The cost of water production encompasses all expenditures associated with project implementation, operation, and maintenance and financing, and consists of fixed and variable components. The fixed water costs are expenditures associated with plant construction and with repayment of the capital investment in the plant (i.e., capital cost recovery); and of the portion of the annual O&M expenditures that are independent of the actual volume of water produced by the desalination plant (labor, maintenance, environmental and performance monitoring, and indirect O&M costs). The “variable cost of water” component incorporates O&M expenditures that are directly related and usually proportional to the actual volume of produced desalinated water (power, chemicals, replacement of membranes and cartridge filters, and waste stream disposal).