Available

   July 13, 2009

The Honorable Angela K. Minkin
California Public Utilities Commission
505 Van Ness Avenue
San Francisco, CA 94102

RE: Public Hearing, Cal-Am Coastal Water Project

Dear Judge Minkin:

LandWatch Monterey County is a membership non-profit organization committed to protecting the environment and the economy by advocating for sound land-use policies. One of our five policy goals is to ensure adequate public facilities and services, including a reliable and sustainable water supply, are in place prior to or concurrently with new development. Because of this, LandWatch has closely followed and participated in the discussions surrounding the Coastal Water Project, and we submitted extensive comments on Coastal Water Project draft environmental report (DEIR).

The State ordered the development of alternatives to pumping from the Carmel River while recent adjudication has limited over-drafting the Seaside Groundwater Basin - the two major water sources for the Monterey Peninsula. The PUC is now considering the three projects reviewed in the DEIR for the Coastal Water Project. All three proposals include a large desalination plant and additional components. LandWatch thinks the proposals currently before the PUC are seriously problematic. All three of the current proposals pose significant environmental problems and unnecessarily high costs to the rate payers, and one of the alternatives poses potential violations of ground water rights.

Cal-Am proposes a desalination plant either at Moss Landing or in North Marina. The plants would produce 10,000 to 11,000 acre-feet per year (AFY) of desalinated water for the Monterey Peninsula. Cal-Am's proposal also includes water from the Aquifer Storage and Recovery (ASR) project developed in conjunction with the Monterey Peninsula Water Management District for a total yield of 1,300 AFY. The Regional Project includes a desalination plant in North Marina at 10,000 AFY with water from the Salinas Valley Groundwater Basin (SVGB) and the ocean, in addition to other components. The project would yield 15,580 AFY with water for Marina, Fort Ord and the Monterey Peninsula.

LandWatch appreciates the effort of the Division of Ratepayer Advocates of the PUC to encourage development of a regional approach to water supply projects for Monterey County. As initially conceived, the Water for Monterey County Regional Project was to be a sustainable water supply alternative focusing on use of reclaimed water, treatment of storm-water runoff, water conservation, aquifer storage and recovery and improved operation and maintenance. These efforts were to be supplemented by desalinated water.
However, the Regional Program described in the DEIR turns the effort on its head, instead focusing on desalination supplemented by the other efforts.

Some issues related to the three alternatives described in the DEIR include:

1. Limitations on transporting water out of the SVGB
2. Private ownership of desalination plants
3. Institutional issues related to managing water on the Monterey Peninsula and
4. Public participation in rate setting

Each of the three alternatives has serious pitfalls. In the interests of avoiding the pitfalls and expediting a real water supply solution, a group of community-based, non-profit, non-governmental organizations developed the Hybrid Regional Plan. The Hybrid Regional Plan is NOT a new approach. Rather, it is a mix of the best elements evaluated in the CWP DEIR, as well as some projects already in place.

As discussed below, the Hybrid Regional Plan has many benefits. The plan is regional in scope and is the environmentally superior alternative. The plan increases the use of lowest cost water-supply options, which benefits the rate payers of the Monterey Peninsula. It also aids the ratepayers of the Peninsula because the plan ensures the ratepayers are directly represented in the project’s implementation. The Hybrid Regional Plan simplifies environmental review by supporting elements of projects already evaluated in the DEIR. The plan avoids directly extracting water from the Salinas Basin which would help avoid potential litigation from the farming community. Finally, the plan is an incremental approach, allowing project effectiveness, cost and environmental impacts to be accurately assessed before irrevocable commitment to the next phase

Phase I of the Hybrid would address the immediate regulatory needs of the Monterey Peninsula and provide 2,700 acre feet per year (AFY) for Marina/Fort Ord. It would rely on 300 AFY from conservation; 1,920 AFY from storing excess winter flows from the Carmel River in the Seaside Basin (ASR); 4,100 AFY of reclaimed water for landscaping and groundwater replenishment; 700 AFY from replacing leaking pipes in Seaside and electronic leak monitoring; interim use of 300 AFY from the Sand City desalination plant; and 5,680 AFY of desalinated water, for a total of 13,000 AFY. The smaller desalination plant proposed in the Hybrid Plan would realize cost savings to rate payers. Phase II of the plan would evaluate the effectiveness of water supply projects identified above followed by implementation of expanded and/or new projects to address drought reserve, growth and water for North Salinas Valley.

To-date, the Hybrid Regional Plan approach has been endorsed by the League of Women Voters of the Monterey Peninsula, the Carmel Valley Association, the Ventana Chapter of the Sierra Club, LandWatch Monterey County and the Prunedale Neighbors Group. LandWatch urges the PUC to seriously consider the Hybrid Regional Plan. It is the environmentally superior alternative and would be the quickest to implement given that most of the components have already been evaluated in an EIR.

Thank you for the opportunity to comment during the PUC hearings.

Sincerely,

Amy L. White, Interim Executive Director
LandWatch Monterey County

Cc: Commissioner John Bohn

ATTACHMENT 1

HYBRID REGIONAL PLAN
The Environmentally Superior Alternative

Because of requirements to reduce water taken from the Carmel River, the California Public Utilities Commission (CPUC) ordered California American (Cal Am), the Peninsula’s major water purveyor, to develop a water supply project. CalAm’s proposal, known as the Coastal Water Project (CWP), focuses on a seawater desalination plant either at Moss Landing or North Marina. A draft environmental impact report (DEIR) evaluated the impacts of plants at these locations along with an alternative developed by local agencies referred to as the Regional Plan.

Each of the three alternatives has serious pitfalls, although the “regional alternative” does propose a cooperative approach. In the interests of avoiding the pitfalls and expediting a real water supply solution, a group of community-based, non-profit, non-governmental organizations developed the Hybrid Regional Plan.

The Hybrid Regional Plan is NOT a new approach. Rather, it is a mix of the best elements evaluated in the CWP DEIR, as well as some projects already in place. As discussed below, the Hybrid Regional Plan

• Is regional in scope
• Is the environmentally superior alternative
• Increases the use of lowest cost water-supply options
• Simplifies environmental review by supporting elements of projects already evaluated in the DEIR
• Focuses first on meeting the urgent water needs of Monterey Peninsula residents and ratepayers
• Avoids extracting water from the Salinas Basin
• Ensures that Peninsula ratepayers are directly represented in the project’s implementation
• Is an incremental approach, allowing project effectiveness, cost and environmental impacts to be accurately assessed before irrevocable commitment to the next phase.

To-date, the Hybrid Regional Plan approach has been endorsed by the League of Women Voters of the Monterey Peninsula, the Carmel Valley Association, the Ventana Chapter of the Sierra Club, LandWatch Monterey County and the Prunedale Neighbors Group. It represents a milestone in community agreement at the grass-roots level, since many of these organizations have never endorsed previous water supply proposals.

BACKGROUND

The Monterey Peninsula has serious water supply problems. California American (CalAm), which is the major water purveyor for the area, is under State order (SWRCB Order 95-10) to significantly reduce extractions from the Carmel River. Additionally, the Seaside Basin has been recently adjudicated resulting in a court order to reduce water pumping from the Basin.

In response to these issues, the California Public Utilities Commission (CPUC), which regulates private utilities such as CalAm, ordered the utility to develop a water supply proposal to meet these regulatory requirements. CalAm’s proposal, known as the Coastal Water Project, includes two alternatives which primarily rely on desalination of sea water. The Moss Landing project is for 10,000 acre-feet per year (AFY); it would desalinate cooling water from the Moss Landing Power Plant. The North Marina project is for 11,000 AFY; it would extract water from Monterey Bay using slant well technology. Both of these projects are intended to meet regulatory requirements and would not provide water for growth.

Both desalination proposals rely primarily on the most expensive source of water. If sited at Moss Landing, the Peninsula’s water supply would become inextricably linked to outdated technology for the production of electricity.

As part of the development process for the Coastal Water Project, a group of interested agencies, organizations and individuals were convened to develop a third alternative to be addressed in the environmental impact report prepared for the Coastal Water Project. The group initially was known as the Regional Plenary Oversight Group (REPOG) and is now called Water for Monterey County. It met over many months to develop a regional program that would be undertaken by local and regional agencies in Monterey County. The Regional Plan was developed by staff of the Marina Coast Water District (MCWD) and Monterey County Water Resource Agency (MCWRA) with assistance from an engineering consultant. The individuals and groups who participated in the REPOG meetings had opportunities to comment on the Regional Plan as it was developed; however, the group did not vote on the Regional Plan submitted to the CPUC for environmental review.

The Regional Plan described in the Draft Environmental Impact Report (DEIR) has two phases. Phase I projects would produce a total of 15,200 AFY. Phase I includes

• a 10,000 AFY desalination plant in North Marina with source water extracted from the 180 foot aquifer in the Salinas Groundwater Basin
• 1000 AFY of recycled water for urban irrigation (RUWAP)
• 920 AFY of stored water from stormwater flows from the Carmel River (ASR)
• 2,980 AFY of Salinas River Surface Water and
• 300 AFY of Sand City Desalination water.

Of the15,200 AFY produced in Phase I, 12,500 AFY is allocated for the Monterey Peninsula and 2,700 AFY for Marina/Fort Ord. Phase I projects are intended to only provide water for growth for Marina/Fort Ord.

Phase II would expand water supplies to meet development included in the general plans of Monterey Peninsula cities, unincorporated areas, and Marina/Fort Ord. Phase II is also intended to address North Monterey County water supply problems. Phase II projects include

• expansion of the desalination plant to 16,000 AFY and
• 2,000 AFY from a groundwater replenishment program which would treat wastewater from the Monterey Regional Water Pollution Control Agency (MRWPCA) Regional Plant to advanced levels for injection into the Seaside Groundwater Basin.

Memoranda of Understanding implementing feasibility studies for Phase I projects have been signed by MCWD, MRWPCA and the County of Monterey.

The environmental impacts of these proposals are presented in the DEIR prepared for the Coastal Water Project. The Final EIR (FEIR), which will respond to extensive public comments on the DEIR, is scheduled for release in the fall of 2009. In the interim, an Administrative Law Judge for the CPUC will hold hearings and receive testimony on other aspects of the CWP including costs and feasibility of implementation.

REASONS FOR DEVELOPING THE HYBRID REGIONAL PLAN

Priority Should be on Meeting the Monterey Peninsula’s Urgent Water Needs. Because of the Regional Plan’s focus on extracting water from the Salinas Valley Groundwater Basin (SVWB) and the Salinas River, implementation of the Regional Plan will likely delay, perhaps for years, urgently needed solutions to the Monterey Peninsula’s critical water problems. The impacts of extracting water from the degraded SVWB have not been adequately addressed and require additional environmental review. Water rights of the agencies proposing to extract water from the basin have not been established. Litigation by affected property owners with land overlying the SVWB is almost certain.

Additionally, elements in the Regional Plan fluctuate from day to day. As Curtis Weeks, General Manager of the MCWRA, says, the Regional Plan is “squishy.” For example, during MOU negotiations to implement the Regional Plan, estimates for the desalination plant ranged from 14,600 AFY for Phase I to 21,300 AFY for Phase II. This is significantly more than the 10,000 AFY desalination facility originally proposed and evaluated in the Coast Water Project DEIR. Furthermore, when the ratio of source water to desalinated water is considered (a ratio of 2:1), the Regional Plan could extract anywhere from 20,000 AFY to 42,600 AFY from the degraded Salinas Basin and Monterey Bay. These extractions, if ever allowed, would produce 10,000 AFY to 21,300 AFY per year of potable water for use on the Monterey Peninsula, Marina and Fort Ord.

Even accepting the statement that only 15% of the water would be from the SVGB (this percentage has not been verified) with the rest coming from Monterey Bay, extracted water could range between 3,000 AFY and 6,390 AFY. The larger amounts have not been evaluated and would take additional environmental review to determine their feasibility and impacts on the SVGB.

The viability of the Regional Plan’s North Marina desalination project is threatened by potentially extensive delays caused by litigation which could last for years as well as by the need for additional environmental review. Instead, the focus should be on meeting the urgent water needs of the Monterey Peninsula which the Hybrid Regional Plan addresses.

Lost Focus. The original goal of the Regional Plan was to develop a sustainable water supply. During the REPOG process, the emphasis shifted away from sustainability and conservation in favor of a primary focus on a very large and costly desalination plant.

The Hybrid Regional Plan, detailed below, reintroduces the original goal of developing a sustainable water supply.

Lack of Representation for Monterey Peninsula Ratepayers and Voters. The Monterey Peninsula Water Management District which is the agency with management responsibility for water on the Monterey Peninsula is not included as a lead or co-lead agency for implementing the Regional Plan. This agency is elected and responsible to the voters on the Monterey Peninsula. As proposed, the major source of future water supplies under the Regional Plan would be undertaken by the Marina Coast Water District and Monterey County Water Resources Agency, disenfranchising Monterey Peninsula ratepayers and voters. In contrast, the Hybrid Regional Plan assures representation of Monterey Peninsula Ratepayers and Voters.

HYBRID REGIONAL PLAN

Water Needs

Phase I of the Hybrid Regional Plan would provide 2,700 AFY for Marina/Fort Ord and 10,300 AFY for the Monterey Peninsula. The amount of water for Marina/Fort Ord is the amount allocated in Phase I of the Regional Plan. Based on data in the May 7, 2009 Administrative Law Judge draft opinion, 9,000 AFY is needed to meet regulatory requirements for the Monterey Peninsula; data in the DEIR show that 10,272 (10,300 rounded) AFY is needed. The three alternatives described above provide 12,500 AFY for the Monterey Peninsula which includes an additional 2,200 AFY mostly for drought reserve and to meet future demands on the Seaside Basin. Based on information in the DEIR, there are no regulatory provisions limiting use of that water for future needs including drought reserve. The Hybrid Regional Plan focuses on meeting Regulatory Requirements first.

Regional Approach with Assurances of Representation of Monterey Peninsula Ratepayers and Voters

The Hybrid Regional Plan proposes that the MPWMD and MCWD be co-lead agencies to implement the Plan. Under a joint-powers agreement, these agencies would design and implement the desalination plant and work with the MRWPCA to implement the Groundwater Replenishment Program which requires participation of a water district. CalAm would be responsible for reducing unaccounted for water, and CalAm and MPWMD would continue implementation of ASR.

Source Water from Slant Wells into Monterey Bay

Source water for the desalination plant would be from the Monterey Bay using slant well technology addressed in the DEIR for the CWP. The MPWMD is currently working on a desalination facility using this technology. The well location would be in North Marina or southern locations. Consideration should also be given to working with Sand City to expand its facility. This location was previously considered by the MPWMD for a desalination project that could produce up to 6,000 AFY. This approach would facilitate development of a desalination facility by avoiding impacts on the Salinas Valley Groundwater Basin and limiting the amount of additional environmental review since a 11,000 AFY facility has already been evaluated in the CWP DEIR.

Focus on Conservation and Reclamation Supplemented by Desalination

A sustainable water supply starts with using existing resources before developing a costly desalination project. The Hybrid Regional Plan focuses on the use of excess flows from the Carmel River, reclaimed water and water conservation.

Up to 10,000 AFY of wastewater is available for reclamation. Both the Hybrid Regional Plan and the Regional Plan propose using reclaimed water for urban landscaping. Both plans also propose using advanced treated wastewater (reclaimed water) from the MRWPCA to replenish the Seaside Aquifer. The difference is that the Hybrid Regional Plan proposes Seaside Aquifer replenishment with reclaimed water as a Phase I project, while the Regional Plan delays it until Phase II.

The proposed water conservation measures are identified in the May 7, 2009 Administrative Law Judge draft opinion. Measures to reduce unaccounted for water by replacing Seaside pipelines and electronic lead monitoring would total over 1,000 AFY as proposed in the Hybrid Regional Plan. These measures are not included in the Regional Plan.

The Hybrid Regional Plan would use water from the Sand City desalination plant until 2016 when it is to be returned to Sand City for its use.

A desalination plant at just less than 6,000 AFY would supplement the measures identified above.

Plan Elements

TABLE 1
HYBRID REGIONAL PLAN

(1) DEIR, p. 5-11, shows range of 300 to 1,000 AFY.
(2) MPWMD/CalAm Proposed Project.
(3) Regional Plan (REPOG/Water for Monterey County).
(4) MRWPCA’s 1/9/09 presentation to the REPOG estimated 3,000 to 6,000 AFY for GWB.
(5) May 7, 2009 Administrative Law Judge draft opinion, p. 59 shows up to 1,000 AFY. And 350 AFY for electronic leak monitoring. Conservative estimate used.
(6) Regional Plan (REPOG/Water for Monterey County).
(7) Supplements other projects.
(8) May 7, 2009 Administrative Law Judge draft opinion cites CalAm regarding 9,000 AFY to meet regulatory requirements (p. 60); DEIR (p. 2-7, Table 2-2 ). The following adjustments are added to 10,272 AFY to arrive at the 12,487 AFY (12,500 rounded) used in the three alternatives: 1,181 for weather adjustments (drought reserve); 762 AFY for replacement of water lost from sedimentation of the Los Padres Dam, and 272 AFY for future Seaside basin needs).
(9) Phase I Regional Plan (REPOG/Water for Monterey County)

Table 2 identifies water supply programs in each of the alternatives.

TABLE 2
WATER SUPPLY PLAN ELEMENTS

(1)    Water for Monterey Peninsula only
(2)    2,700 AFY for Marina/Fort Ord; 12,500 AFY for Monterey Peninsula
(3)    2,700 AFY for Marina/Fort Ord; 10,300 AFY for Monterey Peninsula

Phase II

Phase II of the Hybrid Regional Plan would assess the effectiveness of the projects identified above and make adjustments accordingly. This phase would address drought reserve, water for growth and water for North Salinas Valley.

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