Monterey County spends millions on regional desalination project.

Wet Works: Cal Am’s planned desalination plant will provide expensive drinkable water to the Peninsula—if it receives approval and gets built.

Water on the Central Coast ain’t cheap. Cal Am ratepayers are already in the hole for millions of dollars for the regional desalination project – and it has yet to be approved or even produce a drop of potable water. 


To date, the Monterey County Water Resources Agency has spent more than $2 million on the regional desalination project, according to a Jan. 24 MCWRA board report. Between November 2004 and November 2010, the agency spent thousands of dollars on consulting services, travel and meeting expenses. Additionally, it paid more than $1 million in legal costs: $957,418.35 to Downey Brand Attorneys, a law firm with offices in Sacramento and San Francisco, hired to help draft the Settlement Agreement and move the water project through the California Public Utilities Commission approval process; and an additional $210,206.98 to county counsel. The board report also includes a line item for MCWRA labor costs, which average out to about $217 an hour. 


The multi-million spending, “like drunken sailors,” according to one critic, on the yet-to-be-built water project has some ratepayers and citizens’ advocate groups taking notice.


“Cal Am rate payers are getting screwed on this,” says Janet Brennan, a Monterey County resident.


According to the agreement between Cal Am and the two public agencies involved, MCWRA and Marina Coast Water District, Cal Am will reimburse “pre-effective date costs” incurred by MCWRA and MCWD, which include staff, legal and consulting expenses. In other words, Cal Am ratepayers foot the bill.


“One of the things that concerns a lot of Cal Am ratepayers is the way the agreements have been structured among the three entities,” says local watchdog Julie Engell. “There are no cost controls, basically. Prior to any project being built, MCWRA has already racked up $2 million. That seems excessive to me.”


In late 2010, the CPUC approved the roughly $400 million regional desal project. (It still, however, needs a host of other permits, including one from the California Coastal Commission.) On Jan. 3, the Division of Ratepayer Advocates appealed the CPUC decision, calling it “unlawful,” in part because of a lack of financial oversight. According to the appeal: “In adopting the Settlement Agreement without modification, the Commission has unlawfully delegated to the Public Agencies its obligation to assure Cal Am ratepayers’ rates are just and reasonable.”


“CAL AM RATEPAYERS ARE GETTING SCREWED ON THIS.”


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I don’t know how to respond to what is or is not reasonable,” MCWRA General Manager Curtis Weeks says. “What’s clear to me is that if we get in a process that involves the expenditure of dollars, we do it in as expeditiously a way as possible.”


Weeks says the bulk of the legal costs were spent trying to hammer out the Settlement Agreement, which paved the way for the CPUC’s initial approval. He blames the expense – and the delay – on the DRA and the Monterey Peninsula Water Management Agency, both of which refused to sign on to the agreement. 


“That’s a $12 million delay for one year going through the CPUC process,” Weeks says. “I’ve got to look at the two and ask, why did they cause the delay?”


When asked about the MCWRA staff costs totaling $217 an hour, Weeks says, “Most of those are my costs, county overhead, administrative costs and a whole bunch of costs we bear on an hourly basis.” By the Weekly’s deadline, Weeks didn’t have a list of how many water agency staff members and what specific tasks the money funded.

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