Q: What is the status of the Coastal Water Project?
As a result of the investment of several millions of dollars of its shareholders’ funds (not ratepayer money), six major milestones have been reached:
A specific site for the project has been identified and the owner has agreed to lease the site for that purpose when the requisite approvals have been obtained.
Detailed environmental, engineering, and financial analyses have been completed for all aspects of the project including the desalination plant, pipelines and storage facilities to deliver the water into California American Water’s distribution system and aquifer storage and recovery in the Seaside Basin.
More than a dozen alternative projects or project configurations have been studied in depth and the configuration selected was determined to the the most cost effective, most environmentally sound, and most practical solution to bring water supply security to the Monterey Peninsula and environmental protection.
Duke has agreed to allow a pilot project to be built and operated for a year on the Moss Landing Power Plant site to gather water and environmental data to further refine the design of the desalination plant. The pilot project has been engineered, designed, and is under construction for installation in early 2006.
An application to build and operate the project was made in July, 2005, to the California Public Utilities Commission (CPUC) in what is known as an Application for a Certificate of Public Convenience and Necessity (CPCN).
As part of the CPCN application, a 3,000+ page Proponents Environmental Assessment (PEA) was also submitted to the CPUC. The PEA contains a detailed environmental analysis of the Coastal Water Project (called the “Proposed Project” in the PEA) including all aspects of the project during construction and operation.
Q: Why is there a need for this project?
The Coastal Water Project will serve three critically important objectives simultaneously: (1) provide a cost-effective and efficient, drought-proof water supply for the Monterey Peninsula; (2) eliminate a significant portion of withdrawals from the Carmel River, especially during its dry season, thus improving habitat for fish and wildlife; and (3) lift the threat of State enforcement of its order (State Water Resources Control Board Order 95-10) if California American Water fails to implement a replacement water supply or fails to meet required conservation levels pending implementation of a replacement supply. The CWP will give our community a high quality, reliable water source for generations to come.
Q: What is the State Order 95-10 and how did it come about?
As a result of actions brought by local residents concerned about the fish and wildlife of the Carmel River watershed, the State Water Resource Control Board (SWRCB) in 1995 held that California American Water did not have valid permits for 10,730 AF of its historic diversions. Because the Order would eliminate the equivalent of about 70% of the Monterey Peninsula's water supply, the SWRCB delayed full implementation of the Order, instead giving California American Water the opportunity to develop an alternative water supply while reducing its pumping immediately by 2,146 acre-feet, or 20% of California American Water’s production during water year 1994. The SWRCB withheld full enforcement of its Order on the condition that California American Water makes reasonable progress in developing a replacement water supply.
Since the issuing of Order 95-10, California American Water has aggressively pursued a comprehensive portfolio of water management methods designed to: (a) comply with the SWRCB's order to reduce pumping from the Carmel Valley Aquifer by 20%, (b) maintain a reliable water service for its customers, and (c) enhance the environment of the Carmel River and fish and wildlife habitat through increased water flows and other river improvements. The portfolio has included water system improvements, water efficiency investments, and Best Management Practices for consumers that help customers implement demand reduction and conservation.
Q: How does the Desalination process work?
Desalination works through a process known as Reverse Osmosis (RO). RO has been proven across the world as a sound technology, that produces the highest quality drinking water available anywhere. Generally speaking, RO desalts seawater in the following manner: First, saltwater is collected through an intake. The saltwater goes through a pre-treatment process to remove sand, debris and other impurities. The treated water then flows into membrane filters so fine that only pure water molecules make it through, leaving the salt residue behind. This salty remainder (brine) is then diluted, usually with raw seawater, and discharged to the ocean through an outfall structure. The desal product water then receives final treatment to make sure it meets drinking water health and aesthetic standards. In the end, desalinated water is both reliable and of the highest quality --meeting or exceeding all federal and state standards.
In the case of the Coastal Water Project, the feedwater for the desalination plant would come from the existing cooling water system at the Moss Landing Power Plant (MLPP) owned by Duke Energy. The feedwater would be used after it has cooled the power plant, so no new or additional water would have to be taken from Monterey Bay. Of the hundreds of millions of gallons of water per day that pass through the MLPP to cool the plant, only 10-20 million gallons will be diverted into the desalination plant. Once the desalination process has occurred, the brine water will be returned to the cooling water system, where it is greatly diluted before it is discharged into the Monterey Bay.
Furthermore, since the existing cooling water system at MLPP will be used for the CWP, no new intake or discharge pipelines will have to be built for the CWP, thus reducing the expense and environmental impacts of construction of the project.
Q: Will Desal be more expensive for ratepayers?
Generally, desalination is expensive compared to the cost of existing water facilities that were built decades ago. However, the alternatives, such as water conservation, have been exhausted. As evidence of this fact, Monterey Peninsula residents' water consumption is only ½ the average for other comparable urban communities. Moreover, the cost of environmental mitigation for the continued use of the Carmel River aquifer is rising every year.
The financial studies that have been undertaken thus far suggest that the Coastal Water Project would increase the water bills for average and above average consumers. For those low-income customers or low water consuming customers, increases will be far less substantial. For the average family of three, it is estimated monthly water bills will increase by approximately $30 for a period of roughly five years.
It is important to recognize that the California Public Utilities Commission (CPUC) strictly regulates the water rates private companies such as California American Water can charge. The CPUC will set the rates associated with the CWP as part of its normal rate setting regulatory process, which only happens after extensive public notice and hearings, and thorough analysis by the CPUC. The CPUC also strictly regulates the amount of return on investment the Company can make as the water service provider for the Monterey Peninsula --the company cannot simply maximize its rates and thereby maximize profits.
Q: What is the official approval process for this project?
To begin the approval process California American Water submitted an Application for a Certificate of Public Convenience and Necessity (CPCN) to the CPUC in July, 2005. The CPUC requires a Proponent's Environmental Assessment (PEA) to be part of the CPCN Application. A PEA of more than 3,000 pages was included with the Application in July. The PEA will provide the foundation for the CPUC's own environmental impact analyses, which will be contained in an Environmental Impact Report (EIR) that will be prepared by independent consultants hired by the CPUC.
Work continues to refine the environmental and engineering aspects of the Project. California American Water’s experts continue to work closely with other scientists and experts surrounding Monterey Bay to ensure all of the best information is incorporated into the ongoing studies and analyses.
Because the CWP is located within the Coastal Zone, as defined in the California Coastal Act, the California Coastal Commission has final authority to issue a coastal development permit. Its decision will be based on public hearings, technical scrutiny of the EIR and implementation of the California Coastal Act.
In the end, the fate of any project proposed by a private utility rests in the hands of the CPUC. The CPUC decides whether the project is in the best interests of the Company's water customers. The CPUC will also decide what costs may be charged to the Company's customers to pay for the project over the years ahead. The process will be one of extensive technical analysis by the CPUC, formal and informal public hearings, collaboration, cooperation, widespread oversight, public participation and a responsible system of checks and balances.
Q: What is included in the PEA?
The PEA studied all potentially significant environmental impacts associated with the Coastal Water Project construction and operation. The PEA examined issues raised by scientists, environmental activists, public agencies and community residents at public meetings. The scientific investigations and interim reports, the results of the public workshops and public hearings are all available at the Coastal Water Project Library.
Topics covered by the PEA include a base water supply alternative analysis, which looks at the local drinking water demand, as well as the potential locations and layouts of project components. Analysis of project alternatives that might lessen effects on the environment include locating the desalination plant north of Marina, using Horizontal Directional Drilling for the feedwater, and other sites for the desal facility, pipeline alignments, operational scenarios and aquifer storage recovery (ASR) sites. Conveyance system alternatives were also examined, including pumping facilities, pipeline alignments, reservoir facilities and ASR requirements. Cultural resource impacts, terrestrial and marine biological impacts, water hydrodynamic modeling and surface drainage were analyzed by the PEA.
Q: Is there potential for the project to be publicly owned?
The Monterey County Water Resources Agency (MCWRA) has been conducting a process among local elected officials, water agency/district managers and boards, and others to see if a public entity can be created to assume the responsibilities of owning and operating a regional water supply project. California American Water has assisted this effort with technical engineering, legal, and financial analyses which it has provided to the MCWRA. California American Water supports the idea that the Coastal Water Project could be publicly owned if a viable and financially capable public entity is available and supported by the community. California American Water remains willing to help that process.
In the meantime, California American Water believes that it must move forward with the Coastal Water Project to meet the water supply and environmental goals described above and to ensure that the residents of the Monterey Peninsula do not become subject to fines or other enforcement measures.
Q: Will the Coastal Water Project result in increased growth and development?
Since it is a replacement water only project, the Coastal Water Project will not result in increased growth and development. At 11,730 AFY, the Coastal Water Project will replace 10,730 AFY historically diverted from the Carmel Valley Aquifer and 1,000 AFY historically pumped from the Seaside Basin. The Coastal Water Project is an environmentally based project intended to significantly reduce the impacts of water diversion from the Carmel Valley Aquifer and to prevent seawater intrusion into the Seaside Basin, which would effectively destroy it as a freshwater resource.
Q: Will this project have significant visual and noise impacts?
Desal projects look like small office buildings. The sound emitted by the CWP facility will be less than 70 decibels at the plant fence. The facility will not be heard by a person standing at Highway 1 and will not be heard over the sounds of traffic from Highway 1, even at night. CWP representatives will work with the community on issues of plant design, location, and screening.
