Desal project survives appeal: Ratepayer Advocates contend cost-control measures are insufficient
Jim Johnson
Monterey Herald
04/20/2011
A bid to appeal the state Public Utilities Commission's approval of the regional seawater desalination project has been denied.
In closed session last week, the commission unanimously rejected an application for rehearing filed by the Division of Ratepayer Advocates in January, a month after the commission approved the proposal.
In its decision, the commission rejected the Ratepayer Advocates' assertion that the approval represented an abdication of its oversight responsibilities, especially with regard to its charge to ensure rates are "just and reasonable."
The commission also dismissed the argument that it erred in approving the financing and cost recovery process.
California American Water spokeswoman Catherine Bowie said the commission's decision not to reconsider its earlier approval proved it made the right choice the first time around.
"We're pleased, and we believe the decision showed that the Public Utilities Commission really engaged in a thorough and fair process" when it approved the project, she said. "I think the decision just underscores the fact that the original decision was fair and beneficial to our customers."
Curtis Weeks, general manager of the county Water Resources Agency, said he had not read the decision in its entirety, but he believes it's "good news" because "we're finished with that chapter." But, he added, "we still have a lot of work to be done."
Diana Brooks, water division supervisor for the Ratepayer Advocates, said she was disappointed by the decision because it failed to fully appreciate the cost-control issue.
"We feel the commission put the burden on the DRA to prove the costs are unreasonable rather than requiring Cal Am to prove they're reasonable," Brooks said. "They're relying on Cal Am to keep costs in order. We feel cost control is still a major issue."
Brooks said the Ratepayer Advocates has never appealed such a decision to the state Supreme Court, which would be the next step, and said that is not likely to happen.
Backed by Cal Am, the county Water Resources Agency and the Marina Coast Water District, the $400 million project includes brackish water wells, a desal plant and pipelines to pump the desalted water to Peninsula customers facing the prospect of a state-ordered cutback in pumping from the Carmel River.
In its decision, the commission argued it actually retained and exercised its authority to provide policy direction on how the project would move forward within certain implementation guidelines.
While acknowledging that it allowed the public partners the leeway to ensure project costs are reasonable, the commission also argued it was necessary to address the "unique circumstances and conditions on the Monterey Peninsula."
The commission noted the "critical need" to achieve a water solution on the Peninsula because of the state order. If fully implemented, said the commission, the cutback would result in "severe negative impacts" to the area.
