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“ The Wild, Wild West – Taking on Mother Nature and More”

“ The Wild, Wild West – Taking on Mother Nature and More”. Jack Hawks NARUC Committee on Water July 15, 2014 Dallas, TX. California Update. Hollywood and Maximum Contaminant Levels (water quality regulatory standard) A New Hexavalent Chromium MCL, Effective July 1st

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“ The Wild, Wild West – Taking on Mother Nature and More”

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  1. “The Wild, Wild West –Taking on Mother Nature and More” Jack Hawks NARUC Committee on Water July 15, 2014 Dallas, TX

  2. California Update • Hollywood and Maximum Contaminant Levels (water quality regulatory standard) • A New Hexavalent Chromium MCL, Effective July 1st • The Drought: Unrelenting Pressure • How Water Utilities Are Responding • New Emergency Drought Regulations

  3. 115 Regulated IOWCs • 9 Class A water utilities (> 10,000 connections) • 5 Class B water utilities (>2,000) • 24 Class C water utilities (> 500) • 77 Class D water utilities (< 500) • 1.5 Million Customers • $1.4 billion annual revenues • 6 Million Served

  4. Hollywood and Water Contamination • A Civil Action (1996 – John Travolta) • Trichloroethylene (TCE) contamination of the town's water supply (Woburn, MA) • Financial settlement ($68 million) for town’s residents • Erin Brockovich (2000 – Julia Roberts) • Hexavalent chromium (Cr+6) contamination in Hinkley, CA • PG&E financial settlement ($333 million) for town’s residents • Much agitation in California State Legislature

  5. Hexavalent Chromium (Cr+6) - What a Long Strange Trip It’s Been

  6. What Is It? • Chromium is a naturally occurring element in rocks, animals, plants, soil; occurs predominantly as • Trivalent chromium (Cr+3), essential to normal glucose, protein, and fat metabolism and thus an essential dietary element for humans • Hexavalent chromium (Cr+6), used in makingstainless steel, textile dyes, wood preservation, and for anti-corrosion, treatment of cooling tower water • Human body reduces Cr+6 to Cr+3 • USEPA has classified Cr+6 as a human carcinogen when inhaled because of results from animal studies

  7. A Little History • 1977 - MCL established by USEPA and adopted by California at 50 parts per billion for Total Chromium (includes both Cr+6 and Cr+3); 1 ppb = about 1 drop of water in 250 chemical drums (3 seconds out of 100 yrs.) • 1991 - USEPA raised federal MCL to 100 ppb • 2000 – Julia Roberts wins Oscar for ‘Erin Brockovich’; Prompts California legislature to force MCL development • 2000 – City of Glendale begins treatment studies for Cr+6 • 2001 – California water utilities begin monitoring for Cr+6 under California UCMR

  8. A Little More History • March 2001 – CDHP requests that OEHHA prepare a Public Health Goal for Cr+6 • May 2001 – National Toxicology Program (NTP) announces intent to conduct a long-term animal study to evaluate carcinogenicity of ingested Cr+6 • October 2001 – SB 351 is signed by the Governor, requiring CDHP to adopt a Cr+6 MCL by 1/1/2004 • November 2001 – OEHHA announces intent to develop a Cr+6PHG • 2004 – Water Research Foundation publishes three Cr+6reports

  9. Still More History • 2007 – NTP reports there to be sufficient evidence of carcinogenicity in rodents • August 2009 – OEHHA releases draft PHG at 60 ng/L (parts per trillion; 1 ppt = 1 drop in 20 Olympic-sized pools) • 2010 – USEPA announces in second Six-year Review of existing standards, no revision to Total Chromium MCL • September 2010 – External review draft of USEPA’s IRIS Toxicological Review of Hexavalent Chromium • December 2010 – OEHHA releases revised draft PHG for Cr+6 at 20 ng/L (20 ppt)

  10. Even More History • December 2010 – Environmental Working Group releases report: Chromium-6 is Widespread in US Tap Water • Tested tap water in 35 cities • Range of positive tests: 30 ppt to 13 ppb • Cites WaterRF 2004 occurrence study • April 3, 2011 – EWG press release: “Utilities Knew of Chrome-6 Contamination For Years”

  11. Final PHG in California • July 2011 – OEHHA finalizes the PHG for Cr+6 at 20 ppt • CDPH can now finally start working on developing an MCL required by SB 351 • It is now seven and one-half years since the SB 351 deadline

  12. Water Research Foundation Keeps Science Moving Forward

  13. Environmental Groups File Suit • July 18, 2013 – NRDC, EWG file suit in Superior Court to force CDPH to propose and finalize a MCL for Cr+6 • Court rules in plaintiffs’ favor and requires CDPH to propose an MCL by August 31, 2013

  14. History in the Making • 8/23/2013: CDPH Proposes Cr+6 MCL at 10 ppb • Water Industry Comments Due 10/13/2013 • AWWA CA-NV Section/CWA/ACWA • Coordinate comments • Hire two expert engineering firms to analyze the CDPH supporting evidence and produce technical documents • Bottom Line: CDPH Vastly Underestimates Incidence, Compliance Costs of Cr+6

  15. History in the Making • 20,000 comments received by CDPH • About 250 were “significantly distinct” • Remaining were form emails or post cards • California Administrative Procedure Act allows up to one year to finalize a regulation (i.e., 8/23/2014) • December 17, 2013 • Court finds in favor of NRDC/EWG and orders CDPH to finalize MCL by April 15, 2014 • If there are substantial changes to the rule, must finalize by June 15, 2014 and allow an additional 15-day comment period

  16. History Made • CDPH refutes, dismisses most comments • Reiterates MCL of 10 ppb • New MCL went into effect on July 1, 2014 • Where is USEPA on all this? • Not enough evidence in second six-year review (2010) to warrant a federal Cr+6MCL, nor change the total chromium MCL • USEPA will await occurrence data on total chromium and Cr+6 under UCMR 3 (thru 2015) • Continued IRIS review of Cr+6 • No decision on Cr+6 anytime soon

  17. Impact of New MCL • For customers in affected service areas • Statewide capital costs - $4.1 billion • Annual O&M - $231 million • Cal Water most affected of California IOUs • 25 wells affected at 10 ppb • Capital costs up to $66 million, O&M up to $11 million/yr • All affected water utilities, agencies, municipalities, districts struggling with compressed compliance time frame

  18. Regulatory Response • Memorandum Account Effective on July 1 • Cal Water can apply for cost recovery in future • Not an automatic process • Willows District Case History (2,610 customers) • Tested in 2011-12; CR+6 levels averaged 16 ppb • Total chromium averaged 24 ppb (vs. 50 ppb MCL) • Capital costs – up to $17.3 million; O&M $360,000/yr • Staggering treatment, selection of SBA, other cost reductions, etc. will reduce bill impacts • Cal Water estimates impact from $63/month to $111/month

  19. Drought Update U.S. Drought Monitor California – 7/8/14 • 100% of California in drought for first time in recorded history • 78% likelihood of El Nino prediction in fall 2014 … But … • El Nino years do not guarantee above-average precipitation. • A scary fire season

  20. California Used to Extremes Folsom Reservoir, July 20, 2011 97% Capacity Folsom Reservoir, January 16, 2014 17% Capacity

  21. 2013 Redefined “Dry” in California January 18, 2014 January 18, 2013

  22. Variable & ExtremeOver Time & Location • Most Occurs Nov.- March California Precipitation California Statewide Precipitation SOURCE: http://education.usgs.gov/california/resources.html#water

  23. Snow Water Content • 6/9/14 Statewide Average - 0% • Means major reservoirs will not be replenished • Means reliance on groundwater has increase to 65+% from 38% • Means falling groundwater levels, land subsidence, lower GW storage capacity, water quality degradation North Sierra/Trinity 0% 0% Central Sierra 0% 0% South Sierra 0% 0%

  24. CA Reservoir Storage July 8, 2014

  25. Current Water Supplier Restrictions* • Mandatory: 62 water suppliers • Includes 6 rationing • Voluntary: 154 water suppliers • Drought impacts are strongly tied to local and regional water supply conditions • *As of July 7, 2014, compiled by DWR

  26. 2014 • Governor proclaims Drought Emergency on Jan. 17 • California Water Action Plan released • Drought Legislation: SB 103/104 • Governor issues Executive Order April 25 to re-double drought efforts The State’s Response 2013 • California Water Plan Update 2013 (draft) • Governor establishes Drought Task Force

  27. Highlights • Facilitate water transfers and exchanges • Urban water suppliers directed to address outdoor water use • Californians directed to eliminate water waste • Limit outdoor watering; irrigation, washing hard surfaces, car washing; commercial establishments • Homeowner association rules voided • Assist with temporary interconnections between water systems • Protect threatened and endangered species • CEQA / Water Code sections suspended to speed up actions, including water transfers Governor’s April 25 Proclamation

  28. CPUC’s Regulatory Response • February 27, 2014 – CPUC adopted Res. W-4976 • Drought procedures for water conservation, rationing and service connection moratoria • Comply with Governor’s call for 20% voluntary conservation • Tariff Rule No. 14.1 • Water Conservation and Rationing Plan • Lists non-essential and unauthorized water uses • Tariff Schedule 14.1 • Mandatory rationing • Requires DWA approval • All Class A and B utilities have Rule 14.1 in place • CPUC monitoring vulnerable systems

  29. Tariff Rule 14.1 Highlights • Voluntary Conservation Plan • Customers Notified by Bill Insert or Direct Mailing • Option to Request Activation of Staged Mandatory Rationing (Schedule 14.1) • Small Utilities (< 2,000 connections) Shall Make Conservation Kits Available • Section A of Rule: Non-Essential Uses

  30. Non-Essential, Unauthorized Water Use • Anything more than “minimal” landscaping • “Excessive” water use (per utility notification) • Potable water in gutters, streets • Private car washing (except w/shut-off nozzle) • Washing buildings, driveways, patios, etc., w/potable water • Use of potable water for lawns, gardens, etc., other than drip irrigation or hand watering on specific schedules • Use of potable water for construction purposes, dust control, etc., if other sources available

  31. Non-Essential, Unauthorized Water Use • Use of potable water for street cleaning • Operation of commercial car washes unless 50% recycling per cycle • Use of potable water for outside plants, lawn, landscape, turf during certain hours • Use of potable water for decorative fountains, unless recycled water used • Use of potable water for filling/refilling swimming pools • Water service in restaurants, unless requested • Use of potable water to flush hydrants, except when required for public safety

  32. Schedule 14.1 - Rationing • Utility makes decision on whether more stringent measures are required • Must file w/CPUC to activate staged mandatory rationing measures in Rule 14.1 • Filing conditioned on: • Declaration of Mandatory Rationing – can be made by utility or governing agency (e.g., State Water Board) • Whether utility is unable to address voluntary conservation levels set by itself, its supplier or governing agency • Whether utility chooses to subsequently activate a different stage • Utility may not activate Schedule 14.1 unless authorized by CPUC • Customer notification, public hearing required

  33. Schedule 14.1: Enforcement • Utility may charge a water use violation fine if non-essential/unauthorized use is observed (min. 3 Ccf/person/ month) • After one written warning, utility can install flow-restricting device • All monies collected via fines or penalties will be used to offset lost revenues

  34. Recovery of Lost Revenues • Utilities w/partial decoupling WRAMs • Can file for memorandum (tracking) accounts to track expenses, monies collected and lost revenues – can letter request recovery of the net balance, but … they must subtract amount equal to 20bp reduction in current authorized ROE – even then, recovery cannot exceed authorized ROR • Utilities w/full decoupling WRAMs • Can file for memo account that only tracks expenses incurred and monies collected, since WRAM already protects for lost revenues

  35. New Emergency Regulations • Issued by State Water Resources Control Board July 8; approval on July 15th • Mandatory conservation actions, monthly data collection of water production, temporary water restrictions – prohibits: • The direct application of water to any hard surface for washing. • Watering of outdoor landscapes that cause runoff to adjacent property, walkways, roadways, parking lots, etc. • Using hose to wash automobiles, unless fitted with shut-off nozzle. • Using potable water in a fountain or decorative water feature, unless the water is recirculated. • Violations punishable by fines of $500 per day; any employee of a public agency may write and issue a ticket to a violator – raises all sorts of “water police” questions

  36. New Emergency Regulations • State Board Chair Felicia Marcus has stated that new regsdon’t apply to CPUC-regulated water utilities, but CPUC may well adopt them • CWA’s July 14 comments note that Rule and Schedule 14.1 constitute drought management response • Water IOUs will continue to work with the CPUC to coordinate their existing drought response plans and programs with the State Board’s new regulations

  37. Questions? • Thank You • Jack Hawks • California Water Association • jhawks@calwaterassn.com • 415.561.9650

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