February 3, 2012
Monterey Herald
Monterey, California

Desal EIR dealt blow
Review failed to consider water rights, judge rules

Herald Staff Writer

In an amended ruling, a Monterey County Superior Court judge has found that the environmental review for the failed regional desalination project neglected to properly consider a number of issues, including water rights.

The revised ruling, which amends a tentative decision issued by Judge Lydia Villarreal in December, deals a severe blow to any thoughts California American Water may have had of using the project's environmental impact report on an alternative desal project.

And it could raise questions about whether the EIR is adequate under the California Environmental Quality Act for Cal Am to go ahead with its portion of the regional project.

The revision was released Thursday, about six weeks after Villarreal ruled that Marina Coast Water District should have prepared the EIR as the lead agency under state environmental law. The revision did not change that stance.

Ag Land Trust sued Marina Coast in March 2010, arguing that Marina Coast should have been the lead agency on the project instead of the state Public Utilities Commission.

Attorney Molly Erickson, representing Ag Land Trust, said Villarreal's amended ruling found in favor of all of the organization's environmental claims, in particular its argument that the EIR contained an inadequate discussion of water rights.

"Ag Land Trust has been raising the issue of water rights since at least 2006," Erickson said. "For more than five years, the Marina Coast Water District and the Monterey County

Water Resources Agency ignored Ag Land Trust. In the end, the rule of law was more powerful than the backroom deals.

"This issue is particularly important because the regional project proposed to pump water from the overdrafted Salinas Valley groundwater basin," she added. Cal Am spokeswoman Catherine Bowie said company officials had not seen the ruling and couldn't comment on it.

She said the exact nature of an alternative water supply project, and any environmental review, has yet to be determined. She said Cal Am's bid to construct its part of the regional project will be decided by the PUC, and the company will rely on the commission to decide how to comply with state environmental law.

When Cal Am announced last month that it was withdrawing support from the regional project, it pointed to a lack of progress on the work because of unresolved issues, including conflict of interest charges and permitting and financing challenges. Villarreal's tentative ruling on the EIR was also considered a source of delay.

The company must find a replacement source of water for the Peninsula by 2016 because of a state order to reduce pumping from the Carmel River.

Despite its complaints, Cal Am suggested that "a lot of valuable work" had been accomplished that could be applicable to an alternative desal project.

Late last month, at a PUC conference, Cal Am announced its intention to submit an application for an alternative water supply project within 90 days. The company indicated it would seek a modification of the regional project permit to capitalize on the efforts thus far, presumably including the completion and PUC approval of the environmental impact report.

In her revised ruling, Villarreal found that the EIR failed to address the issues surrounding the availability of groundwater for the desal project and the potential environmental impact, especially after the county Water Resources Agency admitted that it still needed to acquire groundwater rights for the project.

The EIR's assumption that those rights didn't need to be addressed, because they would be "perfected" in the future, was impermissible because it did not meet the goal of allowing full public review of potential consequences, according to the ruling.

The ruling found that Marina Coast, as lead agency on the EIR, would need to address water rights, a contingency plan, the assumption of constant pumping, the exportation of groundwater from the Salinas Valley basin, brine impacts, effects on adjacent properties and water quality.

Jim Heitzman, general manager of the Marina Coast Water District, did not return a phone call from The Herald.

But the district's outside legal counsel, Mark Fogelman, argued at the PUC conference last month that Villarreal's tentative ruling in December did not represent a major impediment to moving forward with the regional project. He urged the commission to order Cal Am to meet its obligations under the project agreements.

Fogelman said the district would appeal if the final ruling remained unchanged from the tentative decision.

County Counsel Charles McKee said he had not seen the amended ruling and couldn't comment, but the county's outside legal counsel, Dan Carroll, cited the December ruling in arguing at the PUC conference that the project was subject to considerable uncertainty.

Jim Johnson can be reached at jjohnson@montereyherald.com or 753-6753.

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