mprwa special meeting agenda packet 11-14-12

7/30/2019 Mprwa Special Meeting Agenda Packet 11-14-12

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AgendaMonterey Peninsula Regional Water Authority (MPRWA)

Special Meeting

7:30 PM, Wednesday, November 14, 2012

Few Memorial Hall of RecordsCity Council ChamberMonterey, California

ROLL CALL

PLEDGE OF ALLEGIANCE

REPORTS FROM BOARD DIRECTORS AND STAFF

1. Reports from Technical Advisory Committee

2. Reports from Authority Directors

PUBLIC COMMENTSPUBLIC COMMENTS allows you, the public, to speak for a maximum of three minutes on anysubject which is within the jurisdiction of the MPRWA and which is not on the agenda. Any personor group desiring to bring an item to the attention of the Authority may do so by addressing theAuthority during Public Comments or by addressing a letter of explanation to: MPRWA, Attn:Monterey City Clerk, 580 Pacific St, Monterey, CA 93940. The appropriate staff person will contactthe sender concerning the details.

APPROVAL OF MINUTES

3. June 28, 2012

4. October 22, 2012 Special Meeting

5. October 25, 2012 Special Meeting

AGENDA ITEMS

6. Receive and Discuss Draft Consultant Report, TAC Recommendation and ProvideDirection to Staff Regarding Policy Position on Desal Projects to be Communicated toCalifornia Public Utilities Commission

7. Response Letter to California Public Utilities Commission Application 12-04-019 DatedNovember 8, 2012 (Information Only)

8. Presentation from Ratepayers First and Citizens for Public Water - Riley

ADJOURNMENT


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Wednesday, November 14, 2012

2

The Monterey Peninsula Regional Water Authority is committed to include the disabled in all ofits services, programs and activities. For disabled access, dial 711 to use the California RelayService (CRS) to speak to staff at the Monterey City Clerks Office, the Principal Office of theAuthority. CRS offers free text-to-speech, speech-to-speech, and Spanish-language services24 hours a day, 7 days a week. If you require a hearing amplification device to attend ameeting, dial 711 to use CRS to talk to staff at the Monterey City Clerks Office at(831) 646-3935 to coordinate use of a device or for information on an agenda.

Agenda related writings or documents provided to the MPRWA are available for publicinspection during the meeting or may be requested from the Monterey City Clerks Office at 580Pacific St, Room 6, Monterey, CA 93940. This agenda is posted in compliance with CaliforniaGovernment Code Section 54954.2(a) or Section 54956.


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MONTEREY PENINSULA REGIONAL WATER AUTHORITY

(MPRWA) REGULAR MEETING MINUTES

Thursday, June 28, 2012

1. CALL TO ORDERThe MPRWA regular meeting of June 28, 2012 was called to order at 6:00 p.m. byPresident Chuck Della Sala.

2. ROLL CALL AND INTRODUCTIONSRoll call was taken and a quorum established with the following members in attendance:

a. Chuck Della Sala, Monterey Presidentb. David Pendergrass, Sand Cityc. Jason Burnett, Carmeld. Carmelita Garcia, Pacific Grovee. Jerry Edelen, Del Rey Oaksf.

Felix Bachofner, Seaside Vice President (arrived after roll call at 6:05pm).

3. PLEDGE OF ALLEGIANCEDirector Pendergrass led the attendees in the Pledge of Allegiance.

4. REPORTS FROM MEMBERS OF THE AUTHORITY BOARD AND STAFFMr. Don Freeman presented options regarding legal counsel.

Ms. Christine Davi expressed the need for continuity of legal services, or to go back forshared services with City of Monterey.

Options discussed include carrying on as is, having shared services with Monterey, anyother entity, or retired city clerks.

Extensive discussion took place among the Board members regarding legal counselneeds.

Mr. John Dunn introduced the budget.

Mr. Fred Muir expressed that water is an important project, and public has highexpectations for this Board.

Mr. Nelson Vega expressed concerns from a taxpayers perspective. He expressed thatthis organization needs appropriate legal advice, and to decide first who is going to do theproject. Mr. Vega suggested options such as going back to City Council and Districts,and possibly a bigger desal plant.

Mr. Bill Hood expressed concern for 2 legal issues, and this organization needs someoneknowledgeable.


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Mr. Mark Del Piero expressed that $1,000 for a letter is expensive. There is also potentialfor conflict of interest for Monterey/Carmel attorneys. He expressed concerns as to whythe County is not represented here.

Extensive board discussion took place.

M/S/C (DELLA SALA/EDELEN) to continue item to a future meeting with therecommendation to appoint an Ad-hoc committee. There were six affirmative votes.

Mayor Burnett provided updates on meetings with PUC and Coastal Commission.

Charles Dela Salla met with the president of Carmel water company and spoke about theanalysis of 3 desal projects, followed by a Cal-Am discussion.

5. RECEIVE REPORT FROM TAC AND PROVIDE DIRECTION AS NEEDEDMayor Garcia excused herself due to potential conflict of interest - campaign regulationsduring supervisorial race.

Mr. Bill Reichmuth spoke about the SWAT analysis of 3 desal plants. He informed theBoard that he was asked by Cal-Am to do an update on water rights/negotiations, etc. Hementioned that the RFP is finally out today, and he would like to do an addendum. Mr.Reichmuth stated there are lots of disconnects, and we need someone who has primaryduty of providing these clerical administrative tasks.

The Board expressed thanks to Mr. Reichmuth for his hard work. He will be steppingdown from his role due to health reasons.

President Della Sala opened public comment.

A member from the public spoke about a PUC workshop to be held in San Francisco onJuly 26 and 27. The JPA has previously submitted a request for this meeting to be held inMonterey on a future date.

Mr. George Schroeder, Peoples project, spoke about RFP comments and suggested thatproposers should spend 2 days looking at the projects themselves. Peoples project wouldpay a portion of cost.

Mr. Rudy Fisher, Pacific Grove Councilmember, mentioned that TAC is doing a good jobfor hiring a consultant. There are high expectations for TAC. neutral funding for analysis.Many people are counting on JPA.

Mr. Nelson Vega mentioned that the agenda for this meeting wasnt properly posted, andcontinuity is needed for clerical duties. He emphasized that real independent legalrepresentation is needed.


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Mr. George Schroeder made a comment in reference to the RFP in which an addendumshould be sent out quickly for a consultant to do a site inspection.

The President closed public comment and opened up discussion to Board members.

Mr. Bill Reichmuth answered questions from Board.

6. PUBLIC COMMENT FOR ITEMS NOT ON THE AGENDAMayor Garcia returned to the Boardroom.

Mr. Tom Riley expressed concerns on several topics. He feels there is a lack ofcommunity consensus and support for water and regional desal projects. The role of JPAis important to get message out to the community on the 3 desal project proposals. Inregards to government funding, knowing how to negotiate some funding may be

beneficial to get a job done. Lastly, this organization is lacking County representation. Hesuggested that the JPA listen to community and Cal-Am rate payers. A water supplyproject will be crucial for the entire Monterey Peninsula community.

Mr. Nelson Vega mentioned potential conflict of interest. He asked what confidence doescommunity have in JPA directors? Mayor shouldnt have private meeting with Cal-Am.He also suggested that the City of Marina be outreached to due to their legal right to thewater. Mr. Vega mentioned that JPA shouldnt go forward with the budget item until thepublic has seen the budget in the staff report.

Mr. Bill Hood mentioned an interim decision that is scheduled for February, is due inSeptember. He expressed the importance of putting time into that process, and to movequickly with practical decisions. It is expected that budgets can dictate a level of effortand vice versa. If you cant be actively involved, there wont be a major impact.

A member of the public from Carmel brought up the issue of not having an appropriateEIR as ordered by PUC. If this isnt done properly, a lot of money will be wasted. Hesuggested that even with a limited budget, an appropriate letter with issues to beaddressed in proper EIR should be sent to PUC.

7. APPROVAL OF MINUTES JUNE 14, 2012M/S/C (DELLA SALA/BACHOFNER) to continue approval of minutes at a futuremeeting.

Vice-President Bachofner suggested that agenda item #8 (membership fees) be discussedafter agenda item #9 (budget.) Extensive discussion took place about membership fees.Agenda item #9 will be discussed before agenda item #8.

The MPRWA Board recessed for 6 minutes at 7:45pm.


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8. DISCUSS MEMBERSHIP FEE AS A MEANS OF SUPPORTING OPERATIONSOF JPA

Mr. Don Freeman discussed that a weighted average from water usage is preferred over a

membership fee. A way to re-word the discussion on membership fees would be todiscuss financial support for operations of JPA.

President Della Sala opened public comment.

Mr. Nelson Vega spoke about a weighted vote emphasis because the citizens will knowexactly how much everything is going to cost. He stated that there should be a policy forwhen people bring desal projects to JPA, they should be responsible for paying the costs;not on the taxpayers.

Mr. Rudy Fisher commented on the budget. He mentioned that the JPA focus should be

on what can be done quickly. The big items include project evaluation study, PUCrepresentation, and legal costs.

No action for this item is necessary due to re-noticing requirements by Don Freeman.

9. CONSIDER ADOPTING BUDGETJohn Dunn presented report on budget. Extensive discussion took place.

President Della Sala opened public comment regarding budget.

Mr. Rudy Fisher commented on the budget suggesting that weighted distribution is afavorable option.

Mr. Nelson Vega commented on the budget and the significance of weighted votes.

President Della Sala closed public comment and opened the discussion to Boardmembers.

Extensive discussion took place regarding the budget.

M/S/C (BURNETT/BACHOFNER) to continue item with direction for staff to have lineitem on legal representation and staff support and for each mayor to get authorizationfrom Council.

10.DISCUSS ADDING ENGINEER TO TACDue to the retirement of Mr. Reichmuth and Mr. Dolan not returning to the TAC, arecommendation has been made to replace two engineers - One with CEQA background(planner) and one with water expertise.


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Mr. Nelson Vega suggested hiring someone for technical advice for intense analysis ofthis entire process.

Mr. Doug Helm suggested adding someone with financial background to work with

community.

11.ITEMS FOR FUTURE AGENDA-Agency modifications. How likely is it to capture costs?-send letter to County for reconsideration of representation to JPA-County role in shared costs-Policy direction on pay as you go policy.-Discuss public outreach.

12.DETERMINE TIME AND PLACE OF FUTURE MEETINGS

Thursday July 12 and July 26 place TBD.

City manager meetings potentially scheduled for July 9.

Ad hoc meeting to meet with City Managers TBD.

13.ADJOURNMENTThe meeting was adjourned at 8:50 p.m.

Respectfully submitted,

___________________________________Toni Oasay

Acting ClerkATTEST:

_________________________________Chuck Della SallaChair


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MINUTES

MONTEREY PENINSULA REGIONAL WATER AUTHORITY (MPRWA)Special Meeting

7:00 PM, Monday, October 22, 2012FEW MEMORIAL HALL OF RECORDS

CITY COUNCIL CHAMBERSMONTEREY, CALIFORNIA

Directors Present: Bachofner, Burnett, Edelen, Garcia, Pendergrass, Della SalaDirectors Absent:

Staff Present: Acting Executive Director, Clerk of the Authority, Legal Counsel

ROLL CALL

President Della Sala called the meeting to order at 7:02 p.m.


PUBLIC COMMENTS

President Della Sala opened public comment for items not on the agenda. David Armanascorepresenting the Deep Water Desal project stated that the error listed in the CPUC's Notice ofPreparation included an incorrect description for the Deep Water Desal project. Mr. Armanascoprovided corrected information to the Authority and the public. Nelson Vega spoke requestingany materials discussed during the public meeting be made available to the public. Nina Beattiespoke about smart meters manufactured by Neptune Technology Group indicating they areinaccurate, have unexplained bill increases and cited an article in the Monterey Herald asinaccurate. With no further requests to speak, President Della Sala closed public comment.

AGENDA ITEMS

1. Receive and Discuss Recommendations From the Technical Advisory Committee Regardingthe Notice of Preparation of the Environmental Impact Report for the Proposed California-American Water Company (Cal Am) Monterey Peninsula Water Supply Project (MPWSP) to beheard by the California Public Utilities Commission and Provide Direction in Regards to thePublic Scoping Meetings Beginning on October 24, 2012Action: Discussed and Gave Direction to Staff

Chair Stoldt reported about the October 22, 2012 TAC meeting discussing areas which theAuthority should address in the response to the Notice of Preparation (NOP) prior to the CPUCScoping meetings on October 24 and 25, 2012 and encouraged the Authority to request themost comprehensive evaluation to avoid future potential litigation. After giving a brief

description of the nine bulleted recommendations from the TAC, he answered questions of theboard.

Director Pendergrass questioned the small project alternatives in Pacific Grove as a viablealternative. Pacific Grove City Manager Tom Frutchey gave a brief description of the threeprojects Pacific Grove has proposed to convert the Pacific Grove golf course from potablewater to waste water and to free up 125 acre feet per year of water.


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MPRWA Minutes Monday, October 22, 2012

Monterey Peninsula Regional Water Authority

Special Meeting Minutes - Monday, October 22, 20122

President Della Sala opened the floor for public comments on this item. Nelson Vega spokeconcerning other geographic areas which have not addressed a water solution and requestedpotentially supplying water to those areas be considered in the decision making process. Healso requested emphasis in the size of the project as well as the importance of addressing thecost per acre foot. He then asked the Authority to analyze their liability and he spoke in supportof Fred Meurer's strategic suggestions for the Authority. President Della Sala closed publiccomment and brought the item back to the Authority for discussion.

The Authority discussed the previous policy over the rate of replenishment and agreed toagendize it for a future meeting.

Edelen discussed scenarios of replacement versus replenishment and requested that adecision of size be based on drought or worst case scenarios. President Della Sala followed upby suggesting that the letter needs to communicate the Authoritys concern about water levelswith regard to ASR and GWR impacts during drought years.

Vice President Bachofner spoke to Edelens comments saying the consideration should notonly include drought impacts on aquifer storage and recovery (ASR) but ground water

replenishment (GWR) as well and that it is critical to understand that Desal plants are modularin nature and can add modulars on line in the future. He emphasized that determining the sizeof the pipe is important. Mr. Freeman responded that the size of the pipe could be regulatedthrough permitting also.

46:24 On a Motion by Director Burnet and seconded by President Della Sala and carried by thefollowing vote, the MPRWA approve providing direction to staff to draft a letter for thePresidents signature which reflects the points made by the Technical Advisory Committee withbelow four modifications:

1) Include language from Fred Meurers memo noting that including the project alternatives atthe project level will take additional resources and the MPRWA is willing to advocate for the

additional costs given the much larger cost of failure.

2) Reiteration of the Water Authoritys position that the desalination facility should be sized forreplacement and replenishment specifying the Authority has not taken a position on time framefor which the Seaside basin should be replenished and noting the impact that both GWR andASR have with respect to drought and weather variability.

3) Sizing of the pipeline and other parts of the project that are not modular and should beconsidered in a different way than the size of the desalination project itself.

DIRECTED LEGAL COUNSEL TO DRAFT SAFE LANGUAGE FOR ITEM 3

4) Include reference to Pacific Grove small water project alternatives but specify that theMPRWA has not endorsed or taken a position on these projects.

AYES: 6 COUNCILMEMBERS: Bachofner, Burnett, Edelen, Garcia, Pendergrass,Della Sala

NOES: 0 COUNCILMEMBERS: NoneABSENT: 0 COUNCILMEMBERS: NoneABSTAIN: 0 COUNCILMEMBERS: NoneRECUSED: 0 COUNCILMEMBERS: None


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President Della Sala invited discussion on the motion. Vice President Bachofner requestedstronger language regarding sizing of the pipe as Seaside has a position for growth and not justreplenishment. Director Burnett responded that his intention was to be careful so that we arenot triggering a CEQA challenge with the language. The Authority agreed to defer to LegalCouncil to draft safe language.

Pacific Grove City Manager Tom Frutchey spoke on behalf of Director Garcia requesting theMPRWA support the Pacific Grove Small Water Projects and suggested the Authority receivean informational presentation. The Authority agreed to change the next regularly scheduledmeeting to a special meeting on Thursday October 25, 2012 to add a presentation from the Cityof Pacific Grove regarding the small water projects cited in the NOP. With no FurtherDiscussion, the Authority agreed unanimously.

2. Appoint an MPRWA Director as Chair of the Technical Advisory Committee (TAC) as requiredby the JPA Agreement and Authorize Staff to Accept Applications of Appointment for AdditionalTAC Member Vacancies

President Della Sala indicated that the JPA agreement requires Alternate Committees to be

chaired by a Director of the Authority. He also commented that previous TAC Chairs have donean outstanding job, however the Authority must be in compliance with the agreement which wassigned by each jurisdiction. He indicated the time commitment to be approximately 10 hours permonth. President Della Sala opened public comment and having no requests to speak, closedpublic comment then made a suggestion that Director Burnett serve as a Chair of the TAC.

On a motion by President Della Sala, seconded by Director Pendergrass, and carried by thefollowing vote, the Monterey Peninsula Regional Water Authority approved appointment ofDirector Burnet as Chair of the Technical Advisory Committee as required by the JPAagreement and authorized staff to accept applications for future appointments of additional TACmembers.

AYES: 6 DIRECTORS: Bachofner, Burnett, Edelen, Garcia, Pendergrass,Della Sala

NOES: 0 DIRECTORS: NoneABSENT: 0 DIRECTORS: NoneABSTAIN: 0 DIRECTORS: NoneRECUSED: 0 DIRECTORS: None

3. Approve Sending Letter Endorsing County Counsel Request for Attorney General OpinionRegarding Membership of Monterey County in the Monterey Peninsula Regional WaterAuthority

Legal Counsel Freemen discussed a letter delivered to the MPRWA and expressed concernabout potential conflicts of interest between two participating agencies with the JPA. He saidunless enabling legislation exists there could be an incompatibility of operability. The intent ofthis item is to get clarification on the matter from the Attorney General from the State ofCalifornia if there is a conflict of interest with Monterey County participating with the Authority.The County has the ability to request that opinion and asked that the Authority be willing tosupport and co-sign the attached letter. The Authority agreed unanimously to this request.


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President Della Sala and opened the floor to public comments on closed session items. NinaBeattie requested that the Authority not consider Sue McCloud as a candidate for the ExecutiveDirector position. President Della Sala informed the public that Ms. McCloud has withdrawn herapplication. With no further business to conduct in open session President Della Sala adjournedto closed session at 8:15 p.m.

***Adjourn to Closed Session***

ADJOURNMENT

ATTEST:

Lesley Milton, Clerk of the Authority MPRWA President


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MINUTES

MONTEREY PENINSULA REGIONAL WATER AUTHORITY (MPRWA)Special Meeting

7:00 PM, Thursday, October 25, 2012COUNCIL CHAMBER

FEW MEMORIAL HALL OF RECORDSMONTEREY, CALIFORNIA

Directors Present:

Directors Absent: Bachofner, Burnett, Edelen, Garcia, Pendergrass, Della Sala

Staff Present: Acting Executive Director, Legal Counsel Clerk of the Authority

ROLL CALL

Mayor Della Sala called the meeting to order at 7:08 p.m.


REPORTS FROM BOARD DIRECTORS AND STAFF

1. Reports from Technical Advisory Committee

Action: No Reports Received

There were no reports from the TAC staff due to the fact the TAC has not had a meeting sincethe last MPRWA Authority meeting. Director Burnett indicated that he will be new Chair of theTAC.

2. Reports from Authority Directors

Action: Reports Received

Director Burnett reported he meet with the President of Cal Am, discussing the October 1, 2012letter sent by the MPRWA, and governance desires of the MPRWA, noting he thinks there isstill an opportunity for optimal governance. He stated Cal Am expressed a preference that itemsincluded in category A of the letter be listed instead in Category B. President Della Salainformed the Authority that there was a public records request received from Mrs. Paterson thatstaff will be responding to and he also reminded the Directors that Authority meetings will beheld at 7:00 p.m. through the end of 2012.

PUBLIC COMMENTS

President Della Sala opened the floor to comments from the public. Doug Wilhelm discussed ananalysis of studies from the newly drafted Southern California Desalination Agreement forpotential ideas for the MPRWA.

Nelson Vega questioned why Director Burnett was meeting with the Cal Am President andexpressed concerns about transparency. President Della Sala responded to Mr. Vegascomments indicating Director Burnett was appointed as part of the ad hoc group tasked withgovernance and financing. Safwat Malek spoke in support of Mr. Wilhelms comments. GeorgeRiley presented a shortened version of the presentation he requested to be agendized at afuture MPRWA meeting which is to coordinate rate paper interest into a single message that


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MPRWA Minutes Thursday, October 25, 2012


Special Meeting Minutes - Thursday, October 25, 20122

the number one priority should be lowest cost. Mr. Riley also expressed concerns over currentand future price increases and requested that the item be addressed now, so that the projectscan move forward collectively and not independently.

Libby Downey applauded Director Burnett for his efforts to work with Cal Am and his continuedwork with governance desires of the desalination project. She also expressed concern that

there is a caveat listed in the NOP which allows for Cal Am to veto any suggestions presentedduring the comment period and requested that the Authority look toward MPRWMD to lendsupport to their desalination proposal. She asked when the consultants reports would be madeavailable and President Della Sala responded that they should be available October 31st.Director Edelen thanked Mr. Vega for his comments on keeping the Authority transparent.

APPROVAL OF MINUTESAction item: Amended and Approved

On a motion by Director Burnett and seconded by Vice President Bachofner and passed by thefollowing vote, the MPRWA voted to approve the minutes as amended by striking the vote of

Supervisor Potter from the record of September 27, 2012 as Monterey County has not signedan agreement to join the MPRWA, therefore is not a voting member.



3. September 27, 2012

AGENDA ITEMS

4. Receive Presentation Regarding the Proposed City of Pacific Grove Small Water SupplyProject And Provide Direction for Potential Inclusion Within The Draft Response Letter To TheCalifornia Public Utilities Commission Notice of PreparationAction: Received Presentation, Discussed and Provided Direction to Staff

Pacific Grove City Manager Tom Frutchey gave a presentation about the Small WaterProjects developed as potential solutions to the water shortage. Pacific Grove has a uniquesituation being isolated geographically as well as being regulated as an area of biologicalsignificance (ASBS), stressing these projects are designed to convert the fully potable water

utilized by the golf course to grey water freeing up potable water as source of water comethe 2017 deadline imposed by the CPUC.


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Director Edelen questioned how the projects would be funded and City Manager Frutcheyresponded that it depends on the participation levels of other companies and jurisdictions thatsupport the objectives.

President Della Sala opened the item for public comments. Safwat Malek encouraged the citiesthat were agreeable to the projects to join with Pacific Grove to bring the costs down. With nofurther requests to speak President Della Sala brought the discussion back to the board.

Director Pendergrass expressed support that this project be requested to the CPUC tobe evaluated further and Director Garcia agreed. Burnett expressed the need to keep an eye oncost effectiveness. President Della Sala expressed concern that the citizens do not see thecollaboration that is occurring between the cities in relation to Areas of Biological Significance(ASBS) and water replenishment. He then closed discussion on the item.

5. Consider Submission of a Letter to the Monterey Peninsula Water Pollution Control AgencySupporting the Proposed Ground Water Replenishment (GWR)Action: Discussed and Approved with Amendments

Director Pendergrass gave a brief description and rationale for the letter, requesting theMPRWA sign the attached letter supporting the proposed Ground Water Replenishment.

President Della Sala opened the item for public comment. Nelson Vega questioned the timeline of this project versus the goal of the desalination facility and expressed the need for a largeenough desalination facility. With no further requests to speak, President Della Sala closedpublic comments.

Director Pendegrass spoke to Mr. Vegas comments indicating that there is an issue with thefarmers agreement and the GWR is not related to flows. President Della Sala spoke to Mr.Vega's comments, expressing the scenario that if we try to build a facility that is too large and itdoes not meet the deadline it would look better if there were other avenues the Authority wastrying to pursue concurrentlyDirector Edelen spoke of an example of a facility that was built larger than necessary and that40% of the generated water was dumped back into the ocean to keep costs down, but thenature of the regulations in California will never allow that to happen therefore it is important toget it through the CPUC with the minimum number of lawsuits.

On a motion by Director Pendergrass and seconded by Director Garcia, the MPRWA moved toapprove sending the drafted letter to the MRWPCA in support of Ground Water Replenishment(GWR).

President Della Sala opened the item to discussion on the motion and requested minor wordchoice edits for the Authority to consider. Director Pendergrass and Director Garcia amendedthe motion to include the edits. Director Burnett asked if the board would consider making anoffer for assisting with public outreach. President Della Sala redirected the conversation back tothe agenda item.

On a motion by Director Pendergrass and seconded by Director Garcia, and carried by thefollowing the MPRWA moved to approve sending the drafted letter to the MRWPCA in supportof groundwater replenishment (GWR) as amended.


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6. Review and Approve MPRWA Letterhead Format and MPRWA Seal for Use on AuthorityCorrespondence and for Attesting Authority RecordsAction: Discussed and Approved as Amended

Clerk to the Authority Milton presented the report indicating the MPRWA has no formallyadopted letterhead for official correspondence and that the current document being used hadnot been approved. City of Monterey staff utilized in house resources to develop the attachedletterhead, logo and draft seal for use on formalizing official documents.

Vice President Bachofner expressed desired changes, discussed marketing and brandingstrategies and requested time to generate documents and graphics that were more graphically

pleasing.

Vice President Bachofner made a motion to officially adopt the old letterhead for interim useuntil other graphic designs could be provided. Motion died for lack of a second.

On a motion by Director Garcia and seconded by Director Burnett and carried by the followingvote, the MPRWA reviewed and approved the attached MPRWA format with edits and theMPRWA seal for use on authority correspondence and for attesting Authority records:

AYES: 5 DIRECTORS: Burnett, Edelen, Garcia, Pendergrass, Della SalaNOES: 1 DIRECTORS: BachofnerABSENT: 0 DIRECTORS: None

ABSTAIN: 0 DIRECTORS: NoneRECUSED: 0 DIRECTORS: NoneVice President Bachofner disagreed with using the drafted documents and said that there isexpertise available for a better product.

7. Response Letters Regarding California Public Utilities Commission Application 12-04-019(Information Only)Action: Received

a. October 1, 2012

The letter dated October 1, 2012 addressed to Cal Am was submitted for information only to

ensure it was available to the public. Director Edelen commented that the two letters included inthe packet were articulate and well written. President Della Sala opened the item for discussionfrom the public and with no requests to speak, closed public comment.

b. Draft Letter November 9, 2012Action: Received and Discussed and Direction Given to Staff


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Legal Counsel Freeman introduced the item and indicated the attached was a draft lettergenerated from the direction provided by the Authority at the October 22nd special meeting.Copies were provided to the public at the start of the meeting. Pacific Grove City Manager TomFrutchey requested amendments regarding the City of Pacific Grove small water projects onpage 3. Documents were provided with suggested wording to the Authority and Clerk. Mr.Freeman answered questions from Board. Director Burnett requested an edit to the implied

reduction stating that .5% was less than significant. Mr. Frutchey agreed to the request.

President Della Sala opened the floor for public comment and had no requests to speak. VicePresident Bachofner expressed appreciation for the well written, strong letter and hopes itreceives traction. The Authority unanimously agreed to the requested edits.

With no further business to come before the board President Della Sala adjourned the meetingat 9:00 p.m.

ADJOURNMENT

ATTEST:

Lesley Milton, Clerk of the Authority MPRWA President


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Prepared For:Monterey Pen insu la Reg iona l Water Au t hor i ty

Evaluation of Seawater DesalinationProjects

November 2012 DRAFT REPOR

Preparedb

SeparationProcesses,I

3156LionsheadA

Suit

Carlsbad,CA 920

760400

36


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INTRODUCTION MONTEREY PENINSULA REGIONAL WATER AUTHORITY

Page ii

4.1.3 DisinfectionStrategy..........................................................................................................................43

4.2 DEEPWATERDESAL(DWD)..............................................................................................................................44

4.2.1 PlantDesignCapacity........................................................................................................................44

4.2.2 TargetedProductWaterQuality........................................................................................................44


4.3 PEOPLESMOSSLANDING(PML).........................................................................................................................45

4.3.1

PlantDesign

Capacity

........................................................................................................................

454.3.2 TargetedProductWaterQuality........................................................................................................45


5 ECONOMICS...........................................................................................................................................51

5.1 CALIFORNIAAMERICANWATER(CALAM)...........................................................................................................55



6 IMPLEMENTATIONCONSIDERATIONS.....................................................................................................61

6.1 CALIFORNIAAMERICANWATER(CALAM)............................................................................................................62



6.3.1Assessment

of

Impacts

of

Seawater

Intake

.......................................................................................

67

6.3.2 BrineDischarge..................................................................................................................................68

7 REFERENCES...........................................................................................................................................71

LIST OF TABLES

TABLEES1SUMMARYOFPROPOSEDPRODUCTWATERQUALITY.......................................................................................ES4

TABLEES2SUMMARYOFEVALUATEDCAPITALANDOPERATINGCOSTESTIMATES..................................................................ES6

TABLE41SUMMARYOFPROJECTEDPRODUCTQUALITYFROMCALAMFACILITY...................................................................43

TABLE42SUMMARYOFPROJECTEDPATHOGENCREDITSFORCALAMPROJECT....................................................................43

TABLE43SUMMARYOFPROJECTEDPRODUCTQUALITYFROMDWDFACILITY......................................................................44

TABLE44

SUMMARYOFPROJECTEDPATHOGENCREDITSFORDWDPROJECT

........................................................................

45

TABLE45SUMMARYOFPROJECTEDPRODUCTQUALITYFROMPMLFACILITY1......................................................................46

TABLE46SUMMARYOFPROJECTEDPATHOGENCREDITSFORPMLPROJECT.........................................................................46

TABLE51SUMMARYOFCHEMICALUNITPRICES..............................................................................................................52

TABLE52SUMMARYOFEVALUATEDCAPITALANDOPERATINGCOSTESTIMATES....................................................................54

TABLE53SUMMARYOFCALAMCAPITALCOSTEVALUATION.............................................................................................55

TABLE54SUMMARYOFCALAMO&MCOSTEVALUATION...............................................................................................56

TABLE55SUMMARYOFDWDCAPITALCOSTEVALUATION................................................................................................57

TABLE56SUMMARYOFDWDO&MCOSTEVALUATION..................................................................................................58

TABLE57SUMMARYOFPMLCAPITALCOSTEVALUATION.................................................................................................59

TABLE58SUMMARYOFPMLO&MCOSTEVALUATION.................................................................................................510

LIST OF FIGURES

FIGUREES1PROJECTEDCALAMPROJECTIMPLEMENTATIONSCHEDULE.............................................................................ES7

FIGUREES2PROJECTEDDWDPROJECTIMPLEMENTATIONSCHEDULE................................................................................ES8

FIGUREES3PROJECTEDPMLPROJECTIMPLEMENTATIONSCHEDULE..................................................................................ES8

FIGURE21CALAMPROJECTLOCATIONMAP..................................................................................................................23


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MONTEREY PENINSULA REGIONAL WATER AUTHORITY TABLE OF CONTENTS

Page iii

FIGURE22DWDPROJECTLOCATIONMAP.....................................................................................................................25

FIGURE23PMLPROJECTLOCATIONMAP......................................................................................................................27

FIGURE61CONCEPTUALIMPLEMENTATIONSCHEDULEFORTHECALAMPROJECT..................................................................65

FIGURE62CONCEPTUALIMPLEMENTATIONSCHEDULEFORTHEDWDPROJECT.....................................................................66

FIGURE63CONCEPTUALIMPLEMENTATIONSCHEDULEFORTHEPMLPROJECT.........................................................................68

ABBREVIATIONS AND ACRONYMS

AACE Association for the Advancement of Cost Engineering

AF Acre-Foot

AFY Acre-Feet/Year

ASR Aquifer Storage and Recovery

Cal-Am California American Water

CDPH California Department of Public HealthCEQA California Environmental Quality Act

CPCN - Certificate of Public Convenience and Necessity

CPUC California Public Utilities Commission

Crypto - Cryptosporidium

CSIP Castroville Seawater Intrusion Project

DWD DeepWater Desal

EA Environmental Assessment

EIR Environmental Impact Report

EIS Environmental Impact Statement

EPA U.S. Environmental Protection Agency

ERD Energy Recovery Device

fps feet per second

FPVC Fusible Polyvinyl Chloride\

gfd Gallons per Day per Square Foot

GWR Groundwater Replenishment

HDPE High Density Polyethylene

KHC Kris Helm Consulting

lb - pound

LF Lineal Foot

MCL Maximum Contaminant Level


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Page iv

MPRWA Monterey Peninsula Regional Water Authority

MRWPCA Monterey Regional Water Pollution Control Agency

mgd Million Gallons per Day

MF Microfiltration

MG Million Gallons

MLCP Moss Landing Commercial Park

MLPP Moss Landing Power Plant

MPWSP Monterey Peninsula Water Supply Project

NEPA National Environmental Policy Act

NOD Notice of Determination

NOI Notice of Intent

NOAA National Oceanic and Atmospheric Administration

NPDES National Pollutant Discharge Elimination System

O&M Operations and Maintenance

PG&E Pacific Gas and Electric

PML Peoples Moss Landing

RO Reverse Osmosis

SCADA Supervisory Control and Data Acquisition

SDI Silt Density Index

SPI Separation Processes Inc.SVGB Salinas Valley Groundwater Basin

SWRCB State Water Resources Control Board

SWTR Surface Water Treatment Rule

TAC Technical Advisory Committee

TBD To Be Determined

TDS Total Dissolved Solids

TOC Total Organic Carbon

UF - Ultrafiltration

UV Ultra Violet Light


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MONTEREY PENINSULA REGIONAL WATER AUTHORITY EXECUTIVE SUMMARY

Page ES-1

Separation Processes Inc. (SPI) in association with Kris Helm Consulting (KHC) is providingengineering and consulting support to the Monterey Peninsula Regional Water Authority(MPWRA) to assist with the evaluation of three candidate desalination projects on the MontereyPeninsula. This report presents the results of our evaluation of the projects, targeted at replacing

supplies currently extracted from the Carmel River but subject to a 1995 order from the StateWater Resources Control board to secure an alternate source of supply by December, 2016.

The proposed strategy for meeting the projected annual demand within the California AmericanWater service area of 15,250 acre-feet is a multi-pronged approach including permittedextractions from the Carmel River and Seaside Basin, an aquifer-storage and recovery system,and the existing Sand City desalination plant--totaling 6,250 acre-feet; leaving a 9,000 acre-feetgap in supply. Two alternatives are under consideration to compose this final supplya 9,000acre-feet production seawater desalination plant; or a 5,500 acre-feet seawater desalination plantin concert with a groundwater water replenishment project using advanced treated recycled waterof 3,500 acre-feet.

This report presents the results of our evaluation of three candidate alternatives for the seawaterdesalination component of the overall water supply portfolio. California American Water isactively engaged with the California Public Utilities Commission to build a facility and securethe required supply. Two other development groups have proposed alternative projects forconsiderationDeepWater Desal, LLC and the Peoples Moss Landing Water Desal Project.The three projects were analyzed on functional, performance, economic and implementationgrounds in an effort to provide a balanced evaluation for consideration by the MPRWA.

The three projects are in the conceptual or preliminary stage of development and all three have astheir objective to provide California American Water the seawater desal component of the

required replacement water supply under State Water Resources Control Board Order No. 95-10.The DeepWater Desal group proposes to provide an expandable plant capable of servingadditional regional water needs as well, outside of the California American Water service area.Brief summaries of the projects follow:

Project Name Monterey Peninsula Water Supply Project(MPWSP)

Proponent(s) California American Water (Cal-Am)

Location 46-acre site of vacant, disturbed land west of theMRWPCA Regional Treatment Plant (RTP).

Purpose To supply supplemental desal component of theMonterey Peninsula regional water supply

This project is currently under consideration by theCalifornia Public Utilities Commission (CPUC).

Production Volume 5.4 mgd or 9.0 mgd


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Page ES-2

Project Name DeepWater Desal (DWD)

Proponent(s) DeepWater Desal, LLC, Dynegy Moss LandingPower Plant, MFJK Partnership of the CapurroRanch, PV2 Solar, and Ecomert Technologies

Location Capurro Ranch Property, north of /Elkhorn SloughPurpose Phase 1 to supply supplemental desal component of

the Monterey Peninsula regional water supply

Phase 2 to supply northern customers

Production Volume Phase 1: 4.9 mgd or 9.1 mgd

Phase 2: 22.0 mgd

Project Name The Peoples Moss Landing Water Desal Project(PML)

Proponent(s) DeSal America, LLC composed of Moss LandingCommercial Park, LLC; and Stanley and Patricia-Vance Lueck

Location Moss Landing Commercial Park


This project is currently proposed as alternative tothe Cal-Am MPWSP.


We evaluated the function of each project in terms of project purpose, customers identified,adequacy of treatment approach, residuals handling, feed water characterization, quality ofproject information, and any omissions or fatal flaws in the information provided. Theevaluation was conducted based on information provided in response to a 56-item questionnaireprepared by the MPRWA technical advisory committee and submitted by each proponent; alongwith additional information each provided in response to specific questions and interviews fromSPI and KHC.

All three projects have available sites for building the required treatment facilities; and credibleseawater intake and brine disposal approaches, though there are substantive differences amongthem. Cal-Am proposes to use a group of subsurface slant intake wells (up to eight for themaximum capacity plant alternative); DWD proposes a new screened open ocean intake installedat roughly 60-ft of depth; and PML is considering options to use either an existing seawaterintake pump station drawing from the Moss Landing Harbor, or potentially a new screened openocean intake installed coincident with an existing 51-in diameter concrete outfall pipeline owned


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Page ES-3

by the Moss Landing Commercial Park. Cal-Am has projected there may up to 3 percent ofgroundwater from the Salinas Valley Groundwater Basin (SVGB) entrained with their intakesupply that would need to be returned (as facility product water) to the basin. For brine disposal,Cal-Am and DWD propose to blend concentrated brine from the desal plants with existingoutfall flowsCal-Am blending with the existing Monterey Peninsula Regional Water Pollution

Control Agencys wastewater plant outfall; and DWD using the existing cooling water returnoutfall at the Moss Landing Power Plant. Both sources have sufficient dilution and hydrauliccapacities. PML proposes to use their existing 51-in diameter outfall, currently permitted todischarge magnesium-depleted seawater. There is some evidence of disrepair of the outfall interms of pipeline integrity and condition of the existing diffusers which would need to beaddressed along with the permitting of a non-shore diluted brine stream.

Cal-Am and PML propose to serve only the identified demand within the Cal-Am service area atthe two plant capacity increments under consideration; while DWD envisions a higher capacityregional project, capable of producing up to 25,000 AFY. DWD has not yet secured agreementswith any potential customers.

In terms of treatment approachall three candidate teams propose to use reverse osmosis (RO)as the primary desalination technology. However, both DWD and PML propose a single passRO system; while Cal-Am has proposed a partial double or two pass systemtreating a portionof the product water from the first pass RO system with a second RO system and blending thesupplies to form the final treated water. The issue relates to the quality of product waterproduced, more than treatment function; as either approach is considered functional.

Pre- and post-treatment approaches are similar. All incorporate granular media filtration of theincoming seawater, with PML following on with a low pressure membrane filtration system(microfiltration or ultrafiltration) to deal with the anticipated higher solids load from waterextracted from Moss Landing Harbor. In the case of Cal-Am, the aquifer filtration provided bythe slant wells could obviate the need for media filtration; but the potential presence of iron and

manganese in the supply could just as well make them necessaryso the approach is consideredconservative. In the case of DWD, the incoming seawater extracted at depth will be cold(roughly 15 C) and warmed through a proprietary warming system at the Moss Landing PowerPlant prior to transmission to the treatment plant site. All three proponents propose to use calcitebeds, carbon dioxide and sodium hydroxide for re-mineralization/stabilization of the RO treatedproduct water and chlorine disinfection.

Cal-Am and DWD will require offsite pipelines for feed, product water and brine disposal; whilePML proposes to use existing intake and outfall pipelines originating on site; requiring only aproduct water delivery pipeline. DWDs site location north of the Elkhorn Slough is likely toentail complex issues with crossings for all three of their large diameter pipelines (one 48-in andtwo 36-in).

All three proponents were cooperative with our evaluation and provided all available andrequested information. The Cal-Am project through past work on other regional projects as wellas ongoing procedures with the California Public Utilities Commission has produced the mostdetailed information on their project, followed by DWD who have prepared a fair amount ofpredesign data on their proposed system along with active environmental investigations for theirproposed intake. PML is at a more preliminary level of engineering and planning in comparison.


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Page ES-4

Importantly however, we have not found any fatal flaws associated with any of the candidateprojects.

Performance of each proposed system was gauged relative to categories of plant design capacity,targeted product water quality and disinfection strategy.

For plant capacity, we considered the proposed instantaneous design capacity of each treatmentfacility in comparison to the required annual production incrementeither 5,500 AFY or 9,000AFY. What we found were wide variationswith Cal-Am proposing capacities of 5.4 mgd and9.0 mgd; DWD of 4.9 mgd and 9.1 mgd; and PML at 4.8 mgd and 9.4 mgd. We considered thelevel of equipment redundancy proposed by each team in the context of the amount of onlinetime it would require a facility at a given rated capacity to deliver the required annual allotment.For Cal-Am, we gauged their planned design capacities adequate considering the need to returnflow to the SVGB as well as meet the 5,500 AFY or 9,000 AFY into their distribution system.At capacities of 5.4 mgd and 9.0 mgd, the plant(s) would need to operate 98 percent of the time

to meet productionnot overly conservative but achievable given the level of equipmentredundancy (including spare process units) in their proposed facility. DWD, with similarproposed levels of redundancy, would have equivalent minimum facility capacity requirementsof 5.0 mgd and 8.2 mgd; somewhat lower than Cal-Am as they lack the requirement to returnflow to the SVGB. PML did not provide a detailed equipment list indicating numbers of processunits; so gauging proposed levels of equipment redundancy was uncertain. However, we feel thefacility should have adequate reliability and conducted our evaluation on that basisrecommending equivalent capacity ratings to DWD of 5.0 mgd and 8.2 mgd.

The product quality produced by the proposed systems would differ based on the configurationof their proposed RO systems. Cal-Ams proposed partial two-pass system could likely achievechloride, boron, and total dissolved solids (TDS) consistent with current Carmel River supplies;

but the single pass systems would not. We consider a lower salinity product supply an asset andevaluated all three projects (from an economic perspective) as having partial two-pass ROsystems. The recommended product quality goal is summarized in Table ES-1.

Table ES-1 Summary of Proposed Product Water Quality

Total Dissolved Solids mg/L 380

Chloride mg/L 60

Boron mg/L 0.5

pH units 8.0

Calcium mg/L as CaCO3 40

Alkalinity mg/L as CaCO3 40


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Page ES-5

For disinfection, the proposed facilities must comply with the Surface Water Treatment Rule andLong-Term 2 Enhanced Surface Water Treatment Rule. Under these regulations, pathogenremoval/inactivation requirements are set on a logarithmic (log) scale, with the CaliforniaDepartment of Public Health establishing specific log removal for priority pathogens, includinggiardia, cryptosporidium (crypto), and virus. The levels set will be based on source water quality

and other factors, and are expected to be in the range of 3-5 for giardia, 2-4 for crypto, and 4-6for virus, based on each of the project source waters being classified as surface waters or underthe influence of surface waters. We find all three projects are likely to achieve sufficient logremoval credits under their proposed treatment schemes to comply.

A primary focus of our evaluation was to provide a balanced, apples to apples comparison ofthe candidate projects from an economic perspective. We implemented this by focusing on thefollowing principles:

Uniformity in plant design capacity for the two non-regional approaches; equivalentcapacity allocation for the proposed DWD regional project.

Equivalency in treatment to achieve: a common RO feed water quality followingpretreatment; a common treated water quality goal; and pathogen removal creditsrequired for the applicable supply source.

Uniformity in equipment redundancy. Uniformity in unit cost criteria for common items. Uniformity in cost factors applied to aggregated costs (e.g., contingencies; electrical

and I&C costs; etc.).

Uniformity in unit costs for chemicals and other consumables for treatmentevaluations.

To implement the above, we adjusted plant capacities for the evaluation on the basis described inthe Project Performance discussion, rating Cal-Ams proposed system at design capacities of 5.4mgd and 9.0 mgd; and the DWD and PML systems at 5.0 mgd and 8.2 mgd. In terms oftreatment process, we attempted to maintain the overall proposed process design of theproponents, but did evaluate all as including a partial (40 percent) capacity second pass ROsystem. We also assumed N+1 redundancy on all rotating equipment and major treatmentprocess units (e.g., filters, RO membrane trains). We employed an equivalent basis indeveloping our capital equipment cost estimates, relying on targeted quotes for equipment andSPIs cost information from past, similar seawater RO projects. For indirect costs, we assumed

fixed factors and applied them uniformly to each project.We implemented a similar strategy on annual operating and maintenance expenses, usingcommon chemical unit prices along with pricing on common consumables, such as the ROprocess membranes. The results of our evaluation are presented in Table ES-2.


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Page ES-6

Table ES-2 - Summary of Evaluated Capital and Operating Cost Estimates

Intake/Outfall $37.0 $31.7 $2.71 $1.66 $3.00 $3.00

Pretreatment & Residuals Handling $10.6 $7.94 $11.2 $7.94 $20.2 $13.6

Desalination System $22.3 $15.1 $19.4 $13.2 $19.9 $14.0

Post-Treatment $1.48 $0.88 $1.48 $0.88 $1.66 $1.07

Distribution $17.0 $16.0 $29.0 $28.9 $22.4 $22.3

Site Structures $11.5 $10.8 $3.65 $2.52 $10.0 $7.00

Indirect Costs1 $58.0 $50.8 $54.5 $47.5 $67.9 $62.3

Contingency Allowance (30%) $47.4 $40.0 $36.6 $30.8 $43.6 $37.0

Mitigation Allowance (1%) $1.60 $1.30 $1.20 $1.00 $1.50 $1.20

Energy $5.83 $3.54 $3.93 $2.41 $4.20 $2.56

Chemicals $0.32 $0.19 $0.83 $0.50 $0.93 $0.57

Expendables $0.69 $0.45 $1.02 $0.68 $1.09 $0.65

Other Proponent Expenses -- -- $2.85 $2.60 -- --

O&M Labor $2.69 $2.36 $2.69 $2.36 $2.69 $2.36

Equipment Replacement2 $1.50 $1.23 $1.01 $0.83 $1.16 $0.92

Capital Recovery3 $12.0 $10.1 $9.24 $7.77 $11.0 $9.34

Total Annual Cost $23.0 $17.9 $21.5 $17.2 $21.1 $16.4

1Includes implementation costs at 25%; ROW easement and land costs, mobilization/demobilization at 2%; electrical and I&C systems at 18%; engineering

and startup at 15%; and additional project proponent prescribed costs. All percentages applied to plant facilities costs.2 Calculated as 1.5% of plant facilities costs.3 Capital recovery factor based on an interest rate of 4.0% and term of 30 years.


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Page ES-7

Overall, the final water production costs are fairly equivalent given the overall accuracy of theestimate and degree of project development. Cal-Ams capital cost is the highest; owing largelyto its high intake system cost. PML is proposing to reuse existing intake infrastructure; whileDWD has an unspecified separate business entity which will be funding its intake, outside of theassigned DWD facility budget. Cal-Ams operating cost is also relatively high, owing in large

measure to higher stipulated energy costs than either DWD or PMLroughly $0.13/kW-hr vs.$0.08 kW-hr.

The three projects are at varying states of development in terms of the regulatory permittingprocess. Cal-Am is further along than either DWD or PML, though DWD has completed or isnearing completion of their initial CEQA compliance documents. Forecast projectimplementation schedules were identified for each project proponent, based on a select numberof key environmental and permitting tasks, including:

1. A project description must be completed.2. An Environmental Assessment must be made.3. An EIR/EIS must be completed (CEQA/NEPA compliance).4. Commercial Agreements must be negotiated/ Cal-Am must obtain a Certificate of Public

Convenience and Necessity (CPCN), after certification of the EIR.

5. Jurisdictional Permits must be obtained for facilities impacting Waters of the U.S.6. NPDES Permits must be amended/obtained.7. Coastal Development Permits must be obtained.

It was further assumed that each proponent had the financial capacity to proceed with predesign

preparation/procurement package development such that the project could be put out to finaldesign and construction bid coincident with approval of the final project permits. The schedulesare provided below as Figure ES-1, Figure ES-2 and Figure ES-3.

Figure ES-1 Projected Cal-Am Project Implementation Schedule


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Page ES-8

Figure ES-2 Projected DWD Project Implementation Schedule

Figure ES-3 Projected PML Project Implementation Schedule


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MONTEREY PENINSULA REGIONAL WATER AUTHORITY INTRODUCTION

Page 1-1

1 INTRODUCTIONSeparation Processes Inc. (SPI) and Kris Helm Consulting (KHC) are providing engineering andconsulting support to the Monterey Peninsula Regional Water Authority (MPWRA) to assistwith the evaluation of three candidate desalination projects on the Monterey Peninsula. SPI

conducted technical and economic evaluations of the proposed projects; while KHC examinedissues relating to permitting and environmental compliance.

California American Water (Cal-Am) is an investor owned public utility who is responsible forproviding the water supply to cities covered within the MPRWACarmel-by-the-Sea, Del ReyOaks, Monterey, Pacific Grove, Sand City and Seaside. The proposed projects wouldsupplement supply previously extracted for the region from the Carmel River. In 1995, the StateWater Resources Control Board (SWRCB) in its Order No 95-10 found that Cal-Am waswithdrawing water from a subterranean stream, rather than percolating groundwater; and in theprocess extracting an average of 10,730 AFY in access of its valid right of 3,376 AFY. Theorder required Cal-Am to secure a replacement source of supply by December 2016.

The average annual water demand in the region is 15,250 AFY1. Currently identified sourcesinclude established rights to Carmel River and Seaside Basin waters of 4,850 AFY, the aquiferstorage and recovery (ASR) system of 1,300 AFY, and 94 AFY from the Sand City DesalinationPlant. This leaves a roughly 9,000 AFY deficit to be made up. Alternatives include a new 9,000AFY seawater desalination plant; and a new groundwater replenishment (GWR) project of 3,500AFY in combination with a new 5,500 AFY seawater desalination plant.

The technical advisory committee (TAC) of the MPRWA developed a list of 56 questions tosubmit to the three desalination project proponents, including Cal-Am, DeepWater Desal, LLC(DWD) and the Peoples Moss Landing Desal (PML). Each proponent is proposing to build adesalination facility to satisfy the planned desalination component of the regional water supply.Responses and supporting information were received from each, exhibiting various stages ofdevelopment and differences in approach. The differences were such that a deliberative, faircomparative evaluation could not be conducted solely on the basis of the information provided.

This report presents the results of a more detailed evaluation and analysis conducted by SPI andKHC. The work was conducted based on information provided in the original responses to thequestions from the TAC along with supplemental information provided by each proponent. Thegoal was to provide an apples-to-apples comparison of each project on an equivalent costbasis; along with an evaluation of the realistic implementation schedule for each, taking intoaccount environmental and permitting issues.

1 RBF Memorandum, Recommended Capacity for the Monterey Peninsula Water Supply Project (MPWSP)Desalination Plant, April 20, 2012


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MONTEREY PENINSULA REGIONAL WATER AUTHORITY PROJECT SUMMARIES

Page 2-1

The tabular summaries provided in this section include information on each of the proponent

projects, including:

Project name Proponent(s) Location Purpose Production volume Key features Facility map Key information provided to review team Persons interviewed/corresponded with

The TAC requested information from each proponent that would satisfy the desalinationcomponent of the proposed water supply. Responses received from the Cal-Am and PMLgroups were generally in line with this request; though there were slight differences in theproposed plant capacities. The DWD response proposed to only serve the higher 9,000 AFYrequirement, along with a planned expansion to act as a regional water supply source to otheragencies on the peninsula as well as cities north of Moss Landing. DWD did reveal in responseto subsequent inquiries how they would serve the 5,500 AFY supply scenario. The information

presented for each project represents their current status from the proponents at the time of thisreport writing.


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PROJECT SUMMARIES MONTEREY PENINSULA REGIONAL WATER AUTHORITY

Page ES-2-2

Project Name Monterey Peninsula Water Supply Project

(MPWSP)

Proponent(s) California American Water

Location 46-acre site of vacant, disturbed land west of theMRWPCA Regional Treatment Plant (RTP).


This project is currently under consideration by theCalifornia Public Utilities Commission (CPUC).


Key Features 1.Raw seawater supply through a series of up toeight sub-surface slant wells located on a vacant

376 acre parcel with roughly 7,000 feet of oceanshoreline.2.Raw water and pump to waste transmission

through one of eight candidate alignments.3.Single-stage, dual media pressure filtration

pretreatment.4.Partial 2-pass RO desalination treatment with

energy recovery. Final product has a proposedblend of 60:40 first pass:second pass product.

5.Product stabilization with calcite, carbon dioxide,and sodium hydroxide.

6.Disinfection with sodium hypochlorite andtemporary UV.

7.2 x 1.0 MG product storage tanks, productdistribution pumps, and 36-in diameter productpipeline to Cal-Am distribution system nearSeaside.

8.24-in brine disposal pipeline to the existing RTPoutfall.

Key Information Provided 1.TAC response package2.Response to supplemental questions from SPI

and KHC

3.Relevant testimony to the CPUC4.RBF 2011 memo on implementation schedule

risk of regional supply alternatives5.RFB 2011 memo on cost analysis of regional

supply alternatives

Persons Interviewed/Corresponded With Richard Svindland


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Page 2-3

Figure 2-1 Cal-Am Project Location Map

____Slant Well

____ Intake

____ Brine

____ Product Water

Desalination Plant

Tie-in to CAL AMexisting facilities


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Page ES-2-4

Project Name DeepWater Desal

Proponent(s) DeepWater Desal, LLC, Dynegy Moss LandingPower Plant, MFJK Partnership of the CapurroRanch, PV2 Solar, and Ecomert Technologies

Location Capurro Ranch Property, north of /Elkhorn Slough

Purpose Phase 1 to supply supplemental desal component ofthe Monterey Peninsula regional water supply

Phase 2 to supply northern customers

Production Volume Phase 1: 4.9 mgd or 9.1 mgd

Phase 2: 22.0 mgd

Key Features 1. Raw seawater supply through a new 48-in openintake extending into the Monterey Bay west of

Moss Landing at a depth of roughly 65-ft.2. Raw water transmission through an existing

right of way maintained by MLPP to an existingpump station at MLPP for transfer to the site.

3. Proprietary warming system at MLPP whichwill increase the temperature of the raw water.

4. Transmission of the warmed feed water througha new 36-in pipeline to the Capurro Ranch site.

5. Single-stage, dual media pressure filtrationpretreatment.

6. Single-pass RO desalination treatment with

energy recovery.7. Product stabilization with calcite, carbon

dioxide, and corrosion inhibitor.8. Disinfection with sodium hypochlorite.9. 2.5 MG product storage tank, product

distribution pumps, and 30-in diameter productpipeline to Cal-Am distribution system nearSeaside.

10.36-in brine disposal pipeline to MLPP existingcooling water ocean discharge.

Key Information Provided 1.TAC response package2.Response to supplemental questions from SPI

and KHC3.Tenera Environmental, Preliminary Modeling of

Potential Impacts from Operation of aDesalination Facility Ocean Intake, August 22,2012

Persons Interviewed/Corresponded With Dennis Ing, Scott Jackson, Jonathan Dietrich


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Page 2-5

Figure 2-2 DWD Project Location Map

____Intake

____ Brine

____ Product Water

Desalination Plant

Tie-in to CAL AMexisting facilities


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Page ES-2-6

Project Name The Peoples Moss Landing Water Desal Project

Proponent(s) DeSal America, LLC composed of Moss LandingCommercial Park, LLC; and Stanley and Patricia-Vance Lueck

Location Moss Landing Commercial Park


This project is currently proposed as alternative tothe Cal-Am MPWSP.


Key Features 1. Raw seawater supply through an existing intakesystem drawing from the Moss Landing Harbor.

2.

Single-stage, zeolite pressure filtration followedby ultrafiltration (UF) pretreatment.3. Single-pass RO desalination treatment with

energy recovery.4. Product stabilization with calcite, carbon

dioxide, and sodium hydroxide.5. Disinfection unspecified, but presumed to be

with sodium hypochlorite.6. Product storage in existing site tankage. New

distribution pump station and 36-in diameterproduct pipeline to Cal-Am distribution system

near Seaside.7. Brine disposal through existing 51-in (internaldiameter) outfall.

Key Information Provided 1.TAC response package2.Project information package dated July 20123.Response to supplemental questions from SPI

and KHC4.Video of a portion of the existing outfall.5.August 2012 Structural Evaluation Report of site

structures and outfall, conducted by JAMSEEngineering, Inc.

6.Construction drawings for the outfall (1973) andmodifications made to the intake pump station(1968).

7.September 2012 Environmental Issues andConstraints Report by SMB Environmental Inc.

Persons Interviewed/Corresponded With Nader Agha, George Schroeder, Stanley Lueck


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Page 2-7

Figure 2-3 PML Project Location Map

____Intake

____ Brine

____ Product Water

Desalination Plant

Tie-in to CAL AMexistin facilities


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MONTEREY PENINSULA REGIONAL WATER AUTHORITY PROJECT FUNCTION

Page 3-1

The function of each proponent project is evaluated on the following criteria:

Project purpose Customers identified Adequacy of treatment approach Residuals handling Feed water characterization Quality of project information Omissions or fatal flaws

In an initial screening level evaluation2, we found no disqualifying criteria for any of thecandidate projects. We did however find differences in the level of project development andapproach. Each project is discussed separately below.

3.1.1 Project PurposeCal-Am proposes their project to serve the needs of the identified demand on the MontereyPeninsula within their service area to comply with SWRCB Order 95-10. The proposedtreatment plant would serve the identified desalination component of the regional water supplyportfolio. They specifically do not propose to provide a plant capacity in excess of definedregional water supply requirements under two scenarioswith GWR and without GWR3.

3.1.2 Customers IdentifiedTreated water would be supplied to the Cal-Water distribution system for service to its currentservice area. Any groundwater from Salinas Basin drawn through the proposed supply wellswould be returned the basin as plant treated water through the Castroville Seawater IntrusionProject (CSIP) ponds3.

3.1.3 Adequacy of Treatment ApproachFeed water for the desalination plant would be extracted from subsurface slant wells. Over the

long term, feed water is projected to include about 97 percent seawater and 3 percent intrudedgroundwater from the Salinas Valley Groundwater Basin (SVGB)3. The desalination plant willbe operated such that on an annual average basis, the plant would return desalinated water to theSVGB in an amount equal to the freshwater extracted from the slant wells.

2 SPI Memorandum, Monterey Desalination Study Initial Scoping and Constraints Analysis, August 30, 20123 Direct Testimony of Richard C. Svindland Before the Public Utilities Commission of the State of California, filedApril 23, 2012


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PROJECT FUNCTION MONTEREY PENINSULA REGIONAL WATER AUTHORITY

Page ES-3-2

The preferred site for construction of the slant wells is an approximately 376 acre parcel of landwith 7,000 feet of ocean shoreline, located west of the proposed desal plant site. The angle of theslant wells will be determined by a proposed test well program, with a maximum well length ofapproximately 750 lineal feet. Wells would initially be placed on the beach, as far as possiblefrom the existing shoreline, but avoiding undisturbed dune habitat. This may cause some or all

wells to be within the predicted 50-year erosion boundary; however, the expected useful life ofthe wells is less than 50 years. A contingency plan will be needed for relocating the wells inlandin the event that coastal erosion renders the wells inoperable4.

Two design capacities are proposed: (1) seven wells operating at 2,200 gpm per well plus oneadditional well as a backup, for a total of 22 mgd (15,400 gpm) producing 9.0 mgd of productwater; (2) five wells operating at 1,840 gpm per well plus one additional well as backup, for atotal of 13.2 mgd (9,200 gpm) producing 5.4 mgd of product water4.

Eight feed water pipeline alignments are being considered, all of which will be made of HDPE orFPVC, and will have a 30-inch or 36-inch diameter. The final selected alignment would includea parallel 16-in diameter pump to waste pipeline, to allow wasting of initial produced water froma pump following startup.

The proposed treatment plant would be located on a vacant but disturbed 46-acre parcel west ofthe MRWPCA Regional Treatment Plant (RTP). The site would be accessed off of CharlesBenson Rd., a two-lane roadway that also serves the MRWPCA RTP along with the MontereyRegional Waste Management District. A new turn lane would need to be provided to allow safeaccess to the proposed desal plant for personnel and chemicals deliveries. Cal-Am is currently innegotiations to purchase the site from the existing land owner. Overall, land acquisition is not alarge concern as Cal-Am has the authority to exercise eminent domain privileges should anegotiated purchase prove untenable.

Incoming seawater would be stored in two 0.5 MG storage tanks then pumped to granular mediapressure filters. Provisions would be included to pre-chlorinate the filter feed if necessary; as

well as include proprietary media to remove iron and manganese should it be present in the rawseawater. Filter effluent would be dechlorinated if necessary, then flow to inline cartridge filtersprior to routing to the RO trains. The proposed RO system would be arranged as a full singlepass and partial second pass; with the second pass product making up 40 50 percent of the finalproduct supply. The first pass trains would include high pressure booster pumps and isobaricenergy recovery devices (ERDs); while the second pass trains would be equipped with highpressure booster pumps only. Operating recovery of the first pass trains would be roughly 45.5percent; while the second pass trains would operate at 90 percent. First and second pass trains,related pumps, and ERDs would be arranged in an N+1 configuration, with a total of fourprocess trains for the 5.4 mgd plant option and six process trains for the 9.0 mgd plant option.5

The product water from the RO system would be post-treated with calcite and carbon dioxide forstabilization, along with addition of a corrosion inhibitor. For disinfection, the product would bedosed with sodium hypochlorite and stored in two, 1.0 MG storage tanks. Provisions may beincluded for a temporary or permanent UV disinfection system as well, should conditionswarrant (e.g., if additional disinfection credits are required).

5

4 RBF Memorandum, Monterey Peninsula Water Supply Project (MPWSP) Project Description, April 20, 20125 Cal-Am Response to SPI Questions, October 3, 2012


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Overall the treatment approach is gauged to be sound. The greatest process risk is likelyassociated with the propose slant wells. Slant well intake systems can provide significantadvantages over traditional open ocean intakes including:

Natural filtration

Avoidance of impingement and entrainment of marine life No ocean construction impacts No permanent aesthetic impacts.

However, slant wells can also pose more construction challenges than other well types as a resultof shallow construction angles and less vertical gravitational force. Slant wells need periodicaccess to the well head area. In areas where recreation exists (e.g., at a public beach) provisionmust be made to minimize disturbance6. Slant well intakes can be used with large desalinationplants, with seawater intake capacities of up to 50 mgd7. Maintenance of well specific capacitylong term is unknown; and elsewhere where employed the wells have been known to initiallydraw from an ancient marine aquifer containing high levels of iron and manganese 8. Lastly, the

specific long term amount of groundwater uptake from the SVGB, estimated at up to 3 percent,is uncertain.

Cal-Am plans to install a test slant well to establish site specific operating conditions andgenerate data which should help to confirm actual conditions and allow development ofappropriate mitigation strategies. Cal-Am has already included provisions for removing iron andmanganese across their pretreatment filters if necessary. The slant wells themselves can bescreened or installed at different angles to control the mix of seawater to diluent water extracted.Cal-Am is currently pursuing permits for the test well. An initial operating period of 6 12months is planned to develop data required for the EIR CEQA work. Cal-Am has indicated thatthe test period could extend as long as 18-24 months if additional data is required5. Should thetest well reveal slant wells to be problematic, a more conventional Ranney sub-surface intakewell could be used as an alternative. The conceptual layout would include three vertical caissonsand horizontal well clusters located across a 1,000 1,500 feet beach front area. Each caissonwould be capable of extracting up to 10 mgd.

With either intake system, delivered raw seawater quality is likely to be good, with lowparticulate and silt density index (SDI) levels, making single-stage filtration an acceptablepretreatment approach. The RO process design is conservative, with a full first pass and partialsecond pass; including N+1 redundancy for all process units. The proposal does not includeacidification or antiscalant dosing to the first pass RO system feed water, but this is likelyacceptable as the planned recovery of the first pass system is limited to 45 percent. Feed andproduct storage tanks are arranges as 2 x 50 percent units, allowing the ability to take a tank out

of service for maintenance. A preliminary site plan indicates the proposed site is sufficient to

6 Williams, D.E. Design and Construction of Slant and Vertical Wells for Desalination Intake. IDA WorldCongress-Perth Convention and Exhibition Centre (PCEC) Perth, Western Austrailia September 4-9, 2011 REF:IDAWC/PER11-0507 Pankratz, T. A Review of Seawater Desal Intake, Pretreatment & Discharge Technologies. IDA Iran 06 WDTSProceedings September 17 & 18, 20068 Ghiu, S. 18 Month Demonstration of Slant Well Intake System Pretreatment and Desalination Technology forSeawater Desalination. WaterReuse Research Conference Proceedings, June 2012.


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accommodate the proposed treatment plant facilities and related administrative and maintenancefacilities adequately.

3.1.4 Residuals HandlingPlant residuals would be handled in a combination of storage and transfer systems. Backwashwaste from the filters would be collected in a 0.5 acre storage pond, with decant disposed withthe RO brine. RO brine would be sent to the MRWPCA ocean outfall. Analyses have shownthat the outfall has sufficient capacity to accommodate the projected peak brine flow from theplant under all but a worst case hydraulic loading scenario that is anticipated to last for sixhours9. In these situations, brine would temporarily be stored on site in a 3.0 MG detentionpond. The majority of the time (96 percent) the outfall is projected to have sufficient capacity.Waste residuals from the RO cleaning system would be neutralized and discharged with the brineto the outfall as well; or alternately to the site sanitary sewer if disposal with the brine is notpermitted.

3.1.5 Feed Water CharacterizationThere has been no detailed characterization of plant feed water to date. Data will be generated aspart of the planned test well program.

3.1.6 Quality of Project InformationAvailable documentation for the Cal-Am project is the most extensive and well developedamong the three proponents. Primarily this is a consequence of their involvement in thepreviously proposed regional project with Marina Coast Water District along with filings to theCPUC supporting their proposed project and development of required CEQA documentation.Appendices to their response to the TAC included the following:

RBF Memorandum, Monterey Peninsula Water Supply Project (MPWSP) Capital andO&M Cost Estimate Update, April 20, 2012.

RBF Memorandum, Monterey Peninsula Water Supply Project (MPWSP) ProjectDescription, April 20, 2012.

Direct Testimony of Jeffrey T. Linam Before the Public Utilities Commission of theState of California, Filed April 23, 2012.

Other project related documents were available on the Monterey Peninsula Water Supply Projectwebsite, including:

California America Water Company, Coastal Water Project, Final EnvironmentalImpact Report, October 30, 2009.

Download Filings for Proceeding A1204019

9Trussel Technologies Inc. Technical Memorandum, MRWPCA Outfall Hydraulic Capacity Analysis, April 18,2012.


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Presentations, including Technical Workshops on Monterey Peninsula Water SupplyProject (July 2012); Monterey Peninsula Water Supply Project Presentation (April2012); and Monterey Peninsula Water Supply Project Presentation (July 2012).

Project Map (April 23, 2012). California American Water Application for Monterey Project (PDFA) California American Water Application for Monterey Project (POS, NOA,PDFA) California American Water Direct Testimony of Keith Israel, including a Technical

Memo from Trussell Technologies, MRWPCA Outfall Hydraulic Capacity Analysis,April 18, 2012

California American Water Direct Testimony of Jeffrey T. Linam California American Water Direct Testimony of Eric J. Sabolsice California American Water Direct Testimony of F. Mark Schubert, P.E.

California American Water Direct Testimony of David P. Stephenson California American Water Direct Testimony of Richard C. Svindland California American Water Direct Testimony of Kevin Thomas

Cal-Am also provided a response to questions from SPI, including the following documents:

Capital Cost Worksheet O&M Cost Worksheet RBF Memorandum, Implementation Schedule Risk Analysis of Water Supply

Alternatives, October 24, 2011

RBF Memorandum, Cost Analysis of Water Supply Alternatives, October 19, 2011Overall the information is considered sufficient to evaluate the proposed project from a technicaland economic perspective.

3.1.7 Omissions or Fatal FlawsOur evaluation and investigation of the proposed Cal-Am project did not uncover any perceivedfatal flaws or significant omissions of project information.

3.2.1 Project PurposeDWD proposes a project that could serve both the defined demand within the Cal-Am servicearea for a desal supply of either 5,500 AFY or 9,000 AFY along with an expanded supply for theregion with a total plant capacity of 25,000 AFY. The project is predicated on development ofcertain components (e.g., the seawater intake, feed pipeline, brine pipeline) for the 25,000 AFYplant, with cost allocation based on treated water flow to defined customers.


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