San Clemente Dam removal cost inflames local water wars.

(UPDATE 6/21, 12:45pm—This morning the Public Utilities Commission approved the San Clemente Dam removal project, sanctioning the Sandoval alternative by a 4-1 vote. Cal Am's revision puts the heaviest share of the costs on its biggest water users. The project will result in an estimated 5.6 percent bill increase—about $2.54 per month—for the average residential customer, effective July 1.)

Two local groups – one looking out for the Carmel River, the other for Peninsula water customers – are butting heads over one question: Who should pay for planning work associated with the $84 million San Clemente Dam removal project?


Today, the state Public Utilities Commission will consider California American Water’s request to recover $26 million in pre-construction costs from Monterey service area customers.


Last November, PUC Administrative Law Judge Christine Walwyn proposed shunting the planning costs to Cal Am’s shareholders. But in April, Commissioner Catherine Sandoval floated an alternative that dumps those costs on ratepayers.


Cal Am spokeswoman Catherine Bowie says Walwyn’s version would “delay the project at the least.” If shareholders are forced to absorb the $26 million – about half their annual Monterey-area revenue – Cal Am could appeal, or scrap the project altogether.


Any delay could threaten the project’s $35 million in public funding. That’s what scares Frank Emerson of the Carmel River Steelhead Association, which is backing Sandoval’s alternative. “If the PUC says, ‘You’re just gonna have to eat your costs,’ what a wet blanket that would be for dam removals all over California,” he says. 


But George Riley of Citizens for Public Water supports Walwyn’s version. “We’re not trying to interfere in the [dam removal] project; we just think the burden ought to be borne more by the investors,” he says. 


Cal Am has offered a revision to Sandoval’s alternative that would shift the cost burden to the biggest water users – resulting in an average bill hike of about 6 percent instead of 30.