AWWA ACE60078

In February of 1997 an odyssey of near epic proportion began with Tampa Bay Water's issuance of a Request for Proposals (RFP) for a developer of a private large-scale seawater desalination plant to provide a "drought proof" water supply for its three county service area. The proposals were received in February 1999 and the reported price for delivered desalinated water of $1.71 per thousand gallons began an irrevocable change to the American Water Industry. The arduous procurement process resulted in the selection in March 1999 of the top-ranked developer, Stone and Webster (S&W) Water, LLC. The Tampa Bay Water Board approved the Water Purchase Agreement (WPA) with S&W Water, LLC, on July 19, 1999 for the development of a 25 million gallon per day seawater desalination facility. The background within which Tampa Bay Water sought the development of the seawater desalination project began with the West Coast Regional Water Authority's "Water Wars." The Water Wars involved the quest for groundwater in the coastal Tampa Bay area and the political and legal battles between those that used and needed the water and those whose resources were being consumed and the environment impacted. The outcome of the Water Wars was the reorganization in June 1998 of the old West Coast Regional Water Authority into Tampa Bay Water. As part of the reorganization, Tampa Bay Water entered into the "Northern Tampa Bay New Water Supply and Groundwater Withdrawal Reduction Agreement" ("Partnership Agreement") with the Southwest Florida Water Management District (SWFWMD). In accordance with the Partnership Agreement, Tampa Bay Water developed the Master Water Plan to develop new alternative, preferably non-groundwater, sources of drinking water totaling an annual average permitted production capacity of at least 85 million gallons per day (mgd). The "carrot" for Tampa Bay Water was $183 million dollars of funding from SWFWMD to help pay for the new sources. The "stick" was the potential for fines of up to $10,000 per day per well for well fields in violation of the pumping limits. The Partnership Agreement called for the phased reduction of pumping from the 11 existing wellfields as the new water sources are developed, pursuant to stringent schedule requirements. The risk to Tampa Bay Water of losing $183 million in funding and being potentially liable for many millions more in fines was especially daunting given the price tag of the new Master Water Plan was $619 million. The Master Water Plan projects cover an area of about 1,000 square miles, and includes 85 miles of large diameter pipelines. The Master Water Plan's three major components are: a 25 mgd seawater desalination plant; a 66 mgd regional surface water treatment plant; and, a 15 billion gallon off-line reservoir. Fiscally managing the Master Water Plan's projects, inclusive of the SWFWMD funding, would require a significant program of rate increases to Tampa Bay Water's customers. Tampa Bay Water's policy managers would therefore be highly focused on meeting the programs project schedule and bringing in the projects on budget. Because of the short schedule for project delivery and a desire to reduce risks and costs, Tampa Bay Water originally selected the Design-Build-Own-Operate-Transfer (DBOOT) project delivery method for the seawater desalination treatment plant. By utilizing the DBOOT approach, Tampa Bay Water expected to realize substantial benefits for its member governments. These benefits included the transfer of the project technology risk to the private developer, have access to innovative design skills, and receive long-term facility operations and maintenance cost efficiencies and guaranties. Includes table, figure.