"Consultant Finds Cal Am's Desal Plant Could Come Online Earliest" by News Blog

News Blog

Consultant Finds Cal Am's Desal Plant Could Come Online Earliest

November 9, 2012

Despite claims to the contrary, the three regional desalination plant proposals competing for the Monterey Peninsula's business—California American Water's Water Supply Project, developer Nader Agha's People's Project and entrepreneur Brent Constantz's DeepWater Desal—would cost about the same. Or at least within a couple hundred dollars per acre-foot.

That's one finding in a draft report by Separation Processes, Inc., a Carlsbad-based consultant hired by the Monterey Peninsula Regional Water Authority to evaluate the three desal proposals.

Assuming an annual output of 9,000 acre-feet of desalinated water per year, SPI finds that the Cal Am desal water will cost $2,555 per acre-foot; the DeepWater Desal water will cost $2,395 per acre-foot; and the People's Project water will cost $2,345 per acre-foot.

The finding is a sharp contrast to claims by Agha and Constantz that they could produce water at a much cheaper rate than Cal Am.

The report finds no "fatal flaws" in any of the three proposals. But it gives Cal Am's proposal one very critical advantage over the other two, concluding it's the only one that could come online close to the December 2016 deadline, when the state mandates a 70 percent cutback in pumping from the Carmel River.

Cal Am's desal plant could start up by mid-2017, according to SPI's evaluation. DeepWater Desal could come online by early 2018, and the People's Project in early 2019.

Since timing is everything when it comes to a new water supply on the Monterey Peninsula, the report could wield significant clout in swaying local agencies to support Cal Am's proposal.

 The report by Seperation Processes was indeed thorough, and the reporters story is accurate as far as it goes. What is interesting is several findings that are left out of this story; the report finds no "fatal flaws", it also admits it did not analyze some of the impacts of the most relevant factors which it did not have the ability to quantify. Each of these factors is extraordinary, has the ability to kill the project, and was completely analyzed previously in the EIR and engineering work of the Regional Project.
 The report states that a Public partner while not absolutely necessary from a legal standpoint (remains to be seen) is essentially required for low cost funding, buy-in from government sectors and mandatory for cooperation from the Agricultural community. Cal Am may have won a battle in the PUC decision regarding the jurisdictional issues but they lost the war with the County's largest player, the Ag Industry. The bluster of Pendergrass and Downey notwithstanding.
 Does anyone, including Cal Am, the Mayor's group and the County of Monterey really believe the Ag Industry is going to allow one drop of river water, ground water or recycled water, that they own, be allowed for usage in the Peninsula? I know our representatives and electeds are intelligent people, they have to know this is a fight they can not win, and why would they even try?
 If you look at the drawings included in the report you see that there are essentially three variations of models for the plant with subsets of each for 8-10 options. One includes beach wells on the Salinas State Beach, two, water from Moss Landing and three inland wells. Most utilize a piece of property of Dolan Road, contiguous with a dairy in North County as the site for the Desalination Plant. They all require pipelines, most of which is under the jurisdiction of the Coastal Commission, and some of which crosses the Elkhorn Slough. 
 I am limited by space considerations in this article, so I will break my responses into three seperate rantings. I am concerned with three seperate issues, cost, environmental issues and time.
 Before I leave this page I do want to quickly reference one additional item, getting the water to the Peninsula. It is amazing to me that this report does not address that, neither to Agha or Constanz. Here is an unsettling number; $107M. That is the amount included in the Regional Project to get the desalinated water from Marina to the Peninsula. Assuming we still have to get the water to the Peninsula, what is the cost estimate to get the water from Moss Landing (actually a dairy in North County) to Marina? 
 More to come......

 Lets talk about cost. First, let me state that I have no information other than what is available to every other citizen, public reports found on the web, or in print. The Regional Project, which was demonized for its cost was $3,790 per acre foot, well field to the average home on the Peninsula. I believe this a fully amortized delivered cost, which broken down to the lowest denominator added $40 per month to average home bill.
 The consultant report did not do an apples to apples analysis as they stated. They are only measuring the cost of desalinating water at the plant. For discussion sake, I will assume the costs stated above include the cost of well fields and transmission of the ocean water to the plant. If not, add that on as well.
 Setting environmental and permitting issues aside, (that will come later) the real cost of desalinated water is the process of getting the purified water to the Cal Am delivery system and then to the home. Lets look at some numbers. Cal Am has a processing cost of $2,555 per acre foot, per their own numbers. The pipeline from Marina to the Cal Am delivery point was $107M. What does a pipeline from Moss Landing to Marina cost, $10M per mile? The $107M adds approximately $1,000 per acre foot to the project, and the additional pipeline will be on top of that. Obviously, I do not have engineering numbers, but add a 10% return on annual investments, the cost for the Cal Am project is higher than the Regional Project, significantly. Where is the hue and cry from DRA and the MPWMD now?
  The Deep Water project weighs in at $2,395 per acre foot and the People's Project at $2,345 per acre foot. Both of these folks are disputing the analysis of their numbers, but they also have discounted the impact of permitting and the Coastal Commission. Per published record the Regional Project budgeted $2M for permitting, these two projects zero. Do they have insight we do not or is this wishful thinking? You still need to add the cost of pipeline transmission to the Peninsula for these projects, as well, which guess what, gets the price above the Regional Project. 
 A new EIR is going to take 2 years, forget the 1 year estimate of Cal Am, they are simply betting that the State Water Resource Control Board will take pity on us because we are trying so darn hard to solve our problem. We have a forty year history of failure, they are not likely to look kindly upon us. Have we miraculously solved our water rights issues?