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California American Water Reaches Settlement In The Monterey Peninsula Water Supply Project

Stocks in this article: AWK

California American Water has reached formal settlements with various parties regarding its proposed water supply project, taking a significant step closer to finally bringing a stable water supply to the Monterey Peninsula.

The settlements were filed with the California Public Utilities Commission Wednesday and involved 15 different intervening parties to the proceeding. Agreements were reached on a range of issues from desalination plant size to costs and financing.

“This is a major step forward,” said Rob MacLean, president of California American Water. “I want to commend the various parties for their dedication to the community and willingness to work together to help solve this complex water crisis.”

The settlement agreement recognizes the value of the portfolio approach to the water supply problem (aquifer storage and recovery, groundwater replenishment and a desalination plant) which is awaiting the CPUC’s issuance of the final environmental impact report scheduled for June 2014.

Key issues addressed in the settlements are as follows:

  • Criteria the CPUC should employ to determine when and if to move forward with the Ground Water Replenishment component of the project.
  • The development of a hydro geological study and technical report on pumping from proposed slant wells to guide California American Water’s use of source water.
  • Project costs, including cost recovery for capital, operation and maintenance costs.
  • Contingency plans for desalination facility intake, discharge and plant location.
  • Various financing mechanisms designed to lower the cost of water from the project.
  • Determination of the needed plant size to serve customers. The sizing takes into consideration the region’s demand plus allocations for growth, including development on lots of record, among other factors.

A pre-hearing conference on matters including the status of the settlement motion is set for September 16, 2013. The settlement agreements are pending CPUC approval and will not take effect until the CPUC reviews them and determines they are reasonable within the law and in the public interest.

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