Capital Budget
12 13
Priorities and Project Drivers
• Continue to meet Level of Service Goals & Objectives • Operational excellence
• Prioritize safety of employees and the public
• Meet regulatory obligations
• Minimize risk to water deliveries
• Minimize risk to power generation
• Climate leadership
• Meet our environmental stewardship objectives
• Adapt the system to address climate change
• Financial sustainability
• Ensure long-term capital investment strategy fits within our financial sustainability objectives, e.g., keeping rates affordable, maintaining strong credit ratings, while balancing risk to operational objectives 14 Planning for the Long Term
• Since 2002, Water System Improvement Program (WSIP) invested $4.8B in the regional and local water systems which had received insufficient investment in prior decades
• WSIP was funded by revenue bonds with a planned 30-year debt burden (and an anticipated tripling of water rates)
• WSIP debt load now constrains water system capital spending • The regional and local water systems have capital needs totaling $10.1B ($6.8B in Local/Regional + $3.3B in HHW), including addressing regulatory requirements for all reservoirs and dams • We have spread these necessary projects over a 30-year period while prioritizing the most critical
15 Local and Regional Water Prioritization Strategy
• Carefully prioritized $2.5B capital plan balances infrastructure reliability, project deliverability, and affordability through strategic deferrals of lower-priority projects (treatment plant improvements, alternative water supplies, dam construction) and scope optimizations.
• Deferrals and funding reductions were strategically applied to maintain highest priority safety, regulatory compliance, and system reliability needs while managing rate impacts.
• Example: three major dam safety projects are deferred, with smaller interim safety measure projects prioritized to address critical issues.
16 Hetchy Water Capital Prioritization Strategy
• Completed a risk-based project prioritization analysis based on HHW priorities and project drivers
• Evaluated deliverability for all projects
• Reviewed historical spending and deliverability capacity • Analyzed carryforward appropriations
• Applied information from above to identify recommended project deferrals and produce a proposed 10-year Capital Plan • Proposed Capital Plan is expected to result in significant overall operational risk reduction
17 Local Water Ten-Year Capital Plan:
Appropriation Schedule
18 Regional Water Ten-Year Capital Plan:
Appropriation Schedule
19 Hetch Hetchy Water Ten-Year Capital Plan:
Appropriation Schedule
$0M
$50M
$100M
$150M
$200M
$250M
$300M
FY1 FY2 FY3 FY4 FY5 FY6 FY7 FY8 FY9 FY10
CIP FY 27-36 - 10-Year Appropriations
Water Power Power - Developer Funded Joint
Major Projects
20 21
Local: In-City Headquarters
New San Francisco Water Division Headquarters (2000 Marin) • Construction started in late 2024
• Expected completion in 2029
Total Budget: 10 Year Plan Years 1 & 2
$ 417.8M $114.9M $114.1M
22 Millbrae Operations Center Improvements
• Major Upgrades to Regional
Operations Center
• Consolidation with seismically
unsafe Rollins Road building
• Millbrae Water Quality
Laboratory is outdated
• South Shops buildings
are unsafe and unusable
• Elimination of aging “temporary”
outbuildings and storage
containers
• In design; completion 2032
T otal Budget: 10 Year Plan Years 1 & 2
$ 427.7M $365.8M $57.0M
23 Regional Water Treatment
Two Sunol Valley Water Treatment Plant
Projects:
•
• Ozone Treatment – to control taste and
odor compounds.
• In construction; completion 2030
• Short T erm Improvements – to ensure
operational reliability
• In construction; completion 2029.
Total Budget: 10 Year Plan Years 1 & 2
$ 326.4M $83.9M $79.4M
Total Budget: 10 Year Plan Years 1 & 2
$ 78.6M $6.2M $2.9M
24 Regional Water Treatment
• Tesla UV Treatment Facility – Increase
reliability, particularly backup power
systems
• In design; completion 2034
• Harry Tracy Water Treatment Plant Phase 3 –
chemical facilities rehabilitation
• Not started; completion 2036
Total Budget: 10 Year Plan Years 1 & 2
$ 42.1M $41.0M $13.8M
Total Budget: 10 Year Plan Years 1 & 2
$ 30.7M $30.7M $0.2M
San Andreas Dam
$380M
Completion 2044
25 Regional Dams
• Dam safety projects for Pilarcitos, San Andreas, & Turner Dams • Interim projects ($44M) in the 10-year plan begin to meet Division of Safety of Dams requirements
• Planning work for projects beyond the 10-year plan
Total Budget: 10 Year Plan Years 1 & 2
$ 1,389.9M $55.8M $10.5M
Turner Dam
$776M
Completion 2058
Pilarcitos Dam
$190M
Completion 2048
26 Local: In-City Main Replacement
Local Water Conveyance/Distribution
Potable Emergency Firefighting Water System
Total Budget: 10 Year Plan Years 1 & 2
$ 477.4M (10 years) $477.4M $92.6M
Total Budget: 10 Year Plan Years 1 & 2
$ 162.2M (10 years) $162.2M $0M
27 Local: AMI & Meter Replacement
• Small Meter New & Renew
• Large Meter New & Renew
• Manifold Services Renewal
• AMI Refresh & Renew
Total Budget: 10 Year Plan Years 1 & 2
R&R $20M $7.5M
Total Budget: 10 Year Plan Years 1 & 2
R&R $9.2M $2.6M
Total Budget: 10 Year Plan Years 1 & 2
$38M $37M $0M
Total Budget: 10 Year Plan Years 1 & 2
$100.2M $45M $15.7M
28 Moccasin Penstock Rehabilitation
• Rehabilitation of 100+ year-old penstocks
• Condition and needs assessments complete
• Alternatives analysis drafted, but undergoing further review • Construction FY31-32; completion in 2036
Total Budget: 10 Year Plan Years 1 & 2
$533.7M $510.2M $5.4M