(1) Funding will only be considered if a project is shown to be the cost-effective alternative/solution to a water quality problem and that the project maximizes the potential for energy conservation and efficient water use, reuse, recapture, and conservation. The cost-effective alternative is determined using a cost-effectiveness analysis.

(2) A cost-effectiveness analysis must include a comparison of the life cycle costs of alternatives considered for the planning period taking into account:

(a) The cost of constructing the project or activity;

(b) The cost of operating and maintaining the project or activity over the life of the project or activity; and

(c) The cost of replacing the project or activity.

(3) Applicants proposing alternative public works contracting for projects must demonstrate that this approach is the cost-effective alternative for procurement.