps $390,000
Plant Inlet Vert Travelling Screens 2 ea Vertical Traveling Screens $200,000
Pretreatment
Chemical Storage and Feed Equipment 10 mgd FeCl3, Calcite, CO2, Cl2, NaHSO3 $600,000 11 mgd Calcite, CO2, NaOCl, NaHSO3 $600,000
Automatic Cleaning Fine Screens 4 EA $600,000 4 EA $600,000
Granular Media Pressure Filters $0 22 mgd See text $7,800,000
Initial Mix and Flocculation Equipment $450,000 None $0
Membrane Filter Feed Pump Station 300 hp 4 x 75 hp, 300kgal sump $960,000 None $0
Membrane Filter Equipment 22 mgd 12 Pressure UF Units $15,300,000 None $0
Structures, Building, and Misc Piping & Equipment 1 LS
300kgal Floc/9000 sf Membrane
Building/6000 sf Chem building $2,400,000
10,500 sf Filter building/
6000 sf Chem building $2,200,000
Reverse Osmosis
Process Equipment, Including CIP and Chemical 10 mgd Single Pass 6 arrays x 2 mgd $24,000,000 11 mgd Single Pass 6 arrays x 2.2 mgd $26,400,000
Structures, Building, and Misc Piping & Equipment 19,000 Sq.Ft Incl. 500kgal UF Filtrate Storage $3,400,000 19,000 Sq.Ft Incl. 500kgal GMF Filtrate Storage $3,400,000
Carbon Dioxide Treatment
Process Equipment Included in Pretreatment Included in Pretreatment
Structures, Building, and Misc Piping & Equipment Included in Pretreatment Included in Pretreatment
Calcite Contactors
Process Equipment Included in Pretreatment
Structures, Building, and Misc Piping & Equipment 15,000 cu ft Covered Contactors $400,000 15,000 cu ft Covered Contactors $400,000
Chlorination
Process Equipment Gas Chlor. Incl. w/pretreatment NaOCl feed incl w/pretreatment
Structures, Building, and Misc Piping & Equipment Included in Pretreatment Included in Pretreatment
Residuals Handling & Treatment
Wash Water Treatment / Recovery 60,000 Gal Equipment/Structure $200,000 60,000 Gal Equipment/Structure $200,000
Treated Wash Water Pump Station 2 mgd 2 x 10 hp, no building $50,000 2 mgd 2 x 10 hp, no building $50,000
Solids Dewatering Equipment 10,000 ppd (1) 0.5 meter Filter Belt Press $300,000 1,000 ppd (1) Gravity Belt Thickener $120,000
Solids Dewatering Building 1,600 sq ft Canopy $100,000 1,600 sq ft Canopy $100,000
Dried Solids Storage 5,000 SF Asphalt Pad $30,000 5,000 SF Asphalt Pad $30,000
RO CIP Effluent Treatment 20,000 Gal Storage Sump $80,000 20,000 Gal Storage Sump $80,000
Clearwell and Pump Stations
Clearwell Pump Station 10 mgd 3 x 40 hp, 200kgal wet well $500,000 Not Required
Clearwell Reservoirs 3 MG 2 x 1.5 MG, 90 ft diam., 32 ft swd $4,500,000 3 MG Same as MLP, but partially buried $5,200,000
Desalinated Water Pump Station 10 mgd 4 x 300 hp vs, 2200 sf, surge tanks $2,600,000 10 mgd 4 x 250 hp vs.,2200 sf, surge tanks $2,500,000
CSIP Delivery Pump Station Not Required 2 mgd 3 x 10 hp, 200kgal sump, no bldng $400,000
Admin/O&M/Lab Building 15,000 Sq Ft $3,000,000 15,000 Sq Ft $3,000,000
Site Work and Yard Piping 1,000,000 Sq Ft $5,100,000 500,000 Sq Ft $2,500,000
Transmission Power to Primary Power Substation 230KV to 12KV substn $1,000,000 $0
Electrical, Instrumentation and Control Systems 25 % $16,400,000 25 % $13,900,000
Subtotal Desalination Plant $83,100,000 $69,500,000
Mobilization/Demobilization 1 % $800,000 1 % $700,000
Engineering/Startup 15 % $12,500,000 15 % $10,400,000
Subtotal Desalination Facilities $96,400,000 $80,600,000
CONSTRUCTION COSTS
North Marina Project
Size/Quantity
Moss Landing Project
Size/Quantity
Page 1 of 2
8/21/2012
Table 1
COASTAL WATER PROJECT
CAPITAL COST ESTIMATE (2009 DOLLARS)
North Marina Project Moss Landing Project
Desalinated Water Conveyance
Pipelines:
North of Reservation Road
Delivery to CSIP Storage Lagoon Not Required $0 6,000 LF 12 to 16-inch PVC $500,000
Trenched Pipelines 47,700 LF 36 in. ML/CSP 250 psi $17,400,000 13,000 LF 36 in. ML/CSP 250 psi $4,900,000
Special Construction 1,800 LF Length included in line item above $4,200,000 None $0
From Reservation Road to Seaside/Monterey Pipeline
Special Construction 30,300 LF 36 in. ML/CSP 250 psi $11,100,000 30,300 LF 36 in. ML/CSP 250 psi $11,100,000
Trenchless Pipelines 0 LF $0 0 LF $0
Seaside Pipeline (to Terminal Reservoir)
Special Construction 1,000 LF Length included in line item above $1,900,000 1,000 LF Length included in line item above $1,900,000
Monterey Pipeline
Special Construction 750 LF Length included in line item above $1,700,000 750 LF Length included in line item above $1,700,000
Valley Greens Pump Station 3 mgd 4 x 25 hp, 800 sf $300,000 3 mgd 4 x 25 hp, 800 sf $300,000
Subtotal Desalinated Water Conveyance System $54,500,000 $38,300,000
Terminal Reservoir and ASR Pump Station
Reservoir Structures 6 MG 2 x 3 MG,130 ft., DYK $10,500,000 6 MG 2 x 3 MG,130 ft., DYK $10,500,000
ASR Pump Station 9 mgd 4 x 50 hp vs, 1200 sf bldg $1,500,000 9 mgd 4 x 50 hp vs, 1200 sf bldg $1,500,000
Earthwork, Sitework, Yard Piping 1 LS 100kcuyds, 60ksf, 4000 LF $2,600,000 1 LS 100kcuyds, 60ksf, 4000 LF $2,600,000
Subtotal Terminal Reservoir and ASR Pump Station $14,600,000 $14,600,000
ASR System
Seaside ASR Wells
Monitoring Well 1 LS 1050 ft Depth, 5 inch diameter $200,000 1 LS 1050 ft Depth, 5 inch diameter $200,000
Test Well Site No. 3, Including Core Hole 1 LS 1050 ft Depth, 2.1/4.3 mgd (inj/ext) $2,200,000 1 LS 1050 ft Depth, 2.1/4.3 mgd (inj/ext) $2,200,000
Test Well Site No. 4 1 LS 1050 ft Depth, 2.1/4.3 mgd (inj/ext) $2,000,000 1 LS 1050 ft Depth, 2.1/4.3 mgd (inj/ext) $2,000,000
ASR No 3 Well Head Facilities Inc E/I/C $1,100,000 $1,100,000
ASR No 4 Well Head Facilities Inc E/I/C $1,100,000 $1,100,000
Subtotal Seaside ASR Wells $6,600,000 $6,600,000
ASR Pipelines and Backflush Facilities
ASR Pipeline 5,000 LF 30-inch Diam MLCSP $1,900,000 5,000 LF 30-inch Diam MLCSP $1,900,000
Recirculation Pipeline 5,000 LF 12-inch Diam PVC $800,000 5,000 LF 12-inch Diam PVC $800,000
Backflush Piping (To Off-site Basin) 3,000 LF 20-inch Diam PVC $600,000 3,000 LF 20-inch Diam PVC $600,000
Backflush Reclamation Basin 0.4 MG Uncovered settling basin w pump $100,000 0.4 MG Uncovered settling basin w/ pump $100,000
Subtotal ASR Pipelines and Backflush Facilities $3,400,000 $3,400,000
Subtotal ASR System $10,000,000 $10,000,000
BASE CONSTRUCTION COSTS $178,300,000 $163,500,000
IMPLEMENTATION COSTS FOR D/B FACILITIES (Note1) $14,500,000 $16,100,000
IMPLEMENTATION COSTS FOR DB/B FACILITIES (Note 2) $24,600,000 $25,900,000
Desalination Plant Intakes 1 EA. Easement $200,000 1 EA Easement $600,000
Desalination Plant 1,100,000 SF Purchase $1,700,000 440,000 SF Purchase $400,000
Private Property Easements for Desalinated Water Pipelines 21,000 LF Easement $300,000 0 LF Easement $0
Pipelines in TAMC ROW (to Monterey Bike Path) 59,000 LF Easement $2,500,000 33,000 SF Easement $1,400,000
Terminal Reservoir 80,000 SF Purchase $1,000,000 80,000 SF Purchase $1,000,000
ASR Well Sites 2 EA. Lease $800,000 2 EA Lease $800,000
Pipelines in Bike Path 11,000 LF Easement $500,000 11,000 LF Easement $500,000
Pipelines through Presidio 3,000 LF Easement $50,000 3,000 LF Easement $50,000
Valley Greens Pump Station 9,000 SF Purchase $180,000 9,000 SF Purchase $180,000
SUBTOTAL ROW/EASEMENT/LAND COSTS $7,200,000 $4,900,000
MOST PROBABLE CAPITAL COSTS WITHOUT CONTINGENCY $225,000,000 $210,000,000
PROJECT CONTINGENCY ALLOWANCE $45,000,000 $42,000,000
MOST PROBABLE CAPITAL COSTS WITH CONTINGENCY $270,000,000 $250,000,000
HIGH END OF ACCURACY RANGE 25% $340,000,000 25% $310,000,000
LOW END OF ACCURACY RANGE -15% $230,000,000 -15% $210,000,000
Note 1: Implementation costs include program management, preliminary design, environmental documentation, legal, property acquisition services. Excludes engineering services provided by the builder.
Note 2: Implementation costs include program management, preliminary and detailed design, environmental documentation, legal, property acquisition services, engineering services during construction, and construction management/inspection
Page 2 of 2
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Exhibit 1

California-American Water Company

Appendix B: List of Attendees

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