By Marge Ann Jameson
“With the decision we adopt today, [the California Public Utilities Commission] takes the highly unusual step of finding, after thorough review, that . . . there are sufficient procedural, contractual, and other legal safeguards . . . to be reasonably certain to produce the lowest cost, viable, and timely solution to Cal-Am’s immediate source water needs so as to provide adequate water for Cal-Am’s ratepayers.”
With those words, which are part of a 361-page document outlining the decision, the California Public Utilities Commission gave their stamp of approval to the Water Purchase Agreement and Settlement Agreement, the first public-private project of its kind in California, concerning the Regional Water Project. The CPUC made the announcement on Dec. 2. The vote was 4-1.
Though amendments had been requested by two of the outgoing members of the commission, which would have affected cost caps and the makeup of potential oversight of the project, the CPUC eventually agreed with the Settling Parties through a series of ex parte meetings that cost caps and additional governance and oversight would affect the ability of the project parties to sell needed bonds to finance the project. It was what Cal-Am and Marina Coast Water had hoped for.
The engineering estimate for the project is nearly $300 million, plus another potential $100 million for infrastructure to be borne by Cal-Am ratepayers.
“We spent $15 million just to get to the CPUC,” said Jim Heitzman, General Manager of Marina Coast Water District. “But we’re not going to get a cheaper project.”
In a press release, California American Water said they estimate that average monthly water bills will increase from $38 to approximately $80 as a result of the project and other investments, including the removal of the San Clemente Dam.
A separate application to the CPUC will determine the exact cost impact to California American Water customers. California American is expected to file the application sometime next year.
The next step will be approval by the California Coastal Commission. They are scheduled to hold a public meeting in the spring anyway, and the Settling Parties, says Heitzman, hope to have 30 percent bonding by then and be able to present their case. Otherwise, the Coastal commission approval could take as long as a year, meaning that the project would not actually break ground until December.
Staff, he says, will work to get ready for the meeting. “We try not to contest regulators,” Heitzman said. “We will not be trying to fight [the Coast Commission],” he added.
“We’re in a favorable bidding climate for the construction,” he pointed out. “there could be some cost-cutting if we get right on it.”
Heitzman said the Settling Parties are grateful for the support of Pacific Grove Mayor Carmelita Garcia, outgoing Seaside Mayor Ralph Rubio, and Carmel Mayor sue McCloud. “They really demonstrated leadership in this,” he said.
A series of community forum groups are planned, to last 4-5 hours each, and to start perhaps in February, 2011.
The source water wells and raw water conveyance will be owned by Monterey County Water Resources Agency. Marina Coast Water District will own, construct, operate, and maintain the desalination plant in Marina and the product water conveyance facilities to the delivery point, which then becomes Cal-Am’s intake point. Cal-Am would own, construct, operate, and maintain the pipeline, conveyance, and pumping facilities that are needed to deliver the water to its customers. The Monterey Regional Water Pollution Control Authority would own, operate, and maintain the outfall for return of the brine to the sea.
