The Turlock City Council has approved a 40-year agreement to sell recycled water to Del Puerto Water District. The agreement is a part of the North Valley Regional Recycled Water Program (NVRRWP) and will provide the city with a steady revenue stream for its portion of the project. Turlock initially expects to deliver up to 7,900 AF per year, but anticipates that the volume will increase over time, as the city grows and wastewater flows increase.
NVRRWP is a regional project that proposes using the Delta-Mendota Canal (“DMC”) to deliver recycled water to Del Puerto Water District from the City of Turlock and City of Modesto. Currently, the cities discharge their recycled water into the San Joaquin River. But new discharge standards require them to install new disinfection systems (using UV light instead of chlorine) or cease discharging by December 31, 2019. Turlock estimates that its cost to install a new system would be $15 million, not including the additional power and labor costs to run the system. The NVRRWP would allow the cities to cease discharging to the San Joaquin River—and the water would be put to beneficial use.
The pricing structure under Turlock’s agreement with Del Puerto is designed to cover the city’s cost related to the project. Turlock is seeking a low-interest loan from Clean Water State Revolving Fund (“CWSRF”) to cover the design and construction of its component of the regional project. In order to receive a CWSRF loan, the city must have sufficient revenues to service the debt.
For the first 30 years of the contract, Del Puerto’s payments for the recycled water will cover annual debt service, operation and maintenance costs, any fees or charges imposed by Modesto for use of its component, and a $30/AF premium to the city—or a total of $175/AF, whichever is less—except in the first five years, when Del Puerto will pay the costs exceeding $175/AF to make the city whole. In the last 10 years of the agreement, the payment will simply be $175/AF.
Del Puerto will also have to secure a Warren Act contract with the Bureau of Reclamation to use the DMC for conveyance of the water and will have to pay Reclamation’s conveyance charge (currently $88.80/AF).
Implementation of the agreement is contingent upon several factors, including Reclamation issuing an environmental report and Record of Decision for the NVRRWP, Del Puerto securing a Warren Act contract and a license for construction and O&M of the project inlet facility on the DMC right-of-way, and Turlock entering a conveyance and operations agreement with Modesto for use of Modesto’s component, receiving any necessary water right approvals from the State Water Resources Control Board, and securing an NDPES discharge permit from the Regional Water Quality Control Board.
Written by Marta L. Weismann