Looks like the Monterey Peninsula will get its new water source.

At its meeting in San Francisco on Thursday, Dec. 2, the California Public Utilities Commission has given the green light to a major regional seawater desalination project in Marina.

In a win for the project partners - Cal Am, Marina Coast Water District and the Monterey County Water Resources Agency - the CPUC adopted Commissioner John Bohn's proposal to OK the drafted water project agreements with only minor modifications. CPUC Administrative Law Judge Angela Minkin had proposed more substantive changes, some of them aimed at keeping costs lower and giving Cal Am ratepayers (and their representatives) a bigger role in the project's governance. But the project partners argued that any major changes to the drafted agreements would likely delay, and could even kill, the much-needed water project.

Bohn agreed, and the commission approved his Alternate Proposed Decision by a 4-1 vote.

Conditions of the roughly $400 million project include:

•  a $297.5 million capital cost cap for the Regional Project facilities;
• a $106.875 million cost cap for Cal-Am-only facilities, including a new pipeline to the Monterey Peninsula;
• Cal Am cost recovery beyond those caps "upon showing of exceptional circumstances and subject to a rigorous reasonableness review"; and
  
• a seat for Monterey Peninsula cities on the project's Advisory Committee.
  

Cal Am's Monterey District customers can expect their average monthly water bill to increase from $38 to about $80, according to a Cal Am press release.

The proposal's most outspoken critics, the CPUC's own Division of Ratepayer Advocates, responded in a statement that "it is disappointed and concerned about the CPUC’s decision to approve a desalination project on the Monterey Peninsula without adequately protecting ratepayers in the future."

The world's most expensive desalinated water today costs about $3,000 per acre-foot, the DRA notes; the Regional Desal Project, by contrast, could cost Cal Am ratepayers up to $11,000 per acre-foot. The DRA had asked the CPUC to impose a cost cap at $2,200 per acre-foot. And while Cal Am estimates that the project will roughly double Peninsula customers' water bills, the DRA warns that costs could exceed expectations and bills could as much as quadruple.

The new desal plant is expected to be complete by 2015 and produce 10 million gallons of potable water per day, replacing water now illegally taken from the overdrafted Carmel River. The state has ordered Cal Am reduce its Carmel River pumping by more than two-thirds by 2016.

“Today’s approval by the CPUC allows us to proceed with final design work and ultimately, construction,” said California American Water President Rob MacLean in a prepared statement. “It is a huge step forward for the people of the Monterey Peninsula who have struggled for decades to develop a reliable water supply and for the efforts to protect the Carmel River and its habitat.”