Economic Analyses of BMPs for
The Cedar Creek Reservoir Watershed
North Central Texas
Water Quality Project (NCTXWQ)
M. Edward Rister, Ronald D. Lacewell, Allen W. Sturdivant,
Taesoo Lee, Raghavan "Srini" Srinivasan, Balaji Narasimhan,
Clint Wolfe, David Waidler,
Darrel Andrews, Mark Ernst, and Jennifer Owens
Stakeholder Meeting
Watershed Protection Plan
Development for the
Cedar Creek Reservoir Watershed (CCRWS)
Department of Agricultural Economics
Department of Ecosystem Science and Management, Spatial Sciences Laboratory
Texas AgriLife Research, Dallas Urban Solutions Center
Tarrant Regional Water District
Funding provided by the Natural Resources Conservation Service (NRCS), Environmental Protection
Agency (EPA) and Cooperative State Research, Education, and Extension Service, U.S. Department of
Agriculture (CSREES). Research conducted under Hatch project #s H-9050 and TEX09161.
July 20, 2009
Kaufman, Texas
Agriculture is Life.
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Agriculture is Life.
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NCTXWQ CCRWS Project Collaborators, 2 of 5
NCTXWQ CCRWS Project Collaborators, 1 of 5
Natural Resources Conservation Service (NRCS)
State
Steve Uselton
Donna Long
Local
Julie Moore
Ronnie Beerwinkle
Glenn Lubke
Texas AgriLife Extension Service, Biological and Agricultural Engineering
Dr. Bruce Lesikar
Justin Mechell
Molly Griffin
Ryan Gerlach
Texas AgriLife Extension Service, County Agents (CEA)
Ralph Davis, Kaufman County CEA
Todd Williams, Rockwall County CEA
Texas State Soil and Water Conservation State Board (TSSWCSB)
Lee Munz
Aaron Wendt
Kaufman County Environmental Coop
Marilyn May
Kaufman-Van Zandt Soil and Water Conservation District
Zach Kinsey
Mark Wise
Mike Benge
Cecil Chaney
Kaufman County Master Gardener Association
Brad Ackerman
Agriculture is Life.
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Agriculture is Life.
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7/20/2009
NCTXWQ CCRWS Project Collaborators, 3 of 5
NCTXWQ CCRWS Project Collaborators, 4 of 5
Texas Commission on Environmental Quality (TCEQ)
Jon Mummert
Art Crowe
Rob Cook
Bill Carter
Espey Consultants, Inc.
Bill Espey
David Harkins
Margarethe Berge
Alan Plummer Associates, Inc.
Alan Plummer
Dr. Robert Adams
Betty Jordan
Bill Ratlif
Ken Lawrence
Ranjan Muttrah
Texas Parks and Wildlife Department (TPWD)
Adam Whisenant
Richard Ott
Texas AgriLife Research and Extension Urban Solution Center, Dallas
Dr. Allan Jones
Tamaron Hunt
Tarrant Regional Water District (TRWD)
Woody Frossard
Texas A&M AgriLife Research and Extension, Texas Water Resources
Institute
Dr. Bill Harris
Lucas Gregory
Agriculture is Life.
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Agriculture is Life.
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Problem
• Tarrant Regional Water District (TRWD)
owns/operates four (4) major water-supply
reservoirs (impacting 1.6 million)
» realizing increased/problematic levels of:
●
sediments
●
nutrients (nitrogen, phosphorous)
» seeking to develop plan for
reducing/preventing
intrusion via most costeffective portfolio of BMPs
NCTXWQ CCRWS Project Collaborators, 5 of 5
Numerous Stakeholders!!!!
Water-Quality with
BMP ECONOMICS©
Agriculture is Life.
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Cedar Creek Reservoir
TRWD Raw Municipal Water Source Reservoirs
Total Watershed Area 1007 mi2
260,817 ha – 644,480 acres
Dalla
s
Ft.
Worth
http://www.trwd.com/TRWD_reservoirs.asp
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Cedar Creek Reservoir
CCRWS
Annual Inflows and
Target Reductions
Sub-Watersheds’ Contribution to P Load
Cedar Creek Reservoir Average Annual Load
(1991-2001)
Item
P
-35%
N
Sediment
Metric
English
208.0
-72.8
188,670
kg
1,419,380
kg
1,564.6
ET
ET
450,000
MT
496,035.0
ET
Black: Annual Inflows
Red: Target Reduction in Annual Flows
Kg: 2.2 lbs
MT: 2,204.6 lbs
ET: 2,000 lbs
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Cedar Creek Reservoir Watershed
Best Management Practices (BMP) Challengers
CCRWS Best Management Practices
(BMP) Categories
#001
#001A
#003
#004
#006
#007
#101
#105
#107
#402
Cropland to Grass
Contour Farming
Nutrient Mgmt
Filter Strip
Grassed Waterways
Terracing
#301A
Rip. Buff. Strips — noncritical
#302
Rip. Buff. Strips — critical
#401A1 Wetland – L. Kings Creek
#401B1 Wetland - End Cedar Creek
#501
#502B
Prescribed Grazing #505
Pasture Planting
Crit. Pasture Planting
Grade Stabilization
#701
#702
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Hypolimnetic Aeration
P Inactivat. w/ Alum – 1/3
Hypolimnetic H2O Release
WWTP - - Level I to II
WWTP - - Level I to III
#s201-9 Phase II Urban BMPs
#210
Voluntary Urban Nutrient Mgmt
#211
Required Urban Nutrient Mgmt
2,000 ft Buffer Strip
Cedar Creek Reservoir Watershed
Cedar Creek Reservoir Watershed
Which BMPs to Select?
Objective of BMP Economic Analyses
Identifying how to
obtain the most
‘bang’ for the
‘bucks’!, i.e., the
least-cost solution.
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Cedar Creek Reservoir Watershed
Steps in Economic Analyses
and Current Status
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• Considerable time involved in developing and linking financial
and economics optimizing models as well as in identifying and
assimilating appropriate data, including incentive payments and
contingency allowances.
• Series of validation meetings with TRWD management and other
team members.
• Several, intermittent, validation meetings with stakeholders.
• Focused verification meeting with ag producers – adoption rates.
• Intermediate results prompted TWRD management to revisit
selected BMP data and expand scope of desired Sensitivity
Scenario Analyses.
• BMP ECONOMICS© model revised in May-June 2009.
• Baseline and Sensitivity Scenarios analyzed July 15-16, 2009.
• Results validated with project team July 17, 2009.
• This presentation developed this weekend.
• Development of final report in progress.
Cedar Creek Reservoir Watershed
RESULTS!
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CCRWS Data
-- Annuity Equivalent costs for each BMP
CCRWS Data
-- P reduction for each BMP
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CCRWS Data
-- Initial Construction Costs for each BMP
21
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CCRWS Data
-- Annual O&M plus Interm. Cap. Replacement Costs for each BMP
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CCRWS Data
CCRWS Data
-- Annuity Equivalent costs per English ton of P reduction for each BMP
23
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-- Annuity Equivalent costs per reduced English ton of P
for each BMP; BMPs in ascending order of $/P unit cost
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CCRWS Data
CCRWS BMP Activity Constraints
BMP
Category
Description
Type Constraint
Binary - 0,1
#211
Urban
Required Urban Nutrient
Mgmt in 2,000 ft
Reservoir Buffer Strip
#401A
Channel
Wetland - Lower Kings
Creek (SB 54)
Binary - 0,1
#401B
Channel
Wetland - End Cedar
Creek (SB 70)
Binary - 0,1
#501
Reservoir 'In-Lake'
Hypolimnetic Aeration
Binary - 0,1
#502B
Reservoir 'In-Lake'
P Inactivation with Alum
– 1/3 of Reservoir
Binary - 0,1
#701
WWTP
WWTP - - Level I to II
Binary - 0,1
#702
WWTP
WWTP - - Level I to III
#001A & #007
Cropland
Contour Farming &
Terracing
Linked -- one but not
both
#701 & #702
WWTP
WWTP from Level I to II
or III
Linked -- one but not
both
-- Annuity Equivalent costs per reduced English ton of P
for each BMP; BMPs in ascending order of $/P unit cost;
recognition of activity constraints
Binary - 0,1
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CCRWS
BMP ECONOMICS©
-- optimization component (LINDO)
CCRWS
BMP ECONOMICS©
-- optimization component (LINDO)
(A)Baseline
• Several scenarios considered
–
–
–
–
– (A) Baseline, focused on reducing P by 35%
– (B) Sensitivity w.r.t. P reduction levels
– (C) Sensitivity w.r.t. Combined Nutrient/Sediment
Reduction and Value of Sediment Reduction
– (D) Sensitivity w.r.t. Categories/BMPs
Focused on reducing P inflow by 35% (72.8 ET)
22 BMPs considered (challengers)
S.W.A.T. estimated effectiveness of BMPs
Subjective assessment of BMPs adoption
•
–
• Results of importance
Objective function value (AE)
BMPs in the solution
Nutrient/Sediment Reduction Levels
Financial costs
– Initial construction
– Operating & Maintenance plus Intermittent
Capital Replacement of Selected Components
– Other details available
–
–
–
–
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Revised BMPs effectiveness levels
Calculated costs for each BMP
•
•
•
•
•
–
Area affected / number of installations
Expected useful life
Initial construction costs (NPV)
Annual Operating & Maintenance plus Intermittent
Capital Replacement of Selected Components
Identified comparable annual costs (AE)
Considered constraints on BMP implementation
•
•
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Binary (none or all – 0,1)
Linked (one or the other, but not both)
BMP ECONOMICS© RESULTS
BMP ECONOMICS© RESULTS
CCRWS Baseline Scenario
CCRWS Baseline Scenario
Optimal Solution
Financial and Load Reduction Performance Details
BMPs
Cropland
Scenario
Label /
Annual
Cost (AE)
Pasture
Urban
Channel
2
0
1
0
3
t
000000111422203
010000000001110
1 A3 4 6 7 1 5 7 2 9 0 1 A2
Reserv
oir
44
005
110
AB1
WW
TP
5
0577
2000
B5 1 2
Scenario
Label / Total
Annual
Cost (mill.
AE)
Baseline, reduce P 35%
$ 2.25
Integer BMPs
Linked BMPs
Baseline, reduce P 35%
$ 2.25 mil
.66
In solution at maximum level;
In solution at partial level;
Blocked from being included in the solution
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30
CCRWS
7/20/2009
O&M
and
Interm.
Cap.
Repl.
Costs
(mill.
AE)
Load Reduction
(ET)
Init.
Constr.
Costs
(mill.
AE)
Init.
Constr.
Costs
(mill.
NPV)
P
N
Sed
$1.40 $ 0.84 $13.0 72.8 392.4 126.5K
CCRWS Baseline Results
BMP ECONOMICS© RESULTS
CCRWS Baseline Scenario
-- finances of the optimal solution
-- Indication of Optimal BMPs and Annuity Equivalent
costs per reduced English ton of P for each BMP
$13.0 million
$2.25 million
Optimal BMPs
66%
Int
Non-Optimal BMPs
Int
X
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CCRWS BMP ECONOMICS© BASELINE RESULTS
-- increasing marginal costs aspects
of the optimal solution
CCRWS BMP ECONOMICS© BASELINE RESULTS
-- costs of reducing P inflows
Labels
Units
Description
Total AE Cost
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CCRWS
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n/a
Base
$
$ 2.25 Mill.
Reductions in P
%
35
Reductions in P
English tons
72.8
Marginal Cost of Another Unit of P
Reduction
$/English tons
$ 70,289
Average Cost per Unit of P Reduction
$/English tons
$ 31,743
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CCRWS Sensitivity Scenario Analyses –
CCRWS
Optimal Baseline Solution Observations
What if ??? ….
• 35% P reduction is achievable
• Baseline annual costs are approx. $2.25 million
• Up front, time 0, initial construction cash costs are
approximately $13.0 million
• A portfolio of BMPs is optimal
• Inclusion of ag-related BMPs is cost-effective
• Some BMPs are relatively cost inefficient
• Optimal economic solution is based on a myriad of
factors
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Values
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• Optimal economic solution is based on a myriad of
factors.
• Are there other solutions with similar costs? i.e., How
dominant is the optimal solution?
• How do various assumptions imposed on the analysis
affect the results?
• What are the tradeoffs in targeting different P reduction
levels?
• What are the implications of simultaneously targeting
reductions in P, N, and Sed?
• Does valuing sediment reduction, recognizing delayed
requirements for constructing reservoirs, affect the
optimal solution?
• If BMPs in each category are required to reduce the load
associated with that category, what are the implications?
• If different categories of BMPs are excluded (or
mandatorily included), what are the consequences?
Sensitivity Scenario Analyses –
BMP ECONOMICS©
-- CCRWS Sensitivity Scenario Analyses
Testing the Dominance of Optimal Solution
AE $
$2.25 million
Alternative BMP Portfolio Solutions
(B1) What are the consequences associated with
targeting different P reduction levels?
VERSUS
AE $
-/+ % about baseline target of 35% reduction
$2.25 million
Alternative BMP Portfolio Solutions
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38
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7/20/2009
BMP ECONOMICS© RESULTS
BMP ECONOMICS© RESULTS
Sensitivity Scenario B1
Sensitivity Scenario B1
Optimal Solution
Financial and Load Reduction Performance Details
BMPs
Cropland
Label /
Annual
Cost (AE)
Scenario
Pasture
Urban
0
00000011 14
01000000 00
1 A3 4 6 7 1 5 7 2
2
0
1
t
2
0
9
Channel
3
2203
1110
0 1 A2
Reserv
oir
44
005
110
AB1
WW
TP
Integer BMPs
Linked BMPs
Sensitivity, reduce P 30%
$ 0.91 mil
$ 1.53 mil
Baseline, reduce P 35%
$ 2.25 mil
Sensitivity, reduce P 40%
$ 3.42 mil
$ 7.19 mil
Sensitivity, reduce P 25%
Sensitivity, reduce P 50%
O&M
and
Interm.
5
0577
2000
B5 1 2
Scenario
Sensitivity, reduce P 25%
Sensitivity, reduce P 30%
Baseline, reduce P 35%
.59
Sensitivity, reduce P 40%
.59
Sensitivity, reduce P 50%
Total
Init.
Cap.
Constr.
Repl.
Annual
Costs
Cost (mill. Costs
(mill.
(mill.
AE)
AE)
AE)
$ 0.91 mil $0.32 $ 0.59
$ 1.53 mil $0.87 $ 0.66
$ 2.25 mil $1.40 $ 0.84
$ 3.42 mil $2.16 $ 1.25
$ 7.19 mil $4.76 $ 2.40
Load Reduction
(ET)
Init.
Constr.
Costs
(mill.
NPV)
$ 8.6
$ 9.7
P
N
Sed
52.0 252.7 87.2K
62.4 289.8 107.9K
$13.0 72.8 392.4 126.5K
$18.3 83.2 463.9
$23.4 104.0 632.8
153.3K
180.1K
.66
.21
.63
In solution at maximum level;
39
In
solution at partial level; Blocked from being included in the solution
CCRWS
7/20/2009
40
CCRWS
7/20/2009
CCRWS
Optimal B1 Solution Observations
BMP ECONOMICS©
-- CCRWS Sensitivity Scenario Analyses
• No big surprises
• The higher the target P reduction level, the
higher the costs
• BMPs come into the solution according to AE
$ per P unit, cheapest first
• Integer constraints may result in lower cost noninteger BMP being in solution at < 100%
(B2) What are the consequences associated with
targeting different P reduction levels?
• Ag BMPs are important
• Channel and Reservoir-In-Lake BMPs are
included in solution at high target P reduction
levels
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Consideration of probable inflow levels, based on
frequency of historical flows, 1966-2002
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BMP ECONOMICS©
-- CCRWS Frequency Of Annual Inflows,
H2O (m3/s)
BMP ECONOMICS©
-- CCRWS Frequency Of Annual Inflows,
P (ET)
average = 227.9 m3/s
average = 208.8 ET
--->72.8 ET (35%)
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44
CCRWS
7/20/2009
BMP ECONOMICS© RESULTS
BMP ECONOMICS©
-- CCRWS Selected Targeted Frequency
of Annual Inflows, P (ET)
Sensitivity Scenario B2
Optimal Solution
BMPs
Cropland
Label /
Annual
Cost (AE)
Integer
BMPs
Linked
BMPs
Scenario
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Sensitivity 10%,92.3ETÆ32.3ET
$ 0.19 mill
Sensitivity 25%,137.1ETÆ48.0ET
$ 0.74 mill
Baseline, 208.2ETÆ72.8ET
$ 2.25 mill
Sensitivity 50%,222.5ETÆ77.9ET
$ 2.71 mill
Sensitivity 75%,254.8ETÆ89.2ET
$ 4.28 mill
Sensitivity 90%,295.1ETÆ103.3ET
$ 7.04 mill
Urban
Channel
Reserv
oir
BMP ECONOMICS© RESULTS
.23
.26
.66
.44
.10
.58
CCRWS
Optimal B2 Solution Observations
Financial and Load Reduction Performance Details
Scenario
Total
Annual
Cost
(mill.
AE)
Sensitivity 10%,92.3ETÆ32.3ET
$ 0.19 mill
Sensitivity 25%,137.1ETÆ48.0ET
$ 0.74 mill
Baseline, 208.2ETÆ72.8ET
$ 2.25 mill
Sensitivity 50%,222.5ETÆ77.9ET
$ 2.71 mill
Sensitivity 75%,254.8ETÆ89.2ET
$ 4.28 mill
Sensitivity 90%,295.1ETÆ103.3ET
$ 7.04 mill
O&M
and
Interm.
Cap.
Repl.
Costs
(mill.
AE)
• Again, no big surprises
• Similar results to previous sensitivity
scenario
Load Reduction
(ET)
Init.
Constr.
Costs
(mill.
AE)
$ 0.15 $ 0.04
$ 0.51 $ 0.23
$1.40 $ 0.84
$1.72 $ 0.99
$2.10 $2.17
$4.61 $2.42
Init.
Constr.
Costs
(mill.
NPV)
$ 0.2
$ 1.7
$13.0
$15.2
$25.4
$27.4
P
N
• Higher levels of reduction require higher
annual budget and more upfront cash
commitment for initial construction
Sed
32.3 138.8 57.3K
48.0 245.5 98.7K
72.8 392.4 126.5K
77.9 435.9 139.7K
89.2 452.4 151.4K
103.3 627.0 179.4K
• Highlights the issue of identifying the
appropriate target P reduction level
• 1-targeted frequency level represents % of
time some P inflows will not be mitigated
• How much is “enough”?
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WW
TP
2
0
1
t
0
3
4 4
5
0 0 0 0 0 0 1 1 1 4 2 2 2 0 3 0 0 5 0 5 7 7
0 1 0 0 0 0 0 0 0 0 0 1 1 1 0 1 1 0 2 0 0 0
1 A3 4 6 7 1 5 7 2 9 0 1 A2 AB1 B5 1 2
46
CCRWS
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Sensitivity Scenario B2
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CCRWS
7/20/2009
Pasture
BMP ECONOMICS© RESULTS
BMP ECONOMICS©
-- CCRWS Sensitivity Scenario Analyses
Sensitivity Scenario C1
Optimal Solution
BMPs
Cropland
Reduce P, N, and Sed by 30%
$ 1.38 mill
$ 2.23 mill
Baseline, reduce P 35%
$ 2.25 mil
Reduce P, N, and Sed by 35%
$ 3.87 mill
$ 6.32 mill
$ 8.63 mill
Reduce P, N, and Sed by 25%
Reduce P, N, and Sed by 50%
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CCRWS
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BMP ECONOMICS© RESULTS
Financial and Load Reduction Performance Details
Total
Annual
Cost (mill.
AE)
Scenario
Reduce P, N, and Sed by 25%
Reduce P, N, and Sed by 30%
Baseline, reduce P 35%
Reduce P, N, and Sed by 35%
Reduce P, N, and Sed by 40%
Reduce P, N, and Sed by 50%
$ 1.38
$ 2.23
$ 2.25
$ 3.87
$ 6.32
$ 8.63
$ 0.67 $ 0.70
$1.33 $ 0.90
$1.40 $ 0.84
$2.79 $1.08
$4.10 $2.22
$6.00 $2.63
Init.
Constr.
Costs
(mill.
NPV)
$ 8.2
$10.1
$13.0
$18.2
$35.3
$42.9
P
4 4
0 05
1 10
A B1
WW
TP
5
0577
2000
B5 1 2
.49
.42
.05
.98
.99
.66
.17
.55
.42
.95
In solution at maximum level;
In solution at partial level; Blocked from being included in the solution
• LP analysis approach facilitates evaluating
meeting more than one target objective
simultaneously
• Reducing P, N, and Sed by same %s
simultaneously is more expensive than
Baseline, for both Total AE and Cash ICC
Load Reduction
(ET)
Init.
Constr.
Costs
(mill.
AE)
Reserv
oir
CCRWS
Optimal C1 Solution Observations
Sensitivity Scenario C1
O&M
and
Interm.
Cap.
Repl.
Costs
(mill.
AE)
Channel
Integer BMPs
Linked BMPs
Reduce P, N, and Sed by 40%
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CCRWS
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Urban
2
0
1
0
3
t
000000 11 14222 03
010000 00 00011 10
1 A3 4 6 7 1 5 7 2 9 0 1 A2
Label /
Annual
Cost (AE)
Scenario
(C1) What are the consequences associated with
targeting reductions in P, N, and Sed levels
simultaneously?
Pasture
N
Sed
52.0 311.3 124.0K
62.4 469.5 148.8K
72.8 392.4 126.5K
77.4 547.8 173.6K
85.9 626.0 199.1K
104.0 722.2 208.4K
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• In Baseline, N and Sed reduction < 35%
• ?What is appropriate target N and Sed reduction
level?
• Attention to N & Sed encourages attention to
different portfolio of BMPs
• Some BMPs do not reduce Sed
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CCRWS
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BMP ECONOMICS© RESULTS
BMP ECONOMICS©
-- CCRWS Sensitivity Scenario Analyses
Sensitivity Scenario C2
Optimal Solution
BMPs
Cropland
Scenario
(C2) What are the consequences associated with
value reductions in Sed levels?
Sensitivity, Sed at $4,200 ac-ft
Sensitivity, Sed at $5,000 ac-ft
Sensitivity, Sed at $6,000 ac-ft
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CCRWS
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54
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$
$
$
$
2.25 mil
2.25 mil
2.25 mil
2.25 mil
In solution at maximum level;
In solution at partial level;
Blocked from being included in the solution
Urban
Channel
2
0
1
0
3
t
000000111422203
010000000001110
1 A3 4 6 7 1 5 7 2 9 0 1 A2
Integer BMPs
Linked BMPs
Baseline, reduce P 35%
2,136 tons of Sed equivalent to one acre-foot of
reservoir space
Label /
Annual
Cost (AE)
Pasture
.66
.66
.66
.66
Reserv
oir
44
0 05
1 10
A B1
WW
TP
5
057
200
B5 1
BMP ECONOMICS© RESULTS
CCRWS
Optimal C2 Solution Observations
Sensitivity Scenario C2
Financial and Load Reduction Performance Details
Total
Annual
Cost (mill.
AE)
Scenario
Baseline, reduce P 35%
Sensitivity, Sed at $4,200 ac-ft
Sensitivity, Sed at $5,000 ac-ft
Sensitivity, Sed at $6,000 ac-ft
$
$
$
$
2.25
2.25
2.25
2.25
O&M
and
Interm.
Cap.
Repl.
Costs
(mill.
AE)
Init.
Constr.
Costs
(mill.
AE)
Init.
Constr.
Costs
(mill.
NPV)
P
$1.40
$1.40
$1.40
$1.40
$ 0.84
$ 0.84
$ 0.84
$ 0.84
$13.0
$13.0
$13.0
$13.0
72.8
72.8
72.8
72.8
• In all of these scenarios, the optimal solution
is the same as that for the Baseline
Load Reduction
(ET)
N
• An exception is the optimal LP objective function
value which is lowered as follows, recognizing
credit of the non-cash value attributed to reducing
Sed levels by the equivalent of 59.2 ac-ft:
• $4,200 Æ$248,672
• $5,000 Æ$296,038
• $6,000 Æ$355,246
Sed
392.4 126.5K
392.4 126.5K
392.4 126.5K
392.4 126.5K
55
CCRWS
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• More than $6,000 per ac-ft value is required
to favor those BMPs more productive in
reducing Sed but not in the optimal Baseline
solution
56
CCRWS
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BMP ECONOMICS©
-- CCRWS Sensitivity Scenario Analyses
BMP ECONOMICS©
-- CCRWS Sensitivity Scenario D1 Analyses
(D1) What are the consequences associated with
requiring BMPs in each category to mitigate the
P loads associated with that category?
57
CCRWS
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58
CCRWS
7/20/2009
BMP ECONOMICS© RESULTS
BMP ECONOMICS©
-- CCRWS Sensitivity Scenario D1 Analyses
Sensitivity Scenario D1
Optimal Solution
BMPs
Cropland
Reduction Annual P Inflow
Level %
Level (ET)
35%
208
Category
Source ET
Maximum
Possible
Maximum
Possible
Allocate Reduction
BMPs
0.35 of 208 Source Reduction Source 0.35 of 208 (% of 208 BMPs in this excluded in
ET)
ET
ET
%s
Category
ET
Calculations
Ag cropland
86.32
30.21
53.62
42%
14.53%
Ag Pasture
48.672
17.04
16.83
23%
8.19%
Urban
22.464
7.86
21.57
11%
3.78%
Channel
23.504
8.23
6.59
11%
3.96%
001, 001A,
003, 004, drop 001A
006, 007 since < 007
101, 105,
107, 402
8.09%
201t209,
10.37% 210, 211
301A, 302,
3.17% 401A, 401B
WWTP
14.56
5.10
11.23
7%
2.45%
5.40%
Scenario
Baseline, reduce P 35%
$ 2.25 mill
Each category reduces 35%
$ 5.83 mill
$ 5.22 mill
$ 3.81 mill
Each category reduces 30%
Reservoir-In-Lake
59
CCRWS
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12.48
208.00
4.37
72.80
11.02
120.87
6%
100%
2.10%
35.00%
5.30%
35.00%
Urban
Channel
2
0
1
0
3
t
000000111422203
010000000001110
1 A3 4 6 7 1 5 7 2 9 0 1 A2
Integer BMPs
Linked BMPs
25.78%
701, 702
Label /
Annual
Cost (AE)
Pasture
Each category reduces 25%
501, 502B,
use 702
505
since > 701
60
CCRWS
7/20/2009
In solution at maximum level;
In solution at partial level;
Blocked from being included in the solution
.66
.97
.14
.83
.55
.07
.69
.05
.00
.73
Reserv
oir
44
0 05
1 10
A B1
WW
TP
5
0577
2000
B5 1 2
BMP ECONOMICS© RESULTS
BMP ECONOMICS© RESULTS
Sensitivity Scenario D1
Sensitivity Scenario D1
Financial and Load Reduction Performance Details
Load Reduction Performance Details by Category
Scenario
Total
Annual
Cost (mill.
AE)
Baseline, reduce P 35%
$ 2.25
Each category reduces 35%
$ 5.83 mill
Each category reduces 30%
$ 5.22 mill
Each category reduces 25%
$ 3.81 mill
O&M
and
Interm.
Cap.
Repl.
Costs
(mill.
AE)
Init.
Constr.
Costs
(mill.
AE)
Init.
Constr.
Costs
(mill.
NPV)
P
$1.40
$2.20
$1.72
$1.54
$ 0.84
$3.63
$3.50
$2.26
$13.0
$52.0
$51.0
$39.5
72.8
77.6
69.9
58.1
Load Reduction
(ET)
N
Sed
392.4 126.5K
541.8 154.8K
467.8 137.9K
385.0 113.5K
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Required P Reduction ET
Category
Solution P Reduction ET
35%
30%
25%
35%
30%
25%
Cropland
30.21
25.90
21.58
30.21
25.90
21.58
Pasture and Rangeland
17.04
14.60
12.17
16.81
14.60
12.17
Urban
7.86
6.74
5.62
7.86
6.74
5.62
Channel
8.23
7.05
5.88
6.59
6.59
5.88
Waste Water Treatment Plants
5.10
4.37
3.64
9.57
9.57
9.57
Reservoir-in-Lake
TOTAL ACROSS ALL
CATEGORIES
4.37
3.74
3.12
6.55
6.55
3.33
72.80
62.40
52.00
77.59
69.95
58.15
62
CCRWS
7/20/2009
CCRWS
Optimal D1 Solution Observations
BMP ECONOMICS©
-- CCRWS Sensitivity Scenario Analyses
•
•
•
•
Pasture category has difficulty @35% reduction
Channel category has difficulty @35% & 30%
No category difficulties @25%
Overall, no difficulties because integer nature of
WWTP and Reservoir-In-Lake BMPs provides
excess reduction beyond needs of categories
• Ag Cropland, Urban, WWTP, and Reservoir-InLake categories have excess capacity
(D2) What are the consequences associated with
excluding specific categories of BMPs?
• Much less Ag Cropland BMPs in optimal solution
than in Baseline
• Enforcing each category to be accountable is
more expensive than using most economic BMPs
63
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64
CCRWS
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BMP ECONOMICS© RESULTS
BMP ECONOMICS© RESULTS
Sensitivity Scenario D2
Optimal Solution
Sensitivity Scenario D2
Financial and Load Reduction Performance Details
BMPs
Cropland
Scenario
Label /
Annual
Cost (AE)
Pasture
Urban
Channel
2
0
1
t
0
3
000000 11 14222 03
010000 00 00011 10
1 A3 4 6 7 1 5 7 2 9 0 1 A2
Reserv
oir
4 4
0 05
1 10
A B1
5
0577
2000
B5 1 2
Integer BMPs
Linked BMPs
Baseline, reduce P 35%
$ 2.25 mil
Exclude Ag. Cropland BMPs
$11.93 mill
Exclude Ag. Pasture BMPs
$ 3.32 mill
Exclude All Ag. BMPs
$10.81 mill
Exclude All Urban BMPs
$ 2.28 mill
65
CCRWS
7/20/2009
In solution at maximum level;
In solution at partial level;
Blocked from being included in the solution
WW
TP
Scenario
Total
Annual
Cost (mill.
AE)
Baseline, reduce P 35%
$ 2.25
O&M
and
Interm.
Cap.
Repl.
Costs
(mill.
AE)
Load Reduction
(ET)
Init.
Constr
. Costs
(mill.
AE)
Init.
Constr
. Costs
(mill.
NPV)
P
N
Sed
$
126.5
$1.40 0.84 $13.0 72.8 392.4 K
Exclude Ag. Cropland
BMPs
$11.93 mill
$7.92 $4.01 $58.8 67.2
544.3 116.2K
.97
Exclude Ag. Pasture BMPs
$ 3.32 mill
$1.65 $1.67 $18.9 72.8
279.3 105.0K
.99
Exclude All Ag. BMPs
$10.81 mill
$7.37 $3.44 $52.6 50.4
283.2 62.0K
Exclude All Urban BMPs
$ 2.28 mill
$1.27 $1.02 $15.5 72.8
389.2 143.3K
.66
.60
.72
66
CCRWS
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CCRWS
Optimal D2 Solution Observations
BMP ECONOMICS©
-- CCRWS Sensitivity Scenario Analyses
• Excluding Ag Cropland BMPs is expensive
• Requires WWTP to increase to level III
• Requires all Channel and Reservoir-In-Lake BMPs to
enter solution
• Ag Pasture BMPs are not contributing
substantially, in a relative sense
• There are close economic substitutes
(D3) What are the consequences associated with
requiring specific BMPs?
• Excluding Urban category BMPs has minimal
effect
• Although BMP 211 (Required Nutrient Mgmt in
2,000 Buffer Strip Around Reservoir) is in Baseline
solution, BMP 301A is a close economic substitute
67
CCRWS
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• Spotlights tradeoffs in per unit P reduction costs
AND BMPs respective capacities to reduce P
inflows
68
CCRWS
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BMP ECONOMICS© RESULTS
BMP ECONOMICS© RESULTS
Sensitivity Scenario D3
Optimal Solution
Sensitivity Scenario D3
Financial and Load Reduction Performance Details
BMPs
Cropland
Scenario
Pasture
Urban
Channel
Reserv
oir
WW
TP
2
0
1
0
3
4 4
5
t
0 0 0 0 0 0 1 1 1 4 2 2 2 0 3 0 0 5 0 5 7 7
0 1 0 0 0 0 0 0 0 0 0 1 1 1 0 1 1 0 2 0 0 0
1 A 3 4 6 7 1 5 7 2 9 0 1 A 2 A B 1 B 5 1 2
Label /
Annual
Cost
(AE)
Integer BMPs
Scenario
Total
Annual
Cost (mill.
AE)
Baseline, reduce P 35%
$ 2.25
Linked BMPs
Baseline, reduce P 35%
Require All Urban BMPs
Require WWTP Upgrade to Level II
Require WWTP Upgrade to Level III
Allow WWTP Upgrade to be NonInteger
Require Wetlands BMP 401A
Require Wetlands BMP 401B
Require Both Wetlands BMPs
In solution at maximum level;
In solution at partial level;
69
CCRWS
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$ 2.25 mil
.66
$ 4.77 mill
$ 2.25 mill
$ 3.07 mill
$
$
$
$
2.25 mill
2.96 mill
2.90 mill
3.62 mill
.41
.66
.92
.66
.34
Blocked from being included in the solution
Load Reduction
(ET)
Init.
Constr.
Costs
(mill.
AE)
Init.
Constr.
Costs
(mill.
NPV)
P
N
Sed
$1.40 $ 0.84 $13.0 72.8 392.4 126.5K
Require All Urban BMPs
Require WWTP Upgrade to
Level II
Require WWTP Upgrade to
Level III
Allow WWTP Upgrade to be
Non-Integer
$ 4.77
$ 4.17 $ 0.60 $ 8.93
72.8 434.2104.1K
$ 2.23
$ 1.39 $0.84 $13.0
72.8 392.4126.5K
$ 3.07
$1.90 $1.17 $19.1
72.8 393.1129.4K
$ 2.23
$1.39 $0.84 $13.0
72.8 392.4126.5K
Require Wetlands BMP 401A
$ 2.96
$1.46 $1.50 $25.1
72.8 365.9137.8K
Require Wetlands BMP 401B
$ 2.90
$1.50 $1.40 $24.2
72.8 395.2137.8K
Require Both Wetlands BMPs
$ 3.62
$1.67 $1.95 $34.5
72.8 358.6 1415K
.97
.99
O&M
and
Interm.
Cap.
Repl.
Costs
(mill.
AE)
70
CCRWS
7/20/2009
CCRWS
Optimal D3 Solution Observations
BMP ECONOMICS©
-- CCRWS Sensitivity Scenario Analyses
• Nothing apparent that is surprisingly impressive
• Implementing all Urban BMPs more than
doubles annual costs
• Ag BMPs drop out
• WWTP
• Requiring level II is inconsequential – it is in Baseline
solution
• Increasing to level III is more expensive
• Changing to non-integer has no effect
(D4) What are the consequences associated with
speculating on the probable level of adoption of
different BMPs?
• Requiring wetlands
• More expensive
• These BMPs contribute minimal P reduction
• Including allows BMP 211 “Reservoir Buffer Strip” to
fall out
71
CCRWS
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72
CCRWS
7/20/2009
BMP ECONOMICS© RESULTS
BMP ECONOMICS© RESULTS
Sensitivity Scenario D4
Optimal Solution
Sensitivity Scenario D4
Financial and Load Reduction Performance Details
BMPs
Cropland
Label /
Annual
Cost (AE)
Scenario
Pasture
Urban
Channel
2
0
1
0
3
t
000000111422203
010000000001110
1 A3 4 6 7 1 5 7 2 9 0 1 A2
Reserv
oir
44
0 05
1 10
A B1
WW
TP
5
0577
2000
B5 1 2
Integer BMPs
Linked BMPs
Baseline, reduce P 35%
Require All BMPs, Except Wetlands, @
>=50%, w/Binary Constraints Imposed
Exclude “Most Unlikely” BMPs,
Allowing Only “More Likely” BMPs
$ 2.25 mill
$ 7.54 mill
$ 4.62 mill
Scenario
Total
Annual
Cost (mill.
AE)
Baseline, reduce P 35%
$ 2.25
O&M
and
Interm.
Cap.
Repl.
Costs
(mill.
AE)
Load Reduction
(ET)
Init.
Constr.
Costs
(mill.
AE)
Init.
Constr.
Costs
(mill.
NPV)
P
N
Sed
$1.40 $ 0.84 $13.0 72.8 392.4 126.5K
Require All BMPs, Except Wetlands,
@ >=50%, w/Binary Constraints
Imposed
$ 7.54 mill
$5.47 $2.07 $24.0 72.8 387.1103.4K
Exclude “Most Unlikely” BMPs,
Allowing Only “More Likely” BMPs
$ 4.62 mill
$3.48 $1.14 $14.3 72.8 457.0136.3K
.66
.50 .50 .50 0.6 .50 .50 .50 .50 .50 .50 .50 .50 1 .50 .50
1
1 1
1 1 1 .65
1
1 1 .50 1
1
1
In solution at maximum level;
In solution at partial level;
Blocked from being included in the solution
73
CCRWS
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74
CCRWS
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CCRWS BMP ECONOMICS©
Overall Conclusions
CCRWS
Optimal D4 Solution Observations
• 35% P reduction is achievable
• Subjective interpretation of what might
happen is suggestive of more expensive
solutions than the Baseline solution
• Baseline solution annual costs are approx. $2.25
million
• ~$1.40 million for O&M plus Interm. Cap.
Replacement Costs
• ~$0.84 million for Initial Construction / Sinking
Fund
• Up front, time 0 costs are ~$13.0 million
• Annual costs could more than double
• Initial construction costs could be $1-$11 higher
• Identifying funding sources for BMPs in
Baseline solution and encouraging the
adoption/implementation of these BMPs
appears economical
75
CCRWS
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• A portfolio of BMPs is optimal
• Inclusion of ag-related BMPs is cost-effective
• Some BMPs are relatively expensive and
ineffective
• Optimal economic solution is based on a
myriad of factors
76
CCRWS
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Thank You
Collaborators & Supporters !
What’s Next?
• Interested in your perspectives today.
• Preparing the final report.
77
CCRWS
7/20/2009
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7/20/2009
~ Bringing Economics, Finance, Accounting, and
Computer Modeling to Water Planning in the Cedar
Creek Watershed and beyond!~
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Questions?
79
CCRWS
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