EXHIBIT 13-D

 

Excerpt from MPRWA Request for Proposals

 

 

5.0 SCOPE OF SERVICES

 

Each of the proponents of the three desalination projects was asked by the Authority to respond to a specific set of questions, including cost-related inquiries.  Each proponent’s response is included as an attachment to this solicitation or is available on the MPRWA website at www.mprwa.org.  The responses have supporting documentation in various stages of development. Respondents will need to address the variations in data quality.  For example, project proponents were asked to examine two plant sizes: 9,000 acre-feet or 5,500 acre-feet – however, the proponents did not each provide such data.  Responding Contractors may also review information from a proponent’s website or contact the project proponent directly.  Proponent information is as follows:

 

California American Water Company  www.watersupplyproject.org

Richard Svindland                               Richard.Svindland@amwater.com       916-568-4296

 

DeepWater Desal, LLC                                    www.deepwaterdesal.com

Brent Constantz                                               brent@dwdesal.com                831-632-0616

 

Peoples’ Moss Landing Desal              www.thepeoplesmosslandingdesal.com

George Schroeder                                ddgeo@sbcglobal.net                           831-601-4878

 

The Contractor will be retained to provide an independent, unbiased, third-party assessment of the three proposed desalination projects. The selected contractor will provide a report and attend at least one presentation to the MPRWA board.  There are six specific items as to project scope, as described below.

 

5.1 Initial Scoping and Constraints Analysis

 

In order to reduce overall cost and scope of work, the Contractor is asked to first evaluate each project at a high level and ascertain if there are any key constraints that would render a project unlikely to be implemented at reasonable cost by January 1, 2017.  The criteria shall be determined by the Contractor, but might include technical feasibility, reliability, permitting, litigation risk, environmental factors, regulatory, schedule, or cost.  Further, if the Contractor identifies ways to improve upon any one of the three proposals, or a viable alternative, MPRWA seeks that opinion in advance of additional detailed evaluation.

 

5.2 Comparison of Cost Estimates for the Three Desalination Projects

 

For projects that were not eliminated under 5.1 above, Contractor shall review the following as presented by the project proponents:

 

·         Capital costs

·         Operating costs

·         Unit costs (especially $ per acre foot)

·         Energy consumption/efficiency/cost

·         Quality of cost estimate (conceptual, preliminary, bid, etc.)

·         Age of cost estimate

Compare the proposed projects based on total capital cost, annual operating plus capital cost, and annual unit cost based on water delivered to the Peninsula.  The Contractor will identify differences in each proponent’s cost methodology and attempt to “normalize” or adjust for differences in order to provide more directly comparable results.  The goal is an “apples-to-apples” comparison.  It is desired to have cost comparisons for projects of two sizes:  (a) one that delivers 5,500 acre-feet per year to the Peninsula, and (b) one that delivers 9,000 acre-feet per year.

 

In the analysis, identify key differences in each proponent’s methodology and attempt to adjust therefor across all projects in order to compare on a common basis.  Attention should be paid to use of contingencies, implementation costs, adjustments for high- or low-end of cost range, and so on.  If a project’s costs are based on a portion of a larger project, please identify the risks associated with a larger project and the potential impact on cost if built as a stand-alone facility.

 

Discuss the primary drivers for differences in cost between the projects.  Identify assumptions or conclusions of any proponent that are questionable or inconsistent with other proponents; inconsistent assumptions should be adjusted where possible and cost figures modified accordingly. 

 

5.3 Identify and Isolate Project Differences

 

Contractors are asked to identify major differences in project features that are not the core desalination components – that is, if all desalination facilities are assumed to all be the same for each of the projects, what are the key differences between the projects in the areas of intake, pre-treatment, outfall, and transmission pipeline?  Have the proponents used consistent cost assumptions on things like pipe, right-of-way, and other items?  Can the projects be compared on the “non-desalination” aspects?

 

5.3 Evaluation of Schedule

 

Please review each project’s timeline and provide an opinion as to the reasonableness of each.

 

5.4 Evaluation of Financing Options

 

Examine each proponent’s financing assumptions and comment where applicable.  Are there assumptions or conclusions in the proponents’ materials with which you disagree?  Why?  How would cost estimates for each project be affected?

 

5.5 Workshop/Presentation/Written Report

 

A written report of findings is expected by August 31, 2012 in order to provide sufficient time for MPRWA to include findings in it testimony to the CPUC presently scheduled for mid-September.

 

In addition to a written report, the Contractor is expected to present its findings to the MPRWA at a meeting to be scheduled.

 

The Contractor is also expected to attend CPUC workshops tentatively scheduled for July 26th and/or 27th.

 

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