In an effort to open the spigot on recycled water in the region, Palo Alto and Santa Clara Valley Water are exploring a deal that would send the city's wastewater to a treatment plant elsewhere in the county, where it would be treated, transformed into potable water and potentially resold to the city for its residents and businesses.

The proposed deal would give Palo Alto a new source of drought-proof water to draw on in case of emergency. Though the concept is new to Palo Alto, Valley Water -- the giant water district that serves most of Santa Clara County -- has had positive experiences with treating wastewater and reusing it, according to Garth Hall, deputy operating officer of Valley Water. It has been operating a plant on Zanker Road in San Jose since 2014, delivering water to an area that includes most of San Jose, as well as Milpitas, Serrano and Santa Clara.

The agreement, which the district is now negotiating with Palo Alto and Mountain View, would first require the cities to lower the salinity of their wastewater before sending it for further purification. Doing so would entail construction of a new desalination plant at the Regional Water Quality Control Plant in the Palo Alto Baylands, a facility that today processes the effluent of Palo Alto, Mountain View, Los Altos, Los Altos Hills, Stanford University and the East Palo Alto Sanitary District.

Under the tentative terms of the agreement, Valley Water (which until this year was known as the Santa Clara Valley Water District) would contribute $16 million to help Palo Alto build the $20-million plant. In addition to being turned into potable water, the less salty wastewater could also be sold to more customers for irrigation and other non-potable uses.

A major provision of the proposed agreement calls for Palo Alto to transfer about half of the treated effluent to the other location for further treatment and reuse. Valley Water would be expected to set up a transferring system for the wastewater within 13 years, after which time it would receive effluent deliveries from the Palo Alto plant for the next 63 years. The long time frame is needed to "justify the large capital investment and meet Valley Water's long-term water-supply-planning objectives," according to a new report from the Department of Public Works.

If approved by the City Council and by the city's wastewater-plant partners, the agreement would significantly expand the reach of the city's recycled water, which today is used for irrigation in Shoreline Park and at the Baylands Links Golf Course. The desalination plant would allow about 60 commercial customers in Mountain View to instantly join the system.

Palo Alto's experimentation with turning treated wastewater into potable water would be a significant shift for the city, which currently gets about 85% of its water from the Tuolumne River in Yosemite (the remainder comes from local reservoirs) and which takes great pride in the water's pristine quality.

As such, the Valley Water plan may end up pitting Palo Alto's environmental bona fides against the "ick" factor of drinking treated effluent.

But it may be an idea whose time has come: The council last year signaled its support for the Bay Delta Plan, which would require the Tuolumne and other tributaries of the San Joaquin River to have "unimpeded flow" of at least 40% between February and June. The Public Works report notes that adoption of the Bay Delta Plan would reduce the amount of Tuolumne River water available during dry years to Peninsula cities like Palo Alto, which get their water from the San Francisco Public Utilities Commission through the Hetch Hetchy system.

The San Francisco PUC has publicly opposed the plan, characterizing it as a threat to the region's water supplies.

"The decision to support the Bay Delta Plan reaffirmed council's commitment to reduce the city's dependence on imported water," the report states. "Water reuse is one of a limited number of water-supply alternatives to imported water," the report states.

As part of the agreement, Palo Alto would gain assurance that if its water allotment falls short -- either because of a drought or because of new state regulations -- it would be able to tap into Valley Water's water supplies.

The deal would also bring new revenue to Palo Alto and its wastewater plant partners. Once Valley Water installs the necessary pipelines to transfer the treated wastewater, it would pay $1 million annually to the cities. That funding would be distributed based on how much effluent each city has contributed to the plant.

At a meeting of the Utilities Advisory Committee earlier this month, staff from Public Works and Utilities departments touted the environmental benefits of the proposed partnership with the Water District. For one thing, the deal would cut down waste: In 2018, the plant treated 19,447 acre-feet of wastewater, of which 96% was discharged to the bay and the remainder was used for irrigation in Palo Alto and Mountain View.

Phil Bobel, assistant director in the Public Works Department, also said the new plant would cut the salt levels in the treated water by half, from the current level of 800 parts per million to about 400 parts per million. As such, it would assuage concerns from irrigators that the current recycled water would harm redwood trees and other sensitive plants.

Karla Dailey, senior resource planner at the Utilities Department, highlighted the value of having another supplier that the city can turn to if for some reason the San Francisco Public Utilities Commission has to reduce its allotment to Palo Alto. The city currently gets about 10 million gallons per day from the system.

"It's another tool that Palo Alto would have in its tool-belt down the road as the future unfolds and as we see what happens with climate change and regulations and the state and all the other things that will not be known for a while," Dailey said.

The city's proposed agreement with Valley Water is the latest example of Palo Alto's increasingly regional approach to planning for future water supply. Palo Alto serves on a recently formed Joint Recycled Water Advisory Committee, which also includes Mountain View and East Palo Alto. Also, it has recently agreed to shift some of its allocations of Hetch Hetchy water to East Palo Alto, where supply challenges temporarily halted development.

Gary Kremen, Palo Alto's representative on the Valley Water board of directors, lauded the deal and said the most important thing Palo Alto would get is a "guaranteed call option to our diverse water supply," which includes water from various regional systems, some spanning as far as Redding. The city will also get the assurance of knowing that its recycled water is pure enough to be safe for local trees, Kremen said.

"What is the value of being able to assure that Palo Alto's foliage and trees are there? You cannot pay enough for that -- unless you're anti-trees," Kremen said.

The commission largely approved the tentative plans, though Chair Michael Danaher urged staff from the city and the water district to include some assurances in the contract that would not only guarantee the water supply but also ensure a reasonable price. Because both entities are public agencies, the water would be sold "at cost," with neither agency making a profit.

Palo Alto and Valley Water aren't the only entities taking a more aggressive approach on recycled water. Los Angeles is moving ahead with a $2 billion project to recycle water and make it potable, with the goal of reducing its imported water by 35% and aid the city's goal of recycling all of its wastewater by 2035, according to the staff report.

San Diego is moving ahead with a recycled-water project under the Pure Water San Diego Program that would provide roughly a third of the city's water supply by 2035.

The Los Angeles effort focuses on "indirect potable reuse," in which water is purified by going through an environmental buffer such as a groundwater basin (this is in contrast to "direct potable reuse" systems, in which treated wastewater goes directly to the water-distribution system). The San Diego project, also considered "indirect potable reuse," calls for water detention at a surface reservoir before it goes to the water distribution system.

Commissioner Lisa Forssell lauded the new Palo Alto proposal, which she said both looks out for the city's interests and considers the needs of the larger region.

"If we aren't using our effluent and there are others in the region who can turn effluent into a valuable water resource, that's something that's worth pursuing," Forssell said.

The City Council will discuss the proposed agreements this Monday.