The question that is asked is, "Why in 1998, when we are experiencing the wettest rainfall season in the history of the Monterey Peninsula, is Cal-Am proposing to file a water rationing plan with the California Public Utilities Commission?

Here''s why. On July 5, 1995, the State Water Resources Control Board (SWRCB) issued an order, WR 95-10, which declared the flow in the Carmel River "underflow" and therefore subject to adjudication and permitting by the state board. The SWRCB, in its findings, ruled that the river was now subject to their jurisdiction, that all water rights held by Cal-Am were invalid, and that we were pumping 10,730 acre-feet of water without a valid right of permit.

That order carried with it a 10-year average water consumption to establish a base. We immediately were required to reduce the base year consumption by 15 percent, and by an additional 5 percent the following water year, for a total of 20 percent reduction. The community accomplished its goal in the 1995-96 water year. However, in the very dry 1997 we exceeded that goal by approximately 1,600 acre-feet and the state board imposed a $168,000 fine.

In July 1997, Cal-Am implemented Phase II of a four-phase, mandatory conservation plan. However, the community failed to reduce its consumption. Cal-Am then instituted Phase III which reduces outside watering to two days a week As indicated, our consumption exceeded those goals for the first four months of the water year 1997-98.

On March 25, 1998 we instituted Phase IV of the Mandatory Conservation Plan which puts into place penalties of monetary value and the installation of flow restrictors on water abusers. Because of its position to be proactive, Cal-Am went to the Monterey Peninsula Water Management District in January 1998 requesting that they implement an immediate moratorium and develop a rationing plan to be in place for the community if it continues to exceed the mandated, legal goal established by the state board. The district''s board declined, so Cal-Am proceeded with the implementation of a rationing plan. We have met with individual members of the water board, their staff, their Technical Advisory Committee representing the cities and the county, their Political Advisory Committee representing the cities and the county, and their Conservation Advisory Committee.

On April 6, we requested a special board meeting with the MPWMD. At that time they did not take a position on Cal-Am''s rationing plan. It was clearly articulated to the board that it was Cal-Am''s hope that with the expansion of the Phase IV Conservation Plan and through education and communication with the community, we will be able to reach our goal and that a Public Utilities Commission (PUC)-approved plan will be placed on the shelf and never needed in this community.

To protect our customers from fines that could be imposed by the state board, we must have a plan approved by the PUC in place so that if we continue to exceed pumpage, measures can be taken to reach that goal. The plan outlines that any customer using less than 300 gallons per day would require no reduction from the base period. Those customers whose usage is between 300-825 gallons per day will be required to reduce on a graduated scale from 5 to 25 percent, with a maximum consumption of 24 units, or 600 gallons, per day.

The plan further recognizes that commercial, industrial, public authority and golf course customers who have fully retrofitted their businesses would be exempt from further reduction after the performance of a water audit by the Cal-Am. Those customers who have not retrofitted would be require to reduce 10 to 30 percent based on various classifications.

We believe our plan has had appropriate screening by the various citizens, the water district and the cities. Their input has been incorporated into the plan. We also believe that if the customers of Cal-Am continue to "use water wisely," this plan after approval, will be placed on the shelf and never instituted.

L. D. Foy is vice president and division manager for the California-American Water Company.

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