ITEM: CONSENT CALENDAR

4. AUTHORIZE CHAIR TO SUBMIT LETTER OF SUPPORT FOR AB 2918 (Laird) TO REDUCE ENERGY RATES FOR DESALINATION PROJECTS

Meeting Date: May 17, 2004 Budgeted: N/A

Program/Line Item No.: N/A

Staff Contact: Henrietta Stern Cost Estimate: N/A

General Counsel Approval: N/A

Committee Recommendation: N/A

CEQA Compliance: N/A

SUMMARY: Assemblymember John Laird (D-Santa Cruz) introduced Assembly Bill 2918 (AB 2918) for consideration by the State Legislature this year, and has requested a letter of support by the District. AB 2918 would allow the California Public Utilities Commission to consider a lower rate for electricity for desalination plants operated by a public agency or regulated utility and placed in service after January 1, 2006. Exhibit 4-A provides a news release from Mr. Laird and text of the bill.

RECOMMENDATION: Staff recommends that the Board authorize Chairperson Edwards to transmit the letter of support attached as Exhibit 4-B. The MPWMD is seriously exploring desalination as a means to provide a reliable and adequate water supply for the Monterey Peninsula as well as offset current pumping from the Carmel River, which harms threatened species and habitat. Unfortunately, desalination is an expensive technology due to the large amount of power needed. Because electrical costs account for roughly 40% of desalination operating costs, AB 2918 will help make desalination available at a more reasonable cost.

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