Compromise between Cal Am and ratepayer advocates paves way for Pure Water Monterey expansion.

An agreement reached March 15 between Cal Am and the Public Advocates Office, a division of the California Public Utilities Commission that represents ratepayer interests has helped clear one of the last hurdles toward the expansion a Pure Water Monterey, a recycled water project led by Monterey One Water, and which would add another 2,250 acre-feet to the Monterey Peninsula's water supply. 

And with that expansion—if it does indeed move forward—there is finally a chance the Peninsula could get out from under the 2009, state-imposed cease-and-desist order against Cal Am, which forced Cal Am, a private water utility, to stop illegally overpumping the Carmel River. Ever since, the order has hung over the Peninsula like an anvil, and has prevented any new water meters being set—with rare exceptions—within Cal Am's service district. That, in turn, has exacerbated the region's housing crisis—you can't build housing without more water. 

The unresolved issue is a water purchase agreement between Cal Am, M1W and the Monterey Peninsula Water Management District that the CPUC approved Dec. 1, 2022. And while Cal Am has repeatedly, and publicly, expressed support for the expansion of Pure Water Monterey, it refused to sign the water purchase agreement until the CPUC gave the company a rehearing on recovering sunk costs for its water projects. Essentially, the company was seeking another $21 million, and refused to sign the agreement until the CPUC at least heard its case. 

But with the compromise that became public March 15, in which both Cal Am the Public Advocates Office filed separate motions with the CPUC, they agreed to meet in the middle: Instead of the $21 million it was seeking, the Public Advocates Office agreed to grant the company another $10 million (which will be paid by ratepayers) to cover the cost of two extraction wells in Seaside. 

In the motion filed by the Public Advocates Office, it states discussion between office and Cal Am have been taking place since Nov. 9, 2022, nearly a month before the water purchase agreement was approved by the CPUC. 

In its meeting today, March 16, the CPUC is set to discuss Cal Am's request for a rehearing for its effort to recoup another $21 million; with the compromise reached yesterday, MPWMD General Manager Dave Stoldt says it's a "positive signal" that will "significantly impact that closed session discussion."

He reiterates nothing is guaranteed until the CPUC agrees on a course of action, but he expects the agency to make a decision about the proposed compromise relatively soon, be it two weeks, a month, or six weeks from now. 

When, or if, that compromise is given CPUC's blessing, contracts for the expansion project can go out to bid, and construction will begin as soon as possible.