With what is seen as a water crisis solution in the balance, board members for the Monterey Peninsula Water Management District are sending a message to embattled private utility California American Water: agree to our terms or be left behind.
The quickest path to an expansion of the Pure Water Monterey recycled water project is for Cal Am agree to buy and deliver the water it produces; however, it is not the only path.
This is where it gets into the fine print of a water purchase agreement. Cal Am wants the MPWMD and Monterey One Water – the sewage agency responsible for the operation of Pure Water Monterey – to agree to support its proposed desalination plant if the Pure Water Monterey project under-produces water in consecutive years. The desalination plant was initially proposed as the solution to the region’s water crisis, with recycled water as part of the supply but not a main source. However, environmental concerns and cost caused public support and the board of M1W to sway to the side of Pure Water Monterey expansion.
“The public is saying that Cal Am is holding these negotiations hostage,” MPWMD board member Karen Paull says. “We need to tell the public and Cal Am that the hostage can be freed, if necessary. But unfortunately, that would require more time and more delay.”
The water purchase agreement is seen as a crucial step in securing financing for the Pure Water Monterey expansion. However, MPWMD has the financial ability to take on the up to $70 million recycled water expansion without an agreement with Cal Am, according to General Manager David Stoldt. The district would agree to buy the recycled water produced by Pure Water Monterey and cover the fixed costs of the expansion.
The district could then become a water retailer, selling some of its recycled water to the Marina Coast Water District or other buyers, and build up its drought reserves. Board member Alvin Edwards says this could place added pressure on Cal Am to buy the recycled water, as the state’s cease-and-desist order on drawing from the Carmel River – an order that takes effect Jan. 1 – will leave the utility with few options.
However, this scenario, Stoldt says, also presents risks. If MPWMD enters a water purchase agreement and leaves out Cal Am, ratepayers will have some financial responsibility for the recycled water project. If Cal Am chooses to press forward with its efforts for a desalination plant and earns approval, ratepayers could be responsible for that as well. In that situation, the up-and-running recycled water project could eventually take a backseat to a desal project in solving the water shortage as Cal Am, which owns the distribution system, would not be required to use recycled water over more costly desalinated water. That throws into question what the Pure Water Monterey expansion would be for.
Stoldt supports signing the agreement. “We’re here, we’ve won,” he says. “There is no desal plant, we’ve got Pure Water Monterey expansion. Any talk of trying to do it on our own will result in lengthy delays and possible additional expenditures.”
Cal Am spokesperson Catherine Stedman says, “We thought we negotiated in good faith and thought we were at a good point.”