LWVMC encourages Yes vote on Measure O

The League of Women Voters of Monterey County is supporting Measure O (public water initiative) and is encouraging voters to do the same. According to a statement on the LWVMC's website, it's reasons for supporting Measure O are:

• Cal-Am has not done a good job of managing water resources,
• The ratepayers have had to pay for failed Cal-Am projects, such as prior desalination project proposals and the San Clemente dam problems,
• The desalt plant currently planned by Cal-Am might not be built for years, or possibly not at all, because of various lawsuits and permitting issues,
• Customer service call centers are not local, and therefore staff are not familiar with local issues,
• Reports of excessively high water bill spikes were not responded to in a timely manner, and in some cases, might be the result of manipulation of the billing periods, which threw some users into higher tiers.

Many of their points are well-founded, and there's no disputing that we, as ratepayers, have repeatedly been billed for expenses that should have Cal-Am's responsibility.  However, the League's position doesn't really address how Measure O will help any of this. 

I wish that the LWVMC had a little more information on its website. I like they way they have created two separate sections on their site--one to advocate for the League's position supporting Measure O, and the other, labeled as "voter education", which is supposed to provide non-partisan information about the issue. Hurray, I thought, what a great way to do it.  Unfortunately, there's nothing on the "voter education" page except for a link to a video debate and a list of upcoming yes/no debates. Oh well. I'm sure somebody had great intentions, but, as often happens, it's hard to find the time to follow through. 

To read the League's position, click here. 

Mayor's Group decides to oppose the Public Water Initiative

The group of peninsula mayors charged with finding a solution to the water supply shortage -- officially known as the Monterey Peninsula Regional Water Authority (MPRWA)-- voted last week to oppose the public ownership initiative.

The group had received numerous requests from the public to take a stand on the issue, and were scheduled to consider commissioning a consulting firm to investigate whether it was in their purview to take a stand, what the effects would be, etc. But the mayors, to their great credit, said "the heck with that. We've been involved with the issue for years and know more about it than anybody, why pay a consulting firm to study it?" And with that, they took a stand. They're drafting a statement against Measure O (as the public water initiative will appear on the ballot). Who's heard of a bunch of politicians NOT commissioning a study -- hooray for them on that point, anyway.

 As much as I don't see why we the ratepayers should pay for a facility that Cal-Am will own, I do see where the mayors are coming from. They're concerned that Measure O will slow down whatever progress is being made on getting a desalination plant built. The deadline for finding an alternative water supply is December 31, 2016, and everyone knows that even if everything goes swimmingly from here on out, there's no way a plant can be built and operational by that date. All the key players are counting on the State Water Resources Control Board granting an extension on the order to reduce pumping from the Carmel River by 70% by the start of 2017. If we can show we're well on the way to getting a plant built, maybe they'll give us a little more time. If we still messing about, arguing about the proposals and conducting studies, with no clear plan for who is going to run the plant, the SWRCB is less likely to give us a break.

 The idea behind the Public Water Initiative is to conduct a feasibility study to see if a public entity such as the Monterey Peninsula Water Management District (MPWMD) should purchase Cal-Am's assets and infrastructure within the district, and if it is feasible, to use the power of eminent domain to buy out Cal-Am. There's a whole lot of details that would have to be worked out to make that happen, and maybe now is not the time. Why can't we just get the thing built first, and then seize it? I haven't made up my mind how I'm going to vote yet, but the mayors have definitely delivered the first blow.

For more information,http://www.montereyherald.com/news/ci_25348099/peninsula-water-authority-oppose-public-water-initiative.

So how do the water rates get set?

So how do water rates get set anyway?

Oooh, oooh, I know this one.

Cal-Am files a rate schedule with the California Public Utilities Commission (CPUC) every three years. The filing includes all districts served by Cal-Am in California. CPUC holds hearings, solicits public comments, etc. It can take several years to work through the process.

If the current rate schedule expires before the new one is approved, Cal-Am applies to continue charging the existing rates (which were approved three years ago). When the new (presumably higher) rates are finally approved, Cal-Am is then allowed to apply a surcharge to make up the difference.

About the water bill...

Wow, I can't believe it.

I actually understand everything on the water bill from Cal-Am. It only took me a couple of weeks, and some fun time on the phone with Cal-Am Customer Service, but I've got it.

I've read estimates that the surcharges to be added while the desalination plant gets built could increase the water bills by up to 60%. This is on top of what we're already paying for past failures and messes. So to understand exactly what it is we're already paying for, I went through the entire water bill line-by-line, compared it to the posted rate schedules, pored over related CPUC decisions, and pestered some poor young man at Cal-Am Customer Service who had the misfortune to answer my call (it's not his fault, he was very nice, but Cal-Am doesn't train staff to answer these questions). Now know what all the numbers are and how they got there. I'm a bit fuzzy on the rationales for some of them--the real reason for them is sometimes a bit obscured by the way they're listed on the rate schedule--but I've got the jist of it.

For example, let's say Cal-Am wants to do some test project. They apply to the CPUC for permission to do it, and the track the costs in a "memorandum account". CPUC issues a ruling that includes authorization to create a memorandum account and report back later. Let's then say everything goes well, the project will proceed, and Cal-Am now wants to recover the money they're spent so far from ratepayers. CPUC gives them permission (of course) to move the total from the memorandum account to a "general account" or "balancing account" and add a surcharge to the water bills.  So on the rate schedule, it shows up as some mumbo-jumbo thing like the memorandum account balancing surcharge authorized by decision D00-00-00. So unless you go and read decision D00-00-00, you still don't know what it is.  And even if you do read the decision, it probably includes multiple issues, and references previous decisions and other documents that aren't available online. Getting to the bottom of it can be an exercise in futility.

I've added a new tab to this site -- Water Rates. On the Water Rates page I've attempted to explain all of the charges and fees that appear on the Cal-Am water bill in Monterey County. I used my own water bill as a reference, so some of the information is specific to city of Monterey residents. But if you're crazy enough to try to decipher your own bill, hopefully this information will help.

While I was at it, I also added some information about another water expense we're paying -- the Water Supply Charge that is added to property tax bills.

Have fun.

What is the ORA?

I keep running across references to the ORA/DRA, which stands for Office of Ratepayer Advocates (formerly Division of Ratepayer Advocates). Spokespersons from ORA are frequently quoted in news stories about water issues, and they seem to get involved in various legal proceedings in front of the California Public Utilities Commission (CPUC). Who are these people?

Turns out, ORA is an agency within an agency. ORA is mandated under state law, and is described as an independent entity within the CPUC advocating on behalf of utility ratepayers. In other words, the ORA is charged with protecting the interests of ratepayers vs. utility companies like Cal-Am. You read that right...ORA exists within the CPUC to advocate for consumers. Isn't that what the CPUC does? According to its website, the CPUC's mission is to "serve the public interest by protecting consumers and ensuring the provision of safe, reliable utility service and infrastructure at reasonable rates."

So if a utility company, let's say, Cal-Am, wants to add a surcharge to water bills to pay for some project, it must apply to the CPUC for permission. The ORA then (usually) takes the other side, and argues against the increase. But it's part of the CPUC, so it's kind of arguing to itself. I guess the point is that the utility comes in with all of its reasons why it needs the increase, and somebody has to say why the increase is unreasonable. Seems like a strange system.

Bewildering Bureaucracy

While reading about the Central Coast Regional Water Project (CCRWP), I came across a list that DeepWater Desal prepared of the various regulatory approvals, permissions, etc. that it has to get to build a desalination plant. The list is quite mind-boggling really. In addition to the obvious things like California Coastal Commission permission to build something on the coastline, and compliance with the Clean Water Act and air pollution control regulations, there are also things like getting a pass from the Dept. of Fish and Wildlife in case you accidentally scoop up some up some little fishies that are protected in the intake water, or permission from the U.S. Coast Guard, which apparently has the authority to nix any buildings near navigable waters. Seriously.

I thought it was an interesting list of the number and variety of federal, state, and local agencies that have their hands in a project like this, so I copied the entire list -- see my Regulatory page.  Full credit goes to DeepWater Desal LLC; I didn't put this together, they did.

I also learned, as I researched other public works projects, that it behooves one to consult with other groups, like farmers' organizations, Sierra Club, watchdog groups, etc. to get buy-in on your project before they all start suing. It's a lot of work really -- no wonder it takes so long to get anything done.

DeepWater Desal

DeepWater Desal, LLC has proposed an alternative desalination solution -- or maybe "additional" is more accurate -- that it calls the "Central Coast Regional Water Project" (CCRWP).

It's a well thought-out proposal, with lots of interesting ideas.

It's "additional" because DWD says it intends to go ahead with the project whatever happens with the Cal-Am proposal. In a letter to the California Public Utilities Commission (CPUC), DWD says it is aware of Cal-Am's proposal, but that it's own plant could be a backup in case the Cal-Am project is delayed or doesn't happen.  The MPWMD apparently agrees, as it has contributed $1million towards environmental review of the CCRWP.^* (Keeping up with all these acronyms?)

Anyway...

The DWD plant would be larger than the Cal-Am plant, and serve a larger region, not just the Monterey Peninsula. In Phase I, the plant would produce about 10MGD, scalable up to 25MGD by Phase III.  They're looking at a site next to the Moss Landing Power Plant. Back in the days when PG&E was running the plant it was used for fuel storage, and it still has an easement for a pipeline running out to the bay. DWD proposes to acquire the easement along with the property, and use it to replace with old pipeline with new intake and discharge lines.

Seawater would be drawn from a deep submarine canyon and would supposedly be colder and clearer with less marine life than more shallow locations.

The site would include a Data Center, though it's a bit unclear whether the data center is just for their own purposes, or something that would be leased to other companies and therefore revenue-generating. At any rate, the Data Center would have cooling needs, so the super-cold seawater from the canyon would be used somehow to cool the Data Center, in the process  warming the water before it goes to Desal, reducing the power needs for the desal process (they say).

Another interesting idea is that they have entered into an agreement with the City of Salinas to create a new power utility. This utility would purchase power from various sources, renewable and non-renewable, and resell it to Moss Landing businesses (besides the desal plant). They think this will reduce the overall cost of power, as well as securing a flexible source of power for the plant that is not dependent on the existing power grid.

Also on the plus side, the facilities would be publicly-owned, and operated by DWD. Construction funding would come from the issuance of municipal bonds.

In contrast, the Cal-Am plan calls for a surcharge, starting at 30% and rising to 60% of water bills, to cover construction costs. The surcharge would end once the plant is operational. (But, of course, Cal-Am has added a provision that it can extend the surcharge to cover additional unanticipated costs...what is the likelihood that that will happen?) So it seems the Cal-Am plan would extract a lot of money from ratepayers now, whereas costs for the DWD plan would be spread over the 30-year life of the bonds. Which is cheaper in the long run?  That would require a lot more analysis.

On the down side, the proposal does not include any provision for delivery of the water. That is, the desalination plant would convey the finished water as far as a "transfer point" on its site.  Any agency that wants that water would need to construct its own pipeline up to the transfer point. Not that's necessarily bad, but if this plan goes through, we would be paying not just to repay the bonds (via the rates) but some sort of  separate charge to construct a pipeline up to Moss Landing.

If, for example, Cal-Am remains the water utility but does not build its own desal plant, it would need to construct a pipeline to bring the water from Moss Landing down to the peninsula, for which it would, of course, charge us. (In fact, Cal-Am already received permission from the CPUC to do exactly that, in a separate filing.) If the public ownership ballot initiative passes, then I suppose the MPWMD would get this responsibility. Either way, we'd have to pay for it somehow.

It's complicated.

For more information about the CCRWP (and comparison to the Cal-Am WSP), please see the DeepWater Desal tab or the DeepWater Desal web site.

^* As usual, there's a problem. Water Plus has filed suit to stop the deal, contending that MPWMD has already endorsed the Cal-Am project and can't back two projects at once. See Legal Actions.