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On April 13, Cal Am wrote a letter to the Peninsula Mayors Water Authority, responding to a letter from Public Water Now and other parties citing “alarming deficiencies” on the Monterey Peninsula Water Supply Project (MPWSP). The letter from Public Water now cited lack of water rights and poor science surrounding the slant well ocean intakes proposed for the Cal Am desalination plant.

The Cal Am letter was signed by desal project manager Ian Crooks. An excerpt follows:

The most definitive and best science to determine the feasibility of slant wells is to drill and operate an actual slant well in the proposed project location and observe its performance. Cal Am’s test slant well at the CEMEX property in Marina has accomplished just that and proven unequivocally over its 480 days of pumping that slant wells are a feasible technology for our project. The important indices are yield, reliability and water quality, and results in all three areas are outstanding. (Italics and bold added)

I wish to rebut this statement as vigorously as I can.

Traditional “scientific method” would support Mr. Crooks’ first sentence. Scientific method requires a hypothesis, and the hypothesis of this “experiment” is that a slant well can sustain a continuous extraction rate of 2,000 gallons per minute (gpm) from the proposed location without harming the groundwater. Extensive modeling by notorious hydrogeologist Dennis Williams, president of GeoSciences, was presented in the first environmental impact report iteration in 2015, and was modified by HydroFocus and Lawrence Livermore Labs in the recirculated version now pending. This extensive modeling “finds” that the hypothesis is correct and therefore that the damage to the existing surrounding coastal aquifers of the Salinas Valley River Basin is “insignificant.”

This is where a test slant well comes into play: To test the modeling work with a field test. This is also sound experimental design based on the scientific method. However, it is at this point I must diverge from Mr. Crooks and his statement highlighted in bold above. Let’s examine the “outstanding” results of the thre indices, one at a time: Reliability, yield and water quality.

Reliability

The long-term pumping test began on April 22, Earth Day, 2015, which was 722 days before Mr. Crooks’ letter to the mayors. Assuming he accurately represents that the pumping had continued for 480 days as of April 13, that means the pump had been idle for 242 days, or just over 33 percent of the total time. Who in their right mind would rate a 67 percent reliability performance as outstanding? When I was going to public high school that rate of performance was known as “a D.”

Yield

CalAm has consistently made claims, widely reported in the local papers and public meetings, that the slant well yield has “exceeded expectations,” steadily drawing between 2,000 and 2,200 gallons per minute (gpm) when it is operating. But here is the problem. There is no evidence or data to support the claim within the public sphere. The current EIR presents no such information. The Hydrological Working Group (HWG), a team of hydrogeologists including Dr. Williams, monitor and measure the well’s performance as required by its permit issued by the California Coastal Commission. The HWG is required to post weekly reports on the public website www.watersupplyproject.org and submit monthly reports to the acting director of the Coastal Commission, which are also posted on the website. The monthly reports are nearly 1,000 pages, reporting minutiae gathered electronically every five-15 minutes about the groundwater and salinity levels at the monitoring wells. Yet the yield results about how many gallons of brackish water are being sucked through the slant well and tossed out to sea through the existing outfall pipe appear nowhere in any of the documentation of these lengthy reports.

As far as “yield exceeding expectations,” you will just have to take Cal Am’s word for it, and surprisingly, everyone seems to (and are damned jolly that it is going so well!) However, in my experience, I have learned to never take Cal Am’s word for anything. Except when they tell us our rates are going up. I always believe them then.

Water Quality

Cal Am reports about water quality are focused solely on the level of salinity of the water drawn through the slant well. The company hopes for a salinity percentage as high as possible. The higher the seawater percentage (i.e. the percent salinity of the brackish water), the lower the percentage of fresh water coming from the landward aquifers and the less water that has to be delivered to Castroville to satisfy the agency act in the “return water agreement.” The agreement is a ridiculous plan cobbled together by politicians, bureaucrats and lawyers that could cost ratepayers millions of additional dollars annually and would require an entire essay to describe its stupidity in detail.) These folks are relatively pleased that the salinity was recently measured at 92 percent seawater. However, the percolating winter deluge will likely dilute that percentage, pumping even more freshwater out to sea this spring. They predict and hope that salinity at the slant well will rise to the target level 96 percent seawater or higher once they install sevem more production slant wells, and start sucking out groundwater at over 10 million gallons per day.

You might be wondering how such a volume of pumping could be expected to have “insignificant impact” on the surrounding aquifers and so do I. It seems like magic, and I suspect magical thinking here regardless of what the extensive modeling in the EIR predicts. Fortunately, the test slant well experiment has provisions to collect data on this aspect. Monitoring wells in the area help determine what is going on in the groundwater near the slant well pump.

So, what has happened at the threshold monitoring well in the 480 days out of 722 of the long-term pumping test as of April 13, 2017? The answer is that the salinity has steadily and “very slightly” risen by over 25 percent in that time. That is an alarming number! This result is further accentuated by the fact that in the 26 days prior to the beginning of any slant well pumping (the only baseline there is at the site) the salinity at the threshold well actually dropped by 2.2 percent.

Rising salinity at this spot indicates significant rising seawater intrusion into the basin. Mr. Williams and the HWG claim that these results are unrelated to the impact of a single test slant well operating only 67 percent of the time. They say it is for other reasons, but they do not quantify nor verify those claims with data.

The science is poor because the scientists have a predetermined outcome that goes beyond normal bias. But what can you expect when you are examining science reports from Cal Am and its Crooks?

Michael Baer is a retired public school science teacher,  a 30-plus year resident of the Monterey Peninsula, and a local water activist.

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Friday’s Carmel Pine Cone contained two unvarnished attempts to vilify Public Water Now, the group leading the upcoming attempt at a public takeover of Cal Am Water. George Riley, the extremely water-savvy managing director of Public Water Now, usually doesn’t let the Pine Cone’s excoriations get to him, but this heavy-handed and apparently erroneous attack got under his skin.

In a letter to the Pine Cone and the rest of local press corps, Riley calls reporter Kelly Nix’s front page story on Public Water Now “appalling” and argues that the companion editorial on April 21 was “riddled with inaccuracies, misrepresentations and assumptions.”

Riley goes on to demand a retraction and clarification though he said he doesn’t expect either. Pine Cone Editor and Publisher Paul Miller has been an unquestioning promoter of Cal Am at least since the turn of the century, and Cal Am has been a significant advertiser in the weekly publication. Efforts to control Cal Am’s rapidly escalating price structure or to scrutinize the company’s flawed and increasingly expensive desalination project have been met with derision, even ridicule from Miller.

In the news article on Friday, Nix focuses on a letter to Public Water Now from the Peninsula mayors’ water committee, saying it had been signed by the committee chairman, Pacific Grove Mayor Bill Kampe. In his letter of response, Riley says the letter was not signed by Kampe or anyone else, was not approved by the mayors’ committee and was not even sent.

“People who were at the meeting confirmed that the letter under discussion was not approved,” Riley wrote. “I watched the tape of the entire meeting. The Pine Cone is dead wrong in its report.”

A draft of the letter was considered as a possible response to a March letter from Riley in which he criticized the desalination venture in general and its reliance on so-called slant wells. He correctly notes that the slant-well technology, despite being favored by regulators, has not been put to at any desalination plant in the world. Nix sought to rebut that by quoting Cal Am officials as saying their controversial testing of the technology is going well. The testing process was interrupted by disclosures of conflicts of interests involving the designer of the technology.

“It’s most unfortunate for readers when the Pine Cone reports unsubstantiated information as fact,” Riley wrote. The account “was NOT based on what the mayors said.”

“It must feel exciting for a small paper to believe it has a big scoop, then pontificate with an editorial,” Riley continued. “But it is a serious breach of journalistic ethics, and your responsibility to this community, to fail to verify, or to ignore that step altogether.”

Riley retired as chief housing officer for San Mateo County and ever since has led Peninsula efforts to control Cal Am’s water rates and to put the private company into public hands in hopes of controlling costs.

Direct links to the Pine Cone article and the editorial are not included in this post because the weekly newspaper’s technology does not accommodate linkage. Those wanting to read those pieces can, however, go to the Pine Cone’s online archive (Google Carmel Pine Cone archive or click here) and then click on the line labeled “download this week’s edition” and wait for a download of a facsimile of Friday’s paper.

Nix’s article gives no indication that he sought any comment from Riley before posting his piece and Riley says he was not approached. The Partisan sent an email to Nix before working hours Tuesday and had not heard back as of 11 a.m. This report will be updated if he responds.

Unlike Nix’s story, Miller’s editorial makes no pretense of objectivity.

“… This community’s water activists must be the dumbest people in the world,” he writes.

“Not only do they incessantly fight every single thing that might help eliminate our perennial water shortage, they simply won’t give up on the idea of a government takeover of Cal Am, no matter how many times the public tells them, ‘No.’”

It goes on like that for several more paragraphs. He says the activists are opposed to desalination, slant wells, pipelines and even water recycling “for utterly nonsensical and self-serving reasons,”none of which he mentions.

He writes that the activists “hate private business and have a deep narcissistic desire to get everybody else to hate businesses, too.”

He concludes, “The only intelligent thing for the activists to do would be to devote their energy to helping solve the Monterey Peninsula’s water problem, and stop pursuing their little takeover hobby until the shortage is gone.

“The problem is that little word, ‘intelligent.’ We don’t know how smart the activists are. But anybody can see how stupid they act.”

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Proprietor’s note: Tom Moore, an exceptionally well qualified member of the Marina Coast Water District‘s board, posted the following as a response to a previous Partisan post regarding the wisdom of private v. public ownership, a subject of current interest because of a looming effort to put privately owned Cal Am water under public ownership. As it stands, the group Public Water Now is expected to sponsor a ballot measure that would require a public buyout of the water utility and put it under the management of the Monterey Peninsula Water Management District, which is governed by a board of elected officials.  Moore did not intend this to be a standalone commentary, but it deserves more attention than it would have received otherwise.

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Point 1: The vast majority of public sector organizations, for-profit organizations and non-profit organizations provide significant benefits for their clients and society, at a cost that is as reasonable as their physical, legal and market circumstances allow.

Point 2: If you insist on clinging to the myth that all government organizations are inefficient, inept and run by lazy, overpaid bureaucrats then:

a. You must notify your local fire and police departments, along with the county 911 Center that they must NEVER respond to a phone call or alarm from your home. You must also never accept medical treatment under any circumstances from Salinas Valley Memorial Hospital. To do otherwise makes you a hypocrite.

b. If you really insist on dueling over the issue, then: AIG, ENRON (“Smartest Guys in the Room”), Bernie Madoff, Wells Fargo Bank, IndyMac Bank, Washington Mutual Bank, Bethlehem Steel, White Star Lines (owners of the Titanic), Pan Am, Eastern Airlines, Drexel Burnham Lambert, Bank of Credit and Commerce International, Union Carbide (Bhopal killings), PG&E (recent San Bruno killings), Three Mile Island, Exxon Valdez. How many trillions of dollars were wasted and innocent people injured or killed by these “efficient” private companies?

Point 3: How much do you think Cal Am would charge its customers if it was not regulated by the CPUC and instead all its water rates were set at the sole discretion of the Cal Am Board of Directors?

Point 4: The CPUC regulatory process is arcane, complex, difficult, time consuming and, above all, expensive for everyone involved. Hundreds of thousands of dollars and years can be spent on a given Cal Am rate setting process. The CPUC exists only so that a private company can be in a line of business that must, of necessity, be a monopoly (such as a utility).

Point 5: Marina Coast Water District is a government organization. Its Board of Directors consists of five locally elected citizens who are paid all of $50 per month. This Board meets one to two times a month. All meetings are held locally, not in San Francisco or New Jersey. The public is even welcome to attend these meetings. (Just try to get into a Board meeting at Cal Am, if you can even find out where and when they are meeting….).

Point 6: Marina Coast is beholden ONLY to its customers and the local voters. There are no shareholders to keep happy and no stock price to worry about. By law Marina Coast rates contain no profit and MUST be reasonably related to the actual cost of providing water and wastewater services. When a new rate plan is developed, it is put together for the next 3-5 years. It takes only about four months to develop and approve such a rate plan. The cost of a new rate plan is less than $50,000, including consultants and staff time. And all Board deliberations on new rate plans are done locally and open to the public. The public even gets to weigh in on new rate plans via the Proposition 218 process. So who is the inefficient bureaucracy here: the government owned utility or the privately owned monopoly?

Point 7: Points 5 and 6 can be repeated (with a couple of slight adjustments) for the Monterey Regional Water Pollution Control Agency (MRWPCA). Note: with the cooperation and assistance of the Marina Coast Water District, the MRWPCA will soon be bringing the Cal Am service area 3,500 acre-feet per year of new water. This is the largest amount of new water for the Cal Am service area that has been developed in the past 22 years. And guess what? The MRWPCA is a government owned utility.

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PUBLIC TAKEOVER EFFORT SHOULD BE FAVORED THIS TIME

For much of my journalism career, one of my roles was to offer advice in the form of editorials but it was more of an exercise than a meaningful attempt to get anyone to act a certain way. I considered it a success if anyone read the whole piece and gave it any thought.

The advice I am about to give is different. For one thing, the intended audience is much smaller. It is for the people who make decisions on behalf of California American Water Co., the principal purveyor of water to the Monterey Peninsula. And it is meant to be persuasive and not just informative.

So here goes.

Cal Am, it is time to sell.

For the benefit of your company, your shareholders and the people of the Monterey Peninsula, it is time for you to sit down at the bargaining table and try to work out a fair price for your highly successful and equally controversial enterprise. Coming to terms with the community, without a protracted takeover process, will save you money. It will maximize the return to your shareholders and that, after all, is what you are all about.

So why am I saying this? And why now?

It’s partly because I went to a forum Monday night in Monterey in which the leadership of Public Water Now sketched the basics of the group’s upcoming effort to convert Cal Am from a privately owned, profit-taking business to a publicly owned, public-benefit operation. There were about 140 people there and, as far as I could tell, none of them was from Cal Am. If there had been, I suspect they’d be writing a memo to their bosses making pretty much the same argument I’m making here.

A key argument against a public takeover effort will be that it has been tried before, most recently four years ago, and it failed then. Don’t be fooled. Although Cal Am outspent the public takeover forces 20-1, the margin of victory, was 55-45, closer than anyone expected. If this thing goes to the ballot again, you can expect the numbers to be reversed.

Since the 2013 vote on what was called Measure O, the rates Cal Am charges its customers have risen dramatically, more than doubling in many cases, and they are poised to keep going up, dramatically, for as long as the company owns the water operation. A key argument against Measure O was that a public takeover wouldn’t be cost effective. Cal Am has crippled that argument by squeezing every ounce of profit out of its customers.

The last straw for many Peninsula residents was the company’s successful effort to raise rates to make up for money it didn’t make while the community was working hard to conserve water because of drought. Cal Am wasn’t alone in this extraction. Many publicly owned water systems in the state did the same thing, but they weren’t dealing with such expensive water.

Here’s more. The 140 people at the meeting Monday night weren’t a bunch of fuzzy-headed activists. There were past and present members of Peninsula city councils and the water management district board. There were lawyers and retired CEOs. This wasn’t a bunch of twenty-somethings. This was a bunch of sixty-somethings, people who know a little something about elections. Many of them stopped to make  campaign contributions on their way out.

Also in the crowd were numerous people who were active in last year’s Measure Z campaign. That was the successful measure to ban fracking in Monterey County. Exxon and Mobil made like Cal Am and piled big money into the fight to defeat the measure. By the time it was over, they had spent more than $5 million on slick and tricky advertising that twisted the measure’s intent. In the end, Measure Z passed with more than 55 percent of the vote, a result that should scare the heck out of Cal Am’s accountants.

One of the speakers Monday night was the woman who ran the Measure Z campaign and the similar campaign that accomplished the same goals in San Benito County. She knows how to run a grassroots campaign, and so do many others who were in the room.

The people who ran the Measure O campaign were there Monday night, of course. The ringleader is Public Water Now’s George Riley, who knows almost as much about water as Cal Am. After Measure O went down to defeat, Riley didn’t walk away to lick his wounds. He dug into water issues. He continued studying Cal Am and he studied the campaign it ran against Measure O. It is safe to say he learned a lot in four years.

Four years ago, the focus of Cal Am’s fight against Measure O was the company’s desalination project, its complex and expensive answer to the Peninsula’s chronic water shortage. Cal Am campaign ads hit hard on the theme that a public takeover would delay the desalination project, which, the advertising assured us, was looming just over the horizon.

George Riley

Four years later, the desalination venture has added untold millions of dollars to the future financial burden imposed on Cal Am’s customers, but groundbreaking is no closer.The project has been stalled by technical issues and conflict-of-interest concerns, perhaps even by lack of will on the part of Cal Am. At the moment its product is something it pumps for free from the Carmel River. Even though state utility rules guarantee that it will make money in the process, getting a desal plant built is a difficult and expensive task. Critical issues, such as water rights and basic pumping technology, remain unsettled.

At the same time, alternative solutions to the Peninsula’s water shortage have moved ahead, including a plan for an ambitious water recycling project that just last week received approval for the bulk of its financing plan. That is something Cal Am’s desalination planners can only dream of.

What that means is that the need for a large and expensive desalination plant is weakening. As it stands, Cal Am looks to charge its customers hundreds of millions of dollars to treat much more water than the Peninsula needs, water that likely would be used to create subdivisions for which there is no demand. No wonder political support for Cal Am is drying up.

Cal Am officials likely have noticed the uptick in letters to the editor critical of Cal Am and its ridiculous water rates. Those letters are from actual bill-paying customers, not Public Water Now activists. The issue of Cal Am rates is not just something for Public Water Now to turn into a slogan. Real people are really upset with the cost of water and don’t like it one bit that the cost here is about as high as it is anywhere.

A lot has changed in four years. When Measure O was on the ballot, the Peninsula mayor’s water advisory board played a key role in urging its defeat. The makeup of that board has changed. Most notably, former Carmel Mayor Jason Burnett is out of office and out of power. It was Burnett who coalesced the mayoral opposition to Measure O and who coordinated strategies with the Peninsula business community’s support for Cal Am. For elected officials, supporting Cal Am politically is far riskier now than was then.

As Riley pointed out Monday, the makeup of the water management district board has changed as well. That’s important because the district would become the initial operator of the water system once Cal Am was removed. Former Sand City Mayor David Pendergrass is gone from the district board, along with his unflinching support for Cal Am. New county Supervisor Mary Adams is going onto the board, bringing her brand of quiet progressivism with her.

If the ballot measure proceeds, Cal Am officials will spend millions fighting it while telling the shareholders that they are protecting the investment. Then, when the measure prevails, Cal Am will spend millions in litigation, fighting the election results initially and then watching as platoons of $500 per hour lawyers negotiate over the public purchase price of the system. In the end, a court, not Cal Am, will decide on the purchase price.

Cal Am officials on the Peninsula have insisted for years that their system here is barely if at all profitable, yet they have made it clear that they will fight to keep it. If anyone knows any Cal Am shareholders, you should send them this piece and encourage them to ask the company whether this fight really makes sense. Doesn’t it make more sense to start negotiating the price now?

It is time for the company to recognize that the tide has turned. By working every angle to squeeze maximum profit out of every aspect of the operation, they have invited a takeover by a publicly operated management structure intent on public service rather than rate of return.

I don’t mean to suggest that the takeover effort is a slam dunk if Cal Am resists. It will require tremendous energy and effort. But by every indication, there is an ample supply of energy and will and a diminishing set of reasons to keep Cal Am around.

So, Cal Am, if you’re thinking like the good corporate citizen you claim to be, you should conclude that it was nice while it lasted but it’s time to move on. And even if you’re thinking like the calculating enterprise that you really are, you should realize that sticking around means throwing lots of good money into a pot you can’t win. To steal a line from the anti-Measure O campaign, it’s a risk you can’t afford.

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I read with great interest Royal Calkins’ post summarizing the efforts of Public Water Now members and supporters to work for public water to replace private water historically provided by Cal Am.  The comments I have seen thus far in response are from regular commenters on the blog, so not much new interest seems to have been ignited.

I have been an avid supporter of prior and current efforts by many to accomplish the demise of Cal Am on the Peninsula. The ratepayers of the Monterey Peninsula do not deserve to be the receivers of what is now considered the most expensive water rate in the country.   They deserve to have a public agency, which would, in theory, provide much less costly rates, real accessibility to the decision-makers, and the ability to remove from office at the ballot box those officials who don’t live up to the ratepayers’ expectations.

Trouble is, in order to determine the potential for those lofty and necessary goals and dreams, it is more than necessary to consider the entire context of the ongoing war, which has spanned over several decades and has been fought so hard by the few but incredibly committed and knowledgeable men and women on behalf of all fellow Peninsula ratepayers.

But before discussing the hurdles, this point is important.  George Riley, head of PWN, Ron Weitzman of the Water Ratepayers Association of the Monterey Peninsula, Marc del Piero, and dozens of other activists already are fully aware of the challenges. They have toiled long and hard with their own money and time on behalf of all of you who are affected by exorbitant unfair rates. Many people know of them, have read their commentaries and understand that a few people are fighting for all of them.  But I bet very few people realize all the hurdles that must be overcome.  It is my hope that when the public becomes aware of the scope of the effort they will want to join in the fight.

The hurdles are all known:  politics; the difficulties inherent in the process of acquisition, with all of its legalities and uncertainties; timing; gaining the vocal and active major support across the board from a strong majority of affected ratepayers; and, last but not least, money. And there is another important hurdle, the Monterey Peninsula Water Management District.

It is already known that the mayors, as nominal leaders of their cities, have thrown their support to Cal Am from the very beginning, starting with the formation of a joint powers agreement they formed to work “fairly and openly” to bring the most “effective and cost-effective” water supply to their constituents.  That hasn’t worked out. I am not pointing a finger at any individual but am looking at the wide picture. People who seek public office want to stay there, usually for very good and ethical reasons.  However, they find out immediately that, in order to do so, they need the support of the people who have the influence, time and money to promote those influences. Therefore, the heads of cities financially dependent on the hospitality industry are less likely to take public stances that are not favored by those who have influence in that industry. The cost of water is not so concerning to the industry as it has the means to pass on additional costs to their customers.  As we all know, residential ratepayers do not have that option.  But, probably in the minds of the mayors, the ability to keep the Peninsula’s economy humming trumps their willingness to go to the mat against the California Public Utilities Commission and Cal Am. During the past Measure O effort to acquire Cal Am, guess who dumped lots of cash to defeat the measure. Cal Am with support from hospitality big-wigs. Not a surprise.

There is more than one option for the acquisition process but only one is capable of success. California law gives the authority to local governments to acquire land and assets from private utilities, primarily by simple purchase of through eminent domain. The problem is Cal Am will not sell any of its land or assets. it will not be a friendly negotiator in the eminent domain process and it has publicly stated that it does not fear litigation. So, if even the new measure passes, the cost of acquisition would need to be studied, at a rather hefty price. If it clearly concludes that acquisition is feasible and will ultimately lead to a lesser burden on ratepayers, it could then lead to an acquisition process filled with hurdles.

Timing is critical.  If the process of retaining counsel, etc., is stretched out, the first election date might not be until next spring when other local issues and re-elections take place. That might work for the proponents, but any distraction is a problem.  The campaign needs to attract motivated and committed members of the public who will spend their time and money in full support of the measure. Working against that is the fact that the previous measure fell short in each city on the Peninsula.

Aiding the effort, Cal Am has shot itself in the foot with its outrageous rate increases. More and more people are expressing their anger for having to put up with rates that make water almost an unaffordable necessity.  But even so, a critical mass has not yet coalesced to provide PWN and its fellow activists necessary to make a much stronger statement at the polls. I am not sure if the response to Royal’s piece is indicative of that, but the commenters who posted were persons who regularly do so, and didn’t include any or many new names who are coming on board with their anger and concern.   More work needs to be done and it takes time AND money to do so – both hurdles in themselves.

Money. Cal Am has access to as much money as it needs to fight off its opposition.

Finally, there is the water district. There has been talk of creating a new joint powers agency to take up the mantle and provide public water once Cal Am is defeated.  That option is a hurdle by its very nature – joint powers agencies are formed by two or more local jurisdictions.  Given the political bent of current local jurisdictions (e.g., the cities), there is not much reason to believe that a new combination of the same parties would not end up same old same old.   A better choice is the MPWMD. After all, it is a water district with jurisdiction over the entire Peninsula. It has a large and capable staff and a proven leader in its general manager.  However, the district is not clean of internal hurdles either.  It has been incapable of implementing a solution to the long-standing water supply problem (although the voters rejected some options sought by the District). The makeup of its board and how it is selected need a new look.  Five members of the board represent five districts and are directly elected, and that is good.  However, two members are appointed, one by the county Board of Supervisors and other by a city committee.  The problem is that the statute does not dictate that the supervisor must be from a supervisorial district that represents at least part of the water district’s area of responsibility, and the method of appointing a city representative is completely inconsistent with the actual language of the statute.  More importantly, a supervisor from a district other than supervisorial districts 5 and 2 (the ones that cover part of the Peninsula) has never been appointed, but the statute allows for that not to happen.  And, with respect to city reps, while the illegality of the history of appointing a city rep (which nobody really cares about), there should be a separate agreement that the rep chosen should rotate on a regular basis among all of the six Peninsula cities.  As it has stood, one man, the mayor of the smallest city on the Peninsula, has represented all of the cities for decades. Those with more at risk should have the greater opportunity to sit in that seat.

No matter if the new measure is passed and the water district is named to succeed Cal Am, there are some procedural issues that need to be addressed if the public is going to have its expected access. The district board rigidly follows the three-minute speaking rule for public comment. Perhaps members of the public could petition for spots on the regular agenda rather than having to make a point in three minutes.

Further, no one should expect that a public agency would not raise rates. It would when necessary. Hopefully, that would only occur after hearings in which groups ratepayers with similar points to make could be agendized.

The bottom line is, for public water to really work, the board of the district has to be in full support of the effort and the process has to be transparent and accessible with real, not symbolic,  input from the public.

Bill Hood is the former executive director of the Association of Monterey Bay Area Governments. He is also a retired water lawyer and engineer who divides his time between Ohio and Carmel.

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Public Water Now, the activist group that has been pushing for a public takeover of Cal Am Water, is asking the various regulatory agencies to put the company’s desalination project on hold until it addresses two sticky and expensive issues.

And if the agencies, particularly the California Public Utilities Commission, do agree to a timeout, look for Public Water Now to use some of that time to launch a renewed effort toward a public takeover of the privately owned utility.

In its campaign against the Measure O takeover initiative in 2014, Cal Am argued that it could not move ahead with the complex desalination project while also having to combat a takeover campaign.

Public Water Now leader George Riley would not comment on that possibility this week though there has been talk of a new ballot measure at the group’s most recent meetings. Others involved in the group have hinted at another takeover measure and have said a decision should occur within months.

In a statement attached to the letter to the public agencies, Riley wrote, “Public Water Now continues to focus on the high cost of a new water supply. PWN knows from experience that ratepayers will pay for Cal Am success, delay or failure. PWN continues to believe there will be litigation on Cal Am’s desal proposal. PWN hopes that public officials will pay astute attention to the potential for delay, and possibly failure, from litigation.

“Meantime, the need for a reliable water supply continues. And Cal Am costs continue to pile up. PWN believes that the potential for complete financial disaster to ratepayers can be reduced, if not avoided altogether, if two important issues were addressed soon: 1. the weak science surrounding the test slant well. 2. the lack of water rights.”

Cal Am’s long-delayed desalination project depends on slant-well technology that aims to reduce the impact on aquatic life. For various reasons, including conflicts of interest involving experts involved in the testing, the company has had difficulty demonstrating that planned technology can work here. In its letter, Public Water Now notes that the technology is not in use anywhere.

The letter also points out that as part of its project, Cal Am intends to use water from the Salinas Valley aquifer though it has no rights to the water.

A Cal Am takeover has been the subject of two previous ballot measures, which both went down to defeat. The first was simply advisory. The second, in 2014, would have required the Peninsula water management district to conduct a feasibility study and then to proceed with a takeover if it was deemed feasible.

The measure received 45 percent of the vote, short of a majority. Cal Am hailed that as proof of public indifference to a takeover but supporters of Public Water Now argued that it was a strong showing considering that the water utility had spent millions of dollars on deceptive advertising to combat the effort. The group’s polling showed that absentee voters who voted early, at the height of the Cal Am advertising blitz, favored Cal Am’s position while those who waited to hear response to the advertising heavily favored the takeover.

Likely a significant factor in Public Water Now’s thinking is the fact that Cal Am’s rates have risen dramatically in recent months, in large part because the state Public Utilities Commission is allowing water agencies to charge customers now for water that wasn’t used because of conservation measures during the recently ended drought.

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????COMPANY HAS NO RIGHT TO SOME OF THE WATER

Back in July 2013, a settlement agreement was reached between California American Water, local water agencies, certain ag interests in the Salinas Valley and several non-profit agencies including the group now known as Public Water Now. The agreement related to Cal Am’s proposed water supply project that involves building and operating a desalination plant in the vicinity of Marina.

Public Water Now is headed by George Riley, a well-known leader in the ongoing effort to seek fair water rates for Peninsula residents. Public Water Now signed the agreement not because it was in full support of the project but because, as a party to the agreement, it would be entitled to participate in reviewing draft reports and other activities. It would be in the loop rather than on the outside.

The settlement agreement contains important language that gives the parties, including Public Water Now, the right to challenge the project’s source of water if it is shown to harm the Salinas Valley Groundwater Basin or the Sand Dunes Aquifer in the Seaside-Marina area. It is unlawful to extract water from one groundwater basin and transfer it to another. Water taken from either or both of those sources and used by a desal plant would be unlawful. On top of that, Cal Am has no underlying legal right to either source.

Therefore, Cal Am turned to the idea of drilling slant wells under Monterey Bay in order to reach sea water for desalination. Drilling data, however, have clearly shown that significant amounts of fresh water, not totally saline water, is in the water pumped so far, meaning Cal Am is pumping water to which it has no legal rights. Further, in spite of Cal-Am’s continuing arguments that slant wells are a tried and true method of obtaining water for a desal plant, the company has provided no proof of that, and Public Water Now has determined that no ocean desal plant in the world is served by slant wells.

Given these facts, Riley sent two emails in 2015 and 2016 to all parties before the California Public Utilities Commission in connection with the continuing hearings on Cal Am’s project. He wrote that he and Public Water Now were exercising the right under the agreement to withdraw support for slant wells and to actively work for legal and reliable alternatives. He provided the necessary facts on the record to support his claim.

Neither email was incorporated into the record.

In response, Cal Am and its supporters had their lawyers submit a “Motion to Strike” Riley’s emails.

The motion asserts that the emails were sent “ex parte,” meaning sent without notice to other involved parties, including a decision-maker. Even though the other involved parties did indeed receive notice, the CPUC prohibits such communications if a decision-maker such as an administrative law judge is a recipient. The administrative law judge was, in fact, a recipient.

The underlying purpose of limiting ex parte communications in a judicial or quasi-judicial setting, such as the CPUC’s administrative action involving Cal Am, is to ensure that no party can gain an unfair advantage by communicating off-the-record with any decision-maker.

IMG_1198 copy

George Riley

It is important to note that administrative law judges do not have decision-making authority on substantive matters. They make procedural decisions but their opinions on matters of substance are only recommendations to the commissioners. None of the five commissioners received the emails, so the integrity of the process was not compromised.

If Cal Am succeeds in having the emails stricken from the record, important facts will be kept out of the record upon which a final decision will be made on the desal project.

What are they afraid of?

If the information and facts offered by Riley and Public Water Now were faulty, why would Cal Am be so concerned about them and go to such effort to have them stricken from the record?  They are concerned about those facts because they are the basis for showing the world the mistakes, misleading statements and other errors that have increased the project costs that will probably be transferred to ratepayers.

The motion asserts that the time for “commenting on the agreement” had long passed when, in fact, the emails were not comments on the settlement agreement. The emails address issues that arose after the settlement agreement. Since the settlement, concerns about the slant wells have evolved, including conflicts of interest involving the man who designed the wells and the validity of the data collected from test wells.

So it comes down to this. The emails were, by a strict definition, ex parte communications prohibited by the PUC. But at the same time, the substance of the emails had nothing to do with comments on the settlement agreement. Rather, they were direct communications necessary to notify all parties involved that Riley and Public Water Now had gathered sufficient evidence from the record to support the exercise of the right to challenge the source of water for the proposed desalination plant.

If the motion is adopted by the administrative law judge, facts that are not supportive of Cal Am would never see the light of day. The motion also threatens serious sanctions against Riley and Public Water Now.

The motion to strike is inappropriate and PWN’s emails should be incorporated into the record. Fairness and equity also demand that the final decisions in this case be determined on the basis of all the facts that should be contained in the entire record. As such, facts adverse to Cal-Am should be included as long as they are facts and can be supported as such. Riley has made that case. Justice demands that the motion fail. If it is adopted, the administrative law judge should direct Riley and Public Water Now to resubmit their materials in another format.

Hood is a retired lawyer and engineer who divides his time between Carmel and Columbus, Ohio. He is a former executive director of the Association of Monterey Bay Area Governments.

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Colourful lollipop on green background with copy spaceExpect oil industry to pull out all stops to fight Monterey County anti-fracking initiative

Most Americans are familiar with Abraham Lincoln’s famous saying that, “You can fool all the people some of the time, and some of the people all the time, but you cannot fool all the people all the time.” I think that’s good, as far as it goes but, nowadays, it doesn’t go far enough – and that’s where the Turner Corollary (TC) comes in.

The TC states that “With the help of a slick, professional, high-priced public relations campaign, you can fool most of the people most of the time.”

I tell you this because, if we are successful in our efforts to get an initiative on the November ballot to ban fracking in Monterey County, you can expect to be subjected to the slickest, most professional and most expensive public relations (PR) campaign to defeat it that the Petroleum Institute’s (PI) bottomless pockets can buy.

Although I have indulged my ego by naming the corollary after myself, I am certainly not the first person to notice the connection between corporate PR campaigns and the defeat of grassroots political campaigns.

John Stauber is a progressive political activist who noticed, in the 1970s, that he would enter a campaign (to halt construction of a nuclear power plant, for instance) with polls showing that his side had a 60-40% lead only to end up losing the election by 60-40%. He, also, noticed that the opposition (the nuclear power industry, for instance) mounted a very slick, professional and expensive PR campaign that was very effective in changing peoples’ minds. Very few of the factors that changed minds had anything to do with honestly demonstrating that nuclear power was safe or that the claims made by the anti-nuclear folks were wrong. Rather, by repeating lies and half-truths over and over in every media (TV, radio, print, mail – and add all of our new social media today) and even using people paid by the PR campaign canvassing door-to-door extolling the virtues of nuclear power. These folks did not identify themselves as being paid by the PR campaign and tried to appear, as much as possible, as simply concerned and involved citizens who just wanted to counter the anti-nuclear position.

Stauber’s growing understanding of how these PR campaigns were resulting in his causes losing elections led him to research the PR industry, in general, and the dirty tricks employed by these PR campaigns, in particular, that contributed to those losses. You can read about this in his 1995 book, co-written by Sheldon Rampton, entitled, Toxic Sludge Is Good For You : Lies, Damn Lies and the Public Relations Industry. Although the book is over 20 years old, it is as relevant now as it was then.

Incidentally, these PR techniques work because (or only when) they are unopposed. And they are usually unopposed because legitimate grassroots organizations – like Public Water Now in 2014 and Protect Monterey County in 2016 – rarely have access to the millions of dollars that corporations have. In 2014 Cal Am outspent Public Water Now $2.5 million to $100,000 on the measure favoring public ownership. That’s a 25:1 advantage.

We can expect to see a similar asymmetrical assault by the PI against our fracking ban. As a matter of fact, it has already begun. Ads by the PI have been appearing on TV, for months, extolling the virtues of oil production in Monterey County. The good news is that the situation is not hopeless. It is possible for grassroots political campaigns to defeat the PR campaigns of these rapacious corporations with the application of “people power.” If we are successful in mobilizing enough people to go door-to-door talking to their neighbors, explaining our position and exposing the lies of the PR campaign and its shills who may also be knocking on doors, we can be successful in the general election.

One final thought. The unfair advantage that wealthy people and corporations with limitless funds have in U.S. elections has been going on for so long (long before Citizens United in 2010) that most Americans don’t even bother remarking about it – if they notice it at all. They act as if this money imbalance is just an inevitable part of the political environment – which it isn’t. But that discussion will have to wait for another essay.

Turner, a retired Monterey dentist, is a community activist.

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????

It is an intriguing announcement from Public Water Now publicizing a Jan. 12 presentation on the Cal Am test well now in use in Marina.

“Cal Am’s Test Slant Well: Facts, Fictions and Questions.” That’s the name of the event.

The news release goes on:Public Water Now (PWN) has researched this for more than a year.  There is much that Cal Am is not reporting.  Neither are the media. We have facts. We will expose what we have, where it differs from Cal Am’s version, why it is important, and what we can do about it.

Come for the unreported story.  It is overwhelming.”

Quite a bit has been reported, of course. After delays of various sorts, Cal Am is testing a so-called slant well drilled at the site of the Cemex plant on the shore north of Marina. It is slanted so it could pump water from beneath the floor of the bay, turning the ocean bottom into a filter of sorts to limit the amount of sea life suck into the proposed desalination plant.

Sounds simple but the associated issues include the amount of sea water pulled into the pipes, the salinity, the amount of ocean life included, the impact on the groundwater supply both near and far and the economic viability of the process.

From the news release, it appears that Public Water Now and water activist George Riley have come up with more to be concerned about. I know they have my attention.  It’s at 7 p.m. Tuesday Jan. 12 at the Unitarian Universalist Church, 490 Aguajito Road, Carmel. From Highway 1, take Aguajito east off the freeway, away from the ocean, and you’re almost there.

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????

The following is my Aug. 7 letter to the California Coastal Commission’s executive director, Charles F. Lester, regarding the Cal Am test well:

Dear Mr. Lester,

Public Water Now (PWN) is the group that discovered the patents owned by Dennis Williams and Geoscience. PWN alerted the public about potential conflicts of interest. PWN is also the group that has harped on the phrase issued by the State Water Resources Control Board about pursuing subsurface intakes, “if feasible,” prior to pursuing other options.

I am writing to alert you to related issues that I hope you consider in the review of an amended permit for Cal Am, and the follow up monitoring and evaluation of data and circumstances re this test slant well.

PWN is well aware of the desire by you, the State Water Resources Control Board, California Public Utilities Commission, and others in the state that want a successful subsurface intake for desal facilities. PWN is also aware of the environmental reasons, and we do not disagree.

But PWN strongly objects to several factors that are in play, and you have a role in considering them.

How does the CCC remain objective and focused on the facts when it has a obvious public policy to support subsurface intake? PWN questions the depth of objectivity CCC will bring if the overlying policy goal is a successful subsurface intake for desal. Will CCC go the extra mile to guarantee its objectivity and interest in validated data and analysis? Is the CCC open to looking beyond the face value of the data it receives?

The patent royalty relationship between Dennis Williams/Geoscience and the driller –Boart Longyear – has not been queried. Is it possible that substantive financial relationships exist between these two that could cause the data to be skewed to serve ulterior motives? Will CCC look into the contract relationship between Williams and Boart Longyear? Will CCC determine there are no royalty and shared self interests in the contracts or in the actual test well operations that could skew their reports?

Will CCC question the financial relationship of these key sources of data and opinion?

PWN has felt for some time that the specific test period got cavalier treatment by the CCC. I made this very point at your hearing in November 2014 on the initial permit. Since slant wells are not in use anywhere in the world, how can CCC not absolutely insist on a valid test period? Not knowing what is a valid period, surely sophisticated professional attention is required. What is a valid test period? Will CCC opine on this? Will CCC prescribe a valid duration for the test period?

The only known subsurface intakes for desal have occurred in California – Dana Point and Sand City.

1) Dana Point results after 18 months of test slant well pumping are these: no conclusions on viability; some sand infiltration problems; and pumping efficiency declined from over 90% to about 55% over 18 months.

2) The data from the Sand City vertical subsurface wells for a small 300 acre foot/year plant shows actual pumping efficiency over 4 year of operation to be in serious decline:

From Sand City Public Works, calendar year:

  • 2011 96.8%
  • 2012 69.6%
  • 2013 64.8%
  • 2014 60.8%

From Monterey Peninsula Water Management District, water year

  • 2011 91.9%
  • 2012 80.7%
  • 2013 62.3%
  • 2014 59.5%

This data on Sand City tells a very negative tale about reliability, and therefore viability. Why does pumping efficiency with subsurface intake decline so significantly over a few years? Dana Point and Sand City data clearly make this point! Has the CCC considered this? This is why a valid test period is critical. Experience so far does not dictate a “full speed ahead” mentality. In fact it screams out for caution. And to be skeptical about any optimism about short term data. The telling will be in the testing, and in the duration, not the first data available.

Will CCC require a legitimate test period of two years or more? Remember, Cal Am originally proposed a two year test period. But with unexplained lower performance at Sand City, is two years adequate?

Every diagram example in all sources describe slant wells as penetrating far enough under the sea floor to extract water from beneath the sea floor. The intent is clear – to avoid aquifer interference, and perhaps to avoid related water rights claims. But the Cal Am test well does not penetrate the vertical line at the mean high tide line. It stops landward of that line. Would this “test well” meet your normal standard for a test of under sea floor intake? The fact that it did not extend under the sea floor area should raise questions about design or engineering?

Was the drilling length too risky or difficult? Was the drilling capacity limited in some way? Is this an issue for feasibility? Was the design under the patents too limiting? Should horizontal directional drilling still be an option? Are there more experiments that should take place? Did the insistence on the removable casings create engineering demands that were excessive? Could the guidelines from the State Water Board have established too high a level of outcome that was too expensive for success? The fact of a shorter test well length than intended (by the proponent, the patent holder and the public promotion) must get questioned regarding its use as a “test”?

Furthermore the plan of Cal Am to proceed directly from a short test period into a development permit for nine production wells makes a farce of all the publicity about the “test well” being a legitimate test well! The plan of Cal Am is based on assumptions, not tests. There are enough questions about long term performance reliability and cost acceptability that should ring alarm bells at the CCC, and elsewhere.

Working out the details and the costs of this experiment should not fall on the ratepayers. This is a state-sponsored requirement, and should have significant state funding. I doubt you have access to funding assistance. At least you might acknowledge the unfairness of the state, and the corporate utility, foisting this unproven and little scrutinized experiment on ratepayers.

The CCC, having jurisdiction over the efficacy of slant well impacts, and having a deep interest in the long term success of subsurface intakes, should have a particular interest in seeing that it is done right. This is too new for the CCC to feel comfort in self-interested promoters and contractors.

Whatever happened to the precautionary principle?

If there is to be a successful test, there must be conscientious and professional attention to the fact that slant wells have never been successfully constructed and become operational anywhere in the world.

Costs can become astronomical, and should not fall exclusively on local ratepayers. State resources must be made available, since it is a policy goal of several state agencies for subsurface intakes. And the facts of declining pumping efficiency should also raise alarms.

We sincerely hope you will take these issues into account during deliberations and analysis of Cal Am’s amended permit.

Respectfully,

 

George T. Riley
Managing Director
Public Water Now

Emailed to: tom.luster

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Vote no campaign and protest signs for a political or social issue in an election resulting in a group demonstration protesting to stop a law  or policy made by a politician on an isolated white background.BILLS FOR SOME HOMES WOULD JUMP 43 PERCENT

Public Water Now is launching a protest to Cal Am’s recent request for a rate increase. Although Cal Am may feel under-funded, we ratepayers are under-represented and under-appreciated.

Public Water Now has settled into the role of watchdog, but now feels the need to pursue action with a stronger and stronger voice. Because we were relentless in seeking a review of the water rate structure, Cal Am recently acquiesced.  Our main interest was to compare and understand the significant differences between residential and commercial rates. We are not convinced that things are fair. And so far, neither Cal Am, nor the commercial interests, has been able to explain how the stark differences are fair.

We did get a meeting with Cal Am officials a few weeks ago on the new rate design. We were told to expect 1) removal of the allotment system, 2) a compressed rate structure, and 3) a shift of costs to the fixed meter charge and away from volume and usage charges. The community’s success at conservation has Cal Am in a tizzy. When the Herald carried the news of the specifics, I was stunned because only days earlier Cal Am had not shared with us the size of the increase (averaging 29% for residential), nor the commercial decrease (averaging 14%), nor the short time period for protest, ending on Aug. 12.

I remember a California Public Utilities Commission workshop in 2012 where Cal Am proudly announced its research showed that higher rates would not cause reduced use. The Peninsula was different, Cal Am said. Cal Am’s view of price elasticity was the opposite of other research Cal Am shared that was unanimous in concluding that the higher the price, the lower the demand. I remember calling Cal Am out on this, in front of about 25 interested and mainly local parties, about its counter-intuitive statement. I was criticized by Cal Am for doing so. It seemed wrong then, and it surely has proven that Cal Am’s research expert was totally wrong.

Cal Am has a serious under-collection of revenue because it misjudged the elasticity of demand. For a protected utility without competition, it has no experience in the business of economic dynamics. Why so many seemingly savvy local business people support Cal Am is mysterious. It boggles the mind to witness such corporate incompetence.

Cal Am’s current rate request is on this link.

My conclusions and the points of protest are these.

  1. Cal Am is using conservation, and the cease-and-desist order and drought crises, to piggyback its under-collection performance. The underlying pitch is to shore up its revenue stream. Guaranteed revenue is the point. This is an inappropriate rationale, timing and method to restructure Cal Am’s entire revenue picture.
  1. The proposed protest period is excessively short, ending Aug. 12
  1. Cal Am has called for workshops, but none has been scheduled by Cal Am or the water management district. This shortcoming undermines the deadline.
  1. The residential rate for Tier 1 users goes up 43%, far exceeding the reported average of 29%. This is where the main water conservers have ended up, so now Cal Am will get its piece of gold from them. It is also where most voters will begin to feel the heat of Cal Am costs. The more we conserve in the public interest, the more we serve the corporate interest.
  1. The commercial rate decrease is not explained, which calls into question if the commercial rates still create an incentive for conservation as advertised.
  1. The fact of under-collections proves Cal Am has not had a rational revenue structure, or it proves Cal Am is inefficient in its management.  Both should be evaluated.
  1. Cal Am revenue reports, contained in its application (link) shows plenty of income after expenses.  Where and how is Cal Am under-financed?
  1. Cal Am claims, but does not explain, how it is less costly to have these new rates.

Protests can be filed by email (below).  In correspondent to the PUC and the Office of Ratepayer Advocates, you should refer to the case number, which for now is  A.15-07-?  (The question mark is correct for now)

Public Utilities Commission: public.advisor@cpuc.ca.gov

Office of Ratepayer Advocates: richard.rauschmeier@cpuc.ca.gov

Monterey Peninsula Water Management District: arlene@mpwmd.net

Monterey Herald: mheditor@montereyherald.com

Monterey County Weekly: mail@mcweekly.com

Monterey Bay Partisan: calkinsroyal@gmail.com

Riley is managing director of Public Water Now.

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????

STATE HAS MADE CAL AM DESAL PROJECT A TEST CASE

OFFICIAL IN CHARGE OF EIR WAS PROJECT’S FIRST CHEERLEADER

TIME PRESSURE GIVES OFFICIALS EXCUSE TO CUT CORNERS

To hear some people tell it, one of the big problems facing Cal Am’s desalination project in Marina is criticism from those concerned about the environmental and economic impacts. Project supporters go so far as to blame the critics for the various delays that have forced repeated changes in the pre-construction timetable.

But after following the process closely for a decade now, after being counseled interminably by project proponents and reading environmental impact reports, feasibility studies and all manner of other paperwork, I have come to the opposite conclusion. I believe one of the venture’s biggest problems is that it has too much support. By that, I mean that agencies that should be honestly evaluating the project are advocating for it instead, leading to lapses in judgment and errors in execution. Peninsula business interests, meanwhile, panicked by the threat of water cutbacks, have taken a full-speed-ahead posture that could help produce a flawed and incredibly expensive answer to a problem that has other solutions.

When a previous incarnation of the desal project fell apart, it wasn’t because naysayers had put up too many obstacles. Key factors in its demise were a politically awkward management structure and the fact that money was being passed under the table in an effort to advance the project, not destroy it.

Now, proponents and participants in the project have proved again to be their own worst enemies, first by making overly optimistic projections about the composition of the water to be desalted and by ignoring glaring conflicts of interest built into the process of testing the water at the plant site north of Marina.

In defense, those in charge cite the heavy deadline pressure, with the state threatening to force untenable cuts in the Peninsula’s use of Carmel River water. They say time is so tight that they must push on or else the Peninsula’s economic well being will be in grave danger. Such thinking plays right into the hands of Cal Am, of course, which makes its money no matter how many times it has to start over.

When I was opinion page editor of the Monterey Herald, we came out in favor of desalination because of the shortage of practical alternatives. We were one of the first entities in the community to voice support. I now feel that the alternatives are becoming more attractive and that the project in its current configuration presents even graver danger to the well being of Cal Am customers on the Peninsula, who will be forced to pay for it no matter how expensive it becomes—even if it never produces a drop of drinkable water.

PENINSULA PLANT COULD BE A MODEL, FOR A PRICE

Creating additional pressures and costs, the state is using the project to test its preferred water-intake technology with minimal compensation to the Peninsula. As it stands, Peninsula water customers will be required to cover millions and millions of dollars in expenses regardless of whether the test is a success. Remember when Cal Am and its supporters were breathlessly arguing that testing of the intake method needed to begin as soon as possible, and that anyone who said otherwise was an obstructionist? That testing is on hold now for reasons that informed and objective observers could have seen coming, and the money meter continues to spin.

Carmel Mayor Jason Burnett, an almost full-time participant in the desalination process as chair of the Peninsula mayors’ water authority, agrees that the financial burden created by the experiment should be shared by state taxpayers, and he indicated he is working on it.

Tap drippingEven now, while the testing and environmental impact review are both stalled, Cal Am is going after yet another set of rate increases to help pay for the plant that may never be built and to offset income it has lost because its Peninsula customers have done such a good job of conserving water. Residential customers, who already consume and conserve some of the most expensive water in the state, would see rates increase by 29 percent under a request Cal Am filed last week with the Public Utilities Commission. At the same time, businesses would see a rate reduction of some 14 percent even though some business interests already pay discounted rates in what amounts to a reward for supporting the desal project.

Cal Am’s ability to obtain rate increase after increase from the PUC helps explain why the utility is comfortable doing whatever the state wants, no matter how illogical or expensive. In the cost-plus world of utility accounting, bigger expenses mean bigger profits.

PENINSULA IS A DESAL GUINEA PIG IN A COSTLY EXPERIMENT

Few people quarrel with the need for a desalination plant or some other means of stretching the Peninsula’s water supply. We have nearly destroyed the Carmel River, our primary water source. State officials were correct to issue a cease and desist order that will require Cal Am to greatly reduce pumping from the river in stages, which local officials are desperately attempting to postpone until the plant comes online.

Compounding the challenge significantly, the project has become an important test case that will help decide what type of water intake should be employed by other desalination facilities now on the drawing boards up and down the state.

They make it sound super complicated. It isn’t. It is worth your attention if only because it will help you understand the latest conflict of interest issue that has thrown a wrench into the process.

The easiest and least expensive intake is known as open ocean, which means pumping water straight from the ocean. The problem is that all manner of marine life is pumped into the plant along with the salty water.

Environmental groups and the various regulatory agencies greatly prefer the idea of subsurface intake, which involves pumping from below the ocean floor, using the sand and other sediment as filters to protect aquatic life. In the best case from an environmental standpoint, the wells would be drilled some distance from the shore and slanted so that their intakes would extend below the ocean floor.

Unfortunately, there is some guesswork involved in deciding exactly where to drill the so-called slant wells and there are few successful examples.  Cal Am’s project presents the state with one of the largest and most meaningful tests of the slant well technology so far.

Racks of filters in a desalination plantAlso unfortunately, not everyone involved in the project has the same agenda, and the state apparently ignored some well-established principles of how public works projects should be organized and assessed.

Perhaps the best way to illustrate that is to examine the shifting roles of the man now in charge of preparing the all-important environmental impact report for the current project. That’s Eric Zigas of the San Francisco firm of Environmental Science Associates.

Zigas may be a familiar name to those who have followed the desalination follies from the start. He also one of the architects of the previous incarnation of the desalination project–the version that devolved into a web of litigation. Before that he was a key part of the Public Utilities Commission team that decided desalination was the best solution to the Peninsula’s water problem.

PROJECT’S CHIEF ENVIRONMENTAL MONITOR STARTED WITH A VERY DIFFERENT ROLE

The current desalination proposal grew out of what became known as Plan B after plans for a dam on the Carmel River fell apart. The Legislature put the Public Utilities Commission in charge of finding an alternative and Zigas was hired to help draft the plan. He teamed with officials at UC Santa Cruz and various state and local agencies to help craft an ambitious scheme for a desalination plant at Moss Landing with a long list of environmental amenities such as a garbage-powered energy supply. The PUC then assigned Zigas to tout the plan to various Peninsula business groups, service clubs, news outlets and others. He effectively helped sell the community on desalination.

But for various reasons, most of the bells and whistles were later removed from the plan, and the project became a cumbersome joint venture between Cal Am, Monterey County and the Marina Coast Water District. Despite Zigas’ earlier role as the official cheerleader for the project, his firm was hired by the PUC to prepare the environmental impact report on that proposal before other factors caused it to be shelved.

Today, Zigas leads the environmental analysis of the process he helped initiate. Those who have worked with him say his experience on the Peninsula gives him unmatched knowledge of the issues involved, which are many. The project is complex, including a plant processing countless gallons of sea water, disposing tons of brine, and dispatching fresh water through a new network of pipelines. The expectation, of course, is that the analysis will be scientific and unbiased. A draft of the EIR is now circulating and the technical community now examining the document will determine whether has Zigas successfully switched hats. Considering how much controversy the process has created, the final EIR is very likely to be tested in court.

(When the first draft of the official environmental impact report incorrectly concluded that there were no functional agricultural wells near the plant site, Zigas briefly defended his team’s work before adopting a no-comment stance. )

eric-zigas

Eric Zigas

Zigas isn’t talking to the press, at least not to the Partisan, and he hasn’t publicly addressed his role in the latest delays.

The EIR process has been pushed back a few months because of a conflict created by the involvement of a firm that holds a patent on the slant-well technology. To help assess the test well, Zigas’ firm had brought in a company called Geoscience, headed by noted hydrologist Dennis Williams. In addition to the potential conflict presented by his patent, Williams also was working for Cal Am on the same project.

The PUC’s project manager, Andrew Barnsdale, was reassigned last week because of the revelations, which were brought to light by project critics. At the same time, a PUC administrative law judge, Gary Weatherford, issued a lengthy order requiring ESA and Cal Am to provide the contracts of everyone involved and to explain the degree to which the testing process may have been tainted.

It should not be forgotten that the Geoscience situation surfaced after the Coastal Commission suspended pumping at the test site last month because the well apparently was taking in more fresh water than anticipated. After the testing began, the groundwater table started dropping, which Cal Am blamed on agricultural pumping though it had insisted previously that there was no agricultural pumping in the area. Critics of the project had nothing to do with that.

GEORGE AND JASON LOOK AT PROJECT FROM DIFFERENT PERSPECRTIVES

George Riley has followed the project’s process as closely as anyone, and has a unique perspective. While he is an activist and head of a group that advocates public takeover of Cal Am, he also has been an accredited participant in the PUC processes as well as a member of a technical advisory committee advising Peninsula mayors on desal matters.

He agrees that the process has been marred by inter-connections.

“A quiet alliance of advocates, appearing as specialists, has emerged,” he said by email. “All are also quietly supported by the ruling state agencies. The ruling water elites at the state level have a greater role here, and has not been discussed.  And Monterey Peninsula as guinea pig is useful for them.”

Riley said Zigas and Environmental Science Associates do deserve credit, both for helping get the well testing process on track after Cal Am’s dawdling had worsened the time crunch and for pushing for well testing data to be included in the environmental impact report. The idea, Riley said, is for the final EIR to become “the vehicle for tooting the horns for slant wells” strongly favored by the various state agencies.

In Riley’s view, the fumbles that have marred the process would not be so worrisome if the state was helping to pay for the slant well testing and if the state would do more to encourage competing proposals that possibly could address the Peninsula’s water needs more quickly and less expensively.

Burnett, in a telephone interview Saturday, said he supports the PUC’s decision to call a brief timeout over the patent issue and examine where things went wrong with the test well team. He said it is important now to view Geoscience as a “proponent” rather than an arms-length analyst.

But Burnett disagrees that the process is fundamentally flawed or that the project’s management structure should be overhauled. He said he has great faith in Weatherford, the administrative law judge who is reviewing the testing conflicts.

(Burnett, by the way, has taken quite a beating politically in some quarters for his role as a leading advocate for such a controversial project. His detractors should be reminded that he helped  create a financing package for the plant that should save ratepayers millions of dollars over time and managed almost single-handedly to impose some level of public oversight over the project despite serious resistance from Cal Am.)

Antique water fountain, detail of a source for drinking water, drinking waterSUCCESS SHOULDN’T REQUIRE SETTLING FOR SECOND-RATE

From where I sit, it seems clear that the PUC needs to do more than study the known conflicts and then continue on the same course if this project is to be salvaged. Soonest, it needs to join with local politicians and work with the State Water Resources Control Board to eliminate the artificial pressure caused by the cease-and-desist order deadlines before they result in a hopelessly flawed and expensive project.

Barnsdale, the now departed PUC project manager, is a bureaucrat, a permit processor, not a construction or desalination expert. His replacement needs to be someone with real world experience rather than a purely regulatory background.

The PUC also needs to do what it can to support alternative measures such as wastewater recycling and stepped up conservation and to take a closer look at the competing proposals, the Moss Landing plans being pursued by Nader Agha and the DeepWater group, to see if they could effectively supplant some or all of the Cal Am project.

Obviously, the PUC also needs to take a long look at Cal Am’s rate structure for the Peninsula and drill into the company’s argument for two classes of rates, one set for the relatively helpless residential customers and a discounted set for the more politically powerful business class.

Finally, Cal Am and its supporters need to stop attempting to vilify anyone who raises questions about the process. All major public works projects encounter problems and this one is  more complex than most. Clearly, outside scrutiny will make it stronger, not weaker. As a community, there is strong agreement that we are obligated to stop abusing the Carmel River and unless someone works some magic and soon, we seem to be stuck with desal as the solution. That does not mean, however, that we must accept a project that carries a bloated pricetag and creates as many problems as it solves.

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Clean Drinking Water The water supply drama continues. Key urban and agriculture representatives continue to hammer away at a mutually beneficial agreement for using industrial wastewater. The Monterey Peninsula Water Management District continues slowly to fortify a backup plan for a desal source if Cal Am falters. It is working with Deep Water Desal on a plan for desalted ocean water at Moss Landing.

Then there is Cal Am’s desal proposal, using slant wells north of Marina. This project is supported by the Mayors Water Authority, most elected officials, and about 16 other interested parties in a settlement agreement that was filed about 18 months ago with the California Public Utilities Commission. I am one of those parties, but I have always been baffled by Cal Am’s insistence on proceeding with slant wells, inland wells drilled on an angle to take in seawater for desalting. Though the technology is intended to minimize the intake of sea life, it is a novel and risky approach with high costs. Why is Cal Am taking this approach? What strengthens Cal Am’s resolve? There are several angles to the issue:

  • Slant wells for potable desal are not operational anywhere in the United States.  Cal Am claimed in a recent report that they are in use in Europe, but it has failed identify any. There is one extensive test site in Orange County with 14 years of effort and test data, but it is not operational.
  • Cal Am has no new water rights anywhere along our coast, and has not applied for any. However it continues to collect data in the Marina area to bolster its plan for slant wells.
  • It appears that Cal Am will use the data and the local water-supply crisis to justify an argument for a “physical solution” (the idea that practical considerations might bypass existing law). However the state Supreme Court disavowed the physical solution argument in a 2000 decision. Will Cal Am challenge that decision and add litigation costs and delay, thus avoiding the need for obtaining water rights?
  • The environmental impact report for the failed regional desal project praised slant wells as the “environmentally superior alternative.” Thus slant wells give Cal Am the imprimatur of protecting the environment.
  • However there are no state requirements for subsurface intakes (slant wells). Granted two very important state agencies – the State Water Resources Control Board and the Coastal Commission – have expressed preference for slant wells as an environmentally superior option, if feasible. There are not extensive criteria for determining “feasibility,” however. There needs to be some practical limit on the cost and amount of time spent on evaluating feasibility. This is a discretionary and subjective determination. So far, we have left it in the hands of Cal Am.
  • Cal Am has built momentum for slant wells to the point that continued investment will be proposed so as to not waste the prior investment. This is a slippery slope.
  • The city of Santa Cruz studied and rejected slant wells as too complicated and too costly.
  • Cal Am ratepayers have paid the full bill for stranded costs from prior Cal Am failures—totaling about $32 million so far, and with another $20 million on the line in legal proceedings ($15 million to $18 million is at stake in litigation with Marina Coast Water District and $3.4 million is at stake in litigation with Monterey County. Ratepayers will be outraged if another failure leads to more stranded costs on our bills. So far the bill for slant wells is probably under $10 million.
  • The mayors have stated that “failure is not an option” on the desalination front. Is this failure of Cal Am, or failure to obtain a new water supply? These two are not linked, or are they?

So why is Cal Am so determined to go the extra mile for slant wells? The answer is “tuck ins.”

Call Public Water Now paranoid, but we see a connection between this project and the defeat of Measure O, which was meant to lead to public ownership of Cal Am’s local operations. Cal Am spent an enormous amount of money to campaign against the measure — about $2.3 million — to protect its local interest. It proved the point that Public Water Now has been making, that the Monterey Peninsula is a cash cow for Cal Am and its parent company, American Water Works.

Public Water Now recently connected the dots with language from Cal Am’s corporate holding company, American Water Works. Its 10-K filing with the Securities and Exchange Commission for 2013 describes the corporate growth strategy to be “tuck ins.”

“Growth of service providers in the investor-owned regulated utility sector is achieved through organic growth within a franchise area, the provision of bulk water services to other community water systems and/or acquisitions, including small water and wastewater systems, typically serving fewer than 10,000 customers that are in close geographic proximity to already established regulated operations, which we herein refer to as “tuck ins.”

—American Water Works 10-K filing with SEC for 2013, page 4.

This national corporate growth policy called “tuck ins,” further documented in other SEC filings, is intended to establish water supply ownership/control/dominance in smaller communities as a prelude to serving the growth potential of that community. PWN contends that Cal Am is overly exuberant for slant wells for one dominant reason: it gives Cal Am a permanent foothold next door to Fort Ord, the Peninsula’s only site of predictable growth in the future.

Now it seems clear why Cal Am is so determined to capture the CEMEX site for slant wells. It is using the fragile justification for slant wells to establish itself in the Fort Ord service area. And do not think its legal battle over the $15 million to $18 million debt of Marina Coast Water District is not playing into this calculus.

This national corporate policy to use “tuck ins” for growth should be a concern to Marina, other Fort Ord interests, and the wider community. It sure will be to ratepayers.

Riley is the managing director of Public Water Now and a longtime advocate for public ownership of water utilities.

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Read This Unless You Like High Water Bills

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????Should large commercial and industrial concerns on the Monterey Peninsula receive preferential water rates, lower than the rates paid by California American Water Co.’s residential customers?

It is a fairly simple question but there’s nothing simple about getting it before the public for meaningful discussion. The public was shielded from the process before the special commercial rates were enacted a year ago. Now, a public forum on the issue may or may not take place Oct. 13 in Monterey. Cal Am seems to have agreed to take part but hotel industry representatives aren’t so sure they want to see that happen.

Some background, and then you decide for yourself what to make of it.

Since last October, the hotel industry and other large water users have enjoyed a price break that was negotiated in private by Cal Am, industry representatives and the California Public Utilities Commission. The Monterey Peninsula Water Management District was also involved in the discussions though its role isn’t entirely clear.

The business interests wisely recognized that Cal Am rates were headed up and nothing but up over the next several years. They feared, among other things, that the cost of the proposed desalination plant plus other efforts would double or triple their water rates, potentially devastating the hospitality industry and others with heavy water needs. So they banded together as a coalition of big water users, hired accountants, lawyers and other representatives, and created a price structure based on flat rates, as opposed to the tiered rates that are intended to promote conservation among residential water customers. They also managed to get for themselves relatively low rates for any businesses claiming to have taken significant conservation measures. No proof required.

It is entirely possible, of course, that special water rates for private industry is in everyone’s best interest. The “What’s Good for GM” argument. If higher water costs resulted in hotel closures, higher hospital bills and lower taxable income for some enterprises, the impact on the entire Peninsula could be more harmful than relatively high water bills for residents. Presumably that was a big part of the pitch the business community made to the Public Utilities Commission, but there’s no real way to tell. There’s also no way to tell whether anyone responded on behalf of the residents’ interests or was allowed to join into the cost-benefit analysis.

As of last October, the steeply tiered rate structure for residential customers on the Peninsula started at 56 cents for the first 100 gallons supplied to a household with minimal water usage.

For a household on the other end of the conservation spectrum, a household irrigating significant landscaping and doing little to keep use down, the rate potentially topped out 10 times higher, $5.65 per 100 gallons, not counting various surcharges. The rates at the high end help explain the well-publicized cases of monster water bills for households experiencing water leaks or phantom usage. (These figures come from Cal Am’s public rate schedules from a year ago so they could be both out of date and overly simplified, but they remain useful for comparison purposes.)

Until last October, commercial users were charged one price if they kept their water use below a monthly allotment based on type of business, past usage and size. They were charged a higher price if they exceeded their allotment.

Since last October, the rates for commercial users have started at 89 cents per 100 gallons, higher than the bottom-tier residential rate. That is for commercial users who do relatively little irrigation and who submit paperwork claiming they have adopted solid conservation techniques.

Enterprises with irrigation requirements closer to average pay a rate about 12 percent more. Those that irrigate more than 10 percent of their property, and who claim to be fully compliant with best conservation practices, pay about 12 percent on top of that, or about $1.11 per 100 gallon.

For practical purposes, that makes $1.10 per 100 gallons the highest effective commercial water rate, as compared to $5.65 for residential users. Technically there is a higher commercial rate, more than $2 per 100 gallons, but that is only for businesses that don’t even claim to be following good conservation practices. It seems unlikely that any business would remain at that level for more than one month. Even those businesses would be paying less than half as much per unit as residences at the highest tier.

(For commercial users, the new rate structure actually uses 75 gallons as the standard unit of measurement rather than the 100 gallons in place for residential users. It has been suggested by cynics that it is meant to make comparisons more difficult.)

When the Public Utilities Commission approved the special commercial rates, there was little publicity beyond a news article and an editorial in the Monterey Herald. I wrote the editorial, raising questions about the different rate structure and the process used to create it. Personally, I received only one call of complaint. It was from  Mike Zimmerman, who is now the chief operating officer for the Cannery Row Co. He said he would set up a meeting to discuss the issue and would call back. He didn’t.

I speculated at the time that the hotel industry decided to go low-profile, hoping the rate structure not receive much attention. I suspect that may still be the case.

The issue finally began generating some interest earlier this year during the campaign over Measure O, which would have started a formal effort toward a public takeover of Cal Am. Now, Public Water Now is pushing for some public discussion of the rates and the ramifications. Public Water Now, by the way, was not daunted by Measure O’s failure and is continuing its public-ownership effort.

Plans for the Oct. 13 session apparently grew out of an Aug. 19 Monterey City Council session in which Cal Am representatives made some sort of a presentation about rates. The minutes don’t reflect exactly what was said, but some went away believing that Cal Am was on board for a wider ranging discussion of rates of all types. Out of that session, Public Water Now’s George Riley proposed an October workshop on the topic of commercial vs. residential rates. An exchange of emails since then seems to put the idea in question, however.

In one, John Narigi of the Monterey Plaza Hotel told Riley that Cal Am had not agreed to a discussion involving the commercial rates.

“It was an agreement to discuss and provide additional information/education regarding the current rates for residents and answer additional questions regarding this specific topic,” Narigi wrote.“You are now asking for a panel discussion on ‘whatever topics the parties want and would assume the public as well’??? Please provide an honest and accurate agenda so we the coalition can decide if there is even a need or desire to participate.”

The coalition Narigi mentioned is the Coalition of Peninsula Businesses, headed by the Monterey County Hospitality Association.

In an email to Narigi, Ron Weitzman of the WaterPlus group said his understanding was that the discussion would involve both commercial and residential rates.

“There are obviously two sides to the issue. To hear only one side would be propaganda, not education,” wrote Weitzman. “…We do not question your need to be rid of the tiered rate structure. Residential ratepayers would also like to be rid of it … .”

So there you are. See you at Monterey City Hall on Oct. 13. Or not. The hotel industry will let us know.

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????

At 7 o’clock this evening, Tuesday Aug. 19, at Monterey City Hall, Cal Am customers get a chance to discuss the rate schedule that provides commercial users with a low, flat rate for water while residential customers pay higher tiered rates.

It was a result of negotiations between the Public Utilities Commission, Cal Am and Peninsula industry representatives. The schedule was adopted last year with no input from residential users. The water management district was party to the discussions but apparently just went with the flow.There was some coverage in the Herald and an editorial criticizing the arrangement but the hospitality industry kept quiet about it, hoping people wouldn’t notice and the issue would go away.

It didn’t.

Here are talking points that water activist George Riley sent to members of Public Water Now in advance of tonight’s session. He does a good job of summing it up as succinctly as possible.

Why the new commercial water rates are unfair to residential ratepayers and to commercial customers:

  • Unfair w/ flat rates vs tiered rates
  • Stealth proceeding, No chance for residential customers to comment
  • Shifted costs to residential customers
  • Without tiers, commercial has no incentive to conserve
  • Successful residential customers (well to do) have highest rates. Well to do commercial customers have lowest rates.
  • Caste system is applied to commercial–Less well off businesses with less resources are penalized, whereas most well off with the most resources are rewarded.
  • Pressure to conserve is a one time investment for commercial, whereas similar one time investment by residential user will not remove the pressure of high tiers to conserve.

Some narrative on talking points.

  1. It was a stealth procedure with no clear warning nor opportunity for public input or understanding.
  2. It is a flat rate. Therefore there is no incentive to make further changes in attitude or performance.
  3. Bill spikes are eliminated. The average commercial use over time makes spiked use a non-issue. Not true for residential users.
  4. Any increase in use can be attributed to a better economy, with no attention to improved conservation.
  5. The 4 categories of commercial rates reward the richer businesses (lower rates) and penalize the struggling businesses (higher rates). Not true for residential ratepayers. Even the most investment does not remove the tiered rates nor the attention needed to actual use.
  6. The lowest commercial rates apply to investment choices (more water saving devices), not on behavior of customers or service personnel. A one time choice removes conservation from further owner/management attention.
  7. The commercial water bill contains a bar chart on usage, which gives a monthly use picture instantly. Not true for residential users, who have a distinct need to see their monthly use pattern because of the spike potential and the need to conserve to reduce costs. Residential bills do not have bar charts. Cal Am removed them about a year ago.
  8. So the tool useful to residential users to conserve and reduce costs was eliminated by Cal Am without ratepayer input nor warning.
  9. Without the useful bar chart to get an instant picture of use, the interested residential user must review prior bills and tally use data.This is ponderous and discouraging to any person wanting to understand their water use.
  10. The flat commercial rates apply to all types of non-residential users–cities, school districts, medical facilities, golf courses. In other words, it is the entire community of users that have flat rate benefits that are not available to residential customers.
  11. The perception of unfairness is real, when the voting customer has a harsh daily reminder of conservation, yet the flat rate can be a one-and-done action.
  12. The caste system for commercial users is unique and terribly archaic to modern fairness in this democracy. The well to do residential users (the richer) pay more and help subsidize the lesser well to do (poor and struggling). The new commercial categories of favoritism rewards the ‘rich’ with low rates, and penalizes the lesser successful and struggling businesses (poorer) with higher rates.

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