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05-23-17 Desal Committee Packet
OTAY WATER DISTRICT DESALINATION PROJECT COMMITTEE MEETING and SPECIAL MEETING OF THE BOARD OF DIRECTORS 2554 SWEETWATER SPRINGS BOULEVARD SPRING VALLEY, CALIFORNIA Boardroom TUESDAY May 23, 2017 1:00 P.M. This is a District Committee meeting. This meeting is being posted as a special meeting in order to comply with the Brown Act (Government Code Section §54954.2) in the event that a quorum of the Board is present. Items will be deliberated, however, no formal board actions will be taken at this meeting. The committee makes recommendations to the full board for its consideration and formal action. AGENDA 1. ROLL CALL 2. PUBLIC PARTICIPATION – OPPORTUNITY FOR MEMBERS OF THE PUBLIC TO SPEAK TO THE BOARD ON ANY SUBJECT MATTER WITHIN THE BOARD'S JU- RISDICTION BUT NOT AN ITEM ON TODAY'S AGENDA DISCUSSION ITEMS 3. INFORMATIONAL UPDATE FOR THE ROSARITO DESALINATION PLANT AND THE OTAY MESA CONVEYANCE AND DISINFECTION SYSTEM PROJECTS (KENNEDY) 4. APPROVE THE ADDENDUM TO THE FINAL ENVIRONMENTAL IMPACT REPORT FOR THE OTAY MESA CONVEYANCE AND DISINFECTION SYSTEM PROJECT (COBURN-BOYD) 5. PRESENTATION OF ROSARITO DESALINATION PROJECT FINANCIAL MODEL USED TO DICUSS ASSUMPTIONS AND POTENTIAL COSTS OF THE PROJECT (BELL) 6. ADJOURNMENT BOARD MEMBERS ATTENDING: Mark Robak, Chair Tim Smith 2 All items appearing on this agenda, whether or not expressly listed for action, may be delib- erated and may be subject to action by the Board. The Agenda, and any attachments containing written information, are available at the Dis- trict’s website at www.otaywater.gov. Written changes to any items to be considered at the open meeting, or to any attachments, will be posted on the District’s website. Copies of the Agenda and all attachments are also available through the District Secretary by contacting her at (619) 670-2280. If you have any disability that would require accommodation in order to enable you to partici- pate in this meeting, please call the District Secretary at 670-2280 at least 24 hours prior to the meeting. Certification of Posting I certify that on May 19, 2017 I posted a copy of the foregoing agenda near the regular meeting place of the Board of Directors of Otay Water District, said time being at least 24 hours in advance of the meeting of the Board of Directors (Government Code Section §54954.2). Executed at Spring Valley, California on May 19, 2017. ______/s/_ Susan Cruz, District Secretary _____ STAFF REPORT TYPE MEETING: Desalination Committee MEETING DATE: May 23, 2017 SUBMITTED BY: Bob Kennedy Engineering Manager CIP./G.F. NO: P2451- 001101 DIV. NO. ALL APPROVED BY: Rod Posada, Chief, Engineering German Alvarez, Assistant General Manager Mark Watton, General Manager SUBJECT: Informational Update for the Rosarito Desalination Plant and the Otay Mesa Conveyance and Disinfection System Projects GENERAL MANAGER’S RECOMMENDATION: No recommendation. This is an informational item only. COMMITTEE ACTION: Please see Attachment A. PURPOSE: To update the Otay Water District (District) Desalination Committee (Committee) on the progress of the Rosarito Desalination Plant and the Otay Mesa Conveyance and Disinfection System Projects (Project)(see Exhibit A for Project location). ANALYSIS: This item was last presented to the Committee as an update at a meeting held on January 19, 2017. The updates or significant milestones that have been reached since the last update to the Committee include: Project Direction Aguas de Rosarito (AdR), a private consortium signed a 40-year definitive public-private partnership agreement with the Baja 2 California government on August 25, 2016 to build the plant and operate it for 37 years. Under the current schedule, operations would start in late 2019 or early 2020 under an initial phase that would produce 50 million gallons a day. The companies that make up AdR are NuWater of Singapore, Suez Environment of France, and a Mexican company called N.S.C. Agua (NSCA) that is a subsidiary of Cayman-Islands based Consolidated Water (CWCO). The next step is expected to take until summer of 2017 for AdR to secure financing of the Project and the State of Baja California to put the guarantee trusts in place. Once the financial close phase is achieved, the design work begins. Staff recently discussed the schedule for this Project with the Department of Homeland Security U.S. Customs and Border Patrol. They wanted assurance that District facilities would be below ground between the fences and the above ground facilities would be located outside of the second fence line. Rosarito Desalination Project in the News The end of the drought and desalination projects are subjects in the national, state, and local news as well as in Mexico in the State of Baja California. Projects that provide a new supply of water have been mentioned on both sides of the border including the Rosarito Beach Desalination Project. On January 9, 2017, the Water Desalination Report article entitled, “Mexico” about CWCO selection of Suez as its EPC partner and technology provider for the Project. The report also noted the financial close was expected to take place in the second quarter of 2017 (see Exhibit B). On January 23, 2017, the Water Desalination Report article entitled, “Mexico State Moves to Guarantee Mega-SWRO” on the state of Baja California, Mexico announcement that the legislature has taken the initiative to ensure its payment obligations for the proposed Project (see Exhibit C). The article notes the contract is to be executed in two phases, with 50 percent of the production capacity to be delivering water in late 2019 or 2020, and the second phase by 2024. On January 30, 2017, the Water Desalination Report article entitled, “Mexico Water Law Rolled Back” on repeal of the Baja water law and how it might affect two seawater desalination projects in Mexico including the Rosarito Desalination Project (see Exhibit D). 3 On February 9, 2017, NBC San Diego published an article entitled, “Otay Water District’s Ambitious Plan to Bring in Desalinated Water from Mexico” about the Project and noted two San Diego environmental groups have expressed concern about the pipeline Project (see Exhibit E). On February 27, 2017 the San Diego Union Tribune published an article entitled, “Tijuana's huge sewage spill has U.S. officials crying foul” on Tijuana’s sewage spill that polluted beaches in San Diego. “This was like a tsunami,” said Imperial Beach Mayor Serge Dedina, who said he tried to get answers from officials on both sides of the border for more than a week with no response (see Exhibit F). On March 2, 2017, David W. Gibson, Executive Officer of the San Diego Regional Water Quality Control Board, Region 9 (Water Board) sent a letter to the Border Environment Cooperation Commission and North American Development Bank about the “Water Board’s deep concern regarding the state of sewage collection and treatment in Tijuana, and the discharges of sewage into waters shared by Mexico and the United States.” He requested “placing this extremely important need ahead of plans for the proposed NCS Agua/Comisión Estatal de Servicios Públicos de Tijuana (CESPT) desalination facility in Rosarito until such time as the reliability and performance of sewage collection, treatment and discharge systems in Tijuana and San Antonio de los Buenos treatment facility are functionally equivalent to the standards routinely achieved and maintained in comparably sized districts and municipalities in the San Diego region” (see Exhibit G). On March 16, 2017, the Voice of San Diego published an article entitled, “Top SD Water Official Wants Tijuana to Prioritize Sewer Water Over Desal Water” which quotes David Gibson “the new plant could siphon money from the already strained Tijuana sewer system.” Gibson said, “He doesn’t oppose drinking water supply projects, but the outcome of the desalination plant should not be neglect of the sewer system” (see Exhibit H). On March 20, 2017, the Water Desalination Report article entitled, “Mexico Politics, Exchange rates Impact SWRO Costs” about CWCO’s Securities and Exchange Commission 10-K filing, that said that unless it can increase its proposed water tariff for its Rosarito project, it may be unable to finance the cost of the 100 MGD (378,500 m3/d), $463 million SWRO project. The 4 article details the impact the Peso/Dollar exchange rate has had on the cost of the project (see Exhibit I). Contract with AECOM AECOM continues to work only on the environmental tasks. On November 4, 2015, the Board approved Amendment No. 4 of the contract with AECOM to increase the Project management budget by $22,425, resulting in a higher contract amount with AECOM of an amount not-to-exceed $3,800,863. At the time, the Project management component of their contract was expected to carry them through to April/May of last year before an adjustment would be needed. No budget adjustment is needed at this time and staff anticipates the Project management budget should be sufficient, as AECOM’s services to the District are minimal. Staff expects to terminate its contract with AECOM after the Presidential Permit is obtained. Total Expenditures Although $6,479,092 has been committed as of May 1, 2017, $4,085,120 has been actually spent. Staff has stopped all activities concerning this Project, except the completion of the EIR/EIS and Presidential Permit activities. It is anticipated that an additional $50,000 will be spent through the end of Fiscal Year 2017 (see Attachment B - Budget Detail). Division of Drinking Water (DDW) Permitting (formerly CDPH) AdR continues the source water testing at the power plant intake and outlet structures that began on September 18, 2014. The results are posted with DDW. Staff and representatives from AdR continue to coordinate on complying with the California Water Resources Control Board Drinking Water Program regulatory requirements related to source water quality testing. A meeting with DDW was held on January 11, 2017, to update DDW on the Project and to discuss the results and the frequency of testing in the future. AdR also provided an update on pretreatment options they are considering and opportunities presented to them by the operators of the adjacent power plant that could simplify the design and operation of the desalination plant. A follow up conference call with DDW was held on January 30, 2017 to discuss modification to the seawater testing program to eliminate the testing of constituents that have come back as “non-detect”. 5 Presidential Permit The potential crossing of the U.S.–Mexico border by a water pipeline requires that the District obtain a Presidential Permit (PP). In November 2013, the District submitted an application for a PP to the U.S. Department of State (Department), the federal agency responsible for processing PP’s. An essential part of the PP process is the environmental review of a project to ensure consistency with the National Environmental Policy Act (NEPA). Since the Project must also comply with the California Environmental Quality Act (CEQA), as it is located in California, the Department and the District decided that a joint CEQA/NEPA document, an EIR/EIS, would be appropriate for the environmental review. AECOM prepared the EIR/EIS in conjunction with the Department and District staff. The EIR/EIS identifies potential significant effects related to air quality, biological resources, cultural and paleontological resources, environmental justice, geology/soils, greenhouse gas emissions, hazards and hazardous materials, hydrology/water quality, noise and transportation/traffic. The mitigation measures that reduce any effects of the Project to insignificant are presented in the document as well as in the Mitigation, Monitoring, and Reporting Plan (MMRP). The only issue area with the potential to result in significant and unavoidable impacts is greenhouse gas emissions related to the potential pump station. A conservative approach was taken for this analysis resulting in the potentially significant impact, although the actual design of the pump station, if it is needed, will likely result in less than significant greenhouse gas emissions. An analysis of the significant impacts is included in the Statement of Overriding Considerations included with the Final EIR/EIS. This statement details how the benefits of the Project outweigh the adverse environmental effects. The Board certified the EIR/EIS at the September 7, 2016 Board meeting. The Department published a notice in the Federal Register that the document was available for comment. At the same time, the State Department Bureau of Western Hemisphere Affairs (Bureau of WHA) sent a notice to other federal agencies about the Project and those agencies had 90-days to comment on whether they think the Project is in the national interest. The comment period closed on December 15, 2016. The Bureau of WHA issued the Record of Decision/National Interest Determination (ROD/NID), and federal agencies had an additional 15-days to review. 6 An amendment to the Final EIR/EIS will be brought to the Board on June 7, 2017. This amendment is necessary because of changes to the Project impact areas for several federally listed species. The changes are actually decreases in the total impact areas for these species. The amendment does not have to go out for public notice and does not impact the PP process, but does need to be a part of the administrative record for the Project. FISCAL IMPACT: Joe Beachem, Chief Financial Officer No fiscal impact as this is an informational item only. STRATEGIC GOAL: This Project supports the District’s Mission statement, “To provide high value water and wastewater services to the customers of the Otay Water District in a professional, effective, and efficient manner” and the General Manager’s Vision, “A District that is at the forefront in innovations to provide water services at affordable rates, with a reputation for outstanding customer service.” LEGAL IMPACT: None. BK/RP:jf P:\WORKING\CIP P2451 Desalination Feasibility Study\Staff Reports\Committee Desal Update 2017- 2\Committee 05-23-17, Staff Report, Desal Update, (BK-RP).doc Attachments: Attachment A – Committee Action Attachment B – Budget Detail Exhibit A – Project Location Exhibit B – Mexico, Water Desalination Report, dated January 9, 2017 Exhibit C – Mexico State Moves to Guarantee Mega- SWRO, Water Desalination Report, dated January 23, 2017 Exhibit D – Mexico Water Law Rolled Back, Water Desalination Report, dated January 30, 2017 Exhibit E - Otay Water District’s Ambitious Plan to Bring in Desalinated Water from Mexico, www.nbcsandiego.com, dated February 9, 2017 7 Exhibit F – Tijuana's huge sewage spill has U.S. officials crying foul, San Diego Union Tribune, dated February 27, 2017 Exhibit G – Letter from David W. Gibson, Executive Officer of the San Diego Regional Water Quality Control Board, Region 9 to the Border Environment Cooperation Commission and North American Development Bank, dated March 2, 2017 Exhibit H – Top SD Water Official Wants Tijuana to Prioritize Sewer Water Over Desal Water, Voice of San Diego, dated March 16, 2017 Exhibit I – Mexico Politics, Exchange rates Impact SWRO Costs, Water Desalination Report, dated March 20, 2017 ATTACHMENT A SUBJECT/PROJECT: P2451-001101 Informational Update for the Rosarito Desalination Plant and the Otay Mesa Conveyance and Disinfection System Projects COMMITTEE ACTION: The Desalination Committee (Committee) reviewed this item at a meeting held on May 23, 2017. The Committee supported staff’s recommendation. ATTACHMENT B – Budget Detail SUBJECT/PROJECT: P2451-001101 Informational Update for the Rosarito Desalination Plant and the Otay Mesa Conveyance and Disinfection System Projects Date Updated 5/2/2017 Budget 30,000,000 Phases Planning Consultant Contracts 26,155 19,945 6,210 26,155 BROWNSTEIN HYATT FARBER 98,577 98,577 - 98,577 CAMP DRESSER & MCKEE INC 13,311 13,311 - 13,311 CPM PARTNERS INC 380,200 380,200 - 380,200 HECTOR I MARES-COSSIO 71,531 71,531 - 71,531 MARSTON & MARSTON INC 26,700 26,700 - 26,700 REA & PARKER RESEARCH 4,173 4,173 0 4,173 SALVADOR LOPEZ-CORDOVA 225,499 225,499 - 225,499 SILVA-SILVA INTERNATIONAL 4,800 4,800 - 4,800 SVPR COMMUNICATIONS Meals, Travel, Incidentals 21,846 21,846 - 21,846 STAFF Printing 61 61 - 61 MAIL MANAGEMENT GROUP INC Professional Legal Fees 970 970 - 970 ARTIANO SHINOFF 162,041 162,041 - 162,041 GARCIA CALDERON & RUIZ LLP 43,175 43,175 - 43,175 SOLORZANO CARVAJAL GONZALEZ Y 32,612 32,612 - 32,612 STUTZ ARTIANO SHINOFF Regulatory Agency Fees 3,120 3,120 - 3,120 COUNTY OF SAN DIEGO 2,142 2,142 - 2,142 STATE WATER RESOURCES Service Contracts 500 500 - 500 REBECA SOTURA NICKERSON 875 875 - 875 LEONARD VILLAREAL 32,463 32,463 - 32,463 (W)RIGHT ON COMMUNICATIONS INC 39,500 39,500 - 39,500 BUSTAMANTE & ASSOCIATES LLC 290 290 - 290 SAN DIEGO DAILY TRANSCRIPT 685 685 - 685 SAN DIEGO UNION-TRIBUNE, THE Standard Salaries 1,183,988 1,183,988 - 1,183,988 Total Planning 2,375,214 2,369,004 6,210 2,375,214 Design 001102 Consultant Contracts 3,800,863 1,413,101 2,387,762 3,800,863 AECOM TECHNICAL SERVICES INC 3,952 3,952 - 3,952 AIRX UTILITY SURVEYORS INC 5,000 5,000 - 5,000 ATKINS 8,818 8,818 - 8,818 CPM PARTNERS INC 5,109 5,109 - 5,109 MARSTON+MARSTON INC 31,920 31,920 - 31,920 MICHAEL R WELCH PHD PE Meals, Travel, Incidentals 3,457 3,457 - 3,457 STAFF Professional Legal Fees 7,761 7,761 - 7,761 STUTZ ARTIANO SHINOFF Regulatory Agency Fees 1,127 1,127 - 1,127 STATE WATER RESOURCES Service Contracts 1,084 1,084 - 1,084 SAN DIEGO UNION-TRIBUNE LLC 114 114 - 114 REPROHAUS CORP Standard Salaries 234,673 234,673 - 234,673 Total Design 4,103,878 1,716,116 2,387,762 4,103,878 Construction Standard Salaries - - - - Total Construction - - - - Grand Total 6,479,092 4,085,120 2,393,972 6,479,092 Vendor/Comments Otay Water District P2451 Otay Mesa Desalination Conveyance and Disinfection System Committed Expenditures Outstanding Commitment & Forecast Projected Final Cost 571-1RESERVOIR 870-1RESERVOIR OTAY MESA RD EN R I C O F E R M I D R DONOVA N DONOVANCORRECTIONALFACILITY SIEMPRE VIVA RD G.F. BAILEYDETENTION FACILITY AIRWAY RD AL T A R D PASEO DE LA F U E N T T E STATE PRISON RD ALT A R D MEXICO USA OW D B O U N D A R Y FUTURE FUT U R E ?ò ?Ü ?Ü FUTUREPORT OFENTRY OTAY WATER DISTRICTOTAY MESA DESALINATION CONVEYANCEAND DISINFECTION SYSTEM PROJECT EXHIBIT A CIP P2451 0 2,0001,000 Feet F P: \ W O R K I N G \ C I P P 2 4 5 1 D e s a l i n a t i o n F e a s i b i l i t y S t u d y \ G r a p h i c s \ E x h i b i t s - F i g u r e s \ E x h i b i t A , M a r c h 2 0 1 5 . m x d Legend Pipeline Alternative 1 Pipeline Alternative 2 Pipeline Alternative 3 VICINITY MAP PROJECT SITE NTSDIV 5 DIV 1 DIV 2 DIV 4 DIV 3 ?ò Aä%&s ?p ?Ë !\ F Water Desalination ReporT Volume 53, Number 1 The international weekly for desalination and advanced water treatment since 1965 9 January 2017 Tom Pankratz, Editor, P.O. Box 75064, Houston, Texas 77234-5064 USA Telephone: +1-281-857-6571, www.desalination.com/wdr, email: tp@globalwaterintel.com © 2017 Media Analytics. Published in cooperation with Global Water Intelligence. 2016 Desal Year in Review This year marks WDR’s 53rd consecutive year of publication. Once again, this first issue will take a look back at some of the stories that WDR covered during the past year. Each story mentioned includes the [bracketed] issue number in which the full story originally appeared. Subscribers are reminded that they can read any of the original articles in their entirety at our searchable website: www.desalination.com. GE water’s imminent sale Early Monday morning, on the 31st of October, just as WDR was about to go to press, GE announced that it would sell off its water business to help pay for its acquisition of oilfield giant Baker Hughes. In retrospect, the fact that GE would divest its Water & Process Technologies shouldn’t have come as a shock to those even vaguely familiar with the way GE does things. However, the announcement caught most of the water industry, including your correspondent, by surprise. After hastily making some changes to the front page, WDR was able to include the news as its lead story and it was still distibuted without any delays. Other than reporting that the business would be sold, GE has offered few additional details, except to say that plans called for the deal to be done quickly, by mid-2017 [41]. Since that initial announcement, there has been endless speculation about how much the business was worth, whether the buyer would be another water company or a private equity firm, and how it would eventually be carved up [42, 43, 44]. As December was drawing to a close, it is understood that non-binding offers from interested parties were to have been submitted so that a shortlist of potential buyers would be finalized by the middle of this month [47]. Saudi arabia desal market re-ignited Since the early 1960s, Saudi Arabia has come to rely on seawater desalination for most of its water supply. Until 2005, most of its large-scale projects were thermal, and until 2010, virtually all of those large-scale thermal installations employed MSF technology. The Ras Al Khair IWPP plant—which is the world’s largest seawater desal facility and is 70% MSF and 30% MED— may be the last new MSF facility in the Kingdom. The plant began delivering some water in 2014, and was formally commissioned last year [3, 45]. Even though Saudi has more desal capacity than any other country, the industry has tended to focus on development occurring in other newer, less traditional markets over the last few years. However, the limelight is once again shifting to the Kingdom. The use of renewable energy is a priority, and even though construction on phase one of Advanced Water Technologies’ (AWT) Al-Khafji solar-powered desal demonstration plant hasn’t started, the Riyadh-based company has begun to seek advisors for a pre-feasibility study for a full scale plant [17]. Meanwhile, King Salman dismissed the Minister of Water and Electricity following the public uproar resulting from an upward adjustment of domestic water tariffs [18]. The Ministry was then dissolved by royal decree and split in two, with the former Ministry’s water responsibilities becoming part of the newly created Ministry of Agriculture, Environment and Water. The governor of the Saline Water Conversion Corporation (SWCC) was appointed acting CEO of the National Water Company [21], and it was acknowledged that SWCC would return to private finance for greenfield projects. The Jeddah 4 SWRO project, originally tendered as an EPC project, now appears to be moving forward as a privately financed IWP [35], with Doosan understood to be the low bidder [43]. In November, a new permanent SWCC governor was appointed [42], and a water investment forum was held Next Week: Produced Water Annual Seminar The 27th Annual Produced Water Society Seminar will be held at the Marriott Town Square Hotel in Sugar Land (Houston), Texas next week on 17-20 January. Topics includ the treatment and reuse of pro-duced water treatment, brine management and membrane sulfate re-moval. For info, visit www.producedwatersociety.com/seminar-2017/. Page 2 of 6WATER DESALINATION REPORT – 9 January 2017 where plans were unveiled to develop 16 new projects over the next 13 years [45]. Fiasco in Flint Although is was not a desal, membrane or reuse story, WDR endeavored to provide some informed coverage of the on- going “lead poisoning” story in Flint, Michigan. Not only was it hoped that the coverage would address some of the hyperbole enveloping the story, but there were clearly lessons that anyone in the water industry could learn about the challenges of introducing a new water supply. WDR’s coverage included a review of what actually seemed to have occurred [3], and the resulting fallout on one utility’s increased lead testing program [26]. Underscoring the Flint incident’s importance to the industry, a late February issue carried a three-part story that commented on the politicization of water and included comments from a toxicology expert to demystify the lead-related human health consequences. The third story described how ‘pipe loop tests’ can be conducted in advance of introducing a new water supply source—such tests were not done in Flint, but were conducted during the early planning for the Carlsbad SWRO—to confirm an appropriate product water stabilization program to avoid corrosion and other compatibility problems [8]. Mexico In February, Consolidated Water Company (CWCO) announced that it had chosen Suez as its EPC partner and technology provider for the Rosarito mega-SWRO project that it was developing in the Mexican state of Baja California [6]. Although CWCO developed the project—which would be the largest seawater desal plant in the Western Hemisphere—a public tender process was required under Mexican law, and at least seven firms expressed an interest in competing for the project [7, 12]. However, only three firms ended up bidding the project [17], and a San Diego county water district applied for a US presidential permit to buy some of the water from the proposed SWRO plant [24, 26]. CWCO was evaluated as the top-ranked technical and commercial bidder for the project [17] and said that it expected to finalize a definitive PPP agreement within 60 days [25], an estimate that proved accurate when it was awarded a contract in August [33]. The Rosarito project was one of two SWRO projects to be developed in the Mexican state under its new public-private partnership legislation. RWL Water developed the mid-size San Quintín project and began designing the project before reaching financial closure. Although the plant was expected to begin operation in late 2017 [12], it is now expected that financial closure will take place in the second quarter of 2017. Carlsbad lives up to expectations Before the first quarter ended, the impact of the newly commissioned Carlsbad Desal Plant was being acknowledged. California regulators certified the Carlsbad Desal Plant as “drought-resilient” and lowered the regional conservation goal [11]. The plant resulted in lowering the municipal water TDS in its service area, drawing favorable comments from member water agencies and residents [26], while its added reliability had a positive impact on the Water Authority’s bond rating [28]. During its first full year of operation, the Carlsbad Plant conducted formal tours for an average of more than 500 visitors per month [38] and produced over 15 billion gallons (56.7 million m3) of desalted water [47]. Other California projects West Basin Municipal Water District continued to consider its options for constructing a large-scale SWRO plant. Following the completion of pilot and demonstration testing, it sought a consultant to further establish a project size and scope [3], which was eventually awarded to CH2M [18]. Meanwhile, West Basin is seeking an engineer to support its desal initiative. Applications must be made at http://tinyurl. com/j255eag by 13 January. Although local politicians thought it would be possible to work with Pacific Gas & Electric (PG&E) to purchase some desalted seawater from the Diablo Canyon power plant [13], the idea was later nixed when PG&E said it would close the nuclear plant by 2025 [27]. The Doheny Ocean Desalination Project at Dana Point, which had been resurrected with a new development team leader, continued ahead with its EIR and CEQA process [13] AWWA/AMTA Membrane Technology Conference Mina Guli, the founder and CEO of Thirst, an organization founded to promote saving water by educating young people, will be the keynote speaker at the annual Membrane Technology Conference (MTC) in Long Beach, California on 13-17 February. To raise awareness about the worldwide water crisis, Guli, an Australian businesswoman, became the first person to run marathons across seven deserts on seven continents in seven weeks. For more information on the MTC, visit http://tinyurl.com/zuklau6. Page 3 of 6WATER DESALINATION REPORT – 9 January 2017 and held a board workshop in June to consider technical and commercial alternatives [26]. CalAm’s development of the Monterey Peninsula Water Supply Project (MPWSP) continued throughout 2016, and the company said a portion of the water produced would be dedicated to the community of Castroville [3]. It also requested a five-year delay in a cease and desist order that would limit its use of water from the Carmel River while the SWRO portion of the project is completed [18]. Meanwhile, the equipment supply contract for the ‘Pure Water Monterey’ reuse portion of the project was awarded to Wigen Water Technologies with a scheduled startup date of early 2018 [31]. CalAm also got good news when a lawsuit involving a former project partner was settled in its favor [32]. A public release of the SWRO project’s draft EIR is imminent. Kennedy/Jenks Consultants was selected as the lead agency to design an advanced water treatment facility for California’s Pure Water Monterey reuse project [2] and in May, five UF/RO equipment proposals were submitted [18], and Wigen Water Technologies was awarded the equipment supply contract [31]. Development work on the Huntington Beach Desal Plant continued throughout the year, and Poseidon continued to deal with intake and outfall related issues. As an alternative to the subsurface intake design that was proven infeasible in 2015, a passive wedgewire screen with 1mm openings was proposed [30]. A fall hearing on the project was delayed for three months so that the state’s permitting process could be streamlined [32], and by October a new framework was in place, and Poseidon said it should result in the completion of permitting process by the end of 2017 [39]. In what is likely the most bold desal scheme yet seen, a non-profit organization proposed a $22 billion solar powered SWRO plant in northern San Diego County using infrastructure from the soon-to-be decommissioned San Onofre Nuclear Generating Station. A spokesperson for SolRio, the developer, said that the project is a major regional project that addresses the drought in the entire Southwestern US, adding, “The world is full of water projects that have always been done the same way. We want to do this one differently.” [46] For most of the year, there was little to report on the Santa Barbara SWRO rehabilitation project, as IDE Technologies was busy building the plant. Carollo Engineers completed a report confirming that an offshore intake was infeasible, as an offshore passive screen intake was reconstructed. Meanwhile, the neighboring Water District engaged a consult to evaluate purchasing water, and maybe even expanding, the facility [42]. As WDR goes to press, it is understood that water deliveries to Santa Barbara residents could begin in late February or early March. Progress on Red-dead project An extension on the availability of the prequalification documents for the long-awaited Red Sea-Dead Sea (RSDS) SWRO, power and water conveyance project in Jordan was granted in late March [12], and after a large number of companies initially responded, another one-month extension was granted [14]. When all was said and done, 98 companies were said to have purchased the documents [26]. Of the 17 companies/teams that submitted credentials, five were prequalified to participate in the tender—which is valued at $1 billion + and will include SWRO, hydro power plant and brine conveyance components—that is expected to take place later this year [45]. Better late than never in Victoria Although the Victorian Desal Plant—one of the five largest SWRO plants in the world, and the largest in Australia—was commissioned five years ago, it has yet to deliver one drop of water to the city of Melbourne. However, low stream flows, high summer water demand and the third consecutive year of dry weather have reduced storage levels to the point that water authorities ordered the plant to be restarted to deliver one-third of the plant’s capacity in 2017 [10]. As WDR goes to press, a problem with the underground cable that delivers power to the plant has been reported. Although it will prevent the plant from being re-started until February, it is still expected to meet its 30 June water delivery deadline. Even though it has been argued that the plant was built bigger than it necessary, the state of Victoria said that its long-term water supply plans include options for expanding the plant or building a second plant at another site [38]. Oman picks up the pace Seawater desalination generated a lot of news in Oman last year. In January, ten teams from seven countries responded to a call to prequalify for three large SWRO projects [6], and soon after the second expansion of the Barka 1 IWP was commissioned, the Oman Power and Water Procurement Company (OPWP) signed a contract with Suez for the Barka II IWP [10]. Then, one week later, OPWP signed another contract with Valoriza Agua/Sogex for the Sohar 3 IWP [11]. OPWP soon issued RFPs for the Sharqiyah, Duqm and Salalah 3 SWRO projects [14], and commissioned the Al Page 4 of 6WATER DESALINATION REPORT – 9 January 2017 Ghubrah SWRO plant while decommissioning the existing MSF facilities at the same site [16]. Halfway through the year, OPWP issued an EOI for the rapid deployment of desal facilities using barge-mounted or mobile, land-based SWRO units [24]. This was followed by the news that Singapore’s Hyflux achieved financial closure for the Qurayyat IWP [25]. Other projects Singapore – In January, Singapore PUB held a Sounding Session to introduce its Marina East Desal Project, its fourth large-scale desal project and will treat a blend of seawater and freshwater from the Marina Reservoir [3]. An RFP was issued in April [16], and bid results were released September [35]. As WDR goes to press, Keppel Infrastructure said it has been awarded the DBOO contract for the project. Texas – Texas’ Guadalupe-Blanco River Authority (GBRA) may have been the first water public water entity to propose a large-scale independent water and power project (IWPP) in the US. After purchasing leases to fulfill the groundwater component of a conjunctive use project, it seemed that the Authority was positioning itself to move forward with the seawater desal portion [9]. However, things went quiet following a mid-year management change and it seems that the project may have been postponed indefinitely. Hong Kong – Hong Kong Water Supplies Department (WSD) and Black and Veatch, its consultant, have launched a process to develop a large-scale SWRO project. A Market Sounding was held in March [10]. WSD then posted a Market Sounding Document on its website to solicit comments on the level of interest shown by potential bidders [13]. A two- month prequalification period is expected for early 2017. Kuwait – Doosan was awarded a DBO contract for Kuwait’s Shuwaikh SWRO project [23] and the country’s Az Zour North 1 IWPP—the country’s first IWPP and largest SWRO plant—was formally commissioned in December [47]. Egypt – The Kuwait Fund for Arab Economic Development funded five small to mid-size SWRO plants in Egypt’s southern Sinai Peninsula [23] Company News Florida-based Harn R/O celebrated its 40th year in business [2], and Ovivo, the Canadian-based water treatment system supplier that had been listed on the Toronto Stock Exchange and whose legacy brands include Eimco and Brackett Green, was acquired by German-based SKion and taken private [28]. Houston-based Water Standard expanded its produced water treatment product lines by acquiring Monarch Separators [4] and teaming with Ultimate EOR Services to develop a design tool to optimize treatment and performance of chemical enhanced oil recovery (CEOR) projects [7] In February, Pall announced that it would partner with Desalitech on industrial projects in the US [5] and added a high-recovery MF/RO product to its mobile fleet [13]. It later introduced a newly branded line of standardized MF/ UF and RO products [25]. Los Angeles-based Water Planet signed partnership agreements with Genesys, Applied Membranes [5] and Osmoflo [32]. Meanwhile, Tokyo-based Metawater merged with Illinois-based Aqua-Aerobics [6], and Consolidated Water Company (CWCO) acquired Aerex Industries, a Florida-based manufacturer of desal systems and water treatment equipment [7]. Suez acquired a majority stake in India’s Driplex Water Engineering, while Germany’s Bilfinger sold its Geiger, Passavant and Johnson Screen product lines to China’s Chengdu Techcent Environment [9]. In March, IDE Technologies acquired the full ownership of the Hadera SWRO plant in northern Israel, which it had constructed and has been operating since its 2010 commissioning [11]. Dow completed its first shipment of RO elements from a new manufacturing facility in Jubail, Saudi Arabia, which was constructed in a joint venture with Saudi Aramco [10], and invested in OxyMem, a developer of membrane aerated biofilm technology [16]. Following a tough 2015, Texas-based Fountain Quail Management had recieved some good news in early 2016 as it secured financial backing that would allow for expansion of its North American produced water business [7]. It was an eventful year for Australia’s homegrown Osmoflo. The company turned 25 years old in February [9] and completed an expansion of the Barka IWPP in Oman, its largest project to date. In March, the co-founder and CEO stepped aside and a new CEO was named [10]. Finally, it Texas & California Desal EventsThe Texas Water Development Board will host the Water for Texas 2017 Conference in Austin on 23-25 January. For information visit http://waterfortexas.twdb.texas.gov/index.asp. CalDesal will hold its annual conference in San Diego on 2-3 February. For information, visit http://tinyurl.com/h6ulg94. Page 5 of 6WATER DESALINATION REPORT – 9 January 2017 closed the year by announcing in late December that it had entered into a definitive agreement to be acquired by Hitachi Zosen [47]. Canada’s Stantec Corporation announced that it would acquire MWH, and a Mexican billionaire launched a takeover of Spain’s FCC, the parent of aqualia [11, 14]. Following a $1.3 billion loss, Abengoa—selected as the 2015 Desal Company of the Year—filed for bankruptcy while seeking buyers/investors in its desal assets [10, 14] and sold off its Vista Ridge pipeline project in Texas [16]. In Germany, ItN Nanovation, a supplier of ceramic membrane filtration systems, said project delays led to it entering into insolvency proceedings [21]. Nanostone, the Minnesota specialty membrane company, underwent a restructuring as it expanded its production capacity and refocused on several target markets [20]. As the year ended, the company was addressing NSF and UF certifications and ramping up production of its next generation ceramic membrane [47]. US-based Clean Membranes formed a partnership with France’s Polymen, which added the Gigamem UF membrane product to Clean Membrane’s product line [24], and Japan’s Meiden opened a US office that offered its ceramic UF membrane for the North American market [26]. Ecolab, the parent of Nalco Water, announced that it had taken an equity position in Pennsylvania-based Aquatech International [28], while Canada’s H2O Innovation acquired Utility Partners, a Mississippi-based company specializing in the operation and maintenance of water and wastewater plants [29]. Michigan-based FEDCO said that it had bought back the 50 percent stake that Torishima had previously acquired in the company [45]. GE Water acquired the Netherland’s-based IMT Tech- nologies, a UF membrane company [19], and Singapore- based Memstar said that it will open a new regional headquarters in the US, staffed with three former executives from another international membrane company, and from which the company will consider merger and acquisition opportunities, in addition to developing and manufacturing new membrane products [46]. Following the announcement that it had won three new produced water treatment projects in the Permian Basin and one in the Marcellus Shale, Boston-based Gradiant said it would spinoff Gradiant Energy Services (GES), a wholly owned subsidiary, to manage its oilfield service business [32]. Gradiant also reported that it was developing six brine concentration projects in China in cooperation with Shanghai Electric [33], and that it had developed and deployed a mobile brine concentrator employing its proprietary bubble column evaporator technology [46]. Tampa-based AquaVenture Holdings, the parent company of Seven Seas Water, launched an IPO in early October, issuing 6.5 million shares at the low end of its $18-$20 indicative price, with nearly 70 percent of the stock held by four pre-IPO shareholders [38]. The stock held above $24 until (presumably) an unfavorable Barrons’ article questioned the company’s losses, stating, “investors probably shouldn’t stop at this watering hole.” New Products Pentair X-Flow commissioned the first commercial installation of its Helix UF at a Belgium landfill while Evoqua’s Memcor introduced its new CSII UF system [5], and the UK-based Modern Water and Bilfinger Deutsche Babcock Middle East agreed to jointly develop a process employing FO to osmotically dilute recirculating MSF brine to reduce its scaling potential [9]. Berlin-based akvola Technologies introduced an online process design tool to aid in the selection of RO pretreatment systems [5], while Aquarion’s Membran-Filtrations-Technik (MFT) introduced a circular disc RO module that can operate at pressures more than twice that of spiral-wound SWRO elements [23], and 3M’s membrane business unit introduced a new UF product [35]. Graeme Pearce of Membrane Consultancy Associates provided the results of his stakeholder survey of the ‘universal rack’ or ‘open concept’ arrangement [21], and Culligan Italy introduced new lines of containerized SWRO and MBR units [38]. H2O Innovation’s Piedmont group introduced a new FRP cartridge filter housing [22]. Although not a new product, Nalco’s technology is being demonstrated for a new use: online membrane integrity monitoring in IPR/DPR applications [23]. Researchers at the University of New South Wales UNESCO Center are working with Australia’s Water Recycling Centre of Excellence to establish default LRVs for MBRs [27]. Water Standard delivered its first membrane deaeration system for a deepwater offshore platform in the Gulf of Mexico [27], and H2O Innovation introduced its flexMBR, which is said to be so flexible that the user can select membrane modules from among one dozen suppliers [34]. Rate for one year: £305 or US$550. Subscribe and renew online at: www.desalination.com/wdr Reproduction or electronic distribution is forbidden. Subscribers may circulate their copy on their immediate premises. To email or create additional copies for other office locations, contact Jake Gomme (jg@globalwaterintel.com) to arrange a site license. Page 6 of 6WATER DESALINATION REPORT – 9 January 2017 California-based Porifera received an applied research grant to further test its process “to provide real-time leak detection and fail-safe operation” of membranes to satisfy regulatory requirements in direct and indirect potable reuse applications [19]. Research The WateReuse Research Foundation (WRRF) and Water Environment Research Foundation (WERF)—the research arm of the Water Environment Federation (WEF)— announced that they would merge to “create synergies [and] reduce future water research redundancy” [2]. WRRF’s focus is on water reuse and desalination, while WERF focuses on resource recovery and water quality impacts from wastewater and stormwater. As the seven-year funding term of the National Centre of Excellence in Desalination Australia (NCEDA) was nearing an end, several of the organization’s executives sought to continue and broaden the work it had started as a government funded Co-operative Research Center (CRC). The group lodged a proposal for ten year funding program under the name ‘Future Water CRC’ [19]. A final NCEDA meeting was held to review the work it had accomplished [24] shortly before the new CRC was shortlisted for funding [34]. Other Topics covered WDR also covered stories that don’t fit neatly in the preceding categories. Some of of which included reviews of technical papers on ultrapermeable membranes [35], evaluations of batch and semi-batch RO systems [41], updates on salinity gradient power [46, 47], and how molecular dynamics is being used to design new membranes [47]. Other 2016 WDR stories included a review of the EPA’s new ELGs governing power plant FGD discharges [2, 3], a detailed UF/RO project price breakdown from five OEMs [19], a review of the water reuse/reclamation definitions [28], a look at some of the oldest operating RO plants [35], a water cost comparison of the Carlsbad and Rosarito SWRO projects [33], a BWRO project cost breakdown [36], a review of how the mainstream media sensationalized the health impacts of drinking desalted seawater [36], a history of desal in the Caribbean [39], the end of thermal desal in Curacao [40], a look at waste heat [43], and a breakdown of companies offering brine concentration/management technologies [44]. Electrochemical desal Capacitive deionization gained ground as a competitive brackish water desalination process in 2016. In addition to its commercial successes [15], Voltea, the leading supplier of the technology, issued a white paper comparing the cost of ownership of its CapDI system to BWRO [28]. It also closed a funding round [35] and announced that it would open a new manufacturing facility in Dallas, Texas [42]. Meanwhile, the European Union’s Horizon 2020 program said it would fund REvivED, a four-year research project to focus on electrodialysis (ED) and reverse electrodialysis (RED) for a variety of applications, including to “establish electrodialysis as the preferred process for desalination of seawater” [28]. Meanwhile, Evoqua conducted a successful pilot test of its Nexed electrochemical modules at the Bureau of Reclamation’s BGNDRF facility in New Mexico [13]. The company noted that the technology has been commercialized for industrial and brackish water applications, and the development of a seawater system is ongoing [28]. New technologies At the Global Water Summit in Abu Dhabi, Los Angeles- based Water Planet’s self-adaptive process control technology was voted as the Technology Idol [17], while Rice University Professor Qilin Li’s presentation of nanophotonics enhanced solar membrane distillation was selected as Technology Idol at the American Water Summit in Miami [46]. WDR reviewed a range of new treatment technologies at various stages of commercialization, including research from the National University of Singapore’s (NUS) Environmental Research Institute, which involved a new, more robust aquaporin membrane [4], and Finland’s Sofi Filtration introduced a new self-cleaning microfilter. Unsurprisingly, several inventors claimed to have developed new, breakthrough technologies that promised to revolutionize desalination. Upon further inspection, some of the ideas—including a Chinese evaporator [4], and a US company’s gravity powered, graphite membrane process [20]—seemed to have been proposed as April Fools’ jokes. Despite the implausibility of another device, which employed a biomimetic membrane that worked as an artificial gill [14], it fooled your correspondent and was later proved to be a fraud [15]. Water Desalination ReporT Volume 53, Number 3 The international weekly for desalination and advanced water treatment since 1965 23 January 2017 Tom Pankratz, Editor, P.O. Box 75064, Houston, Texas 77234-5064 USA Telephone: +1-281-857-6571, www.desalination.com/wdr, email: tp@globalwaterintel.com © 2017 Media Analytics. Published in cooperation with Global Water Intelligence. MexicoState moves to guarantee Mega-swro In its official newspaper, the state of Baja California, Mexico, has announced that the legislature has taken the initiative to ensure its payment obligations for the proposed 100 MGD (378,500 m3/d) Rosarito Desalination Plant. The plant will be designed, built, owned and operated by Aguas de Rosarito (AdR), a special purpose company owned by NSC Agua, Consolidated Water Company’s Mexican subsidiary, and S.A.P.I. de C.V. The project will be constructed under a 40-year public- private partnership contract governed by the State’s new Asociaciones Público Privadas (APP) legislation, with financing to be syndicated by the North American Development Bank (NADB). According to the announcement, the State has pledged a guaranteed monthly payment of MXN 149,312,018 ($6.8 million) for a period of 37 years, beginning in June 2019. WDR understands that the amount will be paid into an independently managed trust to guarantee the project. Under the arrangement, any invoice that is not paid by the state’s water utility would be paid from the trust. The pledge is said to account for index-linked tariff escalation via corresponding inflationary growth in the pledged payroll taxes. The contract is to be executed in two phases, with 50 percent of the production capacity to be delivering water in late 2019 or 2020, and the second phase by 2024. This action appears to move the project another significant step closer to financial closure. CaliforniaWaiver denied for SWRO project permit fee California’s Coastal Commission has denied Poseidon Water’s request for a waiver of the $286,649 application fee for a coastal development permit (CDP) for the proposed 50 MGD (189,250 m3/d) Huntington Beach Desalination Plant. Despite Poseidon’s suggestion that the upcoming review should not require a substantial amount of the Commission’s additional staff time to review, the Commissioner staff “strongly disagrees”. At a 13 January public hearing, Coastal Commission deputy director Alison Dettmer explained that the already complex project continues to take a significant amount of staff time and was about to undergo one or more CEQA reviews and a State Regional Board review, which require the Coastal Commission’s staff participation. She estimated that Tom Luster, the Commission’s senior environmental scientist and lead staffer for desal projects, currently spends up to 70 percent of his time on the project each week. Although one Commissioner suggested that based on the amount of work already completed and the amount of work that remains, the fee should be higher, another suggested that the “Byzantine processes” that had to be followed were not Poseidon’s fault and that both sides have “stubbed their toes” with stops and starts in the project’s permitting process. Besides the concern over the amount of staff time required to review the permit, it was noted that Poseidon did not cite financial hardship as a reason to waive the fee. The staff observed that its one-time fee was 0.5 percent of Poseidon’s $60 million development cost, and only slightly higher than the Regional Board’s $220,000 annual NPDES permit fee. A Commissioner said that the amount seems reasonable when considering that the same fee applies to both $100 million hotel projects as well as complex $900,000 desal projects. Poseidon anticipates the permitting process to be completed in 2017 and, subject to approval, for the Project to then proceed to the construction phase. Palestine Inauguration day Last week, representatives from the European Union (EU) and UNICEF helped inaugurate the Gaza Strip’s largest seawater desal plant. The €10 million ($10.7 million), 6,000 m3/d (1.6 MGD) SWRO plant was funded by the EU, and will produce enough water for 75,000 thirsty Palestinians. Page 2WATER DESALINATION REPORT – 23 January 2017 The project was launched a little over three years ago and implemented in a partnership with the Palestinian Water Authority (PWA) and Gaza’s Coastal Municipalities Water Utility (CMWU). The plant will take feedwater from four beach wells before undergoing pretreatment and desalination in a plant furnished by Aquamatch Turkiye. Concentrate will be discharged 45m (148 ft) offshore through a diffuser system. A 1.5km (1 mile) power transmission line was constructed to serve the site. To help with the frequent rolling blackouts that can last from 12 to 16 hours, the plant has been equipped with solar panels that are able to provide about 12 percent of the plant’s peak energy requirement. The plant will first fill a 2,000 m3 (528,000 g) storage tank before being piped 18km (11 mi) to the south Gaza cities of Khan Younis and Rafah, where it will be mixed with water drawn from the aquifer and disinfected for local distribution. An additional €10 million of funding has already been grant- ed for the project’s second phase, now underway, which will double its capacity. A third phase could begin next year. Upstream Oil & GasProduced Water disposal options discussed Because deepwell injection is the predominant method of produced water disposal, the subject of saltwater disposal (SWD) wells was front and center in many of the presentations at last week’s annual Produced Water Society seminar in Houston, Texas. However, your correspondent does not remember a Society seminar where more treatment and disposal alternatives were discussed. Speakers addressed brine concentration and the beneficial reuse of treated water using technologies ranging from MF/ UF, RO and FO to evaporators, crystallizers, clathrates and membrane distillation as possible alternatives. All of these are, of course, dependent on the cost of oil, distance to the nearest SWD well and the local availability and cost of clean water and brine. Another disposal challenge is also presenting itself in some areas, and the state of Oklahoma in particular: injection induced earthquakes. Of most concern are those locations— like Oklahoma’s Arbuckle formation—where wastewater is injected into basement rock, which is considered a major risk factor for triggering earthquakes. With over 3,200 active disposal wells in the state, Oklahoma experienced over 1,500 earthquakes with a Moment magnitude of 3.0 or higher in the past two years, most of which were apparently triggered by injection wells. This has led to restrictions being placed on the use of injection wells, with more restrictions likely to follow. Laura Capper, of CAP Resources, who gave a presentation entitled SWD Well Issues, Myths versus Realities, noted that one big difference is the improvement in seismic monitoring. “In 1961, the nearest monitor was 600 miles from Oklahoma. Now, there are monitors everywhere, and there are mobile phone apps that alert you whenever an earthquake occurs, raising the public’s stress and anxiety.” One common myth is that hydraulic fracturing has caused the increase in earthquakes. However, this is not true, since disposal wells typically operate for much longer durations and inject much more fluid, often into never before touched rocks. Even then, a combination of many factors is necessary to increase the likelihood of induced earthquakes. A probable increase in restrictions on the injection of oilfield-produced water could have a significant impact on the increase of produced water treatment systems using advanced technologies. Saudi ArabiaPower/Desal plant future uncertain In 2012, the Saline Water Conversion Corporation (SWCC) awarded two contracts to build the $3 billion Yanbu Phase 3 power and desalination complex on Saudi Arabia’s Red Sea coast. The 3,100MW power plant project was awarded to a Samsung Engineering-led consortium that also included Al Toukhi and Shanghai Electric, while the 550,000 m3/d (145.3 MGD), $1 billion seawater desal plant employing Richter Scale versus Moment Magnitude Most readers are probably familiar with the Richter scale method of measuring the strength, or magnitude, of an earthquake. The scale was developed in 1935 for medium sized earthquakes with magnitudes of 3.0 to 7.0, and measures the amplitude of a waveform recorded on a seismograph at a known distance from an earthquake’s source. It does not give any indication of the total energy released by an event, and does not satisfactorily measure the size of the largest or smallest earthquakes. The Moment magnitude (Mw) was introduced in 1979 and is now the most common method of describing the size of a microearthquake, or microseism. Although more complicated to calculate, Mw measures the size of events in terms of how much energy is released. Specifically, it relates to the amount of movement by rock, and the area of the fault or fracture surface. Since Mw describes something physical about the event, calculated values can be easily compared to magnitude values for other events, and it is also a more accurate scale for describing the size of events. Both scales should yield approximately the same value for any given earthquake. Like the Richter scale, the Moment magnitude scale is logarithmic, and an increase of one unit of magnitude is equivalent to an increase of 10 times the amplitude recorded by a seismograph and approximately 30 times the energy. Page 3WATER DESALINATION REPORT – 23 January 2017 MSF technology was awarded to Doosan Heavy Industries & Construction. Last week, Samsung Engineering announced that SWCC had terminated its portion of the project, valued at an estimated $1.5 billion, which is 55 percent complete. One report said that the cancellation was due to a disagreement over the price charged for a mid-project replacement of the power plant turbines requested by SWCC, while another report attributed it to a disagreement regarding the final construction terms. The project was initially due to be completed in 2016, but the date had been moved to August 2017. It is unclear how the move will impact the desalination plant’s completion, since its MSF units will be powered with steam produced by the power plant. Company NewsWater analysis made quick, simple After four years of development, Houston-based Water Lens has introduced a new portable test kit that allows users to measure up to 20 critical water quality parameters in 10 minutes. According to company CEO Keith Cole, the units were designed for high salinity, high TSS waters such as those found in the oilfield produced waters, desalination plants and even zero liquid discharge (ZLD) applications where complex brine chemistries can interfere with other commonly used measurement techniques. The Water Lens test kit consists of a disposable, 96-well test tray that can be used in a typical well plate reader. Each well contains a reagent that has been stabilized by freeze-drying for a long shelf life, and includes a colorimetric dye that is sensitive to the presence of the particular constituent to be measured. Adam Garland, Water Lens’ CSO and the product’s chief architect, told WDR that the device operates on the principle of colorimetric absorption by photosensitive dyes. “When a sample is introduced in the well, the dyes bind to their respective analytes and the photometric spectrum of the dyes changes and are read by monitoring light absorbance at specific wavelengths as it passes through the sample. “While this process of colorimetric detection is not uncommon, what sets Water Lens apart is its speed, ease of use and the ability to cut through the numerous interferences present in high-salinity waters via its library of extensive, proprietary algorithms. It provides lab-quality results and can be used by most field personnel, even those unfamiliar with water chemistry. “Right now, we are able to measure the 20 parameters that are usually of most interest to operators including TDS, alkalinity, bicarbonates, chlorides, sodium, sulfates and total hardness. We’re in the process of adding chlorine, H2S, organic acids, BTEX and seven other parameters. We can also configure trays to meet an operator’s specific needs, including the ability to test multiple water samples for multiple constituents in a single tray,” he explained. Although Water Lens sells its well trays, it does not typically sell its software, well plate readers or the multichannel pipettes used to fill the trays—it loans them to users. After purchasing about 150 trays, the equipment ownership is transferred to the user. “It’s no longer necessary to collect samples, send them to a lab and wait for the results. While this is extremely useful in most water treatment applications, it can be particularly important in remote locations or on pilot test sites. The Water Lens provides operators with quick, accurate results that enable them to make real-time decisions and diagnostics in the field, regardless of how complex the water quality may be,” said Cole. SingaporeNew NEWater plant opens PUB, Singapore’s national water agency, officially opened the 228,000 m3/d (60 MGD) Changi II NEWater Plant last week. The plant raises the total production of the country’s five NEWater facilities to 781,000 m3/d, or 40 percent of Singapore’s total daily water demand. NEWater is Singapore’s brand name for the potable-quality reclaimed water produced from secondary or tertiary treated wastewater effluent that has been purified using MF, RO and UV disinfection. It is expected to make up to 85 percent of the country’s water demand by 2060. Plate reader Well tray Multi-channel pipette Water Lens test kit Rate for one year: £355 or US$550. Subscribe and renew online at: www.desalination.com/wdr Reproduction or electronic distribution is forbidden. Subscribers may circulate their copy on their immediate premises. To email or create additional copies for other office locations, contact Jake Gomme (jg@globalwaterintel.com) to arrange a site license. Page 4WATER DESALINATION REPORT – 23 January 2017 Sean Carter has been appointed as MF/UF/MBR product line manager for Toray Membrane USA. He has most recently served as Toray’s western regional sales manager. He is based in San Diego, California, and may be contacted at seanC@toraymem.com. Kaveh Someah, formerly the vice president of Ovivo Water’s energy division where he was responsible for the company’s global water and wastewater treatment business unit in the power, oil & gas, petrochemical and refining industries, is no longer with the company. He is available for consulting assignments while he considers other long- term options. He resides in Salt Lake City, Utah, and may be contacted at kaveh.someah@gmail.com. Tim Hogan, formerly the principal marine biologist with Alden Research Laboratory, and most recently with HDR, has left the company to start TWB Environmental Research and Consulting, Inc, a professional services firm that specializes in evaluating the marine life impacts associated with desalination and cooling water intakes and outfalls. He is based in Boston, Massachusetts, and may be contacted at thogan@twb-erc.com. Mike Stefanic has announced his retirement from Toray Membrane USA. He joined Toray in 2008 and led the intro- duction and management of its MF/UF/MBR product line. After spending 49 years in the water industry, Mike says his retirement plans are “to have no plans”. He will be attending the Membrane Technology conference in Long Beach on 14- 17 February, where he hopes to see many of his old friends. He may be contacted at mistefanic@hotmail.com. Aaron Horn, formerly of X-Chem, has been appointed executive vice president of operations of Fountain Quail Energy Services. He is based in the Dallas/Forth Worth area and may be contacted at ahorn@fountainquail.com. Jobs Pall Water is seeking a Technology Director for the mu- nicipal membrane portion of their Americas business. Responsibilities include developing and maintaining effective relationships with key influencers and consulting engineers and serving as their technical point of contact. The successful candidate will have an engineering degree and a minimum of 10 years of membrane industry experience. For information, visit http://www.danaher.com/careers- professionals job code PRO000269. The S$170 million plant was jointly developed by Bejing Enterprises Water Group (BEWG), United Engineers (UE) and PUB. It was delivered under a 25-year DBOO arrangement and was built on the rooftop of the Changi II Water Reclamation Plant building, with Black & Veatch serving as the owner’s engineer. Singapore has four other NEWater plants: Bedok (2003), Kranji (2003), Ulu Pandan (2007) and Changi I (2010). A plant at Seletar (2004) was closed in 2011. In brief The Southern California Salinity Coalition (SCSC) and National Water Research Institute (NWRI) are soliciting proposals from qualified technical consultants interested in undertaking an investigation to (1) evaluate the long-term trends for salinity in wastewater and recycled water and (2) assess how periodic droughts and various conservation measures may influence these trends. The study is meant to help improve water resource management decisions. Proposals are due on 6 February. To download the RFP, go to http://tinyurl.com/grbfbbs. The Southeast Desalting Association will hold a workshop on Membrane Theory and Operations on 1 February in Pompano Beach, Florida. For more information, visit http:// tinyurl.com/gmbo2rh. Germany’s Düchting Pumpen has formed a collaborative partnership with California-based Energy Recovery, Inc (ERII) to package ERII’s energy recovery devices (ERD) with Düchting’s pumping solutions to provide “an all- encompassing energy recovery solution” for its desalination clients. The partnership’s solution will be provided through an energy services agreement, which allows customers to upgrade to a paired pump/ERD package without substantial upfront costs. Instead, the technology will be paid for over time through a percentage of the total savings that the solution generates. People Danny Jimenez has been appointed CEO of Gradiant Energy Services (GES), Gradiant’s wholly owned subsidiary that provides water solutions and services for the oil and gas industry. He has an extensive oilfield background and is the former CEO of Craig Energy. Based in Denver, Colorado, he may be contacted at DJimenez@Gradiant.com. Water Desalination ReporT Volume 53, Number 4 The international weekly for desalination and advanced water treatment since 1965 30 January 2017 Tom Pankratz, Editor, P.O. Box 75064, Houston, Texas 77234-5064 USA Telephone: +1-281-857-6571, www.desalination.com/wdr, email: tp@globalwaterintel.com © 2017 Media Analytics. Published in cooperation with Global Water Intelligence. CaliforniaSWRO to get new intake wells When Sand City commissioned its coastal desalination plant in the spring of 2010, it was the only full-scale SWRO plant in the state. The two-train 300,000 gpd (1,134 m3/d) project breezed through the Coastal Commission’s permitting process in only three months because it was a publicly-owned, stand-alone facility; it was constructed away from the shoreline, was part of a local and regional water plan, employed a beach well intake, and, discharged its concentrate back to Monterey Bay at a salinity below that of the seawater. The intake consisted of four 100 ft (18m) deep vertical wells located 200 ft (61m) from the surf line and over 2,500 ft (760m) from the plant. The concentrate is discharged below sea level via one horizontal well located beneath the coastal bluff so as not to substantially change the existing seawater/ freshwater interface. The initial plant design was based on a feedwater TDS ranging from 17,000 to 28,000 mg/L and a recovery rate of 33 percent so that the concentrate would not exceed the permitted discharge level. According to city administrator Tom Bodem, the plant was initially able to meet its production goals, but its performance was slowly and progressively constrained by the deteriorating feedwater quality. “We knew it would probably be necessary to eventually add more wells, but the ongoing drought exacerbated the problem. Last year, it only produced a little over 50 percent of the planned capacity,” Bodem told WDR. Based on the higher feedwater salinity, the plant had to throttle back its operation so the concentrate wouldn’t exceed the discharge limit. A recent hydrologic study—with its $50,000 cost split between the city and CalAm Water, the plant’s operator—determined that the city had two options. It could construct additional wells further inland, or amend the plant EIR and obtain a new discharge permit. Bodem said that the city chose the new wells option, and current plans call for drilling three new wells further inland later this year at a cost that could range from $70,000 to over $100,000 per well. Vertical wells and other subsurface intakes are wonderful when they work as planned. Unfortunately, hydrogeology is an inexact science and this is an example of what happens when things don’t go as expected. Mexico Water law rolled back Last week’s repeal of a Baja California water law left many wondering how it might affect two seawater desalination projects now under development in the Mexican state. Reports say the law, which was passed in late December, would have liberalized tariffs, provided a framework for the private sector to be involved in the provision of water and sanitation services and included an option for direct public- private participation (PPP) contracts. Two projects now under development in Baja California are RWL Water’s San Quintín project, a 5.8 MGD (22,000 m3/d) SWRO plant located 155 miles (250km) south of the US border, and Consolidated Water’s Rosarito project, a 100 MGD (378,500 m3/d) SWRO plant to be built in two stages, 25 miles (40km) south of the border. Both projects are under contract, approaching financial closure, and will be the first water projects delivered under the state’s Asociaciones Público Privadas (APP) law, revised in 2014. People familiar with the projects told WDR that the repeal of the law in question does not appear to relate to the APP 31 January Deadlines Approach Tomorrow marks the close of Global Water Award nominations. To submit your nominations that will acknowledge the most important achievements in the international water industry in 12 categories, visit http://globalwaterawards.com. It is also the deadline to receive the early bird registration discount for GWI’s Global Water Summit in Madrid, Spain, which will be held on 24-25 April. For more information, visit www.watermeetsmoney.com. Page 2WATER DESALINATION REPORT – 30 January 2017 laws that governs PPP agreements on either the San Quintín or Rosarito projects. These APP agreements not only predate the newly repealed water law, but are governed by the APP law, which seems to have the reform and merging of state run utilities such as CESPT and CESPE—serving the municipalities of Tijuana and Mexicali, respectively—as its primary focus. The utilities are the ultimate consumers of the water produced by PPP projects, but the APP contracts are implemented at a higher level within the Baja California state government. North America Politics, oil and produced water Since 2000, one of the hottest industrial markets for advan- ced water treatment technologies has been the Canadian oil sands. Brine concentrator evaporators, crystallizers and MF/UF, RO and ED membrane processes were used in steam assisted gravity drainage (SAGD) and mine depressurization operations throughout the Athabasca oil region in northeastern Alberta. Driven by both high oil prices and the expectation that the heavy crude could be conveyed 1,200 miles (2,000km) south to Texas’ Gulf Coast refineries, development in the region soared and international desalination and water treatment equipment companies flocked to Alberta. However, as oil prices began to fall, and political opposition to pipelines grew, the region’s prospects began to look increasingly grim, and its oil industry was shaken to the core. Things now appear to be changing somewhat. Oil prices have begun to slowly recover, and the Keystone pipeline is back on the table. People are beginning to believe the oil sands could be back in business. With that in mind, WDR asked Third Bay’s Keith Minnich, a Calgary-based expert in the treatment of oil sands produced water, for his outlook on the region’s potential: “Since November 2015, Albertans and the rest of Canada have been adjusting to what many saw as the former US president’s politically motivated denial of TransCanada’s Keystone XL (KXL) pipeline. During the years of permit review, hydraulic fracturing increased the US’ domestic energy production, a 40-year ban on exporting US oil was lifted, and US Gulf coast refineries, which were originally designed for heavy oil, have reportedly been making changes to accept lighter shale crude. Canada’s best oil customer was now a competitor. “There is a recognition in Canada that Canadian oil should be transported to the east and west coasts to directly access the world market. Liberal Prime Minister Trudeau’s government just approved the Trans Mountain pipeline to Vancouver. TransCanada is pursuing approval of the Energy East pipeline, which would deliver oil to refineries and a marine terminal on the Atlantic coast. “Late last week, the new US administration told Canada that ‘if they’d like’ to renegotiate some of the contract terms, ‘we’ll see if we can get that pipeline built’. There are questions about what is meant by renegotiation and even whether KXL is still needed if Canadian oil can be transported directly to the coasts. “Every project, even those that have been approved, are still subject to opposition from the ‘keep it in the ground’ environmental NGOs, NIMBYers and Indigenous peo- ples. It’s a good bet that all options will be pursued, as Canadians are left to wonder which pipelines will be built first. “Gone are the days when Joe Oliver, Canada’s natural resources minister, observed that ‘pipelines were like watching paint dry, [they are] the absolute definition of boredom’.” TexasBWRO is region’s third tap San Antonio Water System (SAWS) welcomed local digni- taries to the formal opening of its newest water treatment plant at the H2Oaks Center in southern Bexar County last Friday. The facility has a 12 MGD (45,420 m3/d) potable water production capacity that consists of 10 MGD of BWRO permeate blended with 2 MGD of fresh groundwater. According to SAWS, this is the only site in the country which produces water from three different sources: brackish water from the Wilcox Aquifer, fresh water from the Carrizo Aquifer and fresh water from the Edwards Aquifer stored in an aquifer storage and recovery (ASR) site on the property. The facility also includes twelve 1,500-ft (457m) deep production wells and two 5,000-ft (1,525m) deep concentrate injection wells, in addition to a visitor center and an onsite university research facility. SAWS H2Oaks Center and BWRO plant Page 3WATER DESALINATION REPORT – 30 January 2017 The $118 million facility, which has been operational and delivering water to the SAWS system since early November 2016, was constructed by a Zachry-Parsons joint venture. The four-train RO system was furnished by Biwater, and the post-treatment system was furnished by Wigen Water. Phase 2 of the project is scheduled for completion in 2021, with the project’s third and final phase scheduled for completion in 2026. The planned build-out capacity of the plant is 30 MGD (113,550 m3/d), with the total capital cost estimated at $411 million. Company NewsSpanish firm celebrates banner SWRO year During 2016, Spain’s Cadagua delivered five SWRO projects under a variety of delivery models in sizes ranging from a modest plant expansion to a large-scale world-class plant. Ignacio Zúñiga Lagares, the company’s director of business development for Latin America and new markets, outlined the projects (below), emphasizing their technical and commercial diversity: the SPV [special purpose vehicle] as investor and operator. Likewise, the Jorf Lasfar was the largest SWRO in Morocco. It was successfully commissioned despite challenging and unforeseen seawater conditions. “All these achievements are a result of hard work in a high demanding market, which required reliable technological and competitive solutions, and have proven our ability to deliver several projects simultaneously,” he concluded. Philippines2nd plant picks Multibore UF pretreatment In June 2016, Maynilad Water Services, a Philippines- based private water utility, awarded Acciona Agua a €90 million ($96 million) contract to construct the Putatan 2 Water Treatment Plant (WTP) in the Philippines, located 22km south of Metro Manila. The project follows the 2011 commissioning of the 100,000 m3/d (26.4 MGD) Putatan 1 WTP plant, and its 50,000 m3/d expansion, which went online in early 2015. The new 100,000 m3/d plant will employ a battery of processes—DAF, biologically active filtration, UF, RO and disinfection—to treat water from Laguna de Bay, the Philippines’ largest freshwater lake. Although considered freshwater, its only outlet is connected to Manila Bay, which allows saltwater intrusion during tidal fluctuations. BASF’s inge reported to WDR that it has been awarded a contract to supply its dizzer UF modules and T-Rack system for the Putatan 2 WTP. According to inge sales director Josef Wunram, the new system will pretreat up to 180,000 m3/d (47.6 MGD) of RO feedwater for the project, and he notes that the company also supplied its UF system for the 50,000 m3/d expansion of the Putatan 1. The project is scheduled for operation in 2018. In brief Gradiant Energy Services (GES), the oilfield services arm of Gradiant Corporation, has announced that it has secured a capital investment from Turnbridge Capital, a Texas-based private equity firm that invests in energy-related services and equipment providers. GES CEO Danny Jimenez told WDR, “We’re a technology-based water management company, and this growth capital will help us fund the execution of new contracts and expand into multiple basins in the US.” Elsevier, publisher of the journal Desalination, has created a new editorial board member level to assist in speeding up the time to publication, while diversifying the expertise and origin of the board. The new Associate Editors are: Noreddine Ghaffour (KAUST), Mohamed Khayet (Universidad Com- Plant Location Client Online, month Capacity, m3/d (MGD)Pretreat Ghubrah Oman OPWP February 191,000 (50)DAF/DMF Al Zawra UAE FEWA June 45,500 (12)DAF/UF Jorf Lasfar Morocco OCP September 75,800 (20)DAF/UF Ceuta expansion Spain City of Ceuta October 10,000 ( 2.6)2-stage DMF Granadilla de Abona Canary Islands Aguas de Tenerife November 14,000 (3.7)DMF SWRO plants commissioned by Cadagua in 2016 “The Ghubrah project, which is the largest operating SWRO in Oman, was an IWP [independent water project] where we not only led the EPC joint venture, but also took part in Granadilla de Abona SWRO plant in Tenerife, Canary Islands Rate for one year: £355 or US$550. Subscribe and renew online at: www.desalination.com/wdr Reproduction or electronic distribution is forbidden. Subscribers may circulate their copy on their immediate premises. To email or create additional copies for other office locations, contact Jake Gomme (jg@globalwaterintel.com) to arrange a site license. Page 4WATER DESALINATION REPORT – 30 January 2017 plutense de Madrid), Baoxia Mi (University of California at Berkeley), Iqbal Mujtaba (University of Bradford), Darren Lee Oatley-Radcliffe (Swansea University) and Sarper Sarp (Qatar Foundation). Fountain Quail Energy Services, a Texas-based oilfield water services company, has acquired X-Chem’s Fraxtar trailer-mounted chlorine dioxide technology. The system, which has been rebranded as ‘MAVREX’, is an inherently safe, 3-precursor design that monitors actual residuals and adapts dosages in real-time. It creates ClO2 in situ with the water stream to eliminate gas reaction chambers, while the treatment and blending of all water takes place in the trailer. Only water with low levels of ClO2 leaves the trailer. At last week’s Water for Texas event in Austin, the Texas Water Development Board (TWDB) awarded Enviro Water Minerals (EWM) and NorrisLeal the Innovative Water Supply Award in the Technology category for their El Paso full recovery desalination project. The project, which will be commissioned in March, recovers fresh water and minerals from BWRO concentrate at El Paso Water Utilities’ Kay Bailey Hutchison Desalination Plant. UGSI Solutions, the disinfectant and chem-feed specialist, has acquired California-based PAX Water Technologies. PAX Water offers a line of active water storage tank mixers, in-tank aeration, and disinfectant residual boost systems to control distribution system disinfectant levels. Clean Industrial Technologies, a Canadian environmental services company, has awarded Los Angeles-based Water Planet a contract to furnish a containerized ceramic membrane system (CMS) for an Edmonton gas refinery. The system will filter up to 100 gpm (22.7 m3/hr) of oily wastewater effluent from the refinery’s API separator for reuse in its heat exchangers and cooling towers. The UF will operate in a cross-flow mode, without chemicals, at a recovery of 95 percent. The system will be controlled by the company’s Intellifux self-adaptive control system. Among the projects included on a list of the new US administration’s “Emergency & National Security Projects” infrastructure projects last week was Poseidon Water’s 50 MGD (189,250 m3/d) Huntington Beach Desalination Project. Poseidon’s only reaction to the news that its project had made the list was to issue a modest written statement that said, in part, the “Project has enjoyed bipartisan support from our state and federal officials, including Senator Dianne Feinstein and former Senator Barbara Boxer. Any federal financial support will lower the consumer cost of water. We look forward to working with the new administration…” Meanwhile, the project’s inclusion, and the $350 million price tag at which it was listed, drew immediate criticism from project opponents who said the report was littered with inaccuracies because “it’s a $1 billion plant.” One wonders if the gentleman who said that would insist on referring to the price of his house by its selling price or the full purchase price including the 30-year finance charges? After five years of collaboration with Taylor and Francis (T&F) publishers, the journal Desalination and Water Treatment will once again be published by Desalination Publications. According to editor-in-chief Miriam Balaban, the move is the result of a T&F policy change that adopted an Open Access model, which she said would cost authors €740 ($790) per paper. The journal has published more than 10,000 papers since it was founded in 2009, and abstracts may be read online at www.deswater.com. AWWA/AMTA MTC update: Harold Fravel, AMTA’s executive director, told WDR that registrations for this year’s conference in Long Beach, California are running ahead of last year. Although two of the conference hotels are full, there are still some rooms at the Renaissance Hotel in Long Beach. He said it is still possible to book a spot on the three plant tours, including a 13 February tour of the Carlsbad SWRO, and added, “we still have room for a few more exhibitors.” For information on the 13-17 February event, visit http://tinyurl.com/zuklau6. People Voltea has appointed Jennifer Smith as Texas/Midwest sales manager of its CapDI membrane-based capacitive deionization systems. She has nine years of experience in the environmental services sector and is based in Austin, Texas. She may be contacted at jennifer.smith@voltea.com. inge GmbH has announced that Krishnan Sadasivam (Sada) has joined their team as manager of membrane solutions for South East Asia, where he will be responsible for the company’s UF product portfolio business. He has over 22 years of experience in the water industry, including 12 years in the Asia Pacific region. He is based in Singapore and may be contacted at krishnan.sadasivam@basf.com. EXHIBIT E RUNNING DRY: DROUGHT IN CALIFORNIA THE IMPACT OF CALIFORNIA'S DROUGHT ON SAN DIEGO COUNTY Otay Water District’s Ambitious Plan to Bring in Desalinated Water from Mexico By May Tjoa Even as California residents debate whether we are free from the drought, local water agencies are looking for ways to increase their water supply. The Otay Water District is working on a project that would involve desalinated water from a new plant being built in Rosarito, Mexico. The district wants to build a 3.5 mile pipeline from the U.S-Mexico border to its 36.7 million gallon reservoir in Otay Mesa. The pipeline would transport some of that desalinated water to customers in Spring Valley, La Presa, Rancho San Diego, Jamul and eastern Chula Vista. Right now, all of the drinking water in the Otay Water District is purchased through the San Diego County Water Authority. If approved, the cross-border pipeline project would be first of its kind in San Diego County. "If we can bring desalinated water across, that gives us a very reliable supply," said Mark Watton, general manager for the Otay Mesa Water District. "And we're looking to do that at a price that's comparable to the water that we're purchasing today." The pipeline to Otay Mesa is projected to cost about $30 million. The price tag includes a disinfection system, a monitoring station, a pump station and other components. The expense would be later included in customers' water bills, as part of expenses for the district's capital improvement program. Before construction can begin, the Otay Water District must get two permits: a Presidential Permit from the U.S. Department of State, and a permit from the California Division of Drinking Water. The Presidential Permit would allow the pipeline to cross the international border. EXHIBIT E The district expects to hear if the Presidential Permit is granted, within the next few weeks. A permit from the California Division of Drinking Water would allow the Otay Water District to put the desalinated water into its water supply. The state is expected to make a decision on whether to approve the project, within the next year. "The California Department of Drinking Water certified the water from the desal plant in Carlsbad," said Watton. "They're going to use the exact same criteria for this water coming across the border. No shortcuts. It has to meet every state of California standard." In the process of qualifying for the Presidential Permit, the Otay Water District held public hearings and went through environmental reviews. "In Mexico there was public hearings, all the stuff we have here. Nobody showed up," said Watton. "We had all the same public hearings on our project here, the presidential permit, the environmental on the pipeline. We had some comments. I don't think anybody showed up." Some local environmentalists expressed concern that raw sewage could get into the water being used for the desalination plant. Watton says the sewer flows in the Imperial Beach area isn't related to the desalination plant. "The desal plant takes ocean water which is 9 miles away from the discharge that they're worried about," said Watton. "The process of the desal in and of itself is very selective, just like the pure water in the City of San Diego. It's the same process." Two San Diego environmental groups have expressed concern about the pipeline project. “Unless the State of Baja California cleans up the more than 50 million gallons a day of raw sewage discharged into the surf zone around the proposed desal project, San Diego County residents should not be guinea pigs for the first-ever potable water reuse project in Mexican history,” WILDCOAST Conservation Director Zachary Plopper said in a written statement. Plopper said the project would never be allowed to be built in California if a similar volume of sewage were being discharged in the ocean around it. Watton said the sewage problem is completely separate from Otay Water District’s Conveyance and Disinfection System project. He added, there will be checks to make sure the water meets California standards. “This new water supply, just as any other potable source including surface water from lakes, rivers, the Carlsbad Desalination Plant, and various Pure Water Programs, will EXHIBIT E need to meet the same high-quality standards required by the California State Water Resources Control Board Division of Drinking Water,” Watton said. “We stand strongly in our mission to distribute high-quality potable water to all of our customers.” According to San Diego County Policy Manager Julia Chunn-Heer, the Surfrider organization is also critical of the project. Chunn-Heer said that the project should have to meet U.S. environmental laws. “Basically water agencies should not be able to skirt our regulations by heading south of the border with projects designed for our benefit,” she said. She went on to say the process of desalination produces significant green house gases. Watton said environmental impact studies are being prepared for local, state and federal regulatory agencies in Mexico. “Unfortunately, certain U.S.-based groups do not appreciate, do not understand or mischaracterize Mexican environmental regulations, which regulate and address issues in many ways that are similar to the U.S. process,” he said. If both the state and federal permits clear, construction on the pipeline from the border to the Otay Water District's reservoir could begin in three years. "Once we get the two critical permits, then we have negotiations. We need to make sure the water is of a price and quality that work," said Watton. "And after all that is done, we can actually commence construction." If that happens, the desalinated water from Rosarito could go into the Otay water supply in about six years. Watton says the goal is to be 60 percent dependent on the San Diego County Water Authority for its drinking water supply, instead of 100 percent. The Otay Water District serves about 222,000 customers. Published at 8:13 AM PST on Feb 9, 2017 Source: http://www.nbcsandiego.com/news/local/Otay-Water-Districts-Ambitious-Plan- to-Bring-in-Desalinated-Water-from-Mexico-413292363.html#ixzz4YJvi3QuP Follow us: @nbcsandiego on Twitter | NBCSanDiego on Facebook EXHIBIT F San Diego Union-Tribune Tijuana's huge sewage spill has U.S. officials crying foul Joshua Emerson SmithContact Reporter February 27, 2017 9:25 am A massive sewage spill in Tijuana that polluted beaches in San Diego County this month may have been no accident, according to state and local officials. In a preliminary estimate, officials said about 143 million gallons of raw sewage spewed into the Tijuana River during a period of more than two weeks that ended Thursday. While cross-border sewage spills of a few million gallons are routine for the region, this is one of the largest such events in the past two decades, according to water-quality experts in San Diego. People from Tijuana to as far north as Coronado have been complaining of foul odors for weeks, prompting lawmakers in San Diego County to contact federal regulators as well as agencies in Mexico. The U.S. regulators said their Mexican counterparts have given little explanation. Mexican officials also haven’t responded to requests for comment for this story since Monday. “This was like a tsunami,” said Imperial Beach Mayor Serge Dedina, who said he tried to get answers from officials on both sides of the border for more than a week with no response. EXHIBIT F “What’s worse is it looks to me like this was deliberate,” he added. “It saves (the Mexican agencies) a lot of money in pumping costs, and ultimately, they can get away with it and do it all the time, just on a much smaller scale.” The junction of the Alamar River on the left and the Tijuana River were 143 million gallons of raw sewage were spilled in 17 days. (Alejandro Tamayo / San Diego Union-Tribune) The toxic discharge is estimated to have happened from Feb. 6 through Thursday, while repairs were made to a major sewer pipe near the confluence of Mexico’s Alamar and Tijuana rivers, according to the U.S. side of the International Boundary and Water Commission. Baja California’s State Public Service Commission maintains the sewer-system infrastructure in that area. “They basically said it was a bypass of raw sewage into the Tijuana River during the rehabilitation of a large sewer pipeline in Tijuana,” said Lori Kuczmanski, spokeswoman for the U.S. side of the commission, which oversees international water treaties with Mexico, among other things. The commission announced the spill on Friday. Before that day, officials in Mexico had not responded to multiple inquiries about the incident, according to local, regional and federal regulators in the United States. By Tuesday, U.S. EXHIBIT F officials said their Mexican counterparts still offered only scant details of the situation. They also said Mexico didn’t give them advance notice of the sewer-pipe repair project. “Was the spill intentional? Well, yeah,” said Dave Gibson, executive officer of the San Diego Regional Water Quality Control Board. “It appears they were working on the pipeline. I don’t believe that it was a question of it failing. “At least a notification would be a good neighborly thing to do, to let us know what was coming down the river before it got here so we could alert the public,” he added. A similar project in the United States would include efforts to prevent sewage from flowing downstream by using booms and then pumping the diverted sewage back into the wastewater system, Gibson said. Depending on how much of the approximately 143 million gallons of sewage has been flushed out to sea by recent storms, toxic materials may persist along the region’s beaches into the spring and summer, according to the water quality board. For much of the past month, South Bay beaches had been closed because of run-off pollution generated by rainfall. While federal officials said the spill has ended, people in Imperial Beach are continuing to report strong odors. On Tuesday, San Diego County’s Department of Environmental Health expanded an existing beach closure because of sewage contamination in the Tijuana Slough National Wildlife Refuge and Imperial Beach. The closure now includes the Silver Strand and Coronado. Officials said warning signs will remain along the shorelines of those sites until bacteria-level tests find the ocean is safe for recreational use. EXHIBIT F The Tijuana River is a notoriously polluted waterway that flows from Mexico into the U.S., emptying into the Pacific Ocean. For years, South County beaches have been labeled as among the nation’s most polluted because of contamination that flows from the river, which is fed by creeks and ravines often littered with garbage and sewage from homes lacking adequate plumbing. Governments on both sides of the border have spent billions in taxpayer dollars to clean up sewage and other contamination in the river; their efforts include construction of several wastewater treatment plants in Tijuana. Those steps have made a significant difference, according to the water quality board. In the 1980s and 1990s, as much as 14 million gallons of sewage a day routinely flowed in the river into San Diego County, the agency said. HENRY ABARBANEL, PH.D., CHAIR DAVID GIBSON, EXECUTIVE OFFICER 2375 Northside Drive, Suite 100, San Diego, California 92108-2700 www.waterboards.ca.gov/sandiego RECYCLED PAPER EXHIBIT G March 2, 2017 Border Environment Cooperation Commission P.O. Box 221648 El Paso, Texas 79913 North American Development Bank 203 South St. Mary's, Suite 300 San Antonio, Texas 78205 SUBJECT: NEED TO FOR IMPROVED WASTEWATER MANAGEMENT IN TIJUANA Dear BECC-NADB Board of Directors: On behalf of the California Regional Water Quality Control Board, Region 9 (San Diego Water Board), I want to share with you my appreciation for the work you have supported to improve communities along the border. I would also like to express the San Diego Water Board’s deep concern regarding the state of sewage collection and treatment in Tijuana, and the discharges of sewage into waters shared by Mexico and the United States. Although significant progress has been made during the last 20 years, in no small part due part to the efforts of BECC and NADB, it is abundantly clear from recent events that much more work remains to be done to improve sewer system reliability in order to protect our communities in Tijuana and San Diego, and the quality of the waters we all care about and depend upon. In particular, the recent release of approximately 143 million gallons of raw sewage into the Tijuana River demonstrates both how vulnerable the current sewer system in Tijuana is and how much work remains ahead of us to prevent and respond to planned and unplanned releases of sewage. I would like to respectfully request that you consider the needs of the residents along the border, on both sides, for adequate sewer system reliability and that you consider making it a top priority, placing this extremely important need ahead of plans for the proposed NCS Agua/Comisión Estatal de Servicios Públicos de Tijuana (CESPT) desalination facility in Rosarito until such time as the reliability and performance of sewage collection, treatment and discharge systems in Tijuana and San Antonio de los Buenos treatment facility are functionally equivalent to the standards routinely achieved and maintained in comparably sized districts and municipalities in the San Diego.region. BECC-NADB Board of Directors - 2 - March 2, 2017 HENRY ABARBANEL, PH.D., CHAIR DAVID GIBSON, EXECUTIVE OFFICER 2375 Northside Drive, Suite 100, San Diego, California 92108-2700 www.waterboards.ca.gov/sandiego RECYCLED PAPER I sincerely appreciate the importance of safe, clean drinking water to the people of Tijuana, but I feel compelled by multiple recent discharges of raw sewage into drainages tributary to the Tijuana River Valley and the poor effluent quality of the San Antonio de los Buenos treatment plant to share with you the San Diego Water Board’s concern regarding the serious threat to human and environmental health resulting from the condition and operation of these systems to communities in Tijuana and San Diego. Adding more influent to an already stressed system and an aging, poorly performing sewage treatment plant can only be expected to result in still more similar discharges. Moreover, the San Diego Water Board is concerned that the terms of the project to develop a desalination facility in Rosarito may be such that CESPT will be burdened with so much debt service as to be functionally precluded from making significant investments in its sewer system just as loadings to it are increasing. I am respectfully requesting that you support a thorough and comprehensive review of the Tijuana region wastewater management needs that precedes the commitment of funding for desalination projects, and that you further consider ways of supporting the development of effective reuse of the wastewater in Tijuana to augment water supplies there as is being done by the cities of San Diego and Escondido, the Padre Dam Municipal Water District, and Orange County. I have previously commented on this regarding the proposed Rosarito project, but the nature of recent sewage failures makes the case I suggested in my previous communications even more consequential and I would ask that you add this communication to the public comment file on the proposed Rosarito desalination project that is pending before you. Thank you very much again for your many years of hard work to improve our communities along the border through sound investment in important wastewater and water projects. Please consider taking or supporting the steps and measures necessary to improve sewer system reliability that would build upon the many successful projects supported and funded through your efforts. Respectfully, David W. Gibson Executive Officer Enclosure: February 23, 2017 Transboundary Spill Report EXHIBIT H Top SD Water Official Wants Tijuana to Prioritize Sewer Water Over Desal Water For years, Mexican officials have been working to build a desalination plant in Rosarito Beach. David Gibson, executive director of the San Diego Regional Water Quality Control Board, says the new plant could siphon money from the already strained Tijuana sewer system. Photo by Ry Rivard Mexican officials are looking to build an ocean water desalination plant near the site of a Rosarito Beach power plant. EXHIBIT H Partner Voices Interested in Water narrative? Follow By Ry Rivard | 5 hours ago San Diego’s top water quality official worries that a new desalination plant in Mexico could worsen the decades-long problem of sewage spilling across the border into the United States. The connection between that plant and sewage spills may not be obvious. But there are three connections: wastewater management, money and politics. For years, Mexican officials have been working to build a desalination plant in Rosarito Beach that would eventually make 100 million gallons a day of Pacific Ocean water drinkable. David Gibson, executive director of the San Diego Regional Water Quality Control Board, says the new desalination plant could siphon money from the already strained Tijuana sewer system. That worry grew more acute after a recent spill sent millions of gallons of sewage north through the Tijuana River in February, causing foul odors and closing beaches in the South Bay. A collapsed sewer line is believed to be responsible for making the spill the largest in over a decade – though an investigation by U.S. and Mexican officials is still trying to pin down exactly what happened. As the scope of that spill became clear, Gibson wrote on March 2 to the International Boundary and Water Commission, a binational agency that is supposed to help settle differences along the border. He said the costs of the desalination plant could burden the Public Service Commission in Tijuana “with so much debt service obligations as to effectively limit or even preclude funding for sewer system improvements in coming years.” In another letter from the same day to the North American Development Bank, which helps fund projects along the border, Gibson suggested the bank should encourage Tijuana to first focus on its sewer system and recycling sewage into drinkable water, rather than spending money on a new desalination plant. Rosarito Beach is on the southern coastal outskirts of Tijuana, but water from the plant would be sent to Tijuana-area water customers via a 25-mile pipeline. By recycling sewage, something San Diego is also considering, Tijuana would presumably reduce the amount of sometimes poorly treated wastewater that American officials say can foul up San Diego’s coastal waters. Gibson’s complaints are not new, nor as they his alone. As the Rosarito Beach desalination project picked up steam last year, Imperial Beach Mayor Serge Dedina and the environmental group he leads, Wildcoast, lobbied against a federal permit EXHIBIT H that would allow water from the Rosarito Beach desalination plant to eventually be sold in the United States. They argued Mexican officials should focus on their sewer system before selling drinking water across the border to the Otay Water District. The Rosarito desalination plant would be twice the size of the new desalination plant the San Diego County Water Authority helped build in Carlsbad, which provides about 10 percent of San Diego’s water. Like San Diego, most of Tijuana’s drinking water comes from the Colorado River. While a good winter has helped replenish the Colorado, it has just gone through a historic drought that worried officials in both countries that rely on it. The Otay Water District has backed the Rosarito Beach project for years in an effort to have its own independent supply of water, separate from the San Diego County Water Authority. The permit needed for a four-mile pipeline across the border is pending in the U.S. State Department. Mark Watton, Otay’s general manager, said people trying to connect the desalination project to Tijuana’s sewer problems are misguided. “If Mr. Gibson is suggesting that (Tijuana) have a restricted water supply to reduce sewage flows, I’d submit that restricting utilities or infrastructure of any sort to limit a city’s population growth is an absolute loser,” Watton said in an email. Gibson said he doesn’t oppose drinking water supply projects, but the outcome of the desalination plant should not be neglect of the sewer system. “Since we haven’t been shown the sewer improvement plans, or more importantly how they will be funded, it is far from clear that the agencies in Mexico are truly prepared to significantly change sewer system performance from the status quo and until they are more transparent and forthcoming, I am concerned we will see more spills,” he said in an email. This article relates to: Border, Science/Environment, Water Water Desalination ReporT Volume 53, Number 11 The international weekly for desalination and advanced water treatment since 1965 20 March 2017 Tom Pankratz, Editor, P.O. Box 75064, Houston, Texas 77234-5064 USA Telephone: +1-281-857-6571, www.desalination.com/wdr, email: tp@globalwaterintel.com © 2017 Media Analytics. Published in cooperation with Global Water Intelligence. AustraliaMothballed SWRO begins delivering water Yesterday, nearly four and a half years after it was commissioned, the 450,000 m3/d (119 MGD) Victorian Desalination Plant (VDP) began delivering water via an 84km (52.5 mi) underground pipeline into the Cardinia Reservoir, southeast of Melbourne. From there, the water will enter the Melbourne water supply system. The plant was built in response to a ten-year drought, but by the time it was commissioned, record rainfalls had filled the reservoirs and the plant was mothballed. However, by last March, the water levels had again fallen to the point that an order was subsequently placed to deliver 50 million cubic meters (40,533 AF) by 30 June 2017. When the plant was being readied for a re-start, an electrical fault damaged the switchgear, and it was only recently repaired, enabling yesterday’s successful startup. It has been reported that the there will be a standing order placed—which will be reviewed every three years—for a minimum of 15 million m3/y (12,160 AFY), or ten percent of its capacity, to ensure that the plant remains in operating condition and can respond when needed. The VDP is operated and maintained by Watersure, a SUEZ/ Ventia (formerly Thiess Services) joint venture, under contract to AquaSure, the plant’s owner. Mexico Politics, Exchange rates Impact swro costs In an ominously worded statement in its 16 March Securities and Exchange Commission 10-K filing, Consolidated Water Company (CWCO) said that unless it can increase its proposed water tariff for its Rosarito project, it may be unable to finance the cost of the 100 MGD (378,500 m3/d), $463 million SWRO project. The company said its bid price was adversely impacted due to the falling value of the Mexican Peso (MXN) and because the “general macroeconomic conditions in Mexico have declined since the U.S. Presidential election”. No further details estimating the amount of the possible price increase, or how much future exchange rate fluctuations may impact it, were provided in the filing. However, CWCO CEO Rick McTaggart sounded much more optimistic later in the week. He noted that on 10 February 2017, the company submitted proposals to its Mexican client requesting a water tariff increase to compensate for the changes, which he said also included changes in lending rates and certain changes in law. “We are currently discussing these proposals with our client and while nothing has been finalized, we are encouraged by their initial responses to our proposals. We continue to work closely with our partners, advisors and financing institutions with the goal of commencing construction of this very important project in the third quarter of this year,” he said. When the financial offers were announced on 15 June 2016, the peso was trading at nearly MXN19 per US$, it has since slipped to as low as 22, but finished last week at 19.19. The impacts of the fluctuating rate on the project’s water tariff are illustrated in the following table: Milestone Date Exc Rate Tariff at 100 MGD buildout MXN / $MXN/m3 $/m3 $/kgal Bids submitted 21 Apr 2016 17.31 13.59 0.79 2.97 Project awarded 15 Jun 2016 18.92 13.59 0.72 2.72 Post US election 18 Nov 2016 20.22 13.59 0.67 2.54 Increase request 10 Feb 2017 20.46 13.59 0.66 2.51 Recent close 17 Mar 2017 19.19 13.59 0.71 2.68 How Peso/Dollar exchange rate has impacted the project water cost Aguas de Rosarito (AdR), a special purpose company comprised of CWCO’s NSC Agua subsidiary, NuWater and Degrémont will execute the project on a design-build-own- operate basis. AdR will raise Mexican peso denominated debt financing through a consortium led by the North American Development Bank, which also provided financial advisory services to the consortium through the bidding process and contract negotiations. Page 2 CWCO said that the project’s annual revenues would be approximately MXN1.02 billion, or $52 million, based upon today’s exchange rate. Water rates under the APP Contract are indexed to the Mexican national consumer price index over its term, and electrical energy costs incurred are to be treated as a pass through charge. Plans call for the project’s first 50 MGD phase to be operational by the end of 2019, but not later than 36 months after financial close. The plant will be doubled in size during a second phase, which is to be operational by 2024. At the end of the 37-year operating period, both phases of the plant and pipeline will be handed over to the state. Saudi ArabiaActivity swirls around trio of mega-SWROs Three large-scale IWPs (independent water projects) with a combined production capacity of 1.43 million m3/d (377.8 MGD) are in the process of taking important steps forward as the first quarter nears an end. The projects, all to be located on Saudi Arabia’s Red Sea Coast, are the first large- scale private projects to be developed since the Saline Water Conversion Corporation (SWCC) announced its massive capacity-building program last November. SWCC has appointed a team comprising Banque Saudi Fransi and Alderbrook (financial), Fichtner (technical) and the UK’s DLA Piper (legal) to advise on the procurement of the 600,000 m3/d (158.5 MGD) Rabigh 3 SWRO project. The project, which is the largest of the three new IWPs, was initially planned for development as a conventional EPC project. It should be operational in 2020. Both the 450,000 m3/d (119 MGD) Yanbu IWP and 380,000 m3/d (100.4 MGD) Shuqaiq 3 IWP have begun the process of selecting consulting teams for the projects, with proposals due to be submitted this Wednesday, 22 March. Tendering is planned to begin by the end of this year, with the aim of securing a developer in early 2019. The projects are three of the eight planned large-scale IWP/ IWPPs that are to be developed in the Kingdom by 2025. United StatesEPA budget slashed Under the White House’s proposed 2018 federal budget unveiled last week, the Environmental Protection Agency’s (EPA) budget cut of 31 percent has the distinction of being the hardest hit of any federal agency. The $2.6 billion cut would reduce the budget to $5.7 billion, its lowest inflation- adjusted level in 40 years. Besides shedding 3,200 jobs, representing 19 percent of its employees, the budget proposes to eliminate $100 million for climate change research, reduce regional water pollution cleanup programs by $427 million and slash Superfund site cleanups by $330 million, while terminating the Energy Star program to promote energy-efficient appliances. The plan does provide for a small increase to the $100 million State Revolving Funds program for low interest loans on “high priority” investments in water and sanitation infrastructure. The budget must now go before Congress, where it will be subjected to a strict appropriations process, which is rarely completed before the 1 October start of the fiscal year. Editor’s note: Last year’s 126-page EPA Budget in Brief— which contains an introductory note that it is “printed with vegetable-oil-based inks and is 100-percent postconsumer recycled material, chlorine-free-processed and recyclable”— begins with a review of the EPA’s mission and priorities. It notes that “The issue of highest importance facing the agency over the next few years will continue to be greenhouse gas (GHG) mitigation and climate change adaptation.” Based on current reports, the EPA’s focus on climate change seems likely to be revised even more dramatically than the budget itself. When asked about it, the White House budget director said, “Regarding the question as to climate change… we’re not spending money on that anymore; we consider that to be a waste of your money to go out and do that.” IndonesiaBuyer sought for 4-yr-old SWRO plant In other Consolidated Water Company (CWCO) news, the company said that if it is unable to find a strategic partner for its SWRO plant in the Nusa Dua area of Bali, Indonesia, it might decide to discontinue its Bali operations. The plant, which had an initial capacity of 0.26 MGD (1,000 m3/d), was commissioned in April 2013 and expanded to 0.79 MGD (2,990 m3/d) one year later. Development of the project began in 2012 in what is considered to be one of Bali’s prime tourist areas. According to CWCO CEO Rick McTaggart, the area has a target customer profile consisting of tourist resorts and luxury/ vacation residences comparable to CWCO’s retail service area on Grand Cayman. However, the business has been adversely impacted by reduced demand for water from the plant and a steep decline in the Bali economy. “We believed that the water demands of these properties had already exceeded the local public utility’s supply WATER DESALINATION REPORT – 20 March 2017 Page 3WATER DESALINATION REPORT – 20 March 2017 capacity, and that other areas of Bali will also eventually experience fresh water shortages. However, desalination had not been employed to any meaningful extent in Bali, and we concluded that we must first demonstrate its viability, as well as our capabilities and expertise if we were to obtain customers. Because of this, we elected to construct the plant before obtaining water supply agreements for its production. “Although we initially thought this business had great potential, we’ve been disappointed with its performance, and we may decided to discontinue our Bali operations if we cannot find a strategic partner, or if its prospects do not improve later this year,” said McTaggart. California Merchant plant ramping up production In January, Sweetwater Tech Resources (STR) received a temporary permit to begin commercial operation of California’s first merchant plant to treat 500 bpd (80 m3/d) of oilfield produced water for beneficial reuse. Last week, the regional facility, which is located in Wasco, north of Bakersfield, received its final permit, enabling it to increase production to treat up to 10,000 bpd (1,590 m3/d) of produced water. The initial treatment system for the regional facility was developed and pilot tested by Los Angeles-based Water Planet in early in 2016. The success of the pilot led to the December 2016 installation of Water Planet’s containerized IMS-5000 treatment system, which includes oil-water separation, solids dewatering, ceramic filtration, granular activated carbon, a two-stage RO to meet boron removal requirements and the company’s proprietary Intelliflux self- adaptive control technology. Water Planet CEO Eric Hoek told WDR that the system would now be scaled-up to its full production capacity. Meanwhile, STR has plans to eventually operate multiple recycling facilities that are capable of treating up to 4 MGD (95,240 bpd; 15,140 m3/d) in the Bakersfield area. Hoek also said that the company took the opportunity to operate its new PolyCera UF membranes, in parallel with the ceramic membranes in the unit to successfully demonstrate their performance in a commercial system. STR’s clients currently deliver produced water to the facility by truck. Following treatment, STR is able to sell the treated effluent, the clean brine and dewatered solids to a local mining company. Company NewsSolar desal — one farm at a time KII/Suns River, a Louisiana-based manufacturer of solar stills, has announced a partnership with Dubai’s Merlin Company to address food and water issues in rural desert areas of the Middle East, North Africa, Pakistan and India. The pair said that they would construct a demonstration installation at the American University of Sharjah’s Research Center, in Sharjah, UAE. Suns River CEO Hill Kemp told WDR, “Our solar stills can produce up to 12 L/m2/d [7 gpd/ft2], or about three times more than a conventional still, using a combination of serpentine cooling tubes and an inclined feedwater heating surface in a recirculating, three-stage configuration. The system will be designed to operate on a day/night cycle, using the heated cooling water to produce a significant amount of the total water production overnight. “For locations where brine disposal is a problem, each day’s concentrate can be discharged into one of three flat pan containers for natural evaporation, leaving behind a solid salt cake.” The demonstration facility will consist of a battery of 15 modules—each measuring 1m wide (3.3 ft) by 2.5m (8.2 ft) long and elevated 2m (6.6 ft) above the ground—with a combined production rate of 0.45 m3/d (119 gpd). The units will concentrate the feedwater, which can range from brackish groundwater to seawater, to a TDS of nearly 150,000 mg/L. Suns River solar still arrangement He said that such a system will provide sufficient water to irrigate a shaded area of approximately 130m2 (1,400 ft2), adding, “The UAE has an initiative to assist its citizens that live in rural areas. Our stills will help ensure that those residents have an adequate water supply.” The demonstration system is expected to be operational later this summer. Singapore Company sheds seawater desal assets GWI has confirmed that Singapore’s Hyflux has applied for regulatory approval to sell up to 70 percent of its Tuaspring IWPP. The project—which includes the 318,500 m3/d (84 MGD) Tuaspring SWRO plant with UF pretreatment and a 411 MW combined cycle gas turbine power plant—was commissioned in 2013. The company is also in the process of shortlisting potential buyers for its 100,000 m3/d (26.4 MGD) Dagang SWRO plant in Tianjin, China, which was commissioned in 2009. The company stake in other SWRO projects includes: • 30% stake in Singapore’s 136,380 m3/d (36 MGD) SingSpring plant, commissioned in 2006, • 47% stake in Algeria’s 500,000 m3/d (132.1 MGD) Mactaa SWRO plant, commissioned in 2015, and • 15.3% stake in Algeria’s 200,000 m3/d (52.8 MGD) Souk Tleta SWRO plant, commissioned in 2011. In brief RWL Water has completed the acquisition of Acquavit, the São Paulo, Brazil-based water, wastewater and waste-to- energy company. Acquavit Comércio E Indústria de Sistemas De Tratamento De Água Ltda, which was founded in 2003, has been renamed RWL Water Brasil and joins RWL Water Argentina—formerly Unitek—as evidence of RWL Water’s confidence in the Latin American market. On 6 March, it was revealed that the bid for $35 million of Australian Government funding for a Future Water Co-operative Research Centre was not successful. The Government announced funding for four new CRCs for transport, food, soils and honeybees. The partners of the Future Water bid—some of whom were supporters of the former National Centre of Excellence in Desalination Australia—are considering entering the next round of CRC funding which opens this coming May. CEO-designate Neil Palmer told WDR that while the result was disappointing, the need for water technology research in Australia, the driest inhabited continent, had not diminished and there was a strong push from industry partners to prepare a new proposal. Last week, Jordan commissioned the country’s first seawater desal plant. The 12,000 m3/d (3.2 MGD) Aqaba SWRO plant was delivered by Jordanian-based AquaTreat under a 7-year BOT contract, and will supply 30 percent of its production to the Arab Potash Company’s KEMAPCO fertilizer plant and the balance to the Aqaba Water Company for distribution to its customers. The plant is to be powered with renewable energy generated from a combination of methane gas emitted from the KEMAPCO plant and solar power. The Southeast Desalting Association will hold a workshop titled Salvaging RO/NF Concentration: ZLD at the City of Palm Coast in Palm Coast, Florida, on 29 March. For information, visit http://tinyurl.com/zxq42q3. A joint AMTA/SEDA technology transfer workshop titled MBR and Reuse in the Southeast will be held in Peachtree Corners (Atlanta), Georgia, on 4-6 April. For more infor- mation, visit http://tinyurl.com/zzbb35d. The bid date for the 150,000 m3/d (40 MGD) Chennai Nemmeli II SWRO project has been delayed for a third time, until 7 April. The project will be delivered to Chennai Metro Water under an EPC contract with an attached 20-year O&M agreement. People De Nora has announced the appointment of Brian Shugrue as director of sales for the Americas. Formerly with USFilter and Siemens Water, he is based in Seattle, Washington, and may be contacted at brian.shugrue@denora.com. James Murphy, III, most recently the executive manager for water utility operations at the Guadalupe Blanco River Authority, and formerly the general counsel for Texas’ Trinity River Authority, has announced that he has joined Halff Associates, where he will be responsible for water supply planning. He is based in Austin, Texas, and may be contacted at jmurphy@halff.com. Rate for one year: £355 or US$550. Subscribe and renew online at: www.desalination.com/wdr Reproduction or electronic distribution is forbidden. Subscribers may circulate their copy on their immediate premises. To email or create additional copies for other office locations, contact Jake Gomme (jg@globalwaterintel.com) to arrange a site license. Page 4WATER DESALINATION REPORT – 20 March 2017 STAFF REPORT TYPE MEETING: Regular Board MEETING DATE: June 7, 2017 SUBMITTED BY: Lisa Coburn-Boyd Environmental Compliance Specialist CIP./G.F. NO: P2451- 001101 DIV. NO. ALL APPROVED BY: Rod Posada, Chief, Engineering German Alvarez, Assistant General Manager Mark Watton, General Manager SUBJECT: Approval of an Addendum to the Final Environmental Impact Report for the Otay Mesa Conveyance and Disinfection System Project GENERAL MANAGER’S RECOMMENDATION: That the Otay Water District (District) Board of Directors (Board) approves the addendum to the Final Environmental Impact Report for the Otay Mesa Conveyance and Disinfection System Project (Project) (see Exhibit A for Project location). COMMITTEE ACTION: Please see Attachment A. PURPOSE: To obtain Board approval of the addendum to the Final EIR for the Project. ANALYSIS: The Otay Mesa Conveyance and Disinfection System Project involves the design, construction, and operation of an approximately four-mile-long, 48-54 inch diameter potable water pipeline and a metering station within the Otay Mesa area of the District. The Project may also include a disinfection facility and/or pump station. The pipeline will begin at the U.S. - 2 Mexico border and end at the District’s Roll Reservoir on Otay Mesa. It will be used to convey desalinated water produced at the desalination plant that will be built in Rosarito, Baja California, Mexico if the District is able to enter into an agreement to purchase the water. The Project would increase the District’s potable water supply flexibility and reliability. A joint California Environmental Quality Act (CEQA)/ National Environmental Policy Act (NEPA) Environmental Impact Report/ Environmental Impact Statement (EIR/EIS) document was prepared for the Project for environmental compliance and as part of the Presidential Permit (PP) process for the pipeline. The PP is required since the pipeline will cross the U.S. – Mexico border. The final EIR/EIS was certified by the Board of Directors on September 7, 2016. The environmental permitting for the Project includes consultation with the United States Fish & Wildlife Service. As part of this consultation, it was determined that the impact footprints and habitat acreages for federally listed species (Otay tarplant, Quino Checkerspot butterfly, San Diego fairy shrimp, and coastal California gnatcatcher) are less than what had been specified in the EIR/EIS. Because of these reductions, an addendum to the EIR was prepared as specified in the CEQA Guidelines, Section 15164 (b). The addendum does not need to be circulated for public review, but the CEQA Guidelines require that it be considered by the Board as part of the EIR. The addendum is attached as Exhibit B. The addendum is prepared under CEQA and applies to the Final EIR. The Final EIS is a federal document, prepared consistent with NEPA for the State Department and the PP process. The changes described in the addendum will also be included as part of the administrative record for the Final EIS and the PP process. FISCAL IMPACT: Joe Beachem, Chief Financial Officer No fiscal impact. See Attachment B, Budget Detail. STRATEGIC GOAL: This Project supports the District’s Mission statement, “To provide high value water and wastewater services to the customers of the Otay Water District in a professional, effective, and efficient manner” and the General Manager’s Vision, “A District that is at the forefront in innovations to provide water services at affordable rates, with a reputation for outstanding customer service.” 3 LEGAL IMPACT: None. BK/LCB:jf P:\WORKING\CIP P2451 Desalination Feasibility Study\Staff Reports\Committee Desal Update 2017-2\ BD 06-07-2017, Staff Report, Addendum to the Final EIR for the OMCDSP.doc Attachments: Attachment A – Committee Action Attachment B – Budget Detail Exhibit A – Project Location Exhibit B – Addendum to the Final Environmental Impact Report for the Otay Mesa Conveyance and Disinfection System Project ATTACHMENT A SUBJECT/PROJECT: P2451-001101 Approval of an Addendum to the Final Environmental Impact Report for the Otay Mesa Conveyance and Disinfection System Project COMMITTEE ACTION: The Desalination Committee (Committee) reviewed this item at a meeting held on May 23, 2017. The Committee supported staff’s recommendation. NOTE: The “Committee Action” is written in anticipation of the Committee moving the item forward for Board approval. This report will be sent to the Board as a Committee approved item, or modified to reflect any discussion or changes as directed from the Committee prior to presentation to the full Board. ATTACHMENT B – Budget Detail SUBJECT/PROJECT: P2451-001101 Approval of an Addendum to the Final Environmental Impact Report for the Otay Mesa Conveyance and Disinfection System Project Date Updated 5/2/2017 Budget 30,000,000 Phases Planning Consultant Contracts 26,155 19,945 6,210 26,155 BROWNSTEIN HYATT FARBER 98,577 98,577 - 98,577 CAMP DRESSER & MCKEE INC 13,311 13,311 - 13,311 CPM PARTNERS INC 380,200 380,200 - 380,200 HECTOR I MARES-COSSIO 71,531 71,531 - 71,531 MARSTON & MARSTON INC 26,700 26,700 - 26,700 REA & PARKER RESEARCH 4,173 4,173 0 4,173 SALVADOR LOPEZ-CORDOVA 225,499 225,499 - 225,499 SILVA-SILVA INTERNATIONAL 4,800 4,800 - 4,800 SVPR COMMUNICATIONS Meals, Travel, Incidentals 21,846 21,846 - 21,846 STAFF Printing 61 61 - 61 MAIL MANAGEMENT GROUP INC Professional Legal Fees 970 970 - 970 ARTIANO SHINOFF 162,041 162,041 - 162,041 GARCIA CALDERON & RUIZ LLP 43,175 43,175 - 43,175 SOLORZANO CARVAJAL GONZALEZ Y 32,612 32,612 - 32,612 STUTZ ARTIANO SHINOFF Regulatory Agency Fees 3,120 3,120 - 3,120 COUNTY OF SAN DIEGO 2,142 2,142 - 2,142 STATE WATER RESOURCES Service Contracts 500 500 - 500 REBECA SOTURA NICKERSON 875 875 - 875 LEONARD VILLAREAL 32,463 32,463 - 32,463 (W)RIGHT ON COMMUNICATIONS INC 39,500 39,500 - 39,500 BUSTAMANTE & ASSOCIATES LLC 290 290 - 290 SAN DIEGO DAILY TRANSCRIPT 685 685 - 685 SAN DIEGO UNION-TRIBUNE, THE Standard Salaries 1,183,988 1,183,988 - 1,183,988 Total Planning 2,375,214 2,369,004 6,210 2,375,214 Design 001102 Consultant Contracts 3,800,863 1,413,101 2,387,762 3,800,863 AECOM TECHNICAL SERVICES INC 3,952 3,952 - 3,952 AIRX UTILITY SURVEYORS INC 5,000 5,000 - 5,000 ATKINS 8,818 8,818 - 8,818 CPM PARTNERS INC 5,109 5,109 - 5,109 MARSTON+MARSTON INC 31,920 31,920 - 31,920 MICHAEL R WELCH PHD PE Meals, Travel, Incidentals 3,457 3,457 - 3,457 STAFF Professional Legal Fees 7,761 7,761 - 7,761 STUTZ ARTIANO SHINOFF Regulatory Agency Fees 1,127 1,127 - 1,127 STATE WATER RESOURCES Service Contracts 1,084 1,084 - 1,084 SAN DIEGO UNION-TRIBUNE LLC 114 114 - 114 REPROHAUS CORP Standard Salaries 234,673 234,673 - 234,673 Total Design 4,103,878 1,716,116 2,387,762 4,103,878 Construction Standard Salaries - - - - Total Construction - - - - Grand Total 6,479,092 4,085,120 2,393,972 6,479,092 Vendor/Comments Otay Water District P2451 Otay Mesa Desalination Conveyance and Disinfection System Committed Expenditures Outstanding Commitment & Forecast Projected Final Cost 571-1RESERVOIR 870-1RESERVOIR OTAY MESA RD EN R I C O F E R M I D R DONOVA N DONOVANCORRECTIONALFACILITY SIEMPRE VIVA RD G.F. BAILEYDETENTION FACILITY AIRWAY RD AL T A R D PASEO DE LA F U E N T T E STATE PRISON RD ALT A R D MEXICO USA OW D B O U N D A R Y FUTURE FUT U R E ?ò ?Ü ?Ü FUTUREPORT OFENTRY OTAY WATER DISTRICTOTAY MESA DESALINATION CONVEYANCEAND DISINFECTION SYSTEM PROJECT EXHIBIT A CIP P2451 0 2,0001,000 Feet F P: \ W O R K I N G \ C I P P 2 4 5 1 D e s a l i n a t i o n F e a s i b i l i t y S t u d y \ G r a p h i c s \ E x h i b i t s - F i g u r e s \ E x h i b i t A , M a r c h 2 0 1 5 . m x d Legend Pipeline Alternative 1 Pipeline Alternative 2 Pipeline Alternative 3 VICINITY MAP PROJECT SITE NTSDIV 5 DIV 1 DIV 2 DIV 4 DIV 3 ?ò Aä%&s ?p ?Ë !\ F Exhibit B Otay Water District 2554 Sweetwater Springs Boulevard Spring Valley, California 91978-2096 AN ADDENDUM TO THE FINAL ENVIRONMENTAL IMPACT REPORT FOR THE OTAY MESA CONVEYANCE AND DISINFECTION SYSTEM PROJECT, SAN DIEGO COUNTY, CALIFORNIA March 31, 2017 The California Environmental Quality Act (CEQA) Guidelines, Section 15164(b) states that an Addendum to a previously adopted Negative Declaration or Environmental Impact Report (EIR) may be prepared if only minor technical changes or additions are necessary, or none of the conditions described in Sections 15162 or 15163 calling for the preparation of a subsequent or supplemental EIR or subsequent Negative Declaration have occurred. Please note the EIR noted herein was prepared as part of a joint Environmental Impact Report/Environmental Impact Statement (EIR/EIS). The EIS is a document prepared for a federal Lead Agency, in this case the Department of State, pursuant to the National Environmental Policy Act (NEPA). No changes to the federal document are necessary. Discussion Revisions to the proposed project (as defined in the final Environmental Impact Report [EIR]) are included herein as an Addendum to the final EIR. The revisions consist of updated impact footprints and habitat acreages for federally listed species that may be impacted by the proposed project. These species include Otay tarplant (Deinandra conjugens), San Diego fairy shrimp (Branchinecta sandiegonesis), Quino Checkerspot butterfly (Euphydryas editha quino), and coastal California gnatcatcher (Polioptila californica californica). There are no proposed changes to least Bell’s vireo (Vireo bellii pusillus) or Riverside fairy shrimp (Streptocephalus woottoni) suitable habitat or critical habitat impacts from those detailed in the final EIR. Revised impacts to suitable and critical habitat per listed species were determined based on the assumption that the Otay Crossings project is developed prior to construction of the proposed project. Revisions to the federally listed species suitable and critical habitat, and conservation measures are listed below. Federally Listed Species Habitat Revisions Otay Tarplant No permanent impacts to critical habitat or suitable habitat. No temporary impacts to suitable habitat. Temporary impacts to critical habitat will occur only in the area without primary constituent elements (6.90 acres). Thus, no critical habitat with primary constituent elements present will be temporarily or permanently impacted. San Diego Fairy Shrimp There were already no impacts to suitable habitat. - 2 - All critical habitat impacts are now temporary (1.01 acres) and the area of overlap with critical habitat will be paved/developed because of Otay Crossings. Thus, no primary constituent elements will be present where critical habitat is impacted. Quino Checkerspot Butterfly Permanent (2.31 acres) and temporary (12.27 acres) impacts to suitable habitat will decrease. Neither permanent nor temporary impacts to Quino Checkerspot butterfly critical habitat will change as the Otay Crossings overlap area does not coincide with Quino Checkerspot butterfly critical habitat. There is one area of permanent impact to suitable and critical habitat near the pump station option at the south end of the proposed project near the border. There is an additional very small area of permanent impacts to suitable and critical habitat near the pump station option at the north end of the proposed project, east of Roll Reservoir. These areas combined amount to 2.31 acres total. Coastal California Gnatcatcher Permanent (0.16 acre) and temporary (1.42 acres) impacts to suitable habitat will decrease by a small amount. Critical habitat impact acreage does not change. Conservation Measure Revisions In addition to the conservation measures in the final EIR, the following conservation measures will be adhered to during the construction phase of the proposed project: Vegetation clearing and all construction activities would occur outside of the breeding seasons and not within 500 feet of habitat occupied by coastal California gnatcatcher and least Bell’s vireo, and other avian species (e.g., coastal California gnatcatcher, February 15 through August 15; least Bell’s vireo, March 15 through September 15). Restoration of temporarily impacted federally listed species habitat will follow success criteria and monitoring specifications that will be approved by the Carlsbad Fish and Wildlife Office (CFWO) prior to initiating construction of the proposed project. Additionally, the following conservation measures have been added to the proposed project to reduce impacts for listed species occupied habitat: 1. Permanent impacts to coastal California gnatcatcher would be offset by application of pre- designated debit credits from the Otay Water District (District) San Miguel Habitat Management Area (HMA) as follows: Acreage Impacted Off-Site Mitigation Ratio Credits Debited from HMA Coastal California Gnatcatcher 0.16 2:1 0.32 2. Permanent impacts to Quino Checkerspot butterfly critical habitat would be offset by off-site habitat acquisition and long-term management. Off-site habitat acquired for compensatory mitigation would be preserved in perpetuity via establishment of a conservation/open space easement. Compensatory mitigation would occur as follows: - 3 - Acreage Impacted Off-Site Mitigation Ratio Required Offsite Mitigation Quino Checkerspot Butterfly 2.31 3:1 6.93 The District will implement the above-noted mitigation requirements through coordination with the Service and acquisition of offsite mitigation lands. Offsite mitigation lands will be inclusive of federally-designated Quino Checkerspot butterfly critical habitat and will satisfy off-site compensatory mitigation for permanent impacts. The District will execute and record a perpetual biological conservation easement or other conservation mechanism acceptable to the Service over the acquired land. The District will also ensure that a perpetual management, maintenance, and monitoring plan is prepared and implemented for the property through an endowment. Summary Given the revisions to the proposed project and the implementation of mitigation measures, impacts to Otay tarplant, San Diego fairy shrimp, Riverside fairy shrimp, Quino Checkerspot butterfly, coastal California gnatcatcher and least Bell’s vireo would be less than significant. In addition, impacts to critical habitat for Otay tarplant, San Diego fairy shrimp, Riverside fairy shrimp, Quino Checkerspot butterfly, coastal California gnatcatcher, and least Bell’s vireo would be less than significant with implementation of mitigation measures. Proposed changes to the project would not result in any new significant impacts. STAFF REPORT TYPE MEETING: Desalination Project Committee MEETING DATE: May 23, 2017 SUBMITTED BY: Rita Bell, Finance Manager PROJECT: DIV. NO. All APPROVED BY: Joseph R. Beachem, Chief Financial Officer German Alvarez, Assistant General Manager Mark Watton, General Manager SUBJECT: Desalination Project Financial Model GENERAL MANAGER’S RECOMMENDATION: This is an informational item only. COMMITTEE ACTION: See Attachment A. PURPOSE: To present the Desalination Project Committee a Financial Model used to discuss assumptions and potential costs of the project. ANALYSIS: Staff has prepared a financial model that incorporates various assumptions for the purpose of discussing the financial feasibility of a desalination project. The presentation will include a demonstration of this model. FISCAL IMPACT: Joe Beachem, Chief Financial Officer None. 2 STRATEGIC GOAL: Prudently manage District funds. LEGAL IMPACT: None. Attachments: A) Committee Action B) Presentation ATTACHMENT A SUBJECT/PROJECT: Desalination Project Financial Model COMMITTEE ACTION: This is an informational item only. NOTE: The “Committee Action” is written in anticipation of the Committee moving the item forward for board approval. This report will be sent to the Board as a committee approved item, or modified to reflect any discussion or changes as directed from the committee prior to presentation to the full board. DESALINATION FINANCIAL MODEL MAY 23, 2017 Attachment B OVERVIEW •Demonstrate the interactive model created for the purpose of determining the cost effectiveness of purchasing desalinated water from Mexico •Assumptions used in the model •Interchangeable variables and how they affect the financial position INFLATORS •Price inflators •Otay’s CWA Fixed Cost •Otay’s CWA Variable Cost •Otay’s O&M Cost •Otay’s Price for Mexico Water •Otay’s water sales volume growth •Mexico volume •Model assumes all growth is on CWA water purchases •Additional Mexico water purchases can be added ASSUMPTIONS •Desal purchase volume •Mexico price •Year Otay begins taking Mexico water •Otay’s starting O&M cost •O&M starts in year ASSUMPTIONS – CAPITAL COST •Capital Cost included Pipeline, Pump Station and Treatment •Optional North/South Conveyance Pipeline and Pump Station •Optional Grant Funding •Assume Debt Financing ASSUMPTIONS –CWA/MWD •MWD lawsuit •CWA member roll off from CWA •CWA shift from Variable Charges to Fixed Charges •CWA Fixed Charge roll off OVERVIEW OF CWA FEE STRUCTURE •Treated Variable Rate •Fixed Charges •MWD Readiness‐to‐Serve Charge –10 year roll off •MWD Capacity Reservation Charge –5 year roll off •CWA Customer Service Charge –3 year roll off •CWA Emergency Storage Charge –3 year roll off •CWA Supply Reliability Charge –5 year roll off •CWA Infrastructure Access Charge –no roll off (per meter charge) MODEL LAYOUT Annual Volume and Cost by Year •100% CWA water purchases (A) •CWA and Mexico water purchases (B) + (C) •Net Position (A) –(B + C) annually and cumulatively QUESTIONS?