Tag Archive for: Water Supply

Desalination plant-credit ratings-water supply

Credit Agencies Affirm Water Authority’s Strong Ratings Despite Headwinds

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All three major rating agencies – S&P, Moody’s, and Fitch – have affirmed the San Diego County Water Authority’s strong credit ratings, which will help the Water Authority optimize its debt portfolio and minimize the cost of financing important water reliability projects.

The reports cited the Water Authority’s strategic management, its conservative approach to water sales projections, and the benefits of the Water Authority’s rate case litigation that recently resulted in $44.4 million being refunded to local retail water agencies – among many other factors.

Significant challenges

However, rating agencies also noted significant challenges ahead, including efforts by Fallbrook Public Utility District and the Rainbow Municipal Water District to “detach” from the Water Authority – a move that could negatively impact ratepayers across San Diego County. If the two North County agencies leave per their plans, Water Authority analysis shows that the other 22 member agencies will have to pay $16 million to $46 million more per year to cover the cost of the departing agencies.

Moody’s said detachment could lead to a credit downgrade, which would increase borrowing costs for critical water reliability projects. S&P Global called detachment uncertainty “an additional credit stressor” – “especially if an approved detachment sets a precedent if members can easily detach from the authority.” S&P added that, “this would be further exacerbated if the two members are not required to pay for their portion of the associated debt and infrastructure costs that the authority has undertaken to provide reliable water sources.”

Solid financial position

Water Authority General Manager Sandra L. Kerl said, “The Water Authority maintains a solid financial position even in these difficult times, and the credit ratings reflect that. But the challenges are real as well, and they should unify the region to ensure that we continue to benefit from the safe, reliable water supplies we’ve invested in together for the past 30 years.”

In affirming their credit ratings, the services cited the Water Authority’s strong financial leadership, including prudent strategies to manage issues related to COVID-19, its success diversifying water supply sources, its commitment to infrastructure maintenance, and its financial reserves for managing contingencies, among other factors.

  • Fitch Ratings affirmed its AA+ rating and gave a stable outlook on March 15. Fitch noted the Water Authority’s “operating costs are low”  and credited the Water Authority for “significant investments in supply diversification (that) have allowed SDCWA to continue to meet water demands in its service area.” Fitch also accounted for the Water Authority’s current hiring freeze, spending cuts and deferral of $30 million in planned capital spending to proactively manage finances during the pandemic.
  • Moody’s Investors Service affirmed its Aa2 rating and stable outlook March 14. Moody’s said, “the stable outlook reflects our expectation that the Authority’s satisfactory operating performance will continue, supported by strong management practices in the face of challenges associated with variable water supplies, rising costs, and the coronavirus pandemic.” Moody’s added: “Liquidity, including a rate stabilization fund, remains sound serving to insulate the Authority from risks associated with variable water supplies, including California’s (Aa2 stable) current drought conditions, as well as unanticipated events such as the coronavirus pandemic.”
  • S&P affirmed its AAA rating on March 17 and issued a negative outlook based on “heightened business risks associated with potential projected declines in water sales.” On the plus side, S&P cited the Water Authority’s demonstrated ability to navigate highly variable demands and weather cycles. The agency also said, “management is taking important steps” to balance fixed and variable costs, and it praised the Water Authority’s “robust infrastructure maintenance and operational policies.”

Risks include detachment

All three agencies addressed risks, such as additional local supplies that reduce Water Authority sales and member agency detachment. As proposed by Fallbrook and Rainbow, the detachments would allow those agencies to avoid paying for water supplies and infrastructure that have been developed in collaboration with those agencies and are currently being used by those agencies to meet their customers’ needs. Abandoning those cost obligations would force other ratepayers countywide to cover their portion of the bills already incurred for decades of investments in supply reliability.

In May 2020, the Water Authority’s Board of Directors voted to oppose detachment unless four conditions can be met related to protecting Fallbrook and Rainbow ratepayers, avoiding negative impacts for other member agencies, protecting the Sacramento-San Joaquin Bay-Delta, and maintaining the Water Authority’s voting rights at MWD.

The issue is under review by the San Diego Local Agency Formation Commission, known as LAFCO. The LAFCO process, which is designed to provide for an impartial analysis of these issues, will allow the Water Authority and all other affected parties to determine if these conditions are satisfied. If not, the Water Authority will oppose detachment.

For more information about the Water Authority’s finances go to: www.sdcwa.org/finance-investor-relations. Information about detachment is at https://www.sdcwa.org/member-agencies/lafco-reorganization/.

Public Input Requested for San Diego Water Plan

/in , , /by /The Coast News Group

San Diego is seeking input from the public on a new water plan introduced by Mayor Todd Gloria. Under the 2020 Urban Water Management Plan, the city would develop more than half of the city’s water locally by 2045.

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Opinion: As Drought Alarms Sound, is California Prepared?

/in , , /by /CalMattersby Jeffrey Mount and Caitrin Chappelle

We’re facing another very dry year, which follows one of the driest on record for Northern California and one of the hottest on record statewide.

The 2012-16 drought caused unprecedented stress to California’s ecosystems and pushed many native species to the brink of extinction, disrupting water management throughout the state.  Are we ready to manage our freshwater ecosystems through another drought?

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Water World: After Nearly 40 years, Peter MacLaggan Leaves a Liquid Legacy

/in , , /by /The San Diego Union-Tribuneby Phil Diehl Mentioned: San Diego County Water Authority

Every time someone turns on the tap in San Diego County, out flows the work of Peter MacLaggan.

MacLaggan was the point man in the construction of the Carlsbad desalination plant, a nearly $1 billion public-private partnership that since 2015 has supplied nearly 10 percent of the potable water consumed in the county.

Desalination relies on the virtually unlimited supply of water in the Pacific Ocean. It provides a safe, reliable source of local water in a region that for many years relied on supplies from hundreds of miles away and was subject to mechanical breakdowns, seasonal shortages and the whims of nature.

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Water Authority Plan Shows Sufficient Supplies Until 2045

/in , , /by /The Daily Transcriptby Thor Kamban Biberman Quoted: San Diego County Water Authority

Since 1991, San Diego County ratepayers have conserved more than 1 million acre-feet of water, and per capita potable water use in the region decreased nearly 60 percent between fiscal years 1990 and 2019, according to the San Diego County Water Authority.

The findings are part of the Water Authority’s draft 2020 Urban Water Management Plan, which was released Monday for public review.

The report concludes that as a result of conservation and billions of dollars in infrastructure, San Diego should have sufficient water supplies through 2045.

“Thanks to decades of regional investments (and conservation) the draft plan shows that we don’t need to secure more regional supply sources for the foreseeable future,” Water Authority general manager Sandra Kerl said in a statement. “Instead we are focused on helping our member agencies develop local supplies, and looking for other ways we can continue to ensure supply reliability at a reasonable cost.”

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California’s New Drought

/in , , /by /California WaterBlog (UC Davis Water Sciences)by Jay Lund, Andrew L. Rypel, and Josue Medellin-Azuara

As March begins to drag on with little precipitation in the forecast and few weeks left in California’s traditional wet season, we are in another dry year. This is California’s second dry year in a row since the 2012-2016 drought.  Statistically, California has the most drought and flood years per average year than anywhere in the US.  This statistical fact seems to becoming increasingly extreme, as predicted by many climate change models.

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Klamath Basin Faces Drought, Again

/in , , /by /Jefferson Public Radioby April Ehrlich

Forecasts based on U.S. Geological Survey data predict that the Klamath Basin will only fulfill about a third of what’s needed for agriculture. The Upper Klamath Lake is more than a foot lower than it was this time last year, which was also a drought year.

The Klamath County commissioners voted Tuesday to issue a county-level drought declaration. The board voted to request that Gov. Kate Brown’s office issue a state-level drought declaration, which would open up financial resources for water users.

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Opinion: The Time has Come for California to Ban Front Yard Lawns for New Homes

/in , , /by /Manteca Bulletinby Dennis Wyatt

The climate change cabal in Sacramento is ignoring some extremely low hanging fruit in their bid to protect us from ourselves.

The reason they don’t see it is simple. It doesn’t involve raising taxes, rewarding corporations or disruptor greenies they align with, nor does it destroy jobs.

The California Legislature needs to ban grass lawns for front yards as well as general commercial development for all new building projects.

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Opinion: Racial Justice Requires Equitable Access to Reliable Drinking Water

/in , /by /The Orange County Register by Jose Barrera

Vice President Kamala Harris was right on point last year when she said that clean water is a fundamental human right. President Biden has put those words into action by signing an executive order establishing a White House council on environmental justice.

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Urban Water Management Plan-San Diego County Water Authority

Water Authority Plan Shows Sufficient Supplies Through 2045

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The San Diego County Water Authority’s draft 2020 Urban Water Management Plan was released for public review today. The plan highlights how regional investments in a “water portfolio approach” to supply management and a sustained emphasis on water-use efficiency mean that San Diego County will continue to have sufficient water supplies through the 2045 planning horizon — even during multiple dry years.

A 60-day public comment period on the draft plan ends May 6 and will include a public hearing on March 25. The Board of Directors is expected to consider adoption of the final plan during its regular meeting on May 27. The 2020 UWMP is due to the state by July 1, 2021. To read the draft 2020 Urban Water Management Plan, or to submit comments, go to http://bit.ly/Water-Authority-UWMP.

Regional investments pay off for water supply

“Thanks to decades of regional investments, the draft plan shows that we don’t need to secure more regional supply sources for the foreseeable future,” said Water Authority General Manager Sandra L. Kerl. “Instead, we are focused on helping our member agencies develop local supplies and looking for other ways we can continue to ensure supply reliability at a reasonable cost.”

The Water Authority started the current UWMP process in September 2018, coordinating closely with its 24 member agencies, most of which must submit their own plans to the state. Member agencies provided input into the draft plan as part of the Water Authority’s ongoing effort to align local and regional projections as closely as possible. The plan’s long-range demand forecast shows an increase in regional demands of less than 1% per year through 2045. This change in demand is consistent with the change forecasted by other large water suppliers, including the City of San Diego and the Metropolitan Water District of Southern California.

Plan is mandated by state law

Multiple supply and demand projections factor into Urban Water Management Plans, which are mandated by the state to ensure sufficient supplies over 25 years. The plans are not used to set water rates; rates are set annually based on multiple financial factors at the time, not long-term projections about water supplies.

Urban Water Management Plans are dictated by statutory guidelines, Water Authority Board direction and an agreement with the San Diego Association of Governments to use its regional growth forecast. The plans also support state laws that link approval for large housing developments to water supply availability.

By law, the plans must be updated every five years. Per state guidelines, the Water Authority’s Urban Water Management Plan includes:

  • Projected water demands under normal weather and dry weather scenarios
  • Conservation savings information
  • A process to conduct an annual water supply and demand assessment
  • Supply reliability analysis

The demand forecast accounts for changes in socio-economic factors, such as the number of projected housing units, the mix of single-family and multi-family dwellings, and employment growth.

Conservation by water ratepayers in San Diego County

Conservation projections account for continued adoption of water-use efficiency measures, compliance with landscape water-use ordinances for new residential construction, and continued installations of sustainable landscapes at existing homes. Since 1991, San Diego County ratepayers have conserved more than 1 million acre-feet of water, and per capita potable water use in the region decreased nearly 60% between fiscal years 1990 and 2019.

Urban Water Management Plan-Water Authority-Desalination Plant

The draft 2020 Urban Water Management Plan shows how regional investments by the San Diego County Water Authority in a “water portfolio approach” mean that San Diego County will continue to have sufficient supplies, including locally-controlled drinking water from the Claude “Bud” Lewis Carlsbad Desalination Plant, the largest, most technologically-advanced and energy efficient desalination plant in the nation. Photo: San Diego County Water Authority

The draft 2020 UWMP also highlights the value of the Water Authority’s long-term strategy to invest in highly reliable and locally controlled supplies from the Claude “Bud” Lewis Carlsbad Desalination Plant and the nation’s largest conservation-and-transfer agreement, which provides high-priority, low-cost water from the Colorado River.

In addition to the UWMP, the Water Authority also regularly updates its Regional Water Facilities Optimization and Master Plan, which focuses on the infrastructure necessary to meet projected long-term demands, and its Long-Range Financing Plan. Those documents work together to ensure the right mix of supplies and facilities to meet the region’s needs at an affordable cost.

Urban Water Management Plan-Water Authority-Primary photo-Colorado River Aqueduct

The draft 2020 Urban Water Management Plan highlights the value of the Water Authority’s long-term strategy to invest in highly reliable supplies, including the nation’s largest conservation-and-transfer agreement, which provides high-priority, low-cost water from the Colorado River. Photo: San Diego County Water Authority