Professional Documents
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SB 643730 v2:015621.0002
SUMMARY OF PERTINENT TESTIMONY FROM CPUC EVIDENTIARY HEARING
(A.12-04-019)
Issue Pertinent Testimony
MPRWA Position Statement Issues:
1. Public contribution Extensive testimony by Cal-Am financial and expert witnesses asserted various concerns concerning
proposed utility securitization (principally concerning recourse to Cal-Am, effects of consolidated debt
to company credit worthiness, need for separate Cal-Am credit rating, costs and delay associated with
securitization, and tax consequences). MPRWA cross-examined aggressively. Resulting impression
was whether the securitization would adversely affect the company is a matter of circumstances
(likely not in this case). Cal-Am acknowledged willingness to further explore acceptable public
financing structures. MPWMD witness, Stoldt and Larkins explained basis for opinion that
securitization would not be recourse to Cal-Am and would not adversely affect Cal-Am credit
worthiness. Stoldt and Larkins recommended that the Commission order Cal-Am to explore
securitization package so long as completed within six months of permanent financing, which would
not adversely affect Cal-Ams credit worthiness, would not require separate Cal-Am credit rating, and
the proceeds would not be treated as income to Cal-Am for tax purposes.
2. Governance Committee Svindland, Keeley and other witnesses acknowledged Governance Committee as a prudent means
for community participation, oversight and cost scrutiny. On the matter of establishing criteria for
GWR Decision, Governance Committee Chair Burnett sent a letter to PUC ALJ Weatherford
requesting a workshop. Judge has set a June PUC workshop to explore settlement on criteria.
3. Lower cost and alternative electricity No extensive testimony: Svindland acknowledged that Cal-Am evaluating options, including potential
use of landfill gas power.
4. Limited use of Surcharge 2 Svindlands direct testimony explained that Surcharge 2 could be used for Cal-Am only facilities (i.e.,
product water pipes, terminal reservoir and related infrastructure), but he qualified statement under
cross examination that the company has not pledged to do so.
5. Intake well issues (water rights,
Salinas Valley Basin impacts, and
permitting)
Extensive testimony was provided by SVCs witness, Durbin, and Cal-Ams witness, Leffler,
concerning potential impacts of the source wells on the Salinas Valley Basin and the percentage of
groundwater that will be drawn by the source wells. Principal issue is whether the site of the source
wells includes a significant aquitard between sand dune aquifer and the 180' aquifer (i.e., is the 180'
aquifer confined at the Cal-Am site?). More confinement would likely result in more impact on the
basin and greater take of groundwater as opposed to seawater. Durbin recommended that there be
geotechnical studies to understand the 180' aquifer, geochemical analysis to age the water, test wells
in 180' aquifer and dunes aquifer, density effects analysis (higher density seawater causes
groundwater to move), and sensitivity analysis (consideration of different hydrogeology resulting from
future phases of the SVWP, future scope of seawater intrusion, etc.)
6. Develop a concurrent contingency
plan for source water
Svindland explained that Cal-Am is willing to collaborate with MPRWA with respect to source water
contingencies, but Cal-Am remains committed to only applying for permits for slant wells/horizontal
wells at Cemex site until and unless the Cal-Am plan proves infeasible.
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SB 643730 v2:015621.0002
7. Proof of SRF financing availability Svindland explained that the state is unwilling to provide written documentation until the project's EIR
is complete, but that a financing package is complete and has been submitted.
8. Address environmental issues,
including seal level rise and coastal
erosion issues
Significant cross-examination of Cal-Am witness (notably Svindland) on this subject. Cal-Am
explanation that project has changed to gravity system of source wells to avoid powered infrastructure
within/at wells and locating desalination facility at 100' above sea level. MPWMD witness, Hampson,
testified that there should be further evaluation of coastal erosion and coastal flooding, including
significant waves during construction. Surfriders witness, Damitz, testified that barrier dams cannot
extend seaward of the high tide line under the NMSs Desalination Guidelines (non-binding guidelines
only). Cal-Ams proposed construction of slant wells in swash zone would require barrier dams that
would be inconsistent with the guidelines.
Other issues
Project sizing Svindland testified that project sized for replacement water (Carmel River and Seaside Basin),
Seaside Basin payback at 700 afy, tourism/economic bounce back, Pebble Beach water entitlement,
and new service to lots of record (1,181 afy subset of general plan build-out of 4,545 afy).
Brine discharge (MRWPCA outfall
capacity)
Cal-Am witnesses were cross-examined by MCWD with respect to sufficiency of MRWPCA outfall
capacity for brine discharge. Cal-Am explained they believe there is sufficient capacity in all but
occasional winter months, in which case Cal-Am is exploring solutions, including temporary brine
storage.
Brine discharge (potential marine
environment impacts)
Surfrider witnesses testified in written testimony that brine diffusers would be required to permit brine
discharge and cross-examined Cal Am witness, Svindland, regarding the same. Svindland testified
that Cal-Am believes that outfall as-is would provide sufficient brine diffusion but has contingencies for
slip-lining the outfall pipeline and use of diffusers, which would require an additional cost of $9-10
million.
GWR and portfolio supply approach Testimony by PCL witness, Minton, regarding the benefits of GWR, including consistency with state
support for water reclamation, reduced brine, reliability, and diversity of supply.
Community collaboration and political
issues
Testimony by PCL witness, Keeley, regarding community division as an element in the failure of
previous water supply projects and benefits of present emerging community consensus as it relates to
potential overcome political challenges to yield success for current project.
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6
Monterey Peninsula Regional Water Authority
Agenda Report
Date: April 15, 2013
Item No: 6.
08/12
FROM: Prepared By: Clerk to the Authority
SUBJECT: Receive Governance Committee Update (Burnett)
DISCUSSION:
There is no written report for this item. An oral presentation will take place at the meeting.
MPRWA TAC Meeting, 4/15/2013 , tem No. 6., tem Page 1, Packet Page 17