Agreement over failed Monterey desalination plan

Agreement was reached on 4 December 2012 on legal and monetary issues resulting from the failed Monterey Regional Desalination Project, which was abandoned earlier this year.

The Monterey County Board of Supervisors, in approving the agreement with California American Water, agreed that its ordinance requiring public ownership of desalination facilities in Monterey County will not apply to California American Water (Cal Am), an investor-owned utility, or its current water supply project proposal, the Monterey Peninsula Water Supply Project.

The Regional Desalination Project was a joint effort between Cal Am, Marina Coast Water District and the Monterey County Water Resources Agency (MCWRA) intended to resolve the long-standing water supply shortage on the Monterey Peninsula. After receiving approval from the California Public Utilities Commission (CPUC) in December 2010, the project faced a series of challenges including environmental litigation and conflict of interest allegations against a former MCWRA board member.

On 18 July 2012, CPUC officially ruled that it would be unreasonable for California American Water to continue to pursue the Regional Desalination Project, citing the uncertainty surrounding financing and the ability to obtain needed permits for the project. In the settlement, the county states it will support the company's effort to limit source water for the desalination component of its water supply plan to the shallow aquifer, which lies above the 180-ft (55 m) aquifer where the company had originally proposed to draw its water. Withdrawals from the 180-ft aquifer are opposed by Monterey County agricultural interests.

California American Water agrees in the settlement to pursue the shallow aquifer as its preferred source, but states that if the shallow aquifer proves unsuitable, the company will revert to its original plan.

The settlement agreement also addresses the development of a groundwater monitoring plan to monitor the impact of the Monterey Peninsula Water Supply Project on the Salinas Groundwater Basin. The monitoring plan will be developed by MCWRA through a public process and paid for by California American Water.

The Monterey Peninsula Regional Water Board still has to decide between three competing seawater desalination projects for the area after its Technical Advisory Committee accepted on 17 September 2012 a report by consultants Separation Processes Inc of Carlsbad.

SPI's initial scoping and constraints analysis was unable to decide between reverse-osmosis projects from Cal Am, the DeepWater Desal group and the People's Moss Landing project to replace water currently abstracted from the Carmel river which must be reduced by 60% by the end of 2016.

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