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LA WATCHDOG - The Department of Water and Power is developing plans for Pure Water Los Angeles (“PWLA”) a facility that will convert wastewater to drinking water. This project will be located at Hyperion, just south of LAX, and will produce an estimated 200,000-acre feet of potable water a year, an amount equal to more than 40% of the City’s annual consumption.
This project is designed to increase the supply of water from local sources (10-15%), reducing our dependence on non-local sources (85-90%). Today, the City relies on water delivered by the Metropolitan Water District (“MWD”) through the California Aqueduct from Northern California and the Colorado River Aqueduct. We also receive water via the Los Angeles Aqueduct from sources in the Eastern Sierras and Owens Valley that are controlled by DWP, although this source has been constrained because of environmental issues.
PWLA is estimated to cost around $25 billion over the next thirty years. Unfortunately, we have not been provided with any information on the impact on rates, even though this is standard procedure in the private sector. Nor have we seen any financial analysis or other financial metrics that would outline the return on investment.
Under this scenario, the capital investment is $125,000 per acre foot, or about $6,250 for every resident of the City. The financial carrying cost is expected to be in the range of $10,000 a year per acre foot, assuming a reasonable return on investment. In addition, the operating costs are projected to be $2,000 per acre foot. The combined cost is $12,000, significantly more than the current cost of water of $1,500 per acre foot currently charged by the Metropolitan Water District.
Fortunately, there is an alternative that will be significantly less costly to City residents although it will be opposed by the power-hungry politicians that occupy City Hall and the upper echelons of DWP.
The alternative is to have MWD develop PWLA and spread the cost over twenty million residents, reducing the capital investment to $1,250 from $6,250, a savings of 80%. In addition, there would be significant operational savings because DWP would not need to pump water uphill to the LA Filtration Plant, an expensive process that consumes significant amounts of expensive power.
The development of PWLA would be in conjunction with MWD’s development of its Pure Water Southern California that is located 15 miles to the south in Carson and is designed to produce almost 170,000-acre feet a year.
Together, these two facilities would be able to serve the City and the County as well as parts of Orange and San Diego Counties, again resulting in significant operating efficiencies and lower costs to the four million residents of the City and the twenty million residents served by MWD.
This alternative should be considered by both MWD and DWP because of the huge capital and operational savings and not be bogged down by political considerations between the City and the parochial interests of the members of the MWD. This is a win-win proposition.
(Jack Humphreville writes the LA Watchdog column for CityWatch, where he covers city finances, utilities, and accountability at City Hall. He is President of the DWP Advocacy Committee, serves as the Budget and DWP representative for the Greater Wilshire Neighborhood Council, and is a longtime Neighborhood Council Budget Advocate. With a sharp focus on fiscal responsibility and transparency, Jack brings an informed and independent voice to Los Angeles civic affairs. He can be reached at [email protected].)
