acre-foot, similar to GRP incentive terms. Those agreements that were converted to LRP are known as “LRP Conversions.”
D. Competitive Local Projects Program
In 1998, the Competitive Local Resources Program (Competitive Program) was established. The Competitive Program encouraged the development of recycled water and recovered groundwater through a process that emphasized cost-efficiency to Metropolitan, timing new production according to regional need while minimizing program administration cost. Under the Competitive Program, agencies requested an incentive rate up to $250 per acre-foot of production over 25 years under a Request for Proposals (RFP) for the development of up to 53,000 acre-feet per year of new water recycling and groundwater recovery projects. In 2003, a second RFP was issued for the development of an additional 65,000 acre-feet of new recycled water and recovered groundwater projects through the LRP.
E. Seawater Desalination Program
Metropolitan established the Seawater Desalination Program (SDP) in 2001 to provide financial incentives to member agencies for the development of seawater desalination projects. In 2014, seawater desalination projects became eligible for funding under the LRP, and the SDP was ended.
F. 2007 Local Resources Program
In 2006, a task force comprised of member agency representatives was formed to identify and recommend program improvements to the LRP. As a result of the task force process, the 2007 LRP was established with a goal of 174,000 acre-feet per year of additional local water resource development. The new program allowed for an open application process and eliminated the previous competitive process. This program offered sliding scale incentives of up to $250 per acre-foot, calculated annually based on a member agency’s actual local resource project costs exceeding Metropolitan’s prevailing water rate.
G. 2014 Local Resources Program
A series of workgroup meetings with member agencies was held to identify the reasons why there was a lack of new LRP applications coming into the program. The main constraint identified by the member agencies was that the $250 per acre-foot was not providing enough of an incentive for developing new projects due to higher construction costs to meet water quality requirements and to develop the infrastructure to reach end-use consumers located further from treatment plants. As a result, in 2014, the Board authorized an increase in the maximum incentive amount, provided alternative payment structures, included onsite retrofit costs and reimbursable services as part of the LRP, and added eligibility for seawater desalination projects. The current LRP incentive payment options are structured as follows:
• Option 1 – Sliding scale incentive up to $340/AF for a 25-year agreement term
Appendix B - 19
IRWD – 2025 Urban Water Management Plan – Reduced Delta Reliance
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