April 1, 2012
Monterey Herald
Monterey, California

Outlook still grim for new water authority

By RON WEITZMAN
Guest commentary

The Monterey Peninsula Regional Water Authority, the new kid on the block in our water-challenged neighborhood, inspired high hopes for our local water team. Now, after several practice sessions with it as our new pitcher, the outlook for our team looks as grim as before. Shades of Charlie Brown.

As ratepayer advocates, WaterPlus members at first cheered on the new kid. Our hope was the mayors' joint powers authority would become the public agency that built our new desalination plant or would persuade another local public agency to do so. It has done neither. When we saw it was focusing on evaluating water supply options proposed by others, we strongly suggested its evaluation be objective. We should have known better.

Local water supply options fall into four categories depending on the role of desalination in them: whether the owner of the desalination plant is Cal Am or a public agency and whether desalination provides sufficient water to meet our needs or is just one part of a portfolio of water supply sources that together might meet our needs. Each of these four option categories has a close local proponent: Cal Am for private ownership with sufficient desalination, the water management district for public ownership with a portfolio of sources, and WaterPlus for public ownership with sufficient desalination.

Falling into the remaining category, the mayors' joint powers authority has limited its focus to a portfolio of two local public agencies and our private water company, each connected to a different water supply source: the water management district to aquifer storage and recovery, the pollution control agency to ground water replenishment and Cal Am to desalination. This commitment to a combination of three specific water supply sources prior to evaluation is anything but objective.

Worse, the portfolio is not drought-proof and, with Cal Am as the desalination provider, the mayors' joint powers authority has committed to the most expensive of all options categories. Here is why: Cost and drought.

The two private-ownership option categories are more expensive than the other two because a private company has to pay much more for capital than a public agency does in the case of desalination, up to a half-billion dollars more, as you can see by comparing the $400 million capital cost amortized over 30 years at 8.5 percent for Cal Am and 3.5 percent for a public agency.

A portfolio of water supply sources (aquifer storage and recovery, groundwater replenishment and desalination) is more costly than a sufficient desalination source for two reasons: First, aquifer storage and groundwater replenishment are each more costly than desalination per acre-foot, according to Cal Am (1 March 2012 Compliance Filing to CPUC on A.04-09-019, page 12). Second, water is more costly per acre-foot from a small (portfolio) desalination plant than from a large (sufficient-source) one, according to the state PUC Division of Ratepayer Advocates in its evaluation of the Regional Desalination Project.

The portfolio depends on components that aren't drought-proof the Carmel River had no excess water to inject into the Seaside aquifer this past winter and supplies the minimum amount of water to meet the state's cease-and-desist order, with no "cushion" in case of drought. By contrast, sufficient-source desalination is drought-proof.

The mayors certainly appear to be sincere, but, like Charlie Brown, this may just not be their game.

Ron Weitzman is founder of WaterPlus, which advocates on behalf of local Cal Am ratepayers for an adequate and affordable water supply and supports public ownership of the water utility. He lives in Carmel.

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