U.S. EPA Announces $88 Million Water Infrastructure Loan for Innovative Water Reuse Project in Soquel, CA
Nationally, EPA’s 31 WIFIA loans are helping finance more than $13 billion in water infrastructure projects
SOQUEL, Calif.– Today, the U.S. Environmental Protection Agency (EPA) announced an $88 million Water Infrastructure Finance and Innovation Act (WIFIA) loan to the Soquel Creek Water District in California for an innovative water reuse project that will produce safe drinking water by purifying recycled water. The project will also help prevent further seawater intrusion by replenishing the critically stressed aquifer that serves as Soquel’s drinking water source.
“Monterey Bay plays a vital role in the region's marine health and biodiversity,” said EPA Pacific Southwest Regional Administrator John Busterud. “EPA’s financial support to the Soquel Creek Water District will help protect the Bay while replenishing local groundwater and ensuring that the community is more resilient against drought.”
The Pure Water Soquel project will use advanced technology to purify recycled water, producing 1.3 million gallons per day of safe, high-quality water and providing a reliable, sustainable and drought-resistant water supply that meets current and future demands. The project will also prevent further intrusion of saltwater into the aquifer and support the preservation of a sustainable groundwater basin. When complete, the project will lessen the need for potential future diversions from sensitive waterways like the San Lorenzo River. Additionally, by reusing water, the project will reduce discharges of treated wastewater to the Monterey Bay National Marine Sanctuary.
“With 40 states anticipating some freshwater shortages within their borders in the next 10 years, projects like Pure Water Soquel Creek are taking the challenge of meeting 21st century water demands head on,” said EPA Assistant Administrator for Water David Ross. “Through WIFIA, EPA is able to support innovative water infrastructure to help diversify water supplies and protect groundwater while saving ratepayers money.”
The Pure Water Soquel project supports a larger effort to improve the security, sustainability and resilience of our nation’s water resources through water reuse. In February 2020, EPA Administrator Andrew Wheeler announced the National Water Reuse Action Plan, a collaborative approach to water reuse that identifies 37 specific actions led by a spectrum of federal, state, local and other water sector interests. Over the coming months, EPA will be seeking input from stakeholders that will help inform the next iteration of the Action Plan, which is slated for release in Spring 2021.
EPA’s WIFIA loan will provide financing for $88 million of the Pure Water Soquel project cost while remaining costs will be funded by a combination of system funds, a Proposition 1 Groundwater grant, and a Seawater Intrusion Control loan from the state of California. The WIFIA loan will save the Soquel Creek Water District an estimated $66.7 million compared to typical market financing while project construction and operation are expected to create an estimated 581 jobs.
“I want to congratulate the Soquel Creek Water District for this significant milestone in the history of the Pure Water Soquel project,” said U.S. Representative Jimmy Panetta (CA-20). “Seawater intrusion into critical groundwater supplies is of great concern throughout my coastal district, and with this low-interest loan, the District can begin the next phase project, helping ensure the long-term protection of our local water supply.”
“This very low-interest loan from WIFIA is a real landmark in Soquel Creek Water District’s efforts to address our critical water supply issues,” said California State Assembly Member Mark Stone. “We are so fortunate here in Santa Cruz County to benefit from this extraordinary level of support and funding from the U.S. EPA, as well as from our own State Water Board, which is making the difference in assuring long-term sustainability of the community’s drinking water supply.”
“Maintaining a clean, reliable supply of drinking water is clearly one of the most vital issues here and throughout California,” said Zach Friend of the Santa Cruz County Board of Supervisors. “With the help of this generous WIFIA loan from the US EPA, the Soquel Creek Water District is poised to take a giant leap forward toward local water supply sustainability, by creating a new source of pure water, replenishing the groundwater, and preventing further seawater contamination.”
“We’re grateful to the EPA for this WIFIA loan, which will help the District in our roles as both our community's water supplier and environmental steward,” said Dr. Bruce Daniels, President of the Soquel Creek Water District Board of Directors. “Assuring the sustainability of our groundwater supply is paramount. With this loan, we’re able to accomplish that, while reducing the burden on our rate payers and providing a drought-proof water supply for today and future generations.”
“This low-interest loan represents a valuable partnership and investment among the District, the EPA and our local rate payers in support of our Pure Water Soquel Project,” said Ron Duncan, Soquel Creek Water District General Manager. “The project will replenish and protect the groundwater – our sole source of drinking water – from being further contaminated by saltwater intrusion, which is already detected in multiple locations. Thanks to the EPA and this WIFIA loan, we’re on track to implement Pure Water Soquel.”
WIFIA is providing financial support at a critical time as the federal government, EPA, and the water sector work together to help mitigate the public health and financial impacts of COVID-19. Since the beginning of March 2020, WIFIA has announced fifteen loans and updated four existing loans with lower interest rates. These recent efforts by EPA’s WIFIA program will save ratepayers over $1 billion compared to typical market financing. Since the first WIFIA loan closed in April 2018, EPA has now issued 31 WIFIA loans totaling $6 billion in credit assistance to help finance $13 billion for water infrastructure projects while creating 28,000 jobs and saving ratepayers $2.7 billion.
Background on WIFIA
Established by the Water Infrastructure Finance and Innovation Act of 2014, the WIFIA program is a federal loan and guarantee program administered by EPA. WIFIA’s aim is to accelerate investment in the nation’s water infrastructure by providing long-term, low-cost supplemental credit assistance for regionally and nationally significant projects. The WIFIA program has an active pipeline of pending applications for projects that will result in billions of dollars in water infrastructure investment and thousands of jobs.
EPA is accepting Letters of Interest for FY 2020 until October 15, 2020. Approximately $5 billion in financing is available. For more information about the FY 2020 selection process, visit: https://www.epa.gov/wifia/wifia-funding-currently-available.
For more information about the WIFIA program’s accomplishments through 2019, visit: https://www.epa.gov/newsreleases/epa-announces-first-wifia-annual-report-highlighting-35-billion-infrastructure-funding.
For more information about the WIFIA program, visit https://www.epa.gov/wifia.