ISSUES RELATED TO REGIONAL WATER PROJECT AND SETTLEMENT/FINANCIAL AGREEMENT DEVELOPED BY THE LWV/MP, LANDWATCH, SIERRA CLUB AND CARMEL VALLEY ASSOCIATION

In order to help you better understand LandWatch's concerns with the Regional Project and related Settlement Agreements (as currently proposed), click on this link to read a list of issues developed by the League of Women Voters of the Monterey Peninsula, LandWatch, Sierra Club, and the Carmel Valley Association.

1. Regional cooperation to address water supply issues on the Monterey Peninsula and in the Salinas Valley increases opportunities for water supply solutions and grant funding. Growth/no growth is not an issue with the proposed Regional Project which addresses only regulatory requirements for the Monterey Peninsula and does not provide water for growth.
   
   
2. The California Public Utilities Commission (CPUC) should not accept the section by which charges by Marina Coast Water District (MCWD) and Monterey County Water Resources Agency (MCWRA) would be categorically deemed reasonable and necessary and thus be excluded from the CPUC’s review authority. A suitable alternative process for review and approval of expenses should be required.
   
   Issue: The CPUC would give up much of its authority to set water rates under the draft agreement, and Peninsula ratepayers would be left without sufficient protection from overcharging.
   
   
3. Monterey Peninsula ratepayers should be represented in the decision-making process, ownership of the project should be proportional to ratepayer participation, and project costs should be fairly distributed.
   
   Issue: Monterey Peninsula ratepayers would not be directly represented because the desalination plant would be owned by MCWD and the wells by MCWRA. Monterey Peninsula ratepayers would pay 95% of project costs and have no fiscal oversight nor any say in decisions related to the facility, while Marina ratepayers would pay only 5%.
   
   
4. A financial review structure that has independent or oversight relationship to the parties is essential.
   
   Issue: Cost controls in the agreement are designed and controlled by the same two parties to which they apply. None of the three parties to the agreement have any incentive to challenge costs or practices of the other two.
   
   
5. The Monterey Peninsula Water Management District (MPWMD) should be involved in decisions regarding well location, construction and operation.
   
   Issue: The location of wells would be determined solely by MCWRA. Wells are proposed to be located in areas that would limit water supplies to the Monterey Peninsula because of the prohibition against exporting water from the Salinas Valley Groundwater Basin. They would also be located in areas where the County has no water rights resulting in a delay of project implementation because of litigation.
   
   Because of prohibitions against exporting Salinas Valley groundwater out of the basin, the Monterey Peninsula may never get enough water to meet regulatory requirements. The Regional Project is based on the assumption that all the fresh water extracted from the basin will stay in the basin and only the desalinated portion of water derived from the ocean will be exported to the Peninsula. This approach works as long as the percentage of fresh water is 19% or below and ocean water is 81%. If the amount of fresh water exceeds 19%, the Peninsula would not receive needed water. The Final EIR for the project finds the percent of fresh water would average 29% and go as high as 40% after the first 10 years. The MPWMD has needed expertise to site the wells in locations with the greatest percentage of ocean water.
   
   
6. Test wells should be developed prior to project approval and the long term commitment of CalAm ratepayers to the terms of the Settlement Agreement.
   
   Issue: Data on the composition of source water for desalination is based on modeling rather than monitored well data. The make-up of source water would influence well location and drilling technology, i.e., slant wells or vertical wells which in turn influences project costs and time frame for project completion.           
   
   
7. Parties to the agreement should be responsible for their own litigation costs.
   
   Issue: Monterey Peninsula ratepayers would pay for all litigation costs by agencies over which they have no control.
   
   
8. Bond funding should be for project costs only.
   
   Issue: Recently inflated cost estimates could be used to authorize bond funding could include more than project costs under the agreement.
   
   
9. Water provided to the Monterey Peninsula should be available forever.
   
   Issue: The contract to provide water to the Monterey Peninsula could be cancelled even though ratepayers would have paid for 95% of project costs.
   
   
10. Ratepayers should only be charged for pre-effective date costs to those costs that the parties spent for developing the Regional Project concept.
    
    Issue: MCWD and Monterey County may attempt to recover costs not directly related to development of the Regional Project.

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posted 06.27.10