CPUC judges issue proposed decision that may help Cal Am's desal ambitions, but questions remain.

A proposed decision from two California Public Utilities Commission administrative law judges dropped Friday afternoon, May 9, that could have major implications as to whether Cal Am—the investor-owned utility that supplies water the Monterey Peninsula—will be able to move forward with its proposed desalination project in Marina, which has been a lightning rod of controversy for more than a decade. 

The ruling was solely focused on adjudicating what the Peninsula’s annual water supply and demand would be by 2050, a benchmark set to inform the CPUC, and the California Coastal Commission, about whether a desalination project is necessary to meet the Peninsula’s water demand for the next 25 years. 

The question was borne out of the expansion of Pure Water Monterey, a recycled water project led by Monterey One Water and Monterey Peninsula Water Management District that will add 2,250 acre-feet annually to the Peninsula’s supply when it comes online later this year, putting the Peninsula’s total annual water supply at over 12,000 acre-feet—according to MPWMD—while the current demand is down to about 9,000 acre-feet annually. 

Cal Am, along with a number of other entities including MPWMD, M1W, the City of Marina and Marina Coast Water District, among others, each submitted their own supply and demand estimates and in some cases provided testimony for the record. 

The May 9 proposed decision was mixed, agreeing with Cal Am on some of its claims, while agreeing with other parties on other claims. The administrative law judges, Robert Haga and Jack Chang, adopted Cal Am’s 2050 demand estimate of 13,732 acre-feet, while adopting a current water supply of 11,204 acre-feet (including the Pure Water Monterey expansion), which was more than Cal Am’s estimates. 

Ultimately, the decision that will matter is the one that’s adopted by the CPUC, and the various parties have just over two weeks to now file comments and point out parts of the proposed decision they find fault with, but with an important caveat: The judges will only consider information that’s already in the administrative record—nothing new can be introduced. 

One baffling aspect of the proposed decision is that the judges accepted as “reasonable” that there would be a 500 acre-foot increase in demand by 2050 due to a “tourism rebound” from the Great Recession in 2009. The judges also accepted Cal Am’s future demand claims by counting entitlements for Pebble Beach lots, some of which won’t require Cal Am’s water, and that MPWMD asserts were already accounted for in regional estimates of population growth. 

At no point in the proposed decision is there any discussion about what would happen to desalinated water if there's no demand for it.

When a final decision is adopted, which could happen as early as June, parties can elect to ask for a rehearing of the issue, but even if one is granted, it wouldn’t allow for the introduction of new evidence. 

If no re-hearing is granted, the last option would be an appeal to the State Supreme Court, which takes up only a small percentage of cases, around one percent.