Summary:
Peoria Water Services staff is seeking approval from Council to enter into a non-binding Memorandum of Understanding to Investigate a Regional Advanced Water Purification Facility Study Among the City of Phoenix, City of Mesa, Town of Gilbert, City of Tolleson, City of Glendale, City of El Mirage, City of Goodyear, City of Peoria, City of Scottsdale, City of Tempe, and EPCOR Water Arizona, Inc. (“MOU”).
The City of Phoenix has proposed a new advanced water purification facility to be co-located adjacent to the existing 91st Avenue Wastewater Treatment Plant (“91st Ave”) just north of the Salt River in southwest Phoenix. An advanced water purification facility would take high-quality reclaimed water from 91st Ave and treat it further to meet potable standards turning the reclaimed water into a drought-proof drinking water supply—this is sometimes referred to as Direct-Potable Reuse (“DPR”). Given the potential economies of scale and existing infrastructure routing wastewater from across the Valley to 91st Ave, Phoenix has been communicating with potential partners to extend the potential benefits of a new facility to the metropolitan region.
The purpose of the MOU is to:
1. Express support for advanced water purification as an important future water source to each participant;
2. Describe cooperative efforts leading to a "Regional Advanced Water Purification Facility Feasibility Study (“Feasibility Study”) and Project Plan;"
3. Develop a cost share agreement to finance the Feasibility Study and Project Plan;
4. Explore funding opportunities to finance the Feasibility Study such as federal appropriations or grants;
5. Explore potential governance structures for a new shared regional facility;
6. Explore water management tools and other arrangements to maximize the benefit of a new facility to the region and state.
By entering the MOU, Peoria would be agreeing to actively participate in a steering committee to accomplish the purposes of the MOU, listed above. Peoria would also be agreeing to take actions to better inform internal and external stakeholders about, “…the importance, safety, and reliability of water made available through advanced water purification.”
The MOU is non-binding with zero financial obligation and commensurately includes no guarantee of share of ownership or capacity in a new facility. The MOU term is from the date of execution of the MOU to the earlier of:
· Execution of a cost share agreement;
· Voluntary withdrawal by the City of Phoenix;
· Two or fewer parties remaining in the MOU; or
· July 1, 2027.
Peoria can choose to formally exit the MOU with written 30-day notice.
Entering into this MOU is consistent with Peoria’s existing water resources strategy. Peoria’s forthcoming Integrated Water Utility Master Plan (“IWUMP”) update identifies growing supplies of reclaimed water generated at Peoria’s three Water Reclamation Facilities. This reclaimed supply will eventually rival Peoria’s Central Arizona Project (“CAP”) allocation in scale and, unlike CAP water, not be directly subject to drought or shortage. How Peoria puts its growing supply of reclaimed water to use in meeting customer demand is critical to the city’s ability to grow and maintain sustainability in the event of CAP cuts. Further, participating in the MOU is consistent with Council’s existing direction provided via the FY2024 Capital Improvement Program (“CIP”) that allocates $500,000 to an Advanced Treatment Study (Project Number UT00530). The CIP-funded study will help Peoria determine what path it should take with its reclaimed water supply. A partnership for a regional facility with Phoenix and others is one potential path and participating in the MOU ensures the option is not prematurely closed.
An example of how a shared, regional advanced water purification facility might work for Peoria is as follows:
a. Peoria sends reclaimed water from its southernmost Butler Drive Water Reclamation Facility to the new facility at 91st Avenue via existing and new pipelines
b. Peoria exchanges its supply of potable water generated at this new facility with Phoenix
c. Phoenix delivers exchanged water to northern Peoria via existing or new potable system interconnects or via the CAP canal
Should Peoria enter into the MOU and it becomes effective, Peoria staff will begin participating in the steering committee. The committee will meet regularly with the goal of developing a "Feasibility Study" cost share agreement for execution in January 2024. Should Peoria staff ultimately find this cost share agreement worth pursuing, staff will bring it to Council for approval.