ITEM:		ACTION ITEMS
17.	CONSIDER AUTHORIZING MPWMD PARTICIPATION IN DIVISION OF RATEPAYER ADVOCATES PROPOSED ANALYSIS OF REGIONAL ALTERNATIVE TO COASTAL WATER PROJECT
Meeting Date:			January 25, 2007	Budgeted:	N/A
From:			David A. Berger,	Program/	N/A
			General Manager	Line Item No.:
Prepared By:			Same	Cost Estimate:	N/A
General Counsel Approval: N/A
Committee Recommendation: N/A
CEQA Compliance: N/A

SUMMARY: The Division of Ratepayer Advocates (DRA), an independent arm of the California Public Utilities Commission (CPUC), has formally invited Monterey Peninsula and north Monterey County water districts, municipalities and other effected local agencies to participate in a series of meetings for the purpose of assisting DRA in its analysis of a possible regional alternative to California American Water’s proposed Coastal Water Project. DRA anticipates that the outcome of its proposed meetings would be a regional strategy that integrates water supply and water management program alternatives, which would potentially have greater benefit to Cal-Am’s ratepayers and other entities, than would the proposed Coastal Water Project. The purpose of this agenda item is to seek Board authorization for MPWMD to participate in the DRA analysis. Staff believes that District participation is consistent with the Board’s strategic vision, its three-year strategic goal related to determining a long-term water supply solution for the District, and its six-month strategic objective of continuing as an intervener and active participant in the CPUC’s consideration of the Coastal Water Project.

RECOMMENDATION: It is recommended that the Board authorize MPWMD participation in the Division of Ratepayer Advocates-led regional water supply/management alternatives analysis described herein.

BACKGROUND: On December 21, 2006 the City/Water Managers Working Group met with DRA representative Diana Brooks and DRA consultant Steve Kasower to discuss their December 19, 2006 proposal to engage Monterey Peninsula and north County local agencies in discussions regarding a possible regional alternative to the Coastal Water Project that Cal-Am submitted in 2005 for CPUC approval (Exhibit 17-A). The Coastal Water Project (CWP) application to the CPUC consists of a desalination facility co-located on the Moss Landing energy plant site, with a maximum yield of 10, 730 acre-feet per year (AFY) intended to satisfy State Order 95-10 directive to replace about 70% of its current Carmel River pumping, plus 1,000 AFY to help address the Seaside Basin overdraft, or a total project yield of 11,730 AFY. The CPUC is analyzing the CWP and potential project alternatives as part of an Environmental Impact Report currently being prepared, the draft of which is scheduled to be issued in the second quarter of 2007. DRA, MPWMD and others are interveners in that CPUC application.

As described in the December 19 Brooks/Kasower letter, and additional materials they subsequently distributed to local agencies (Exhibit 17-B), DRA believes that a regional approach to water supply management and project development could potentially better serve Cal-Am’s ratepayers, than would the proposed Coastal Water Project. DRA is interested in collaborating with water/wastewater districts and agencies, municipalities and other effected local entities in analyzing ways and means to integrate various water supply projects, or project elements, and water management strategies into a regional solution. Projects to be analyzed in the DRA-led process would include all of those identified on the MPWMD Matrix of Water Supply Alternatives. DRA’s goal is to develop an integrated strategy in collaboration with MPWMD and other effected local entities, which could potentially reduce the financial impact of Cal-Am’s compliance with Order 95-10 on Peninsula ratepayers.

In its December 21 meeting, the City/Water Managers Group concluded DRA’s proposal is fully consistent with its previous consensus that water supply and water quality problems facing the Monterey Peninsula and north County are best addressed regionally. The managers also felt that the DRA proposal offers an opportunity to leverage limited local agency staff and financial resources that would be needed for a coordinated, comprehensive technical analysis of the various water augmentation projects that have been proposed to solve water needs of those two regions. DRA is seeking an early commitment from interested local agencies before launching this year-long effort. DRA has scheduled the first in a series of meetings as a half-day planning session on January 31, 2007, the purpose of which is to involve local agency senior managers in a discussion of DRA’s proposed goals, meeting schedule, and related organizational matters. DRA proposes that all of these meetings be publicly noticed, so that interested citizens and groups could observe and contribute their input.

Curtis Weeks, who leads the city/water managers group, has proposed a January 25, 2007 meeting to review DRA’s proposal with the group of Board Chairs of the water/wastewater districts and agencies and Mayors of effected cities, which previously has discussed regional governance concepts for water supply planning coordination. In light of the DRA’s proposal, the managers group is revising a draft MOU for review at that meeting that could be used to initiate a regional water supply coordination effort among these agencies/districts and cities, which has been in discussion for the past two years. This draft MOU subsequently could be considered by the MPWMD Board and the other district/agency governing boards and city councils. The draft MOU contemplates that both managers and elected officials of effected local districts/agencies and cities would be directly involved in the DRA water supply/management alternatives analysis meeting process described above and in the attached materials.

EXHIBITS

17-A December 19, 2006 Letter from Diana Brooks and Steve Kasower

17-B January 18, 2007 Brooks/Kasower E-Mail and Attachments

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