AWBA Board Meeting, March 20, 2002Tucson AMA Institutional and Policy Advisory Group (IPAG)
CAP Storage & Recovery in the Tucson AMA
Preliminary Observations & Policy Options from the Institutional
and Policy Advisory Group (IPAG)
Informational Briefing
AWBA Board Meeting, March 20, 2002
AWBA Board Meeting, March 20, 2002Tucson AMA Institutional and Policy Advisory Group (IPAG)
IPAG Background
Regional Recharge Plan (1998)
AWBA Facilities Plan for TAMA (1998)
Ongoing examination• Recharge capacity & sites
» Kai-Avra proposal (2000)
• Subcontract firming • Recovery
AWBA Board Meeting, March 20, 2002Tucson AMA Institutional and Policy Advisory Group (IPAG)
Analysis
Re-examination of the 1998 Regional Recharge Plan
• Much of the report remains valid and useful
• Partially outdated due to additional facilities and other factors
Updated analysis• More comprehensive exploration of physical
& financial variables
• Emphasis on AWBA activities
AWBA Board Meeting, March 20, 2002Tucson AMA Institutional and Policy Advisory Group (IPAG)
Analytic Tool
• DEMAND by sector & provider
• USF & GSF capacities & fees
• AWBA funding & storage
• STORAGE by facility, storer & year
• SUMMARY
Series of linked, interactive spreadsheets
AWBA Board Meeting, March 20, 2002Tucson AMA Institutional and Policy Advisory Group (IPAG)
AWBA Spreadsheet Cost of water, cost of
storage, 4-cent tax revenue & carryover, withdrawal fees, etc.
Cost of water, cost of storage, 4-cent tax revenue & carryover, withdrawal fees, etc.
Incentive Priced CAP
$-
$10
$20
$30
$40
$50
$60
$70
$80
1996 1999 2002 2005 2008 2011 2014
year
$/A
F
Firm
Advisory
Projected
Ad Valorem tax
$0.0 mil.
$0.5 mil.
$1.0 mil.
$1.5 mil.
$2.0 mil.
$2.5 mil.
$3.0 mil.
1996 1999 2002 2005 2008 2011 2014
year
$/A
F
Projected
Actual
Annual & cumulative
storage
Annual AWBA storage (all sources)
0 kAF
25 kAF
50 kAF
75 kAF
2002 2006 2010 2014
Annual AWBA storage (all sources)
0 kAF
25 kAF
50 kAF
75 kAF
2002 2006 2010 2014
Cumulative AWBA storage (by source)
0 kAF
250 kAF
500 kAF
750 kAF
1,000 kAF
2002 2006 2010 2014
Cumulative AWBA storage (by source)
0 kAF
250 kAF
500 kAF
750 kAF
1,000 kAF
2002 2006 2010 2014
“Baseline” Assumptions• Cost of water: CAP advisory rates through 2007, 3% growth thereafter
• Ad valorem tax: $1.6 million base, 3% annual growth
• Facility charge: flat $12, based on average cost at TAMA USFs and 2% GSF
“Baseline” Assumptions• Cost of water: CAP advisory rates through 2007, 3% growth thereafter
• Ad valorem tax: $1.6 million base, 3% annual growth
• Facility charge: flat $12, based on average cost at TAMA USFs and 2% GSF
AWBA Board Meeting, March 20, 2002Tucson AMA Institutional and Policy Advisory Group (IPAG)
CAP Firming
• 200,000+ AF shortfall (30% below target)
• Shortfall reflects revenue constraints and cost of credits
• Will likely result in future groundwater mining
The AWBA’s firming target for the Tucson AMA will not be met with projected revenue
AWBA Board Meeting, March 20, 2002Tucson AMA Institutional and Policy Advisory Group (IPAG)
Firming Options
Bridging the firming gap {options under consideration}
– Lower the cost of credits• Continue to lower water costs
• Seek low-cost energy
• Continue to lower storage costs at USFs • Spread fixed costs by utilizing available capacity
• Increase utilization of TAMA GSFs• Invest in infrastructure to GSFs willing to pay $21/AF
• Use Withdrawal Fee money to buy-down the $21
• Lower the AWBA GSF price for the Tucson AMA
AWBA Board Meeting, March 20, 2002Tucson AMA Institutional and Policy Advisory Group (IPAG)
Firming Options
Bridging the firming gap {options under consideration}
– Restructure existing TAMA revenue sources
• Extend ad valorem revenue stream• Use Withdrawal Fee money for firming
– Other
It is likely that a combination of solutions will be required
AWBA Board Meeting, March 20, 2002Tucson AMA Institutional and Policy Advisory Group (IPAG)
• Lowering the cost of credits through buy-down of the $21/AF80% USF; 20% GSF with $4/AF buy-down
“Baseline” 98% USF
Firming Options
Hypothetical Example
30% USF; 70% GSF with $4/AF buy-down
AWBA Board Meeting, March 20, 2002Tucson AMA Institutional and Policy Advisory Group (IPAG)
CAP Recharge Locations
Pima Mine Rd.Pima Mine Rd.
ClearwaterClearwater
Lower Santa Cruz USF
Lower Santa Cruz USF
Avra USFAvra USF
BKWBKW
Kai-Red RockKai-Red Rock
Service Areas/CC&Ns
Operational USFs
Operational GSFs
Central Arizona Project
Groundw
aterflow
CMIDCMID
AWBA Board Meeting, March 20, 2002Tucson AMA Institutional and Policy Advisory Group (IPAG)
• Encourage & participate in dialog with CAWCD, AWBA, ADWR, et al.
• Further identify TAMA subcontractors’ recovery needs
• Explore the recovery implications of interstate storage
Recovery
There is strong interest in where water is stored and how it will be recovered
Recovery planning activities