EPA Provides $135 Million to Orange County WD for Groundwater Replenishment Project Expansion

By on August 3, 2018
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Officials with Orange County Water District’s (OCWD) have received notification of a $135 million Water Infrastructure Finance and Innovation Act (WIFIA) loan from officials with the U.S. Environmental Protection Agency (EPA) for the final expansion of the district’s Groundwater Replenishment System.

“This advanced water recycling and groundwater replenishment project will provide Orange County residents and businesses with an additional local drinking water supply,” said EPA’s Regional Administrator for the Pacific Southwest Mike Stoker. “Not only will this project protect local water resources, it will make Orange County more resilient to future droughts.”

Stoker publicly announced the WIFIA loan at Ward Street in Fountain Valley – the site of the future water recycling and groundwater replenishment project. Officials on hand for the announcement were U.S. Congressman Dana Rohrabacher (R-48th District-Huntington Beach), OCWD Board President Denis Bilodeau, and Orange County Sanitation District General Manager James Herberg.

“Having been a proponent of the OCWD’s Ground Water Replenishment System project since its inception, I am pleased that the OCWD has received a $135 million Water Infrastructure Finance and Innovation Act loan. This loan will help finance the final expansion of the GWRS, which will increase our drought-proof water supply and provide for the water needs of future generations of Orange County residents,” said Congressman Rohrabacher.

The Orange County Groundwater Replenishment System is slated to produce an additional 30 million gallons per day of drinking water, by treating wastewater from the Orange County Sanitation District. After purification the treated water will be stored in the Orange County Groundwater Basin. This process will provide a three-part benefit for the local community by increasing local groundwater source replenishment, providing drought-proof drinking water supplies thereby reducing the region’s need to import water and benefitting the environment through reduced discharges into the ocean.

The EPA’s WIFIA loan to OCWD will help finance nearly half of the project’s estimated cost of $282 million. The WIFIA program is a new federal loan and guarantee program at EPA that aims to accelerate investment in the nation’s water infrastructure through long-term, low-cost supplemental credit assistance for regionally and nationally significant projects. The program was established by the Water Infrastructure Finance and Innovation Act of 2014.

OCWD expects to save some $16 million dollars because of the WIFIA loan and its low interest rates versus municipal bonds.  Project construction is scheduled to begin in 2019 and be completed in 2023. Additionally, the project is expected to create approximately 700 temporary jobs.

“WIFIA borrowing enhances the Groundwater Replenishment System’s viability,” stated Bilodeau. “The WIFIA loan program creates another tool in the proverbial toolbox to finance critical water infrastructure projects like ours. The cost of borrowing is less than the private market would have been, which helps make the cost of the final expansion feasible to ratepayers. OCWD is trying to reduce reliance on imported water from the Colorado River and become self-sufficient, but OCWD won’t make water at any cost.”

A WIFIA loan provides many repayment benefits in addition to the significant cost savings. Benefits include the ability to repay at any time without penalty, subordination in payment priority to other debt, extended repayment terms of up to 35 years, flexibility when the loan is drawn with no interest accrual until funds are disbursed, and the opportunity to use the loan with other assistance such as the State Revolving Fund for the remaining 51 percent of a project’s cost.

“Today marks a major milestone for EPA’s WIFIA program,” said EPA Office of Water Assistant Administrator David Ross. “With our loan to the Orange County Water District, EPA has issued over $1 billion in WIFIA credit assistance this year, thanks to the hard work and dedication of the professionals within EPA’s Office of Water.”

According to EPA’s estimate of national drinking water and wastewater needs, over $743 billion is needed for water infrastructure improvements. The WIFIA program plays an important part in fulfilling this need and in the President’s Infrastructure Plan, which calls for increasing the program’s funding authorization and expanding project eligibility. In April the EPA announced the availability of additional WIFIA funding. Additional information on the program and application information can be found at: https://www.epa.gov/newsreleases/epa-announces-new-funding-water-infrastructure-projects.