Embrace Cal-Am or the State Water Board will Shut Off Your Water!

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Pelicans paceline above a dry coast

Business leaders on the Monterey Peninsula don’t exactly love water-supplier, Cal-Am, but, as they’ve demonstrated many times, they greatly prefer Cal-Am to a water purveyor directly responsible to residential ratepayers.

This makes them, and the mayors’ water authority that represents them, staunch opponents of Measure O; Public Water Now’s June ballot measure calling on the Monterey Peninsula Water Management District (MPWMD) to study the feasibility of a public buy-out of the local water system. That’s not a surprise.

What is a surprise is the centerpiece of their argument for opposing the measure. We had expected to hear the usual pro Cal-Am argument that “maybe-public-ownership-will-somehow-in-some-unforeseeable-way-cost-us-more-because-private-enterprise-even-when-operating-as-a monopoly-with-no-competition-whatsoever-and-with-financial-incentives-to-be-as-inefficient-as-possible-and-guaranteed-a-huge-return-on-investment-at-ratepayer-expense-is-still-better-than-the-government-which-everyone-knows-can’t-do-anything-right.”

Instead, the mayors have opened their attack by arguing that support for Measure O will make it more difficult to get an extension of the December 31, 2016 cut-off date for ending illegal diversions from the Carmel River. In other words, if you vote for Measure O then it will be your fault if the State Water Resources Control Board (SWRCB) refuses to extend the deadline. An extension is needed since the desal project obviously isn’t going to be ready on time.

The rationale is that the SWRCB will interpret any show of dissatisfaction with Cal-Am as a sign of “disharmony” on the Monterey Peninsula and evidence of lack of support for the desal project. And that, say the mayors, will make the SWRCB less likely to grant an extension.

So is the SWRCB really demanding harmonious ratepayer allegiance to Cal-Am? It doesn’t look that way to us. In fact, given the SWRCB’s obvious skepticism regarding Cal-Am’s dedication to solving the Monterey Peninsula’s water problems, we think it’s more likely that the SWRCB would welcome a yes vote on Measure O and interpret it as a sign that the Monterey Peninsula is ready to bring in a water agency more seriously focused on ending the illegal diversions.

To get a feel for the SWRCB’s attitude toward Cal-Am we recommend reading the Cease and Desist Order that imposed the 2016 cut-off in the first place. In it you will find passages like:

We are fully cognizant of the complex legal and institutional framework within which Cal-Am must operate to develop or obtain additional supplies of water. However, we find that nearly 14 years after the adoption of (Order 95-10), Cal-Am has implemented astonishingly few actions to reduce its unlawful diversions from the river. Most of Cal-Am’s efforts toward obtaining additional water supplies have been directed toward large projects that could provide enough water both to offset its illegal diversions and to provide water for growth in its service area. We understand why such projects are desirable from the viewpoint of a utility, its customers and the PUC. Nevertheless, Cal-Am’s only achievements toward reducing its illegal diversions have been the work done on two projects yielding small amounts of water. Significantly, these projects are in place largely due to the efforts made by other agencies, i.e., MPWMD and the City of Sand City. But for these agencies, Cal-Am would not have made any reductions in its illegal diversions from the river during the past 14 years, except conservation savings compelled by the ACLs issued by the State Water Board in 1997 and 1998. We conclude that Cal-Am should have made and should make greater efforts toward implementing smaller projects, and that Cal-Am should make such efforts irrespective of whether the PUC approves the Coastal Water Project or one of its alternatives. (CDO 36-37)

So the SWRCB names the MPWMD as one of only two agencies to have actually done anything to reduce the illegal diversions, as opposed to Cal-Am, which has done “astonishingly” little. Yet the mayors want us to believe that the SWRCB will think we’re not serious about ending illegal diversions if we express a preference for putting the MPWMD in charge?

Or how about the SWRCB’s explanation for why they ordered Cal-Am to “immediately commence work” on fixing leaky pipes:

We are of the opinion that Cal-Am can proceed with a main replacement program at any time and that Cal-Am’s wish to obtain PUC approval before proceeding with a main replacement program is only to assure that the funds expended for main replacement may be recovered from its customers (In general, private businesses acting illegally are not excused from immediately complying with the law in order to make sure they can recoup their costs from their customers). (CDO 42)

Not exactly a ringing endorsement.

And as for the danger to public health and safety created by forced reductions in illegal diversions:

Cal-Am contends that reducing the quantity of water currently being diverted from the river would jeopardize its ability to deliver water to its customers. … We should not give too much weight to this contention, however, for three reasons. First, Cal-Am continues to make new connections to its system. If Cal-Am were truly concerned that the existing supply of water is inadequate, it could act to end new connections pursuant to Water Code section 350, et. seq., or seek an order from the PUC prohibiting new service connections in accordance with Public Utility Code section 2708. (CDO 48)

…and so on.

If the mayors are “truly concerned” about getting that extension, maybe they should focus on what the SWRCB actually said it would look at in deciding whether an extension should be granted:

No relief shall be granted unless all of the following conditions are met: (a) Within 18 months of the adoption of this order, Cal-Am has imposed a moratorium on new service connections … ; (b) the demand for potable water by Cal-Am customers has been reduced by 13 percent [measured against the adjusted base of the years in question] and (c) a showing is made that public health and safety will be threatened if relief is not granted.

Nothing about harmony and universal support for Cal-Am.

Clearly, what the SWRCB wants to see are meaningful conservation measures resulting in significant reductions in water use now; a focus on multiple small projects, as opposed to tunnel vision support for a single large project; and, should an extension be necessary, serious evidence identifying the minimum amount of water necessary to avoid public health and safety problems.

Conserving water will impress the SWRCB. Rallying around the Cal-Am flag won’t.

Click here for a much more complete explanation of the SWRCB’s Cease and Desist Order and what it requires.

For more on the business community’s long history of resistance to small, more achievable projects, click here and here.

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2 Responses to Embrace Cal-Am or the State Water Board will Shut Off Your Water!

  1. mojaponica says:

    Brilliant take down of the Mayors’ arrogant stance.
    We are to trust this group of politicians to tell us that all the surrounding towns who have municipal water have got it wrong, and the Monterey Peninsula must continue to send profits to New Jersey? These elites, with their back room deals and corruption, along with do-nothing CalAm are the very reasons we have no new water supply.

  2. Michael Wellborn says:

    Excellent analysis Xasauan! My discussions with state water board members have provided a long-term sense of frustration and skepticism of Cal-Am’s spin. Going public is not easy, but offers much more potential for transparency and local control.

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