February 9, 2014
Monterey Herald
Monterey, California

Adopting desalination a problem of human nature

Guest commentary

graphCalifornia American Water reigns over six small cities on the Monterey Peninsula, cities that over the years have been experiencing an accelerating rise in the cost of water resulting from an accelerating decline in its availability. Yet, the Peninsula juts out into the vast Pacific Ocean, surrounding it by water that only needs desalting to be drinkable. We have the technology and the wherewithal to do it; only lacking is the will. The problem is not Mother Nature; it is human nature.

Consider the issue of size for the desalination plant proposed by Cal Am. Here I am going to consider only the desalination plant without its possible supplementation by groundwater replenishment, the combination being a more costly option. To avoid confusion, though Cal Am sometimes uses a number of different units, I am going to use only acre-feet per year as a measure of plant capacity. (An acre-foot is the amount of water that would cover a flat acre one foot high.)

Nineteen parties participate in the Public Utilities Commission proceeding on Cal Am's proposed water supply project, including the desalination plant. Of these, six have joined Cal Am in its proposal to the commission of a specific size for the plant.

This proposal is based on several components of water demand to determine total demand and several components of water supply to determine total available legal supply, the total demand being 15,296 acre-feet and the total available legal supply, 5,544 acre-feet. The plant size proposed in the seven-party agreement is the difference between these two numbers: 9,752 acre-feet.

Although a number of parties in the proceeding believe this amount is too high because it includes growth-permitting water for empty lots and tourism rebound, WaterPlus, while not one of the seven agreeing par ties, believes it is at least the amount we need because local household use is only about 60 percent of national household use, largely because of the unusually high cost of water here.

You don't have to be an economist to recognize that cost affects or is affected by supply and demand, and so you may find it perplexing that cost has apparently not entered into Cal Am's determination of plant size. Cost certainly affects demand: the higher the cost, the lower the demand, as we have just seen. Cost is also affected by supply: because of economies of scale, the greater the supply, the lower the unit cost. Economists use these two relationships to construct supply and demand curves to determine production size at the point of their intersection. Because that has not yet been done for local water, at least publicly, I am going to do it here.

The Office of Ratepayer Advocates of the Public Utilities Commission has provided a supply curve for desalination plants based on actual data from across the United States. That is the curve I am going to use for supply. According to Yale's Shella M. Olmstead and Harvard's Robert N. Stavins in "Managing Water Demand," a 10 percent drop in cost tends to result in a 4 percent increase in demand for water where cost is high, as it is here. Using that information, together with the local demand in 2012 of 12,052 acre-feet of water at a cost of $4,052 per acre-foot, I have constructed the local demand curve.

The intersection of the supply and demand curves being at about $1,600 and 15,500 acre-feet, the graph shows that our total water supply should be about 15,500 acre-feet, 402 acre-feet more than the amount proposed by Cal Am, and that it should cost about $1,600 per acre-foot if our sole water source were desalination. Contrary to common belief, the graph also shows that the cost of desalinated water per acre-foot, though greater than the average cost of water from all sources in the United States, is less by far than the current cost of water here on the Monterey Peninsula.

Perhaps Cal Am did not use a supply-demand graph to support the nearly identical total local water supply it proposed because the graph would show this enormous cost difference. The amount we pay is so much higher than elsewhere, even than desalinated water, that the differences must be due mostly to human rather than natural causes. By our votes, we have let Cal Am create this problem. Now, before it becomes intolerable, we can act to resolve it by voting in June for the Public Water Now initiative promoting the purchase of Cal Am by a local public agency. The choice is ours.

Finally, with this cost picture in mind, here is a question for every elected official on the Monterey Peninsula. Confronted by the prospect of years of persistent drought aggravated by global warming, what water-supply policy is more rationally defensible than support for a desalination plant having sufficient capacity to meet the entire local demand for water?

Weitzman, who lives in Carmel, is president of Water Plus.



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