Explaining Cal Am’s decision to withdraw application
As you may have heard, California American Water recently made the decision to withdraw our application for a Coastal Development Permit for the Monterey Peninsula Water Supply Project desalination source wells with the aim of securing a reliable water supply for our community as quickly as possible. We expect this will result in a couple of months’ delay to the project, and I wanted to explain to you why we made this decision.
After years spent developing this project and making adjustments to respond to stakeholder concerns, it became obvious that we needed to take more time to address objections raised by the community of Marina — namely that our project would be built in their backyard without them receiving any benefit from it. We have worked with Marina stakeholders in the California Public Utilities Commission process and tried to address concerns in the California Coastal Commission
process, but we want to see if more can be done.
I believe Marina would see both environmental and economic benefits from the desalination project. Specifically, the project’s environmental impact report, prepared by the California Public Utilities Commission and Monterey Bay National Marine Sanctuary, found that the project would help to address harmful seawater intrusion. Our economic impact studies also found that the project will bring $260 million in direct economic output to the region and create nearly 1,800 jobs. Nevertheless, we heard loud and clear from the community and Coastal Commission members that these benefits were not enough.
Over the eight years our project has been in development, we have had many discussions with Marina about how they could participate, including receiving water from the project or even owning portions of infrastructure. These options remain on the table. But mostly, we want to hear from the city and others if there are constructive ways to build bridges and to bring them on board with this important water solution.
The rate impact for California American Water customers, particularly low-income customers, is another area of concern. Last week we proposed to the California Coastal Commission that they condition our approval on an application to the California Public Utilities Commission to increase our customer assistance program from a 30% discount for qualifying customers to a 50% discount. Such an increase would make the program by far the most generous of any water utility in the state. We plan to pursue this idea and want to hear from stakeholders if they support this plan or have other ideas.
The Monterey Peninsula needs a replacement supply to the Carmel River. Not only to protect the river and respond to orders from the state, but to ensure there is enough water for long-term economic growth and the development of affordable housing. Given the complexity of competing interests and need to minimize environmental impacts, we believe we’ve come up with the best possible project. But no project will succeed without community support. In 2013, we had the support of 16 parties including LandWatch, Public Water Now, Planning and Conservation League, Surfrider Foundation and the Sierra Club — many of the same groups that oppose the project now. We don’t know if it’s possible to bring those parties back on board, but we feel we owe it to ourselves and our community to try.
We hope the postponed vote will result in a delay of months not years. During the interim period before we reach a solution and begin construction, it will be a challenge to meet demands for water while fulfilling our obligations to cut-back on drawing from the Carmel River. However, we are working hard to find ways to manage our limited supplies and avoid rationing. We all knew that without the community coming together to find a solution, the consequences of the Carmel River pumping cease-and-desist order would be felt. These impacts will be felt by businesses and residents alike and will impact the entire region. That is why it is so important we come together now and find a way to advance a solution for our water needs.
The Pure Water Monterey project is an important part of our water supply portfolio, but it does not provide an adequate supply to replace desalination on its own. The focus of that project needs to be ensuring that 3,500-acre-feet is available to help bring our community through in the period before desalination is online.
We appreciate all the support and involvement from business leaders, environmental leaders, our customers, and elected representatives to help bring a solution to fruition. We will continue to work with all of you through this interim period and look forward to a final hearing before the Coastal Commission.