CalAm seeks resolution of Monterey desalination finances

California American Water (CAW) has invoked a disputes procedure in continuing wrangles with its partners in the proposed Monterey Regional Desalination Project.

One of the scheme’s partners, Monterey County Water Resources Agency (MCWRA), has declared that the 37,850 m³/d seawater desalination project’s water-purchase agreement (WPA) signed on 6 April 2010, together with associated agreements, are void following conflict-of-interest allegations involving former agency board member Steve Collins.

In a letter to MCWRA and the other partner, Marina Coast Water District, on 12 August 2011, CAW says that the WPA required the parties to obtain all or a portion of the financing for the project within 120 days of 11 January 2011. The deadline has passed, and, while CAW admits that the other two agencies have been developing a “conceptual level finance plan”, this is not good enough.

CAW is working under the imposed deadline of a “Cease & Desist Order” related to its abstractions from the Carmel river.

“To meet the 2016 deadline in the (order), the agencies need to obtain the financing immediately and move this project forward,” says the water company’s letter, signed by Robert G MacLean, president of CAW.

“Unfortunately,” the letter continues, “due to the lack of progress in resolving these issues, CAW has reached a point where it must take this action to formalize its concern over the current status of the project.”

Serving notice that it considers the two agencies to be in default under the agreement, CAW invokes the dispute resolution procedures contained within it.

“It is CAW’s sincere desire that the agencies cure the default as soon as possible to allow the project to move forward in an expeditious manner,” the letter concludes, asking for immediate negotiations.