All Aboard! Desal Gravy Train Moving Full-Steam Ahead

Who would have dreamed that saving the Carmel River could be so lucrative?

The Regional Desal Project may be stalled by litigation and lack of a financing plan, but the desal gravy train isn’t slowing down a bit.

The economy may be bad for most of us, but not for those who give a boost to the Regional Desal Project. Let’s start with RMC Water. They were well paid to prepare the EIR for the project – a document the law requires to be a neutral examination of potential impacts. After producing a favorable EIR, they then received a no-bid $28 million dollar contract to run the project. But don’t worry. We’re sure the prospect of receiving $28 million dollars didn’t affect their ability to analyze the project’s impacts in an unbiased way.

Then there’s public servant Steve Collins. As a member of the board of the Monterey County Water Resources Agency, Steve became one of the project’s most enthusiastic promoters – selflessly volunteering his time to help the Monterey Peninsula find a solution to its water problems … except, of course, for the fact that, unknown to practically everyone, he was also being paid by RMC. Paid something in the neighborhood of $150,000 for less than a year of, presumably, part-time work. No economic slow-down there!

And now comes news that the Surfrider Foundation, an organization whose work to protect beaches and the ocean we’ve long admired, will be reimbursed $285,818.23 for their work on the project. As near as we can tell, what they did was to prepare an economic analysis of alternatives (why, exactly, an organization whose primary work is to advocate for clean beaches and surfing spots would be tapped to perform an economic analysis of industrial plant siting isn’t clear), attend various meetings and, probably most importantly, lend their hard earned environmental credibility to the project by signing off on the operating agreement. We guess that economic analysis must have been really, really thorough … or something. $285,818.23?

Meanwhile, the Ag Land Trust’s lawsuit over whether the project even has the right to pump water, has brought work on test wells to a standstill. This suit, which we are continually assured will be quickly settled (Water Resources Agency general manager Curtis Weeks predicted in mid-March, for example, that the suit would be settled in less than a month) continues to move forward. Early this month, the Sixth District Court of Appeals rejected the Marina Coast Water District’s appeal of a local judge’s refusal to dismiss the case.

And now the Board of Supervisors is getting cross over the lack of a financing plan for the project (interestingly – and perhaps coincidentally – while little is known about exactly what Steve Collins did to earn $150,000 from RMC, his work is said to have included preparing a financing plan for the project). In spite of the Board approving (in early March) another $186,000 to complete the financing plan, the end of April deadline the Board set will be missed and we hear rumors that lenders are proving less than enthusiastic about the project.

Maybe it’s the litigation giving the lenders cold feet. Maybe it’s the fact that everyone else in the state and world seems to be able to produce desalted water so much more cost effectively. Maybe they’re worried that RMC’s contract to run the project could turn out to be void under Government Code section 1090 (under Government Code section 1090 if a member of a board that makes a contract – whether the member votes or not – has a financial interest in the contract, the contract may be void). Maybe they’re shocked and repulsed by the way so many individuals and organizations are taking advantage of the State Water Resources Control Board’s cease and desist order to shake down the Cal-Am ratepayers (well, alright, it’s probably not that – but it should be).

Whatever the reasons, while the project may currently be all but dead in the water, it’s nice to know there’s been no slowdown in the benefits to its supporters. And we’re sure the ratepayers of the Monterey Peninsula are overjoyed to have the opportunity to provide so much richly deserved compensation to those working so tirelessly to solve the Peninsula’s water problems.


4 Responses to All Aboard! Desal Gravy Train Moving Full-Steam Ahead

  1. Lois DeFord says:

    Unbelievable. Thanks for sharing this important information. Why do I get the feeling that we’re being sold down the proverbial river?

  2. Sarah Damron says:

    There are a number of concerns expressed here, but I can only speak to the concerns about Surfrider Foundation. I assure you Surfrider is not riding any “gravy train”…as one can see from reading the request for compensation, $0 is requested for the work or expenses of Surfrider staff and volunteers. I personally contributed hundreds of hours of my time to participate in the proceeding.

    The work we (and our experts) did was meaningful and germane to our mission of protecting our coastal environments, with our experts working to evaluate things such as project costs/benefits (including consideration of non-market values such as environmental protection and enjoyment), energy use, sea level rise, and water conservation.

    The CPUC’s Intervenor Compensation Program affords intervenors in utilities cases the opportunity to participate in proceedings in a meaningful way by
    somewhat leveling the playing field. Utilities can afford to shell out millions to hire top-tier lawyers and experts. The Intervenor Compensation Program allows intervenors to request compensation for the participation of their experts and lawyers which, although maybe not on the same pay scale as utilities’ lawyers and experts, at least gives intervenors a good shot at participating and contributing to the outcome.  Of note, the value of the contribution and justification for compensation must be proved. To allow time for people to comment, intervenors are expected to notify the Commission of their intent to request compensation early on in the proceeding. Once actual requests are made they are subject to reasonableness review by the CPUC, are dependent on proving substantial contribution to the proceeding, and require approval by the CPUC.  These are requirements the state legislature has put into place to prevent the program from being used as a “big fat petty cash that everyone can tap” (per the Squid Fry article that run a few months back).  The entirety of Surfrider’s claim is to compensate legal and expert assistance over the 21-month proceeding which included preparation for evidentiary hearings and a long settlement process (–settlement is very time intensive due to meetings and iterative review of agreements). 

    The Request for Compensation we have filed is public information and can be found through the CPUC’s website here: Public comments can be made to the Commission.

    As to the Regional Project itself, to which Surfrider has lent its environmental credibility, one must consider the context. Marine life killing co-located seawater desalination plant at Moss Landing or brackish water desalination plant using otherwise unusable water and avoiding entrainment of marine life? That’s an easy call for an environmentalist. Is the Regional Project an environmentalist’s dream-come-true project? Not exactly, but certainly more so than the alternatives on the table. Given the timeline and what’s at stake, we felt it prudent to support what we considered to be the best option on the table.

  3. Antony Tersol says:

    If you read the draft documents regarding the reimbursements, you will see that the Surfrider Foundation does not receive any of the monies. All the monies are being paid to the attorneys and consultants who did work on the settlement. Salaries for staff from Surfrider who participated in the process were not reimbursed.

    You question why Surfrider was “tapped”. Surfrider chose to be involved at a very early stage in order that concerns be addressed of environmental effects on marine organisms in the original proposal for a project at Moss Landing. Subsequently Surfrider was part of the process that suggested an alternative stressing integrated water management, with conservation and efficiency a part of the solution, resulting in a smaller desalination plant. There was no quid pro quo. If the CPUC were to decide the work claimed was valueless there would be no reimbursement.

    Allowing third parties to ask for reimbursement for work done ensures that the decision process includes testimony and expertise from those other than those with a financial interest in the project (CalAm). Without the input from Surfrider and the lawyers and experts who became associeated with Surfrider, the project could have been a much larger desal plant sited at Moss Landing with larger negative environmental consequences.

  4. xasauan says:

    Surfrider is requesting a considerable amount of money (that will ultimately be paid by Cal-Am ratepayers). Whose pocket, whether staff or consultants, it ends up in is not the point. Whether third parties should be reasonably compensated for their contributions (we think they should) is also not the point. We think it’s great that the DRA-led process, in which Surfrider was one of many participants, led to abandonment of the original Moss Landing proposal – but that’s not the point either. We’re not sure what you mean by “integrated water management” and “conservation and efficiency” becoming “part of the solution” and resulting in a smaller desal plant. The current proposal is to desalt 100% of the water necessary to offset illegal Carmel River diversions – not to desalt less and make the rest up through conservation and efficiency. But even that is not the point.

    We meant no more than we said. We think it’s strange that the main work Surfrider is being compensated for carrying out is an economic analysis of the project alternatives and we think the amount of money seems excessive.

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