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HomeMy WebLinkAboutAgenda - 04-17-2001-9g~._ ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: April 17, 2001 Action Agenda Item No. SUBJECT; OWASA and Orange County Jordan Lake Allocations DEPARTMENT: County Manager PUBLIC HEARING: (Y/N) No ATTACHMENT(S): INFORMATION CONTACT: County Engineers 3/21/2001 Memo Paul Thames, ext 2300 TELEPHONE .NUMBERS: Hillsborough 732-8181 Chapel Hill 968-4501 (Delayed from BOCC April 3, 2001 Durham 688-7331 Meeting) Mebane 336-227-2031 PURPOSE: To review and discuss information regarding the future allocation of raw water from Jordan Lake; to consider supporting OWASA's Round 3 application fora 6.0 mgd Level II raw water allocation from Jordan Lake; and to consider relinquishing Orange County's existing 1.0 mgd Level I I raw water allocation from Jordan Lake. BACKGROUND: The NC Environmental Management Commission (EMC) is currently conducting a third round of allocation requests for raw water supplies from Jordan Lake. The total allocations requested in the second and third rounds have far exceeded the rated 100 million gallon per day (mgd) water supply capacity of Jordan Lake. The Round 3 allocation process requires that all entities having an existing Level II allocation (for future withdrawals) reapply to preserve their allocations. Unlike the initial Round 1 application process, Round 3 applications must provide detailed projections as to water demand and water supply capacity as justification for requested allocations. The attached memorandum from County Engineer Paul Thames explains in detail OWASA's Round 3 request fora 6.0 mgd Level II (future) allocation of raw water from Jordan Lake and the difficulties Orange County will face in retaining or utilizing its existing Level II allocation. The Engineer will briefly outline the major points of his report, and respond to the Board's questions on this subject. A Board decision about the County's allocation will be needed no later than the April 17, 2001 regular meeting. FINANCIAL IMPACT: If Orange County is to maintain its Level II allocation, its annual cost in interests and service/maintenance charges for Jordan Lake will be approximately $2,300 per year. If the County maintains its Level II allocation and eventually does convert to a Level I allocation, the annual cost will be approximately $4500 for the raw water allocation plus additional charges for water withdrawal, treatment and distribution operational costs. At 1.0 mgd, capital costs could exceed two million dollars with operational costs approaching $5,000 or more per day. 2 RECOMMENDATION(S): The Manager recommends that the BOCC make decisions ta: • support, in whatever manner the Board deems appropriate, OWASA's Round 3 application fora 6.0 mgd Level II raw water allocation from Jordan Lake; and • relinquish Orange County's existing 1.0 mgd Level II raw water allocation from Jordan Lake, in recognition of the difficulty in justifying Orange County's Jordan Lake allocatian as well as the high cost and difficulty of accessing and distributing water from Jordan Lake. 6- MEMORANDUM TO: County Commissioners John Link, County Manager COPIES: Ed Kerwin, Executive Director, OWASA FROM: Paul Thames, PE, County Engineer DATE: March 21, 2001 SUBJECT: Orange County and OWASA Raw Water Allocations from Jordan Lake Allocation The following information relative to the raw water allocation/re-allocation process and history for OWASA and Orange County is provided as per the request of the BOCC. The Environmental Management Cornrnission is currently conducting a third round of allocation requests for raw water supplies from Jordan Lake. Allocations have thus far been requested from as far away from Jordan Lake as Greensboro and Fayetteville. The total allocations requested have far exceeded the rated 100 million gallon per day (mgd) water supply capacity of Jordan Lake. In the third round allocation process, all entities that have a Level II allocation (for future withdrawals) aze required to reapply to maintain their existing allocations. Furthermore, round 3 applications -unlike the initial round 1 application -are required to provide detailed water demand and, water supply capacity projections as justification for requested allocations. In the round 1 allocation request process of July 1988, Orange and Chatham Counties, the Town of Hillsborough, OWASA and the Orange Alamance Water system submitted a joint application to the NC Environmental Management Commission (EMC) for Level I (immediate withdrawals) and Level II (future withdrawals) raw water allocations. The total Level I allocation request for 4.0 (mgd) carne from Chatham County. The Level II allocation requests totaled 38.3 mgd. Eventually, the EMC awazded Chatham the 4.0 mgd Level I allocation it requested and 2.0 of the .6.0 mgd Level II allocation it requested. The other Level II allocations were: OWASA - 10 of 19 mgd requested, Hillsborough - 5.5 of 6.0 mgd requested, Orange-Alamance - 3.5 of 4.0 mgd requested and Orange County - 1.0 of 1.3 mgd requested. OWASA's commitment to its allocation of the Jordan Lake water supply went so far as its purchase, in the early 1990's, of 12S acres of land adjacent to Jordan Lake at the point identified as the best raw water intake site on the west side of the lake. It was supposed at the time of the purchase that the site could be used to accommodate all of the infrastructure necessary to withdraw, treat and distribute (pump) the water allocations far all of those entities who were party to the joint application. However, since the time of the joint allocation request and OWASA's purchase ofthe Jordan Lake property, the circumstances relating to a potential partnership among those who submitted the joint allocation request have changed drastically. Hillsborough and Orange-Alamance relinquished their allocations in 1993 when the EMC and the NC Division of Water Resources began the process of billing the pro rata costs of developing and maintaining the portion of Jordan Lake dedicated to raw water supply to those entities holding allocations (Orange County pays about $2,000 per year to preserve its allocation). Chatham County has developed its own water treatment capacity and has entered into a partnership with Cary and Apex that gives it access to the existing raw water intake facilities on the eastern side of Jordan Lake. OWASA's projected need for water supplies from Jordan Lake has decreased significantly as a consequence of: 1) reductions in projected demand from its newly defined (Utility Service Area Boundary Agreement) service azea; and 2) the projected availability of the water storage capacity of the American Stone quarry reservoir. The end result of all of these changes is that it can no longer be assumed that OWASA would or should be the lead agency (on the western side of Jordan Lake) in developing the infrastructure necessary to withdraw, treat and distribute water from Jordan Lake. It is probable that some other jurisdiction such as Durham (which is requesting a 25 mgd allocation in the round 3 allocation process and which has interconnections with OWASA, Hillsborough and Orange-Alamance as well as other water systems to the north and east) maybe the more appropriate lead agency. As OWASA still controls the property that would be most appropriate for locating the necessary infrastructure, it maybe assumed that it would continue to play a key role in the process of utilizing Jordan Lake's water supply capacity -- at least on the west side of the lake. For the round 3 allocation process OWASA has amended -reduced -the amount of its Level II allocation request from 10 mgd to 6 mgd. As stated eazlier, this reduction reflects OWASA's projections of reduced demand and increase supply capacity from other sources. OWASA has further determined and so indicated that its projected need far a Jordan Lake water supply is temporary, bridging the time gap between a projected demand in excess of its existing supply capacity and the availability of the American Stone Quarry reservoir' storage capacity. However, as long as OWASA maintains its allocation and there is some infrastructure in place allowing either Durham or Chatham County to withdraw and treat OWASA's allocation, OWASA should be able to maintain access to its allocation if or when it is needed. Orange County maybe in real danger of losing its 1.0 mgd allocation, even if the BOCC should decide to pursue maintaining it. The round 3 allocation process is geazed toward entities that aze actual water providers that operate water.treatment and/or water distribution systems. Specifically, the primary criteria for awarding a round 3 allocation involve the ability to demonstrate that: 1) there is differential between projected water supply capacity and projected water demand that can be addressed by having possession of the allocation; and 2) that there are not other reasonable or feasible means of accommodating that differential. In the case of Orange County, there maybe additional requirements of explaining how the County would gain access to its allocation and convey treated water to the areas and those customers wl~o require it. IF Orange County is to demonstrate a projected demand for water supplies, a corresponding projected insufficiency of water supply capacity and some means of conveying treated water to customers, it will have to include either or both Hillsborough and Orange-Alamance into its plans. Currently Hillsborough has a water supply in excess of its needs, a plan to expand its reservoir and water supply capacity at need, and contractual arrangements to purchase water on an emergency and non_emergency basis from neighboring water systems (Durham and OWASA). Orange-Alamance currently has a water demand and water supply capacity that aze neazly equivalent under the best circumstances (unrestricted withdrawals during periods of high flow in the Eno River) and water purchase agreements with neighboring water supply systems (Mebane/Graham, Hillsborough and Durham) that aze sometimes 5 problematic from an operational standpoint. If the entire Efland-Cheeks and Buckhorn Road EDD portion of the Orange-Alamance service area were built out, an additional water demand of approximately 0.4 to 0.5 mgd might be generated. However, from a land use perspective, Orange County policy makers have not yet determined that the community should be built out to the extent that such a water demand (and wastewater disposal demand) would be generated. In conclusion, OWASA has generated water demand and water supply capacity projections that justify maintaining a rordan Lake water supply allocation, albeit an allocation that is significantly reduced. Orange County, however, will find it difficult to justify maintaining an allocation where it must rely on the good offices of others to withdraw, treat and convey the water to some paint within the County and on the capacity of yet others to distribute it to water users. If I may provide additional information, please advise. OWASA January 3, 2001 ORANGE WATER &. SEWER AUTHORITY Quality Service Since 1977 Chairman Stephen Halkiotis Mayor Michael Nelson Orange County Board of ~ Town of Carrboro Commissioners 301 West Main Street 200 South Cameron Carrboro, NC 27510 Hillsborough, NC 2727$ Re: Jordan Lake Water Supply Allocation Dear Chairman Halki.otis, Mayor Nelson, and Mayor Waldorf: Mayor Rosemary Waldorf Town of Chapel Hill 306 North Columbia Street Chapel Hill, NC 27516 JAS! - h; ~::.: 1 am writing to follow up on my December 6, 20001etter to you regarding OWASA's Jordan Lake water supply allocation. We have submitted a draft application to the N.C. Division of Water Resources (DWR) requesting that our existing 10 million gallons per day (mgd) allocation of Jordan Lake's water supply storage be reduced to 5 mgd. We have further advised the DWR that we retain the right to make substantial changes in this application, should the need arise, prior to the final application deadline currently scheduled for Apri12001. The background and rationale for this action is contained in our Jordan Lake Water Supply Allocation Discussion Paper; dated January 2001, which is provided herewith. X have also attached a copy of the cover letter to Mr. John Morris, DWR Director regazding our draft application for your information. The OWASA Boazd of Directors will continue to carefully evaluate this matter and will keep you advised. Sincerely, ~~.~~• Peter C. Gordon Chairman Board of Directors c: OWASA Boazd of Directors a/ John Link Bob Morgan Cal Horton Ed Kerwin Robert Epting 400 ]ones Ferry Road Equal Opportunity Employer 7/oicc (919) 968-4421 ._ _ _ _ _ _ _ _ .. r. V iof Al nLQ AALA ~~1f~4SA ORANGE WATER & SEWER ALITHGRITY Quality Service Since 1977 December 29, 2000 Mr. Jahn Morris, Director NC Division of Water Resources 1611 Mail Service Center Raleigh, NC 27699-1611 Dear Mr. Morris: I am pleased to submit this draft application for a Jordan Lake water supply allocation on behalf of the Orange Water and Sewer Authority (OWASA ). We believe the information. contained herein supports our preliminary request to reduce our existing 10 million gallon per day (IviGD) Level II allocation to S MGD. OWASA has invested substantial resources ~in our Jordan Lake option since 1988. These have included $149,000 in fees far the 10 MGD Level II allocation; $$$0,000 in the eazly 1990s far 125 acres of land adjacent to Corps of Engineers property on the western side of Jordan Lake; $25,000 for an intake siting study in 1991; and $60;000 in construction costs for pipe casings placed under U.S. Highway 64. It is obvious that our longstanding interest in Jordan Lake is more than casual, and it goes without saying that OWASA is. committed to meeting any and all financial obligations associated with a Jordan Lake allocation. Historically, our allocation-has represented a supply that could supplement existing sources when their yield no longer meets the growing needs of the community we serve. More recently, OWASA's Comprehensive Water and Sewer Master Plan and its March, 2000 Water Supply SO- Yeaz Vision paper identified the extended (3 billion gallon) Stone Quarry Reservoir as the best choice for the next increment of water supply expansion. This option has been strongly endorsed by our Boazd of Directors and the community. Due to the extended time needed to increase the volume of the existing quarry through commercial mck extraction, as well as contractual commitments between OWASA and American Stone Company (our commercial quarrying partner), the expanded quarry is not expected to be available for use as a storage reservoir unti1203S. The supply and demand analysis presented in the attached draft application indicates a.likely deficit of up to several million gallons per day between 2020 and 2035. We propose using our Jordan Lake allocation as a temporary supplement to offset that deficit until the expanded Quarry Reservoir can be placed in service in or about 2035. It is not known at this time if OWASA's use of its allocation will be in partnership through a regional enterprise, ar more simply through along-term finished water purchase/sale contract with the City ofDurham and/or Chatham County. 400 ]ones Ferry Road Equnl Opporrunitr Employer Voice (919) 968-4421 7 For the past two years, OWASA staff have participated in active discussions with staff of both Durham and Chatham County about potential joint ventures in withdrawal, transmission, and treatment facilities, including the possible creation of a Jordan Lake water development authority. We have kept the OWASA Boazd of Directors well apprised of these discussions and opportunities, but they have not yet benelited from a full discussion with other leaders of the community, so it is premature to speculate on their eventual outcome. OWASA will provide more detailed plans to the Environmental Management Commission (EMC) for its use of Jordan Lake water as these options.aze more fully developed in the months to come. The OWASA Board has discussed the application process extensively and requests that I convey their keen interest in retaining a substantial portion of our 10 MGD Level II allocation. A critical element of OWASA's mission of providing an adequate supply of high quality drinking water has been maintaining a reliable range of long-term options for the future. Jordan Lake has always represented an important hedge against an uncertain future -and, as you well know - future water supply and demand scenazios are subject to major unknowns and uncertainties. Changes in underlying conditions or assumptions on which forecasts aze based can result in radical changes to future scenarios. The Board of Directors has asked me share with you same of the major uncertainties inherent in OWASA's future supply and demand scenarios: Service Area Growtli and Demand -Our demand forecasts aze based on an array of specific expectations, including the assumption that OWASA's service area, defined as the Urban Services Area delineated in the Carrbora-Chapel Hill-Orange County Joint Planning Agreement, will remain unchanged. OWASA's water demand forecasts also assume that the limited amount of land available for future growth and development under existing local policies will result in service area "buildout" sometime during the next SO years. At that time, the historic trend of increasing water demands would level off at a demand of between 16 and 22 MGD. We note that the demand forecasting methods prescribed for these draft applications do not provide for any variation from the forecast demand curves. OWASA's own analyses include "high" and "law" bands of uncertainty that vary approximately 10 percent above and below the "expected growth" line. Rate of Quarry Expansion and Ultimate Capacity -The ultimate yield of the extended Quarry Reservoir will depend on its water storage capacity. OWASA's sustainable yield projections are based on a final capacity of 3 billion gallons (BG). The current capacity of American Stone's active quarry is approximately 1 billion gallons. OWASA's existing Quarry Reservoir has a storage volume of 0.2 bg. American Stone's agreement with OWASA contains a "due diligence" commitment to maintain rock production at an average rate of 650,000 tons per year, which corresponds to a quarry pit volume increase of 0.065 billion gallons per year. At this rate, quarry volume will increase by 1.95 bg over the next 30 years, providing a total volume of slightly more than 3 BG. If -due tp economic conditions, market competition, or changes in corporate policy -- American Stone's production activity decreased below this level, or if the company went out of business and stopped production altogether, then the usable storage volume and resulting water supply yield would be less than what has been projected. 9 Meteorological Variation and Climatic Clzange -The sustainable yield estimates calculated for OWASA's existing and future raw water supply system were based on historic temperature and streamflow records that reflect the natural variation and uncertainty characteristic of such observations. Ta the extent that future weather conditions differ from the historic range - reflecting,either short term variation'or longer term climatic changes -the yield of OWASA's water supply system will differ from what has been projected. We urge your staff and the EMC to consider these and other uncertainties as you evaluate OWASA's and other requests. Please consider this draft application as our preliminary request. We understand that OWASA retains the right to make substantial changes in this application should the need arise prior to the final application deadline currently scheduled for Apri12001. if you ar your staff have any questions or need further information about the attached materials, please feel free to contact me directly or Mr. Ed Holland, OWASA's Planning Director. Sincerely, ~~~ Ed Kerwin Executive Director attachments cc: Mr. Sydney Paul Miller OWASA Board of Directors 10 QVIIASA ORANGE WATER & SEWER A~LIT'HORxTY Quality Service Since 1977 Jordan Lake Wa#er Supply Alloca#ion Discussion Paper January 24UI Purpose This paper outlines a future role far Jordan Lake in OWASA's long-term water supply and contingency plans. Tt has been developed in conjunction with OWASA's request to the North Carolina Environmental Management Commission (EMC) to retain a portion of its Jordan Take allocation. Background OWASA has held an allocation of 10 percent of Jordan Lake's water supply storage capacity since the EMC first issued allocations in 1988. The reservoir can supply an estimated average of 100 million gallons of water per day (MGD); therefore, OWASA's portion represents a yield of about 10 MGD. (For semantic convenience, all subsequent references to "allocation" in this paper are expressed in terms of yield or MGD, rather than as a percentage o£ water supply storage capacity.) The EMC issued a second round of allocations in 1995, a portion of which aze still undergoing review for interbasin transfer issues. Tf all of the EMC staff recommendations are approved, a total of 44 MGD of Jordan Lake's water supply will have been allocated through the first and second rounds. Most recently, the EMC began a third cycle of allocations in response to the City of Durham's needs, as well as those of other Triangle area. and downstream Cape Feaz River communities. Decisions will be based, in part, on water demand forecasts for the next 30 years. EMC guidance and information requirements for this new round of applications are substantially more rigorous than in previous cycles, reflecting a concerted effort to assure more consistent and credible methods in the allocation requests. OWASA was required to submit a Round Three application in order to retain all ar a portion of the 10 MGD allocation held since 19$S. A draft application was submitted to the NC Division of Water Resources on December 29, 2000 to comply with the filing deadline. A formal deadline for final applications has not yet been set, but these are expected to be due sometime in April, 2001. The EMC is scheduled to issue new Jordan Lake allocations by the end of Dece~ber, 2Q01. 400 Jones Ferry Road Equal ~pporcunicy ,Employer ~ Voice (919) 968-4421 n.-. n.. _. err A~:..rnrl ..n Re....,.l,.a P~.,a~ r •-- ~ FAX (919) 968-4464 Jordan Lake V4jater Supply Allocation January 2001 . Page 2 of 6 A Role for Jordan Lake? A critical element of OWASA's mission of providing an adequate supply of high quality drinking water has been maintaining a viable and reliable range of long term options for the future..Historically, OWASA's Jordan Lake allocation has represented a supply source that could supplement the University Lake, Cane Creek, and existing Stone Quarry supplies when their yield no longer meets the growing demands of the community. Stone uar Still the Preferred Choice More recently, OWASA's Comprehensive Water and Sewer Master Plan (Master Plan) and its Mazch, 2000 Water Supply 50-Year Vision paper identified the extended (3 billion gallon) Stone Quarry Reservoir as the best choice for the next increment of water supply expansion. Although the necessary approvals have not yet been obtained for the quarry extension, OVVASA is optimistic that they will be granted before the EMC issues its Jordan Lake allocation decisions in December, 2001. Potential Su 1 Deficit Before 2030 The figure on the next page projects raw water supply and demand through 2035. The ~diamond- shaped data points represent actual raw water demand for the past 20 years. The three diverging straight lines are the High, Low, and Expected demand forecasts developed in the Master Plan. Three levels of supply capacity: (1) Existing System; (2) Conveyance Upgrades; and (3) 3 billion gallon (BG) Quarry Reservoir - aze shown as straight horizontal lines. The Conveyance Upgrades and 3 BG Quarry Reservoir capacity levels are approximately five percent lower than presented previously in the Master Plan due to their depiction as 50-yeaz, rather than 30-yeaz, sustainable yields. (The EMC is requiring that upcoming Jordan Lake allocation requests be based on a 50-yesx safe yield analysis of existing and alternative sources.) The solid, step-shaped line represents the raw water supply available at a given time. The shaded areas indicate water supply shortfalls ar deficits under the supply and demand conditions specified. According to terms of OWASA's lease agreement with the American Stone Company, quarrying may continue through 2030. OWASA's Master Plan consultant estimated that the finished pit could not be brought into service as a water supply reservoir for an additional two and a half to six years. The indication of a 1 to 3 MGD raw water supply deficit between the years 2020 and 2030 suggests that OWASA should retain a significant portion of its current Jordan Lake water supply storage allocation. 1' Jordan Lake Water Supply Allocation January 2001 Page 3 of 6 Raw Water Supply, Demand, and Defic it Fo recas ts 20 .--. .. .. ~ 18 ~ 16 ~ 14 -- 12 0 10 s ~, ~. 6 ~ 4 1980 1990 2000 2 010 2 020 2 030 Notes: Individual dots represent historic raw water demands by .fiscal year. Upper, middle, and lower diverging lines correspond to High, Expected, and Low demand forecasts developed in the Master Plan. Heavy, step-shaped line represents raw water supply available at specified time. Shaded areas represent potential raw water supply deficits under indicated conditions of demand. Supply capacities (in mgd) are expressed as 50-year sustainable yield. Sources of Uncertain Future water supply and demand scenarios are subject to major unknowns and uncertainties. Changes in underlying conditions or assumptions on which the forecasts have been based can result in substantial changes to future scenarios. Service Area Growth and Demand - OWASA's demand forecasts are based on an array of specific expectations, including the assumption that its utility service area, defined as the Urban Services Area delineated by the CarrboraChapel Hill-Orange County Joint Planning Agreement, will remain unchanged: OWASA's water demand forecasts also assume that the limited amount of land available for future growth and development under existing local policies will result in service area "buildaut" sometime during the next 50 years, but neither the rate nar 3 BG Quarry Reservoir (19.4 mgd) ............ ........... ............. ............, ............. ..... Con veyance Upgrad es (14 3 mgd) . d) stem (11 1 m Bustin S i . g g y ,,. .. .. . ...• 12 Jordan Lake Water Supply Allocation January 2001 Page 4 of 6 timing of this is known. At that time, the historic trend of increasing water demands would level off at a demand of between 16 and 22 MGD (not depicted on this graph, which extends only to 2035). Rate of Quarry Expansion and Ultimate Capacity -The ultimate yield of the Quarry Reservoir will depend on its water storage capacity. Sustainable yield projections illustrated in the attached figure are based on a final capacity of 3 BG. The current capacity of American Stone's active quarry is approximately 1 BG. OWASA's existing Quarry Reservoir has a storage volume of 0.2 BG. American Stone's agreement with OWASA contains a "due diligence" commitment to maintain rock production at an average rate of 650,000 tons per yeaz, which corresponds to a quarry pit volume increase of 0.065 billion gallons per year. At this rate, quarry volume will increase by 1.95 BG over the next 30 years, providing a total volume of slightly more than 3 BG. If -due to economic conditions, mazket competition, or changes in corporate policy -American Stone's production activity decreased below this level, or if the company went out of business arid stopped production altogether, then the usable storage volume and resulting water supply yield would be less than what has been projected. Meteorological Variation and Climatic Change -The sustainable yield estimates calculated for OWASA's existing and future raw water supply system were based on historic temperature and streamflow records that reflect the natural variation and uncertainty characteristic of such observations. To the extent that future weather conditions differ from the historic range - reflecting either short term variation or Langer term climatic changes -the yield of OWASA's water supply system will differ from what has been projected. Is There Still a Role for Jordan Lake in OWASA's.W~.ter Sup lyp Future? Even assuming the anticipated approval of the Extended Stone Quarry Reservoir, OWASA faces a potential 1 to 3 MGD water supply shortfall for a period of several years before the new 3 BG Quarry Reservoir can be put into service. If any conditions of service area growth, quarry production rates, or 30-yeaz weather trends differ from those that have been assumed, the extent and duration of the water supply shortfall may be greater or lesser. In keeping with OWASA's past practices and with industry standards of maintaining as many viable and reliable water supply options as possible, OWASA should retain at least a portion of its Jordan Lake water supply allocation. How Much? It is cleaz from the EMC's application requirements that the new round of allocations will be based on a more rigorous analysis of demand forecasts and supply alternatives than has been applied in the past. It is unlikely that allocations will be issued in the absence of thorough and credible demonstrations of need, which have been provided in the application materials. Because OWASA recognizes tl:at its antierpated needs do not warrant the full IO~MGD Leved II allocation that it currently holds, the draft application voluntarily offers to adjust OWASA's allocation downward to S MGD. Jordan Lake Water Supply Allocation January 2001 Page 5 of 6 Haw Would This Allocation Be Used? It is anticipated that the 5 MGD allocation would be used to offset the potential water supply shortfall that may occur if service area demands exceed the 14.3 MGD capacity of the planned improvements to OWASA's raw water conveyance system before the 3 BG Quarry Reservoir can be put into service. OWASA proposes using its Jordan Lake allocation as a temporary supplement to offset that deficit until the expanded Quarry Reservoir can be placed in service in or about 2035. The most feasible means by which OWASA could use this allocation would be through potable water interconnections with the City of Durham and/or Chatham County. Rather than pumping raw water through a lengthy pipeline from Jordan Lake to OWASA's treatment plant in Carrboro, or pumping treated water from a new plant on the western side of Jordan Lake in Chatham County through a new transmission line to OWASA's service area, it appears to be more feasible to obtain treated water directly through the Durham or Chatham County system. This assumes, of course, that Durham su~ecessfully obtains its own Jordan Lake allacation and develops the necessary withdrawal, treatment, and transmission facilities to use that allocation. According to Durham staff, this scenario might evolve solely through Durham's own efforts or through an interlocal or regional partnership. The other assumption inherent to this scenario is that OWASA would be party to a satisfactory long term agreement with Durham and/or Chatham County that guaranteed to OWASA the fixture availability of specified amounts of treated water. What About OWASA's Existin Investments in Jordan Lake? OWASA owns a 125-acre parcel in Chatham County adjacent to Corps of Engineers property on the west bank of Jordan Lake south of U.S. Highway 64. This land cost $550,000 in the early 1990s. Additionally, OWASA has paid a total. of $148,933 in annual fees for its existing 10 MGD allocation. Current payments are between $19,000 snd $20,000 per year. Other Jordan Lake expenditures have included approximately $60,000 in construction costs for pipe casings placed under U.S. Highway 64 several years ago and approximately $25,000 for an intake siting study conducted in 1992. It is expected that some of these assets, especially the land and the intake siting analysis, would be useful in negotiating appropriate water supply agreements with Durham and/or Chatham County. Durham staff have indicated. interest in using OWASA's Jordan Lake property for a water treatment plant, but have not evaluated this extensively. OWASA would be entitled to a pro-rated reimbursement of previous allocation payments made to the State if the EMC adjusts the present 10 MGD allocation downward. 14 Except for the pipe casement under Highway 64, it appears that the full value of OWASA's Jordan Lake assets could be recovered or reinvested. Jordan Lake Water Supply Allocation January 2001 Page 6 of 6 Sunnmary • Consistent with OWASA's past practices and with industry standards of maintaining as many viable and reliable water supply options as possible, OWASA seeks to retain a portion of its existing Jordan Lake water supply allocation. OWASA will face a potential water supply shortfall of up to several MGD before the new 3 BG Quarry Reservoir can be put into service. If the conditions of service area growth, quarry production rates, or 30-year weather trends differ from those that have been assumed in OWASA's most recent forecasts, the extent and duration of that shortfall could be greater, • OWASA has offered to adjust its current Level II allocation downward from 10 MGD to 5 MGD, but retains the right to make substantial changes in its final application if the need arises before the deadline (currently scheduled for Apri12001). • It is expected that the future use of OWASA's Jordan Lake allocation will be via purchases of treated water transmitted through the Durham and/or Chatham County systems. Prepared by: Edward A. Holland,: AICP Planning Director Approved by: i2~.--~~ Ed Kerwin Executive Director 15