Project (alphabetical order)

Size Intake Source

CalAm
5.4/9.0 mgd Slant Wells

DWD
4.9/9.1/22.0 mgd Screened Open Intake

PML
4.8/9.4 mgd Existing Shallow Surface Intake

Notes and references

Values are from the SPI-KHC report, Sect. 2; we are aware of reports the Cal-Am may be increasing the proposed size of its facility somewhat. Detailed descriptions in Section 3 of SPI-KHC report. Cal/Am and PML intakes are within their direct project control; while DWD's intake would be constructed and owned by a third party. Detailed descriptions in Section 3 of SPI-KHC report. Cal/Am may bypass filters during operation if iron and manganese levels are low. The filters are primarily a contingency measure. PML has proposed media filtraion in combination with UF; but also proposes to conduct a one-year pilot test prior to final determination of pretreatment requiremetns. The pilot test is considered warranted; given the likely poor water quality extracted from the Moss Landing Harbor. All values and information extracted from Section 5 of the SPI-KHC report (January 2013 update). Note all costs based on uniform plant capacity criteria; not the proponent proposed capacities listed above. Cal-Am 5.4/9.0 mgd; DWD and PML 5.0/8.2 mgd

Pretreatment

Media Filtration

Media Filtration

Media Filtration-UF

Economics Capital Cost $206M/$174M $151M/$122M $190M/$161M

Operating Cost

$10.6M/$7.49M

$10.2M/7.68M

$9.85M/6.93M

DWD actually has lower costs than PML in the Energy, Chemical, Expendable, and Equipment Replacement Categories; but their lese payments for the Dynegy facilities and sewater intake along with proposed ownership fees increase their cost above PML. Cal-Am's high cost is primarily associated with their comparatively higher electricity rate, discussed further below. Under the sensitivity analyses conducted as part of the January Update; Cal-Am's annual O&M cost could decrease to $8.88M/$6.47M as a result of acheiving lower cost power; and DWD's cost could likewise be reduced somewhere in the range of $8.5M - $9.4M/$6.6M-$7.2M) depending on their final cost of power.

Interest rate Annualized cost Cost per acre foot Financing

8.49% 4.00% 4.00% $29.7M/$23.7M $18.9M/$14.7M $20.9M/$16.3M $3,300/$4,310 $2,100/$2,670 $2,320/$2,965 Assumpitons for the cost of financing were provided to SPI-KHC via the Technical Advisory Committee. As noted on p. 6-2 of the SPI-KHC report, the financing capabilities of the applicants were not assessed. It was assumed that the applicants had sufficient financial resources to pursue project development including preliminary design prior to obtaining financing. It was further assumed that public agency participation would inculde access to project financing. Listed rate are those confirmed and considered to be likley maxima for 2012 pricing contained in the report. Cal-Am beliieves they can likely source a lower rate of $0.087 kW-hr; and has provided documentation from PG&E with pricing based on an E-20 Transmission rate schedule. This could be acheived if Cal/Am provides a new transmission line to the site. This would have the effect of lowering Cal/Am's cost of water in the above analysis by roughly $200/AF.

Financial ability to deliver project

Cost of electricity (confirmed?)

$0.131/kW-hr

$0.08 kW-hr

$0.08 kW-hr

DWD also believes it could achieve a lower rate by a form of direct power purchase from Dynegy. Dynegy cannot sell power directly to a private company, but could sell it to a public agency, who could then sell it to DWD. Salinas has offered to work with DWD in this regard. DWD provided documentation indicating a likely rate between 0$0.04 and $0.06 kW-hr. The lower rates would lower DWD's water production cost somewhere in the range of $100 to $200/AF depending on the final power cost achieved. Not Independently Assessed

Access of SRF funds Permiting / Schedule Estimated permit schedule

Jul-15

Jul-15

Jul-16 Major Permits Obtained. Project Completion follows by approximately 24 months.

Cal-Am -- Intake wells include test-well phase which will define intake design. Coastal Development Permits must be obtained for both test wells and final intake design. Coastal Commission is likely very concerned about stewardship and oversight of privately owned intake system and desalter. Agreements with Public Agency Partner could address these concerns. Major permiting hurdles Intake and Brine Intake Wells, Coastal Open Intake, Coastal DWD Open Water Intake must be shown to be preferable to subsurface intake to satisfy Coastal Disposal, Coastal Development Permit Development Permit Commission concerns. Mulitple purposes for intake of seawater requires definition of porject Development Permit purpose in CEQA/NEPA. PML Permitting of intake and discharge systems will require detailed assessments of impacts. Coastal Commission will evaluate proposal against impacts of alternative methods of intake and disposal. Possible delay associated with Technical Feasibility As discussed in Section 3 of the SPI-KHC report, Cal-Am plans a test well to help develop design criteria for their proposed slant well intakes. Until testing is done, there is some uncertainty in their approach; though we do not guage it as significant. DWD is relying on third parties for construction of their intake and a planned data center which use Pretreatment; outfall the seawater supply for cooling. As discussed in Section 3 of the rpeort, heating of seawater can condition increase biological activity to an uncertain degree. As described above, PML's overall process design requires pilot investigation to help define challenges with treating water from the Moss Landing Harbor. Further, their existing intake appears to be in substantial dis-repair and requires further investigatiion/assessment (report Sections 3 and 5). State of project development Legal CEQA / NEPA CEQA CEQA / NEPA CEQA Cal-Am project alteration of seabed floor may trigger review under NEPA. DWD requires NEPA review of new intake. PML may trigger NEPA review depending on method of intake and brine disposal. Cal-Am must complete the proposed test well installation and operation, and other relevant geotechnical work, to determine whether the production from the propose intake wells is likely to cause legal "injury" to other users of groundwater within the Salinas Groundwater Basin. If the results show that injury to other groundwater users is unlikely, or if a "physical solution" can be implented to mitigate any likley injury, then Cal-Am's proposed intake wells should not be subject to injunction by competing groundwater users. Advanced Adequate Preliminary Major uncertainty exists in the timing for Coastal Commission Review and Approval.

Open technical questions

Slant Wells

Heat Exchange

Water Rights

Present Concern

None

None

Other Ownership / Management Public vs Private Owner Decision points Accountability Transparency Very open. Somewhat open. Very open. On the basis of technical information. Cal-Am through the CPUC process has had to publically disclose and defend much of its technical approach. DWD has been open from a process design perspective; but the complexities of its third pary agreements are still not fully disclosed. The availability of technical information is summarized in Sections 2 and 3 of the SPI-KHC report. Cal-Am has supplied very detailed information for this stage of project development. DWD's technical process information is good; but details of it's integratioin with the planned data center are less developed. PML has provided what information it has developed, but it is still preliminary pending their planned pilot investigation. Cal-Am is a large, proficient organization. DWD's team is competent; but their overall organization structure with Dynegy, its data center partner, and Salinas is still developing; along with their proposed JPA to own/operate the facility. Private JPA Public, but agency not identified.

Detailed Proposal

Yes

Yes; but partial

No

Organizational capacity Deliverability

Good

Complex

Unkown