California American Water Monterey Supply Project - Scenarios

December 11-13, 2012

Section I - Rate Impact of Tier 5 usage decrease on lower Tiers

Consumption and Revenues in each Rate Tier
Residential Consumption by Rate Tier in Monterey
Tier4 3% Tier3 9% Tier1 21% Tier5 38% Tier223% Tier1 60% Tier4 14% Tier2 15% Tier3 12% Tier5 5%

Residential Revenues by Rate Tier in Monterey

Footnote: based on 2011 data

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Section I - Rate Impact of Tier 5 usage decrease on lower Tiers

Scenario 1: Eliminate 200AF of Demand in Tier 5, Revenue Requirement unchanged:

Eliminating 200AF of Demand in Tier 5 with Revenue Requirement unchanged will cause a 16.2% Rate Increase for all Tiers. Loss of Tier 5 Revenue is compensated through Increase in Rates in all Tiers.

Footnote: Calculation based on Proposed Rate Design. Above scenario assumes 200 AF of usage in Tier 5 is eliminated due to overall reduction of demand.
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Section II Toilet Retrofit Program for Monterey

Scenario: Retrofit all residential household toilets in Monterey with 0.8 gallon per flush (gpf) Ultra High Efficiency Toilets:

Scenario: Retrofitting all residential household toilets (avg. 2.2 toilets per household) in Monterey with Ultra High Efficiency 0.8 gallon per flush toilets: approx. 35,000 households in Monterey retrofit would cost around $21 Million ($280 total cost per install) each household would save approximately 4,000 gallons per year Total annual savings: approx. 420 AcreFeet Cost per AcreFoot if program expenditures were capitalized: $7,021 per AcreFoot

Section III Water Demand Price Elasticity Factors

Water Demand graphically
Water Demand Curve Residential Water Demand in Monterey: How much indoor and how much outdoor demand is still elastic? Has indoor use neared inelasticity? Conservation programs and practices caused a shift in demand curve Monterey residential water use approx. 60 gal/day per capita
Minimum Water Requirement per capita

Price

Illustrative example
Inelastic Water Demand less-sensitive to price

Changes in price cause movement along the demand curve Device based Programs shift entire demand curve

Quantity Demanded

Section III Water Demand Price Elasticity Factors

Literature Review
+0.5
+0.25
bothestimatesare Shorttermbetween 0.04&0.29 Shortterm(ST)0.26, Longterm(LT)0.4 priceelasticityprior (0.56)andduring drought(1.11) compared Scenario1 Tierspecificelasticities 0.05to0.16 Scenario2 Tierspecificelasticities Shortterm(ST)0.15, 0.07to0.23 Longterm(LT)0.25
0.15 0.25 prior drought 0.56 during drought 1.11

0
0.25
mean 0.41 avg. 0.49

0.5
0.75

K e n n e y e t a l . Footnote:Apriceelasticityof0.5meansthata100%increaseinpricewillreducedemandby50% 2 0 0 8

D a l h u i s e n e t a l . 2 0 0 3

Short term 0.26 LT: 0.4

0.04 & 0.29 0.49

B r o o k s h i r e 2 0 0 2

N a u g e s & T h o m a s . 1 9 9 7

E s p e y e t a l . 1 9 9 7

P i n t 1 9 9 9

R a t e I n c r e a s e o f 1 0 0 %

N a t a r a j . 2 0 0 8 ( S a n t a C r u z S t u d y )

S c e n a r i o 1 D e m a n d S t u d y C h e s n u t t C A W

S c e n a r i o 2

M o n t e r e y J u n e 2 0 1 1 t o S e p t . 2 0 1 2

C A W a v e r a g e o b s e r v e d E l a s t i c i t y i n

Section IV Montereys Conservation Program Water Savings and Costs to date

Monterey Conservation Program; historical expenses and water savings 2006 to 2011

CaliforniaAmericanWater ConservationProgram
CaliforniaAmericanWaterConservation Expenses MPWMDConservationExpensescollected throughCAW AcreFootSavingsformeasurableconservation programs CostperAFsaved(20062011)

TOTAL 20062011

$3,369,388 $1,014,967 957.25 $4,580

Footnote: Several conservation outreach and education programs have no AcreFoot Savings values associated with, however, are still believed to produce significant water savings such as public outreach, school programs, etc. Costs do not include labor expenses for conservation staff, admin costs or other outreach expenses.
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Section V Portfolio of Options: Cost vs. Yield

MontereyWaterSupply availableandnew sourcescompared
$CostperAcre Foot

available sourcesof supply

$15,000

newsourcesof supply

PacificGrove Stormwater Recl.Project

LosPadresDam Dredging

Mtrey Recycled WaterProject PGSatellite Recld.Water Treatmt.Prjct MRWPCAGWR MontereyDesalination Project Project(incl.SurchargeI)

$10,000
PGRecld. WaterPrjct

$5,000

ASRWells SandCityDesal Groundwater

10,000 AF

20,000 AF

YieldinAcre Feet
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Section V Portfolio of Options: Cost vs. Yield (contd.)

Monterey Water Supply Existing and New Sources compared

Summary

EXISTING

NEW
Reclaim ater edW Pacific PacificGrove M PCA RW LosPadres M onterey M onterey PacificGrove Grove Groundwater SatelliteRecycled Dam RecycledW ater Desalination Recycled Storm water aterTreatm ent Replenishm ent W Dredging Project Project W aterProject Recycling Project Project

Groundwater/ SandCity BegoniaPlant Desal

ASRW ells W ell14

$perAF AF

$197 $2,700 $2,221to$3,282 $5,095 $2,105 $2,500to$3,000 $2,624to$3,042 $5,828 $10,400 $12,925 3,376 94 1,320to1,950 9,006 100125 3,500 100125 800 100275 854

Footnote: Some costs shown are estimates of previously conducted studies reflected at todays costs
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