The future of the Peninsula’s water supply comes before two state boards next week.

Thursday, Nov. 17 is shaping up to be a momentous day for the future of the Monterey Peninsula’s water supply, as two major state boards – the California Coastal Commission and the California Public Utilities Commission – are set to weigh in on two separate projects that aim to add supply to the local portfolio.

Arguably, the more weighty of the two hearings is the Coastal Commission’s, which is meeting for three days in the Board of Supervisors chambers in Salinas. In those chambers on Nov. 17, the commissioners will consider whether to grant a coastal development permit to California American Water for its proposed desalination project in Marina, which has been a lightning rod for controversy since first being proposed nearly a decade ago.

It will not be the first time the project comes before the commission: In November 2019, the commissioners – after the agency’s staff recommended they deny a permit – made no decision, but directed both its staff and Cal Am to provide additional information. They wanted to know more about a number of things, including the project’s potential impact to Marina’s groundwater, as the project is proposed to draw brackish water from slant wells under the beach at the former Cemex plant in Marina.

The project again was set to go before the commission in September 2020 – again with the agency’s staff recommending denial – but Cal Am withdrew its application shortly before the hearing. At that time, Coastal Commission staff believed an expansion of the recycled water project Pure Water Monterey was a more environmentally friendly alternative to solve the region’s water supply shortage for the near future, at least.

Also on Nov. 17, the CPUC will consider approving a proposed decision for a water purchase agreement with Cal Am that would facilitate Pure Water Monterey’s expansion, which promises to provide an additional 2,250 acre-feet of recycled water annually to the regional water supply. Cal Am has repeatedly promised to sign the agreement, if approved.

That creates a conundrum: If the CPUC approves the water purchase agreement and Cal Am signs it, then the amount of water production capacity would more than meet current demand.

Dave Stoldt, general manager of the Monterey Peninsula Water Management District, has long been vocal about his team’s calculations that show, based on water demand projections for the Monterey Peninsula from the Association of Monterey Bay Area Governments, expanding Pure Water Monterey’s expansion could meet local demand for water for 30 years. “If we’re really wrong, it’s 20 years,” Stoldt says.

The decision to approve a desal project, he believes, is premature until it’s clear when the demand for the water will be there.

And as for what it would cost to construct and operate the desal project, that remains unclear – Cal Am’s last estimate for the cost to build was just under $300 million in 2017. A lot has changed since then.

Cal Am spokesperson Josh Stratton, who answered questions via email, writes, “We plan to update construction and material costs in the coming months.” As to why Cal Am hasn’t given any cost updates for five years, he writes, “What would be truly costly would be to delay the implementation of a drought-proof water supply.”

Whatever the cost ends up being, it would be passed on to ratepayers, at least in part (pending approval from the CPUC).

The project differs from Cal Am’s previous proposals in that it promises to produce up to 4.8 million gallons per day, and could subsequently be phased up to 6.4 million gallons per day. Cal Am’s earlier proposal was to build it all right away. The bigger size is what the CPUC approved, so even if the Coastal Commission approves the phased project, it will still have to come back before the CPUC, which will also undoubtedly be asked to approve a higher cost for the project.

This project is also different in that this time around in that Coastal Commission staff recommend commissioners approve it. The staff report with that recommendation acknowledges that the project “involves the most significant environmental justice concerns the Commission has considered since it adopted an environmental justice policy in 2019.”

Kathy Biala, a Marina City Council member and a leader of Marina activist group Citizens for Just Water, which was formed in opposition to the project, says, “That sentence says it all. Yet instead of denial, they are recommending an approval with 20 conditions.”

Those 20 conditions include securing whatever federal, state and local permits needed to move forward, which includes permission from Monterey One Water to use the agency’s outfall to disperse the project’s brine. It also includes a series of other environmental regulatory requirements associated with habitat, as well as a groundwater monitoring program.

Biala has long had concerns about the project’s impact on Marina’s groundwater, as well as having a private company build wells under the beach without the city’s permission.

She is baffled that the same agency that once recommended denial is now recommending approval, even while acknowledging the environmental justice issues that were a sticking point in 2020. “The material facts haven’t changed,” Biala says. “What does this say about anyone’s environmental justice policies, when the clearest example of environmental injustice is not denied?”

The Coastal Commission’s report states Cal Am’s project “would result in the most costly water of any of the desalination projects the commission has considered recently.” The report notes that it would increase ratepayer bills by $47 to $50 per month for a typical single-family household.

Cal Am, in its proposal, promises to cap water bills for low-income residents for five years, a cost Stratton says will be spread out among ratepayers statewide, shareholders and the state and federal government.

“At the end of the day the CPUC sets our rates, including for costs associated with the project,” he adds.

In this current fiscal year, water from Pure Water Monterey is projected to cost about $3,500 per acre-foot. Desalinated water from Cal Am’s project would cost far more – how much, who knows? – and if there’s no demand for it, who pays for the unused capacity? For years, it’s possible that amount of unused capacity could be up to 100 percent of the plant’s volume. In that event, who’s stuck holding the bill is not clear.