DeepWater Desal

There are three proposals that are generally considered the most viable options:

• Cal-Am Water Supply Project
• DeepWater Desal
• Moss Landing/People's Water Project

DeepWater Desal - Central Coast Regional Water Project

Deepwater DeSal LLC is a private company that plans to build a 25MGD desalination plant at Moss Landing: the Central Coast Regional Water Project (CCRWP). It would serve both Monterey and Santa Cruz counties. DeepWater Desal plans plans to draw water from a deep submarine canyon that veers inshore near Moss Landing. It is believed that this water source is cleaner, clearer, and contains less sealife than shallower sources.

The plant would be owned by a Joint Powers Agency (JPA) composed of various municipal agencies in Monterey and Santa Cruz counties. DeepWater Desal would operate the plant under JPA oversight. Each member agency would subscribe to the plant's output in the amount of its needs, and would be responsible for only its proportionate share of the project's costs. Funding would come from tax-exempt municipal bonds to be issued by the JPA entities. Water rates would then be set to cover both amortization of the bonds as well as operation and maintenance of the plant.

Finished water from the CCRWP will be available to both public agencies as well as private water utilities such as California Water Service Company (Salinas) and Cal-Am (Monterey).

DeepWater Desal intends to proceed with the CCRWP (assuming it can obtain appropriate water rights, funding, etc.) whatever happens with the ballot initiative and/or Cal-Am's Water Supply Project. If nothing else, it would be a backup option available if the Water Supply Project doesn't happen or is delayed.

• The plant will be built in the three phases, with the first phase providing 10,000 afy, with the final stage bringing it up to 25,000 afy. 
• The seawater intake location will be about 100 feet deep and 1.1 miles offshore. The pipeline will take advantage of an existing Moss Landing Power Plant easement for a fuel oil pipeline. CCRWP will remove the fuel oil pipeline and replace it with a submerged pipeline, which will run from the intake location to an existing, currently unused, well at the Moss Landing Power Plant.  From there, the intake water will be pumped to the to-be-built CCRWP facility. 
• Brine will be discharged via a separate pipeline, again using the existing MLPP easement. Diffusers will be used to ensure adequate mixing of the brine with ambient seawater, such that the salinity of the discharge will be within 2% of the salinity of the ambient seawater. 
• A portion of the intake and discharge pipelines will run under Hwy 1, meaning that permissions must be obtained from CalTrans to install, use, and maintain them. (The Sand City Coastal Desalination Plant did the same thing.)
• DeepWater Desal has an agreement to form a new power utility with the City of Salinas. This utility will purchase power from various sources, including some renewable sources, ensuring a flexible supply for the plant. In addition to powering the plant, the new utility will sell power to other Moss Landing businesses, thus offsetting some of its costs. 
• This project does not include the construction of pipelines to convey water to customers (beyond a transfer point on the CCRWP site). Each agency that purchases water from CCRWP is expected to provide its own transmission pipeline up to the transfer point.

For technical details about the CCRWP construction and operation, please see DeepWater Desal's project description prepared for the CPUC, May 1, 2013.

Location

DeepWater Desal plans to purchase a parcel of land next to the Moss Landing power plant. This parcel was used for fuel storage back when the plant was run by PG&E; it is now owned by the company that now runs the power plant. It includes an easement for a fuel pipeline that extends out into the Bay; DWD would replace the existing pipeline with a new water intake pipeline, plus a discharge line for the brine resulting from the desal process.

In addition to the desalination plant and associated storage tanks, chemical storage buildings, etc. the campus would house a Data Center. It's unclear so far exactly what the Data Center would be used for, but DWD says it has agreements with various technology companies, so it seems they intend for the Data Center to be revenue-generating. The cold feed water extracted from the deepwater canyon will be circulated in such a way as to provide cooling for the Data Center, thereby warming the water before it goes to the desalination plant. The thought is this will provide lower-cost cooling for the Data Center, as well as reducing power needed to warm the water before treatment.

Budget

$350 million, to be funded via the issuance of tax free municipal bonds.
This seems to indicate that the construction cost of the project will be spread over the 30-year life of the bonds. In theory, water rates would then go down (not accounting for inflation, of course). Water rates would also reflect the ongoing operation and maintenance costs for the plant.

Note that this amount is roughly the same as the Cal-Am Water Supply Project($320-370 million, depending on size). However, the CCRWP does not include conveyance pipelines, where the WSP does. (The cost estimate for the Cal-Am plant alone is $260 million.) The CCRWP, with its larger output, will serve a larger area, potentially spreading out the costs amongst a larger group of ratepayers.

DeepWater Desal CCRWP / Cal-Am WSP Comparison

	DWD Central Coast Regional Water Project	Cal-Am WSP
Size	25 MGD 10 MGD Phase I; scalable to 25 MGD Phase III	9.6MGD May be reduced to 6.4 MGD if GWR gets going
Service area	Monterey & Santa Cruz Counties	Monterey Peninsula
Ownership	Joint Powers Agency	Cal-Am
Operated by	DeepWater Desal LLC	Cal-Am
Power source	new power utility company; joint venture with City of Salinas	existing power grid
Water source	deepwater canyon off the coast near Moss Landing; accessed via horizontal wells	beneath ocean floor past high tide line off Marina coast; accessed via slant wells
Total project cost1	$350 million	$320-370 million
Funding source	issuance of tax-free municipal bonds	ratepayer surcharge + state revolving fund loans
Costs recouped by	water rates would be set to cover the cost of amortizing the bonds, plus general operation and maintenance costs for the plant	Construction costs would be recouped via a ratepayer surcharge that would end once the plant is operational (may be extended to recover unanticipated costs, with CPUC approval). Operation and maintenance would be covered by the water rates.
1It is difficult to directly compare the cost because of differences in the project components. The Cal-Am plan includes pipelines and equipment to deliver the finished water to the peninsula; the DeepWater Desal plan does not. The DeepWater Desal plan includes construction of a Data Center, revenue from which is anticipated to offset some construction costs.