OUR MISSION: To provide our customers with high-quality, efficient and reliable water, power and sewer services in a manner that values environmental and community interests and sustains the resources entrusted to our care.
525 Golden Gate Avenue, 13th Floor
San Francisco, CA 94102
T 415.554.3155
F 415.554.3161
TTY 415.554.3488
February 1, 2022
TO: Commissioner Anson Moran, President
Commissioner Newsha Ajami, Vice President
Commissioner Sophie Maxwell
Commissioner Tim Paulson
THROUGH: Dennis J. Herrera, General Manager
FROM: Steven R. Ritchie, Assistant General Manager, Water
RE: 2009 Water Supply Agreement Update
This memo provides our quarterly update on the SFPUC’s activities required by the 2009 Water Supply Agreement (WSA).
Per the WSA, SFPUC provides the following to BAWSCA on an ongoing basis:
Weekly water delivery data for San Francisco, South/East Bay, and the Peninsula;
Monthly Hydrologic Conditions Report;
Monthly water sales data, including “Suburban Resale” and City Retail water use data;
Quarterly progress reports on meter maintenance and calibration; Water Quality “blend change” notices and other notifications as needed, in accordance with the Water Quality Notification and Communications Plan; Monthly BAWSCA Bond Surcharge Collection Report per Prepayment and Collection Agreement between BAWSCA and SFPUC;
Monthly updates on regional Alternative Water Supply planning projects that BAWSCA is directly participating in; and
Quarterly reports on the progress in planning for the Alternative Water Supply Program (not a WSA requirement but requested by BAWSCA).
Since the last update on November 1, 2021, the SFPUC has also completed the following actions:
1. Provided a water supply conditions report to the Wholesale Customers on February 1st with initial estimates of available water supply in the coming year (WSA Attachment H, Section 6.1.1).
2. Provided a dry-year water supply update on February 1st in the form of a letter to the State legislature and Department of Public Health per AB1823
requirements with a copy to BAWSCA, (not a WSA requirement, but included here for informational purposes).
3. Declared a Water Shortage Emergency calling for a 13.7% reduction in wholesale water use under the Water Shortage Allocation Plan (WSA Attachment H).
4. Completed the annual Water Supply Development Report (WSA Section 4.05) on December 6, 2021.
5. Provided updates to the Wholesale Customers regarding Governor Newsom’s Executive Orders related to drought conditions, including conveying to the customers the Governor’s call for a 15% reduction in water system demand from 2020 levels.
6. Held several discussions with BAWSCA to implement and address questions regarding implementation of the Water Shortage Allocation Plan (WSA Attachment H), including the issuing of monthly water budgets for the wholesale customers.
7. Reviewed the Water Enterprise and Hetch Hetchy Water and Power 10-Year Capital Improvement Plan in advance of Budget discussions with the Commission (WSA Section 6.09.e.).
8. Held several discussions with BAWSCA regarding progress and coordination for the continued planning of the Los Vaqueros Reservoir Expansion project.
9. Met with BAWSCA, San Jose and Santa Clara in May to collaborate on planning efforts regarding future needs in consideration for their request for permanent status.
10. Continued coordination on member agency adoption of amendments to the Water Supply Agreement regarding Minimum Annual Purchases (WSA Section
3.07.C) adopted by the SFPUC on January 26, 2021.
11. Provided initial review of BAWSCA questions related to FY 2019-20 Wholesale Revenue Requirement Compliance Audit Wholesale Customer Review (WSA Section 7.06). Additional meetings are scheduled to complete review and resolution of FY 2019-20 questions.
12. Conducted the SFPUC’s 11th Annual Water Quality & Technology Workshop on November 17, 2020. (WSA Section 3.08.C)
13. On November 30, 2021, transmitted the draft FY 2020-21 Wholesale Revenue Requirement (WSA Section 7.03) to BAWSCA in advance of finalization of delayed SFPUC Financial Statements. Final Wholesale Revenue Requirement expected to be issued by February 28, 2022.
14. Continued planning for Annual Wholesale Customer Meeting to be held February 17, 2022 (WSA Section 8.03).
15. Conducted the SFPUC’s 11th Annual Water Quality & Technology Workshop on November 17, 2021. (WSA Section 3.08.C)
16. Provided the FY 2022-23 Wholesale water rate range to BAWSCA in December 2021 (not required, but related to WSA Section 6.03), projecting a 13-25% rate increase. This will be the first year of wholesale rate increases since they were set at $4.10/ccf in FY 2016-17, as since that time the SFPUC has been paying down the “balancing account” owed to the wholesale customers.
Discussed with BAWSCA the preferred application of the balancing account (WSA Section 6.05B) and questions related to the proposed rates.
In the near-term, the SFPUC is working to complete the following actions:
1. Continue review and responses to questions submitted as part of the FY 2019- 20 Wholesale Revenue Requirement Compliance Audit Wholesale Customer Review. (WSA Section 7.06)
2. Transmit the calculation of the Wholesale Revenue Requirement for FY 2020-
21. This deliverable was delayed from its normal November 30 deadline due to the delay in the issuance of the SFPUC’s audited financial statements. As they are expected to be issued by the end of February, the WRR report will be transmitted within two weeks, as agreed to by the SFPUC and BAWSCA.
3. Help conduct the quarterly meeting of the Water Quality Committee (WSA Section 3.08.C).
4. Present on expected water supply conditions, capital improvement and maintenance efforts, rates and financial plans at the Annual Meeting of the Wholesale Customers and BAWSCA on February 17, 2022.
5. Continue to discuss with BAWSCA rate impacts of the SFPUC debt service coverage policy (revised in March of 2017) on debt service coverage requirements (WSA Section 6.06).
6. Continue financial reconciliation work required by 2018 WSA Amendments to asset classification for specific Hetch Hetchy projects.
7. Provide a water supply conditions report to the Wholesale Customers by March 15th with updated estimates, and a final report in April 2022, of available water supply in the coming year (WSA Attachment H, Section 6.1.1).
8. Continue to engage BAWSCA and member agencies in update of SFPUC Wholesale Customer website, including testing as pages are developed. The Wholesale Customer website update is currently estimated for launch in February 2021.
Please contact me if you have any questions.
cc: Nicole Sandkulla, BAWSCA CEO/General Manager