Hearings and Business Meetings

SD-366 Energy Committee Hearing Room 02:30 PM

Ms. Virginia Grebbien

P.O. Box 8300, Fountain Valley, CA 92728-8300 • 10500 Ellis Avenue, Fountain Valley, CA 92708
Telephone (714) 378-3200 Fax (714) 378-3373 Web Page
www.ocwd.com
ORANGE COUNTY WATER DISTRICT
Orange County’s Groundwater Authority
Officers
PHILIP L. ANTHONY
President
JAN DEBAY
First Vice President
KATHRYN L. BARR
Second Vice President
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VIRGINIA GREBBIEN
General Manager
Directors
PHILIP L. ANTHONY
WES BANNISTER
KATHRYN L. BARR
DENIS R. BILODEAU
RICHARD CHAVEZ
JAN DEBAY
SHAWN NELSON
STEPHEN R. SHELDON
JOSE SOLORIO
ROGER C. YOH
TESTIMONY
ON
U.S. BUREAU OF RECLAMATION
REUSE AND RECYCLING PROGRAM
(TITLE XVI OF P.L. 102-575)
SUBMITTED TO
HONORABLE LISA MURKOWSKI
CHAIRWOMAN
SUBCOMMITTEE ON WATER AND POWER
COMMITTEE ON ENERGY AND NATURAL RESOURCES
UNITED STATES SENATE
PRESENTED BY
MS. VIRGINIA GREBBIEN
GENERAL MANAGER
ORANGE COUNTY WATER DISTRICT
ORANGE COUNTY, CALIFORNIA
February 28, 2006
Good afternoon Chairwoman Murkowski and members of the subcommittee.
Thank you for the opportunity to testify today on the Bureau of Reclamations’
Title XVI Program. I am Virginia Grebbien and I appear before you as the
General Manager of the Orange County Water District located in Orange County,
California and on behalf of our Board of directors. I will summarize my remarks
and would request that my formal testimony as well as background information
on OCWD be included in the hearing record. OCWD was formed in 1933 and
today is responsible for managing and protecting the vast groundwater basin
under north and central Orange County. The groundwater basin provides about
two-thirds of the water supply for 2.3 million people in our region which includes
the cities of Anaheim, Buena Park, Costa Mesa, Cypress, Fountain Valley,
Fullerton, Garden Grove, Huntington Beach, Newport Beach, Irvine, La Palma,
Los Alamitos, Orange, Placentia, Santa Ana, Seal Beach, Stanton, Tustin, Villa
Park, Westminster, and Yorba Linda.
I am pleased to appear before you today to review the development status of
recycled water projects and the important role the U.S. Bureau of Reclamation
Title XVI program has played and must continue to play in the future. In
Southern California we realize that the future of water reliability lies in the ability
to supplement our imported water supplies with local water supply development
such as recycled water. It is important to note that this priority involves multiple
uses such as irrigation, industrial and indirect potable reuse.
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I have a long history with the Title XVI Program. I first testified in support of Title
XVI in 1992 when the Program was originally authorized. In 1996 Congress
amended the law. The changes included a “cap” of 25% on eligible project costs.
I was part of the WateReuse Association Task Force that helped initiate this and
other changes. As a public official, I have managed the planning, design and
construction of three Title XVI projects. I have also been involved in the
institutional development of numerous others. The Title XVI Program has
successfully helped develop 30 recycled water projects. I would note that this
subcommittee has been a major reason behind the program’s success. I would
also note that full committee Chairman, Senator Pete Domenici has been a key
reason that we have enjoyed continued funding of Title XVI programs despite
efforts by the past two Administrations to reduce the federal role. We deeply
appreciate Senator Domenici’s commitment to ensure that we have a solid
federal partnership.
Despite the fact that the Title XVI Program enjoys tremendous support from the
Western and Sunbelt states and despite the fact that the Title XVI Program is
over subscribed, we are being asked, again, some important and fundamental
questions that I hope will guide us in developing an improved water recycling
partnership with the federal government. These are:
• Does the Title XVI Program work?
• Does it provide value?
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• Does it actually create new water?
• Is there a legitimate federal role?
• Should the Title XVI Program be modified?
From my humble perspective as one of the pioneers of implementing the original
law, and an ardent supporter of recycled water, let me assure the subcommittee
that the Title XVI Program works. It provides value. And, it creates new water.
Given the economic vitality of the West (California alone is the 5th largest
economy in the world; makes up 13% of the nation’s GDP; and generates $1.4
trillion in gross state product) and the federal mandates that state and local
communities must meet to assure a clean and safe water supply, a legitimate
federal role does exist. Let’s be clear on one important point; the federal
assistance that is provided through Title XVI delivers benefits by reducing
borrowing costs, enhancing public acceptance of a project, and providing a
platform for the speedy transfer of innovative technologies that can be used
elsewhere in the nation.
Orange County Water District is currently constructing the Groundwater
Replenishment System. This visionary indirect potable reuse project will be
operational in the summer of 2007 and will produce 72,000 acre-feet per year
(enough water to meet the annual needs of 140,000 families) of new water for
the 2.3 million residents of Orange County. The Project uses state-of-the-art
treatment, monitoring and groundwater replenishment technology. This
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technology is used to insure high quality water is produced from the project. All
aspects of the project are monitored to insure quality objectives are met and
maintained. The product water will be recharged into the Orange County
Groundwater Basin increasing the sustainable yield from the basin. The Project
not only provides direct benefits to the rate payers within our service area but it
provides regional benefits as well. Recycled water is a drought proof supply that
is available even in the driest years. Having recycled water available enables
OCWD to make conserved and imported water available to other Southern
California water agencies that are not as fortunate in their water supply portfolio
during dry years. In addition, to the extent local water supply can be created
than it relieves the pressure to import water from the Colorado River into the
Southern California Region.
The Groundwater Replenishment System would not have been successful
without federal buy-in and support. GWR is a reality today because both the
State of California and the federal government have chosen to financially
participate in this project. The federal role is critical because it provides a
mechanism for local elected officials and decision makers to deal with the
inherent risks when implementing a large scale recycled water project.
The total capital cost for the GWRS project is $487 million. The Title XVI grant of
$20 million has leveraged $80 million in State funds and $387 million in local rate
payer dollars. The federal cost share was critical as it provided a mechanism to
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solicit State grant funds and importantly provided a level of political acceptability
and project legitimization that enabled our local decision makers to move forward
with the project.
What would have happened to the GWRS project without federal support? We
would not have as broad based community and political support for the project as
we currently enjoy. As we engage in outreach about the project we start with the
projects supporters; the federal government – they provide money and
technology transfer; the state of California – they provide money and regulatory
oversight; local government - they provide the majority of the money and the
local will to implement the project. All six of Orange County’s congressional
leaders support the GWRS project. California’s two United States Senators
support the GWRS project. That support is backed up by federal dollars. This is
the foundation upon which we have built community, environmental and business
support for the GWRS project. Unlike some recycled water projects which
unfortunately were built and then not operated due to lack of community support.
I have 100% confidence that the GWRS project will be successfully producing
recycled water next summer and the cornerstone of that confidence starts with a
small federal investment.
Federal involvement in Title XVI projects is warranted for several reasons. In
California we have a mandate to reduce our use of Colorado River water. In
Arizona and Nevada there is a similar mandate to responsibly use Colorado
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River supplies. In Texas the Ogallala Aquifer and watershed supply shortages
are creating the need for recycled water supply development. In Florida there is
a critical groundwater supply shortage. In New Mexico water supplies are
extremely limited from the Rio Grande River and other local watersheds. The
common theme is that regional water supplies with direct federal involvement
must be augmented and enhanced through local water supply development of
recycled water.
The federal government has established significant mandates for ecosystem
maintenance and restoration. Fisheries, in stream flows, habitat development all
take water. Water that is typically being redirected from urban uses. At the
same time, our water demands are not decreasing and neither are our future
water supply projections. New water supplies that are environmentally
sustainable must be developed if we are to meet our ecosystem mandates.
Recycled water is one such supply. If the federal government is instrumental in
establishing these ecosystem mandates how can we question the need for
programs such as Title XVI that provide necessary funds to implement alternative
water supply development?
It is important for the federal government to play a role in research and
technology transfer. Large results can be gained at the local and regional levels
with relatively small investments from the federal government. No single local
water agency has the financial resources or expertise to research and investigate
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membrane processes, brine concentration technologies, the health risks of
pharmaceuticals or alternative power technologies to name a few areas of
interest. However, the federal government has the capability to bring disparate
agencies together in cost sharing arrangements to jointly work on technology
improvements that will make recycled water development even more cost
effective and reliable. Again, a small federal investment leverages local dollars
and technical talent for significant water resources gains.
Over the last decade I have watched the Bureau of Reclamation’s struggle to
define its role in the Title XVI Program. Congress has continued to authorize
projects while the Administration has continued to decrease the overall funding
for Title XVI. This has created a “backlog” of unfunded projects. Some point to
this situation as proof that Title XVI is broken and needs fixing. I would instead
say this is proof of the value of Title XVI and what is needed is an expansion of
the program. A proposal has been floated that the federal government should
offer loan guarantees rather than grant funding. In my view this is a tool that
should be available along with other financing options. However, the suggestion
that this tool could replace the existing grant program is an ineffective idea. As a
local government agency, OCWD has access to a significant amount of tax free
credit. We have an AA+ credit rating and our average cost of debt is 4%. A loan
guarantee from the federal government will not provide political support or the
political will to implement recycled water projects like the current Title XXVI
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program does. Similarly, a loan guarantee does not enhance a local government
agencies’ ability to raise capital.
What is missing from the Title XVI program is a comprehensive federal program
similar to the federal Drinking Water supply Program that sets standards for
federal support. This is an important point that I cannot emphasize enough. Title
XVI is an effective program. The federal partnership made it possible for projects
like GWR to get off the drawing board. However, a number of lessons have
been learned since its original passage in 1992. Water recycling as well as
desalination are foundations for our future public health, environmental and
economic well being. I would add that on the heels of last year’s natural
disasters, these projects also serve to safeguard against water supply
disruptions.
One of the important lessons that I take away from my years of working with Title
XVI is the fact that we are at stage where we need to implement a
comprehensive federal program of assistance to local agencies. This means that
we need to amend Title XVI to address issues including:
• Identifying the overall need for assistance on a project by project basis
among the states based on a bi-annual survey of need conducted by the
U.S. Bureau of Reclamation based on State generated data.
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• Establishing a series of criteria that would qualify a project for assistance
such as ensuring a project provides multiple benefits or will contribute to
other ongoing water conservation programs.
• Ensuring that any existing Title XVI project authorization is fully funded.
• Expanding Title XVI to advance the commercialization of promising
technologies that can reduce the cost of water production and/or increase
the safety and acceptance of recycled water by the public.
• Providing for a defined budget authorization to support a comprehensive
federal water recycling program that can create stability and predictably to
the management of this program need.
In closing I would like to reiterate that the Title XVI program is not broken. It is a
very valuable program that has facilitated the development of 600,000 afy of
recycled water supply capacity. Title XVI has produced projects such as GWRS.
The federal government’s investment of $20 million has leveraged $467 million in
state and local dollars. GWRS, a Title XVI project, will not only help to drought
proof Orange County by creating a new water supply, but it will also reduced
pressure on Colorado River supplies, it will facilitate technology improvements, it
enhances the science of groundwater monitoring and it provides opportunities for
technology transfer and research.
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Again, it is an honor to appear before you today and review the important ways
that Title XVI has assisted OCWD’s efforts to ensure a safe and reliable water
supply and how we as a country should proceed into the future. Thank you.