March 1, 2015  
Monterey Herald, Monterey, California

Guest Commentary

Expenditure secrecy fuels water deal heat

By Ron Weitzman

The top front-page article in the Feb. 26 Herald did a good job in describing the smoke and fumes of the oral argument over local water issues before the Public Utilities Commission in San Francisco the day before. The quotes in the article were colorful and apt. Missing was the meat that gave rise to the heat. First, let's look at the smoke, and then the fire producing it.

At issue is a deal proposing the payment of Monterey Peninsula ratepayer money to the county for exemption of Cal Am from a county ordinance that permits only a public agency to own and operate a desal plant here. Though the records are under seal, the money is claimed to be what the county spent on the regional desal project that Cal Am is seeking to replace with one much more profitable to it and much more costly to ratepayers. The rationale for the PUC to authorize the deal is that it would avoid costly litigation between the proposing parties, Cal Am and Monterey County. The smoke (as in smoke and mirrors) is that, in their oral argument, the proposing parties dwelled on the amount of money to be paid the county while obscuring the troubling issues of selective law enforcement, no evidence supporting possible litigation costs, secrecy, breach of public trust, and preemption of a pending ruling by a Superior Court.

Opposing Cal Am and the county were five parties: the Water Ratepayers Association of the Monterey Peninsula, as WaterPlus, the PUC's Office of Ratepayer Advocates, Citizens for Public Water, the Public Trust Alliance, and the Marina Coast Water District, identified by their acronyms, respectively: WRAMP, ORA, CPW, PTA, and MCWD. Each of these parties concentrated on at least one of the issues obscured by the proposing parties.

Pointing out that exemption of Cal Am from the county desal ordinance was premature without a prior PUC certification of Cal Am's project as publicly convenient and necessary, WRAMP showed that by choosing not to authorize the exemption, now or later, the PUC would be compelling Cal Am to sell its desal plant to a public agency whose ownership would save ratepayers hundreds of millions of dollars, dwarfing any possible savings from the avoidance of litigation.

The ORA indicated that Cal Am and the county had failed to show how much the threatened litigation might cost, if anything, and questioned whether any of the money claimed by the county included expenses for work normally done by its employees. Observing that secrecy of expenditures by the county might be the primary objective of the proposed deal, CPW suggested the county might be seeking to hide evidence that could compromise its case against Stephen Collins because most of the redactions in the expense records were not made until he became an issue.

PTA made the case that the arguments presented by the opposing parties all constituted a breach of public trust and that, because of its recently publicized violations of the public trust, the PUC should be especially wary of any concession to a utility it might make now. MCWD made the most elaborate and extensive argument against the proposed deal focusing on the collusion of Cal Am with the county not only to steal the desal project from MCWD but also to leave the district with almost $20 million in stranded project costs while charging their own stranded costs to ratepayers a knot that the San Francisco Superior Court is in the process of unraveling.

The fumes show that the fire is not yet out. Withdrawn from an earlier consent agenda, the proposed decision has been moved to a PUC meeting on March 12.

Ron Weitzman is president of Water Ratepayers Association of the Monterey Peninsula (formerly WaterPlus)

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