ADMINISTRATIVE COMMITTEE
2.	RECOMMEND FUNDING PLAN FOR PURE WATER MONTEREY ADVANCED WATER PURIFICATION ELECTRICAL FACILITIES
Meeting Date:		April 14, 2020	Budgeted:	N/A
From:		David J. Stoldt	Program/
		General Manager	Line Item No.:	N/A
Prepared By:		David J. Stoldt	Cost Estimate:	See Below
General Counsel Approval: N/A
Committee Recommendation: The Administrative Committee reviewed this item on April 14, 2020 and recommended _____________________.
CEQA Compliance: Covered by Pure Water Monterey certified FEIR.

SUMMARY: At its February 5, 2020 meeting the Water Supply Planning Committee recommended to the Board a proposed funding plan for the new Medium Voltage (MV) Switchgear, to be adjusted for the actual bid received, with District portion not to exceed $700,000 and then the item would go to the District’s Administrative Committee and Board at their March 2020 meetings, utilizing the actual bid numbers. The bid opening was delayed to April 2, 2020 hence this is the first Administrative Committee meeting since bid opening.

Two bids were received, and the lowest bid was $2.4 million by Anderson Pacific. That is approximately 60% higher than anticipated. Reasons for the difference include over-specification of equipment and supplier limitations under the Covid-19 pandemic. Under the proposed funding plan, the District would be responsible for $1,249,800 – almost 80% more than authorized by the Water Supply Planning Committee. As a result, it is staff recommendation to defer action on this item until Monterey One Water (M1W) has an opportunity to consider its options.

RECOMMENDATION: The Committee should defer action on this item until Monterey One Water (M1W) has an opportunity to consider its options.

BACKGROUND: In October 2016 the Monterey One Water (M1W) Board approved an Energy Supply Option Analysis for the Advanced Water Purification Facilities (AWPF.) Based on the results of that analysis, the AWPF will be served by both PG&E and the biogas electrical generation plant at the Monterey Regional Waste Management District (MRWMD).

In August 2018, MRWMD informed M1W that they were not ready to expand the co-generation system and the proposed PG&E Meter and Switchgear would not be able to be constructed as part of MRWMD’s current PG&E application. The designers worked with MRWMD and M1W staff to come up with an alternative approach to provide power from MRWMD to the AWPF without the need to change the existing PG&E Meter and Switchgear.

The power supply for the AWPF Project is envisioned to come from two sources:

1. PG&E Power. Medium voltage (21kV) power from a new PG&E primary service connection to the AWPF (AWPF MV Switchgear). This is the initial power for the AWPF to meet the program schedule for producing purified water.

2. MPRWD-to-AWPF Power. Medium voltage (21kV) power from the adjacent MPRWD co-generation facilities. A new MPRWD MV Switchgear would deliver cogeneration power to both PG&E and to the AWPF. The MPRWD-to-AWPF power would be delivered over MPRWD-owned power lines.

Option 2, which is the preferred long-term permanent solution, was originally estimated to cost approximately $1.5 million. Construction will be after facility operations begin, the Anderson Pacific AWPF construction contract is closed out, and the State Revolving Fund (SRF) loan is finalized and closed. Hence, the cost of the MV Switchgear is likely to be an unreimbursed construction period cost.

Amendment 3 of the MPWMD-M1W Cost Sharing Agreement says:

1.(d) Unreimbursed Construction Period Costs Defined

From March 1, 2017 through December 31, 2020, there may occur project related costs that are not allowed to be capitalized to the project and paid or reimbursed by State Revolving Fund Loans. Examples of those costs include, among others:

1. Public Outreach

2. Geochemical Water Quality Modeling

3. Groundwater Basin Modeling

4. Facility Expansion Design and Engineering

5. Regulatory Proceedings

6. Expansion Environmental Scoping and Review

7. Expansion Permitting

1.(e) Financing of GWR Unreimbursed Construction Period Costs

MPWMD shall pay seventy-five percent (75%) of such costs, and M1W shall pay twenty-five percent (25%) of such costs.

Because of the magnitude of the cost, M1W and the District have agreed to seek contributions from two other parties, Marina Coast Water District and MRWMD. Based on the pre-bid estimate, a funding plan was proposed as follows:

$1,500,000 total cost

$ 208,500 Marina Coast Water District (13.9% allocation)

$ 400,000 MRWMD

$ 668,250 District (75% of remainder)

$ 222,875 M1W (25% of remainder)

A summary of the timelines for the PG&E Power and the MPRWD-to-AWPF Power for the AWPF Project are provided below:

AWPF Power and MPRWD-to-AWPF Power Timeline

· MPRWD submitted service change application to PG&E Generation/Interconnection Group – 2015.

· M1W submitted application for AWPF MV service to PG&E Service Planning Group – Nov. 2016 along with 60% design drawings.

· Discussed MPRWD-to-AWPF power concepts with PG&E Service Planning Group – March 2017.

· Completed AWPF MV Switchgear design. Bid with overall AWPF project – May 2017. Submitted final AWPF MV service design drawings to PG&E.

· Completed 90% MPRWD-to-AWPF Design – submitted to MPRWD for Review – Sept. 2017

· Completed 100% MPRWD-to-AWPF Design – submitted to MPRWD for Review – Jan. 2018

· Discussed MPRWD-to-AWPF power concepts with PG&E Service Planning Group – Feb 2018. Was told to contact the Generation/Interconnection Group for this coordination.

· Received preliminary PG&E Service drawings for the AWPF MV Switchgear in March 2018. Met with PG&E at AWPF site.

· MPRWD communicated with PG&E Generation/Interconnection Group about the MPRWD- to-AWPF power concepts – August 2018. Was told to contact the PG&E Service Planning Group for this coordination.

· MPRWD requested a meeting with both PG&E Generation/Interconnection Group and Service Planning Groups to correct mis-understandings and conflicting information from PG&E regarding consultation and approval for the MPRWD-to-AWPF power supply – August 2018.

· AWPF Power: PG&E Conduit installed to AWPF MV Switchgear location. Installed switchgear in Sep 2018.

· Requested PG&E install meter and power conductors in October 2018.

· PG&E Power available late 2018.

· Authorized re-design of new MPRWD MV switchgear based on MPRWD and PG&E comments to the MPRWD-to-AWPF Design in 2019. Unable to include revisions in AWPF contract with Anderson Pacific.

EXHIBIT

None

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