Presentation Transcript

1. Carlsbad Desalination Plant Aerial
2. Carlsbad Desalination Project Aerial (Plant & Pipeline) TOVWTP Improvements Pipeline 3 Relining (27,100 feet) Desalination Plant Desal Conveyance Pipeline 10-miles of new 54-inch pipe Aqueduct Connection Facilities
3. Carlsbad Desalination Project Components Poseidon to Construct: 50 MGD desalination plant located on the site of the Encina Power Station 10 mile 54-inch diameter conveyance pipeline Connection to Water Authority aqueduct Pipeline 3 Water Authority to Construct: Relining of 5.5 mile reach of Pipeline 3 Improvements at the TOVWTP to accommodate desalinated water flows
4. General Responsibilities Poseidon: Permit, Design and Build the Desal Plant Permit, Design and Build the Product Water Pipeline Own, Operate and Maintain the Desal Plant Supply Product Water Water Authority: “Take or Pay” for Product Water (minimum commitment of 48,000 AF/Yr) Timely Construction of TOVWTP Improvements and Pipeline 3 Rehabilitation Receive Product Water Own, Operate and Maintain the Product Water Pipeline, the TOVWTP Improvements and Pipeline 3
5. Project Structure Developer/Owner of the Plant Poseidon Resources (Channelside) LP Plant financed through a combination of debt and equity Debt provided through tax-exempt Private Activity Bonds (PAB’s) Equity provided by Stonepeak Construction/Operation of the Plant Contractor – Joint venture of Kiewit Infrastructure West and J.F. Shea Construction IDE Technologies is process technology provider Plant Operations and Maintenance also provided by IDE
6. Project Risk Allocation
7. Financing Project Financing Structure: 82% funded through Bonds issued via the California Pollution Control Financing Authority (CPCFA) Plant Bonds issued as Tax-Exempt Private Activity Bonds with Poseidon as the sponsor Subject to Alternative Minimum Tax (AMT) Pipeline Bonds issued as Tax-Exempt Governmental Purpose Bonds with the Water Authority as the sponsor Not subject to the AMT, but issued with a 5 year early call option Water Authority exempt from repayment obligations if Poseidon does not perform 18% Cash Equity from Stonepeak Infrastructure Equity invested after debt proceeds are spent; but equity commitment is secured from closing by a letter of credit
8. Carlsbad Project Unit Costs (December 2012 $/AF) * This unit cost represents the direct costs that are accounted for in the Water Purchase Agreement between Poseidon and the Water Authority in December 2012 dollars. They exclude any indirect costs that the Water Authority may incur for the Pipeline 3 and the Twin Oaks Valley Water Treatment Plant improvements.
9. Impact of Desal Water on San Diego Retail Rates Estimated Retail Impact of Carlsbad Desalination if Applied to CY 2013 Rates (below analysis done in October 2012, prior to closing): Estimated rate impact as Water Authority supplies: Based on high range of Carlsbad seawater desalination costs Based on conservative 2013 sales of 466,000 AF First year of operation sales (2016) projected at 520,000 AF 5 Retail Agency Average Composite Cost (CY 2012) Fixed Charge $19.83 + Commodity Charge $51.40 = Composite Monthly Bill: $71.23 * Includes both direct costs billed by Poseidon and indirect costs incurred by the Water Authority outside of the agreement with Poseidon. Actual rate impact will vary by member agency.
10. Huntington Beach Desalination Plant ProposedProject
11. Flow Schematic Intake/outfall facilities Re-using existing industrial facilities
12. Partnering Cities / Water Agencies Municipal Water District of OC City of Huntington Beach Irvine Ranch Water District City of Anaheim Moulton Niguel Water District City of Newport Beach South Coast Water District City of Santa Ana Santa Margarita Water District City of Garden Grove Orange County Water District City of Fountain Valley El Toro Water District City of Orange Emerald Bay Water District City of Fullerton Laguna Beach County Water District City of Westminster Mesa Consolidated Water DistrictCity of Seal Beach Trabuco Canyon Water District Golden State Water Company East Orange County Water District
13. Water Reliability Agreement – Term Sheet WRA term sheet developed over past year; Final draft provided to Working Group in January Term Sheet to support non-binding Letters of Intent (“LOI”) to purchase water Term Sheet includes estimated unit costs for desalination plant and distribution system
14. WRA Draft Term Sheet – Key Terms Roles and Responsibilities Poseidon: Own, design, permit, finance, construct, start-up, acceptance test, and operate the Project Design, permit, finance and construct any new pipelines for the Delivery System Buyer(s): own and operate the new pipelines in the Delivery System; purchase Product Water as provided for under the Contract and accept delivery of the Product Water at the Delivery Point. Delivery point defined as boundary line of the project site 30-year “take if delivered” contract
15. WRA Term Sheet – Estimated Pricing
16. Public Support (Partial List) City of Huntington Beach City of Buena Park City of Dana Point City of Laguna Hills City of Laguna Niguel City of Laguna Woods City of La Palma City of Mission Viejo City of Orange City of Placentia City of Rancho Santa Margarita City of San Juan Capistrano City of Stanton City of Tustin City of Villa Park City of Aliso Viejo City of La Habra Orange County Sacramento legislative delegation The Orange County League of Cities Metropolitan Water District of Southern California Municipal Water District of Orange County California Latino Water Coalition California Chamber of Commerce CA Hispanic Chamber of Commerce Huntington Beach Chamber of Commerce The Orange County Board of Supervisors The Orange County Business Council The Orange County Taxpayers Association The LA-OC Building & Construction Trades Council California Coastal Coalition
17. Development Schedule Permitting Coastal Commission hearing mid-2013 Water Purchase Agreements Non-binding Letters of Intent (“LOI”) approved by buyer(s) before end of April Executed agreements - end of 2013 Plant Construction 2014 Start