Planning Assumptions Planning Assumptions 1 The following slides - - PDF document

SLIDE 1

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Access to Excess CAP Access to Excess CAP Water, 2010 & beyond Water, 2010 & beyond

Customer/Stakeholder Workshop Customer/Stakeholder Workshop April 1, 2009 April 1, 2009

Planning Assumptions Planning Assumptions

The following slides were presented as concepts for discussion on 4/1/09

SLIDE 2

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Customer/Stakeholder Workshop, April 1, 2009

A A2

2E Assumptions

E Assumptions

Ag S

ettlement Pool is fully satisfied

Five to ten year planning period

• 2017 is a key date

AWBA 4-cent funding has ended Ag Pool drops from 400 KAF to 300 KAF

Excess supply generally diminishes over time

• Tied to long-term CAP contract use, and On-River use

Normal supply conditions on Colorado River

• S

hortage greatly reduces or eliminates this category of excess, so different guidelines apply

Customer/Stakeholder Workshop, April 1, 2009

A A2

2E Assumptions

E Assumptions

There is a single rate for all excess (except Ag Pool) AWBA is constrained by water availability and money

• 4-cent revenue and carryover is primary funding
• Interstate banking is excluded

Replenishment Reserve part ially satisfied with excess

• Block of long-term storage credits is statutory requirement for CAGRD
• Reserve shares priority with AWBA

In theory, AWBA and CAGRD RR could take most or all of

the available excess for 5 to 10 years

• In practice, there are many competing priorities and pressures on the

excess pool…

The following slides were presented as concepts for discussion on 4/1/09

SLIDE 3

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A A2

2E Proposal

E Proposal

A 5-step Process that Divides, S cores and Allocates Excess Water Orders

Step 1: Step 1: Set Aside Water Set Aside Water for Banking for Banking

The following slides were presented as concepts for discussion on 4/1/09

SLIDE 4

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Customer/Stakeholder Workshop, April 1, 2009

AWBA & CAGRD RR AWBA & CAGRD RR

CAWCD will make an annual decision regarding excess

water for banking purposes (i.e., both AWBA & RR)

• Will include consultation with AWBA staff and Commissioners

CAP staff will develop a recommendation for CAWCD Board

consideration in June/ July

Based on multiple considerations, including total proj ected supply,

progress on AWBA and CAGRD RR goals, and preliminary Excess orders

Step 2: Step 2: Apply Min & Max Apply Min & Max

The following slides were presented as concepts for discussion on 4/1/09

SLIDE 5

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Customer/Stakeholder Workshop, April 1, 2009

Min & Max Min & Max

S

mall orders have little effect on the total excess supply

• The number of customers is modest

S

taff recommendation will include a de minimis

S

et as a volume (e.g., 2,500 AF) Large orders have a large effect

• A cap would set an upper limit on any one customer’ s access

S

taff recommendation will include a cap

S

et as a percentage of the total “ Other Excess” supply available in a particular year (e.g., 15% )

S

taff will recommend that Min and Max take precedence

• S

mall orders are exempted from the A2E guidelines

• Large orders are capped, regardless of A2E guidelines

Step 3: Step 3: Fill Non Fill Non-

• Credit

Credit Orders Orders

The following slides were presented as concepts for discussion on 4/1/09

SLIDE 6

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Customer/Stakeholder Workshop, April 1, 2009

Non Non-

• Credit Orders

Credit Orders

Current de facto priority between excess used to earn a

long-term storage credit, and non-credit uses

• i.e., Full Cost has had priority over Incentive Recharge

S

taff recommends that non-credit orders be filled first

• Includes direct delivery, annual storage & recovery, and

replenishment

• Not subj ect to reduction, other than Max
• Likely implemented as a separate pool, with condition that no LTS

Cs can be earned

Step 4: Step 4: Score Remaining Score Remaining Orders Orders

The following slides were presented as concepts for discussion on 4/1/09

SLIDE 7

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Customer/Stakeholder Workshop, April 1, 2009

Scoring Scoring

Each order has multiple attributes that are relevant in

determining “ priority” or “ merit”

S

taff is proposing that orders be “ scored” based on a few key attributes

• Allows balancing of competing obj ectives
• Points awarded for each attribute
• Number of points reflects relative importance of the attribute

Customer/Stakeholder Workshop, April 1, 2009

Scoring: Location of Use Scoring: Location of Use

CAWCD’ s elected representation and defined service

area is limited to Maricopa, Pinal and Pima Counties

S

taff will recommend that orders be scored based on their relationship to CAP’ s service area

• Large number of points for delivery inside S

A

• No points for delivery outside S

A

S

taff does not recommend differentiation within CAP’ s service area

The following slides were presented as concepts for discussion on 4/1/09

SLIDE 8

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Customer/Stakeholder Workshop, April 1, 2009

Scoring: Facility Type Scoring: Facility Type

Credits are for future use, but storage at a GS

F has an immediate benefit for the partner (facility operator)

S

taff will recommend that orders earning a long-term storage credit be differentiated by facility type

• Orders at GS

Fs awarded more points than at US Fs

Customer/Stakeholder Workshop, April 1, 2009

Scoring: Customer Type Scoring: Customer Type

Excess has been used by a wide variety of customers CAWCD has not traditionally made eligibility distinctions

among its non-agricultural excess users

The ability t o transfer and sell recharge credits muddles

the determination of intended use and “ speculation”

S

RP’ s use of excess adds more complexity

S

taff does not recommend differentiating based on customer type

• Address speculation concerns with other means
• Monitor activity, and reconsider if necessary

The following slides were presented as concepts for discussion on 4/1/09

SLIDE 9

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Customer/Stakeholder Workshop, April 1, 2009

Scoring: Use History Scoring: Use History

New and significantly increased orders have impacted

the overall excess pool

S

• me customers have been on a long-term plan, and do

not believe it is fair to be reduced by newcomers

S

• me new customers argue that existing customers want

to exclude their beneficial activity

Establishing a baseline can be subj ective The further out in time, the less relevant

Customer/Stakeholder Workshop, April 1, 2009

Scoring: Use History Scoring: Use History

S

taff proposes that orders be scored on use history

• At or below ’ 06—

’ 08 max, many points

• A modest step above max (e.g., 120%

), some points

• A large step or new customer, no points

History would be used as a relative, not absolute factor

The following slides were presented as concepts for discussion on 4/1/09

SLIDE 10

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Customer/Stakeholder Workshop, April 1, 2009

Scoring: Other Scoring: Other

The scoring approach allows both specific and broad

policy obj ectives to be preferenced

• Factors can be added or adj usted as circumstances change

Other factors are under consideration

S

taff may recommend awarding points for storage at facilities that are CAP recovery partners

Customer/Stakeholder Workshop, April 1, 2009

Scoring Summary Scoring Summary

Points

________

All

Customer Type

SSSSS"""

S mall increase

SSSSSSSS

New, or large increase

SSS"""""

Less or equal to past

Use History

SSSSSSS"

All

Other Policy

SSSS¡"""

Credit @ US F

SSS"""""

Credit @ GS F

Facility Type

""""""""

Inside S A

Location

SSSSSSSS

Outside S A

Attribute Type

Note, min & max apply to all orders

Point values not yet determined!

The following slides were presented as concepts for discussion on 4/1/09

SLIDE 11

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Customer/Stakeholder Workshop, April 1, 2009

Scoring Examples Scoring Examples

Points

________

All

Customer Type

SSSSS"""

S mall increase

SSSSSSSS

New, or large increase

SSS"""""

Less or equal to past

Use History

SSSSSSS"

All

Other Policy

SSSS¡"""

Credit @ US F

SSS"""""

Credit @ GS F

Facility Type

""""""""

Inside S A

Location

SSSSSSSS

Outside S A

Attribute Type Points

________

All

Customer Type

SSSSS"""

S mall increase

SSSSSSSS

New, or large increase

SSS"""""

Less or equal to past

Use History

SSSSSSS"

All

Other Policy

SSSS¡"""

Credit @ US F

SSS"""""

Credit @ GS F

Facility Type

""""""""

Inside S A

Location

SSSSSSSS

Outside S A

Attribute Type

Example #1. Existing customer

• rders same as past, to earn

credits at a USF in Pima County

History:

"""""

Facility:

"""

Location: """""""" Note, min & max apply to all orders Note, min & max apply to all orders

Example #3. Existing customer

• rders same as past, to earn

credits at a USF in La Paz County

History:

"""""

Location: S Facility:

""""

Point values not yet determined! Example #2. New customer, to earn credits at a GSF in Pinal County

History:

S

Location: """""""" Facility:

"""""

Step 5: Step 5: Reduce Orders Reduce Orders Based on Score Based on Score

The following slides were presented as concepts for discussion on 4/1/09

SLIDE 12

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Customer/Stakeholder Workshop, April 1, 2009

Reduction Approaches Reduction Approaches

Fully fill higher scoring orders; lower scored orders

receive de minimis

• Cutbacks are concentrated on lower-scored orders

Or…

Reduce based on score; lower scored orders reduced at a

higher rate

• Cutbacks are shared, but lower-scored orders reduced at greater rate

Customer/Stakeholder Workshop, April 1, 2009

Reduction Examples Reduction Examples

Fully fill higher scored orders

9 8 3 7 2 1 6 5 4

The following slides were presented as concepts for discussion on 4/1/09

SLIDE 13

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Customer/Stakeholder Workshop, April 1, 2009

Reduction Examples Reduction Examples

Reduce based on score

High S core Middle S core Low S core

Summary Summary

The following slides were presented as concepts for discussion on 4/1/09

SLIDE 14

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Customer/Stakeholder Workshop, April 1, 2009

Pool Comparison Pool Comparison

Ag S ettlement Pool

400,000 af

Full Cost

Incentive Recharge

AWBA & CAGRD RR

Current

AWBA & CAGRD RR

Credit-Earning Pool

Non-Credit Pool

Ag S ettlement Pool

400,000 af

Proposed

Set Annually Fully Filled Reduced-to- fit based on scoring

Discussion Discussion

The following slides were presented as concepts for discussion on 4/1/09

SLIDE 15

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S end comments & questions to Ken S easholes (kseasholes@ cap-az.com) The following slides were presented as concepts for discussion on 4/1/09