Hot Water Question of the Day No. 15

The Sand City desal cost estimate was made by Thom Akeman and reported in a letter to the Herald editor on October 25, 2007.   The cost estimate computed by Akeman was TWICE as high as Cal Am's projected cost.   Thom's estimate was $3,713 per acre-foot for Sand City water, as contrasted with Cal Am's $1,800-$2,200 projection for its Moss Landing desal plant.  .  Thom also pointed out that the actual price offered by Cal Am to San City works out to be about five times as high as what Akeman was currently paying for water delivered to his house ($733 per acre-foot). 
This means that the cost of $3,713 per acre foot will be paid by us, the ratepayers.

This also indicates two more things:  that Cal Am is not a good judge of desal costs; and that Cal Am does not act judiciously as long as ratepayers pick up all costs.  .  We need to be wary!!!  It is in the ratepayer interest to grill all desal proponents for real costs.  Cal Am has already indicated its costs will continue to increase, regardless of how much water we use. 

All desal costs will be high, however different desal proposals come with different cost levels.  One of the least expensive is the Pajaro Sunny Mesa proposal for a publicly owned facility in Moss Landing  Of all the options for an expanded water supply, desal will be the most expensive.  So it behooves all ratepayers to take seriously the cost of desalination projects. 

Hot Water Question of the Day No. 14

PUBLIC HEARING ON OVER PUMPING CARMEL RIVER BY CAL AM AND THE ENTIRE WATER SUPPLY FOR MONTEREY PENINSULA
 
Held by State Water Resources Control Board, which issued Order 95-10
 
Hearing will focus on its DRAFT CEASE AND DESIST ORDER regarding 95-10
 
Tuesday, April 1, (9:30am  presentations, 1pm public comment) Monterey Conference Center, DeAnza Room
 
So far, water supply plans have moved along without pressure.  Now comes real pressure, from a powerful state board, with leverage to enforce.  It is 'high noon' for relieving Carmel River from the degrading history of over-drafting, and all the assumptions about business as usual.  This raises questions about growth, separate city desals, the extent of conservation, local regulations that assume high quantities of water, life with water scarcity,  general  casualness by most of us about life here, what is sustainable, and how much water will cost into the future.    
 
State Water Resources Control Board meets at Monterey Conference Center morning and afternoon Tues April 1.  Mtg starts at 9:30 am.  About 10am, there will be presentations from Mo Co Water Resources Agency, MPWMD and Pajaro Valley Water Mgmt Agency, all on water supply efforts.  The REPOG will be focused on and will get a lot of play.  I do not know how much will be said about other desal plans. 
 
Public Hearing is at 1pm, for public comment.
 
The Cease and Desist Order is directed at Cal Am.  It cites delay and modest growth as examples of failure to abide by the 95-10 order to reduce pumping.  The threatened CDO will set a tight timetable for reduced pumping, with penalities and fines for non-compliance.  This is serious!

Hot Water Question of the Day No. 13

The Monterey Peninsula water supply is regulated by many agencies.  One is the very powerful State Water Resources Control Board, which issued the famous Order 95-10 in 1995 that demanded a reduced drafting of water from the Carmel River.

The State Water Board recently issued another order --a draft Cease and Desist Order.  Despite the demands to find a new water supply, the State Board has noted modest growth and population increases over the past 12 years.  In effect the State Board is shouting out  “We warned you!  Your actions are insufficient!  We are intervening!” 

A Cease and Desist Order is never good, because it can bring fines and penalties for non-compliance.  Such fines can be charged to the ratepayers. 

However since the leaders of the community have failed to respond in a timely manner, maybe the CDO is needed to get their attention, like a 2x4 and a mule!  It is surely possible the pressure from the State Water Board may be enough to generate action on a new supply.  There are two plans in the works that might be able to meet tight deadlines for new water—the regional plan called REPOG with a medium sized desal plant in Marina, and the Monterey Peninsula Water Management District proposal for a smaller desal plant in Sand City. 

Of course Cal Am has another plan for a desal plant in Moss Landing, but it is not getting much support in the broader community.  The proposal by Pajaro Sunny Mesa for a different desal plant at Moss Landing is being geared for North County use, with the option to provide water to the Monterey Peninsula. 

Hot Water Question of the Day No. 12

The Monterey County Board of Supervisors has an ordinance (Health and Safety Code 10.72), adopted in 1989, to require that a “public entity” own and operate a desalination treatment facility.  In March 2007, the Board of Supervisors scheduled a public hearing to possibly overturn that requirement.  Many members of the public, including Citizens for Public Water, opposed such a move.  The Board ultimately did not make a change. 

The background is that Cal Am had been working behind the scenes, laying the groundwork for it to be changed.  There had been several meetings with key County Staff.  In addition there were written comments in documents filed with the CPUC that made reference to changing the ordinance. 

We need to be ever vigilant.  The issue will not go away just because it was not changed in 2007.  The Board of Supervisors can change its ordinance anytime it has a rational to do so.  Such rational can be scientific, financial, programmatic, or political couched in acceptable terms.  Vigilance is important. 

Hot Water Question of the Day No. 11

The CPUC recently awarded Felton FLOW $67,000 as appropriate reimbursement for the proceedings before the CPUC.  The $67,000 has been levied against Cal Am.

The expenses are related to Felton’s fight to free itself from Cal Am control.  Felton has passed an $11 million bond to finance the purchase of assets in the Felton service area.  Cal Am has fought against this small community of 1300 ratepayers for several years. 

Cal Am has indicated the $67,000 expense against it should be reimbursed by ratepayers, including the Monterey Peninsula.  Cal Am has not filed yet for reimbursement, but Cal Am reps have indicated it would. 

Most corporations have a legal reserve to cover litigation expenses and losses.  In addition corporations often have insurance and reinsurance coverage of potential demands against its earnings.  Cal Am, on the other hand, in its well managed profiteering style, has no such account, or refuses to use it, and is talking about having many ratepayers cover the expense, including those on the Monterey Peninsula. 

Hot Water Question of the Day No. 10

Cal Am is owned at the top by RWE, an international utility holding company.  RWE owns American Water Works as a wholly owned subsidiary, which in turn owns California American Water, along with 21 other state and provincial water works in the US and Canada.  Cal Am is one piece of this transnational conglomerate. 

Hot Water Question of the Day No. 9

Pajaro Sunny Mesa recently completed acquiring several rural water systems in North County as a result of court decisions that transferred ownership from poorly performing ALCO water in Salinas.  This placed PSM in the position of serving the largest geographical area in Monterey County. 

Pajaro Sunny Mesa has initiated procedures to develop its desalination plant to serve that area.  It can be expanded to accommodate other needs like the Monterey Peninsula and the 95-10 demands.  Its offer to do so has a price tag that is about one-third less than Cal Am’s projected cost for its Moss Landing desal plant. 

Hot Water Question of the Day No. 8

After Order 95-10 was issued in 1995, the Monterey Peninsula Water Management District set water conservation goals for all categories of users.  One category called ‘unaccounted for water’ combines uses for firefighting, street washdowns after accidents, and some other public uses.  This category also includes flushing pipes, losses from pump and valve repair, and leaks from poor pipes, inadequate maintenance, poor response to reported leaks, and insufficient replacement. 

This category has historically been about 12%, and continues to be 12% today.  Cal Am has made no progress toward its conservation goal.  Cal Am’s inattention to this reflects the fact that it is partly hidden in public safety activities, and partly because Cal Am has done remarkably little to reduce its own waste.

Hot Water Question of the Day No. 7

Several desal proposals are mentioned in the media, and a few are serious contenders.  Desal plants that will be publicly owned include Pajaro Sunny Mesa, and Monterey Peninsula Water Management District.  The newer REPOG plan is assumed to be in public ownership, but this point has not been finalized.  

Cal Am’s Moss Landing project will be privately owned.  The concept plan by Water Standard Co using an offshore vessel will be privately owned.

There are three small city-based publicly-owned plans in the news.  Sand City for 300AF, Monterey for a private development on Cannery Row called Ocean View Plaza, and another in Monterey for city use.  The Ocean View Plaza plan is for a single private development, but with complicity by the City of Monterey, so it is not a clean public ownership status.

Hot Water Question of the Day No. 6

Hot Water Question of the Day No. 5

Nearly all water agencies apply a block, or stepped, rate structure.  Beyond a basic water allowance are sequential and increasingly higher costs for extra water use.  However, for Monterey Peninsula residents, unique additional factors are applied.  Every household allowance is based on a formula for number of people, AND number of acres, AND number of large animals, like horses.  The more of each, then the higher the water allotment at the lowest cost.  Horses and large lots can qualify a person for lower rates, just like a larger family will.  So horses and acreage equal people.

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Hot Water Question of the Day No. 4

There are three viable desal proposals that are in the works. 1) Pajaro Sunny Mesa has a plan for desal in at Moss Landing to serve its North County population and a larger customer base if desired. 2) The ‘regional water supply plan’, called REPOG, proposes a desal near Marina to serve all customers from Monterey Peninsula to North County. 3) Monterey Peninsula Water Management District has a proposal to serve only the Monterey Peninsula with a desal plant in Sand City. All three make more sense than the Cal Am proposal in Moss Landing to serve the Monterey Peninlula with an extensive, expensive and environmentally destructive pipe line.
Yet Cal Am got CPUC approval to continue to incur costs and charge it to the ratepayers. These costs are in your current Cal Am water bill.

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Hot Water Question of the Day No. 3

Cal Am is, for a change, asking time with the public to go over its various rate increase applications. This is not a time to protest specifically, although you can ask a million questions and be mad too. CA Public Utilities Com will hold its hearing in May for more formal protests. In the meantime, ask a million questions. Why higher top rates for residential users, but not commercial? Has CA fixed its leaks known for years now? How does the capital plan get prioritized? Does the public have a say here? Will Costs related to the Felton issue get charged to Monterey Peninsula customers? Why do we pay for a Desal at Moss Landing if that location no longer looks viable? What savings has CA recovered from it's crackdown on water wasters? Why does the rate structure allow horses and acreage to get credits equal to people? Why does Cal Am need so many new staff? How exactly how does investor money get used by Cal Am if all new capital costs fall on the consumer? What about the IPO Initial Public Offering? More of every kind of question, but the main emphasis relates to increasing rates, yet everything that costs can be questioned.

Hot Water Question of the Day No. 2

Residential customers have a rate structure that caps out at 400% of the basic allotment for extra consumption. Non-residential customers (commercial, industrial, public authorities) top out at 200%. So the penalty on families for high water use is twice that on businesses and public agencies. This means there is less incentive for the heavy users to conserve. How does this make sense? There should be no volume discounts for scarce water!

Hot Water Question of the Day No. 1

The State Water Resources Control Board issued Order 95-10 in 1995 to reduce the overdraft of the Carmel River. Because of lack of progress to sufficient progress to date, it is planning to issue another order—a Cease and Desist Order--against Cal Am. If this order is issued, and is not followed, there may be financial penalties. The CPUC has allowed such fines to be passed on to ratepayers.

The threat is real, and will be the subject of a public hearing on Tuesday, April 1, in the afternoon, at Portola Plaza, the conference center, Monterey.