Ending the Drought
The real cost of a water solution outweighs the objections.
Thursday, April 29, 2010
There’s been a lot of talk over the past few weeks about the regional water supply project. Any project of this size and significance will have its critics, and concerns have been raised about its cost.
Just how much will a desalination plant cost the Monterey Peninsula?
The project’s sponsors – the Monterey County Water Resources Agency, Marina Coast Water District and California American Water – say it’s too soon to place an exact figure on our future water supply, but have given us a range of $280-$390 million.
A $100 million difference sounds like a lot, but is reasonable when you consider how much remains unknown. The amount of grants and low-interest loans that could be obtained by the Monterey County Water Resources Agency and Marina Coast has yet to be determined, and the amount of time over which such loans will be repaid is also unknown. Grants would lower the cost to Cal Am customers. And the difference between a 20-year versus a 30-year term could be as much as $200 million.
Yet there’s also a lot that is known, including the general dynamics of major construction projects and the bond market. The project’s sponsors have extensive experience when it comes to water infrastructure engineering and development. Based on that, they are able to talk about the most likely cost of the project – approximately $4,000 an acre-foot. That figure covers all of the needed infrastructure, including the wells, the desalination plant and additional pipeline.
Across the U.S., an acre-foot is the amount of water an average family uses in a year. On the Peninsula, where there’s a strong conservation ethic, an acre-foot provides enough water for four families a year.
Four thousand dollars an acre-foot is 40 percent less than the desalination project Cal Am proposed at the Moss Landing Power Plant and 32 percent less than the smaller North Marina project some skeptics support.
But while the sponsors of the regional project say the water will cost $4,000 an acre-foot, others say the cost could be more than $7,500 per acre-foot.
The $7,500-per-acre-foot figure offered by the Monterey Peninsula Water Management District and California Public Utilities Commission’s Department of Ratepayer Advocates stems from a worst-case scenario. While it’s possible, under improbably disadvantageous conditions, that a project could cost $7,500 per acre-foot, it’s not likely.
At this early stage, the most responsible way to have a public discourse is to talk about what the experts believe is reasonable. All three project sponsors have vowed to keep costs as low as possible and agreed, in writing, to hold themselves to multiple layers of checks and balances to assure those efficiencies are achieved. The fact that there currently is a good environment for bonds and grants and construction costs is equally important.
Of the dozens of projects studied over the years, and, in particular, those which the state’s regulating bodies have deemed feasible, the Monterey Bay Regional Water Project is the most cost effective. This is especially true when compared to the cost of doing nothing.
No one knows the price we’ve already paid for an inadequate water supply. Who can calculate the many individual and business opportunities that have been lost to decades of strict water use restrictions and water bills that go sky high if anything beyond a modest amount is used?
The water cutback order issued against Cal Am last year is very real, and the state Water Resources Board will enforce it. Imagine what would happen, then, if there were no project, and our major water supply were reduced by more than half. Survival of our very community would be the unfortunate price.
No one has said that desal water will be inexpensive. It’s no revelation to anyone who has been following our community’s decades-long water debacle that a seemingly endless stream of regulations and politics has created a problem of giant proportions. What’s news is that the deadline is here – but so is the solution.
The cost discussion fails to recognize the project’s many benefits. The Monterey Bay Regional Water Project will use renewable energy. It will improve river flows and habitat, help restore the Seaside Aquifer, reduce wastewater discharge to the Marine Sanctuary and increase water reliability for the Monterey Peninsula, which is critical to our economy.
There’s a simple, guaranteed way to end any argument about the regional water project’s price tag. Just ask the detractors to identify a cheaper solution. They can’t.