ITEM:		DISCUSSION ITEMS
2.	TECHNICAL REVIEW OF DRAFT eNVIRONMENTAL iMPACT REPORT ON CALIFORNIA AMERICAN WATER’S PROPOSED COASTAL WATER PROJECT
Meeting Date:			March 16, 2009	Budgeted:	N/A
From:			Darby Fuerst,	Program:	Water Supply Projects
			General Manager	Line Item No.:	N/A
Prepared By:			Andrew M. Bell	Cost Estimate:	N/A
General Counsel Approval: N/A
CEQA Compliance: N/A

SUMMARY: On January 30, 2009, the California Public Utilities Commission (CPUC) issued the Draft Environmental Impact Report (DEIR) on California American Water’s (CAW) proposed Coastal Water Project (CWP). The comment period for the DEIR ends on April 1, 2009. District staff has found the document to be generally well-organized and well-written. The preparers of the document have identified and described a wide range of projects. However, there are portions of the document that need additional information and analysis. Also, corrections are needed to some of the information provided in the document. Staff has identified a number of areas that merit comment by the District, and staff is soliciting additional comment and direction by the Board as to the content of a formal comment letter to be submitted by the District.

RECOMMENDATION: The Board should receive a report by staff on recommendations for the District’s written comments on the draft document, followed by the opportunity for the public to comment on this item. The Board should then provide recommendations for additional comments, and changes, if any, to staff’s proposed comments.

BACKGROUND: In July 2002, the CPUC issued a report titled “Plan B Project Report,” the result of AB 1182 (Keeley, January 1999), which directed the CPUC to prepare a long-term water supply contingency plan for the Peninsula, as an alternative to the Carmel River Dam and Reservoir Project proposed by CAW in 1996. In September 2004, CAW filed an application with the CPUC for a Certificate of Public Convenience and Necessity (CPCN) for the CWP, a project that is similar to the set of projects recommended in the Plan B Project Report. These projects include a seawater desalination plant located in Moss Landing combined with an aquifer storage and recovery (ASR) project with injection/recovery wells located in the Seaside Groundwater Basin. In July 2005, CAW issued a document in support of their application for a CPCN titled “Proponent’s Environmental Assessment” (PEA) for the CWP. The PEA provides a description of the CWP and an analysis of the potential impacts of the project, similar to an EIR. Following submittal of the PEA, the CPUC began preparation of the Draft EIR for the CWP. The DEIR was issued on January 30, 2009.

The DEIR analyzes the proposed CWP as well as a number of project alternatives. The most detailed analysis is provided for three project alternatives:

1. Coastal Water Project – a 10 million-gallon-per-day (MGD) seawater desalination project located at the Moss Landing Power Plant combined with an ASR project diverting water from the Carmel River system and injecting and storing it in the Seaside Groundwater Basin. This project would provide 12,500 acre-feet per annum (AFA) to the Monterey Peninsula area to make up shortfalls in the Carmel River System and the Seaside Groundwater Basin.
2. North Marina Project – an 11 MGD desalination project with subsurface intake system in the vicinity of the Marina Coast Water District (MCWD) office at the west end of Reservation Road, combined with Seaside Groundwater Basin ASR project. This project would provide 12,500 AFA to the Monterey Peninsula area.
3. Regional Water Supply Project – a combination of several water supply components, including a desalination project with subsurface intakes located north of Marina between Highway 1 and the coastal dunes, recycled water for non-potable uses, Seaside Groundwater ASR project, diversion and treatment of Salinas River water diverted at the Salinas River Diversion Facility now under construction, and injection of highly-purified wastewater from the Monterey Regional Water Pollution Control Agency (MRWPCA) treatment plant into the Seaside Groundwater Basin for groundwater recharge and later recovery for potable uses. The regional project is separated into two phases: Phase 1 would provide 12,500 AFA to the Monterey Peninsula area and 2,700 AFA to the MCWD, including the former Fort Ord area, for a total of 15,200 AFA. Phase 2 would provide additional water supplies of up to 10,400 AFA, including 4,500 AFA for growth on the Monterey Peninsula and 5,900 AFA for North County areas.

Additional detail on these three alternatives is provided in Exhibit 2-A (Table 3-1 in the Draft EIR: Project Facilities), Exhibit 2-B (Table 5-2: Components of the Phase 1 Monterey Regional Water Supply Program), and Exhibit 2-C (Table 5-4: Components of the Phase 2 Monterey Regional Water Supply Program).

Chapter 7 of the DEIR, titled “Alternatives,” includes a description of the screening process for project alternatives, compares impacts of the projects described above, and describes two types of alternatives: (1) design alternatives, including alternative desalination plant locations, intake and brine disposal methods and locations, and pipeline routes; and (2) water supply alternatives. The water supply alternatives included in this section (pages 7-42 through 7-53) are as follows:

No-Project Alternative,

Ship-Based Desalination Alternative,

Phase 1 Regional Project plus Seaside Groundwater Basin Replenishment Project, and

CAW Growth Project (would provide 17,000 AFA to the Monterey Peninsula, i.e., 12,500 AFA in replacement supplies plus 4,500 AFA for growth).

Staff Comments

District staff has identified the following as areas that merit comment. In addition, there are a number of minor edits and corrections that staff proposes to include in the District’s comment letter.

pp. 2-11 through 2-13 (Future CalAm Service Area Demand – General Plan Buildout)

• Factored demand may be high or low, depending on the ultimate use of the water user. MPWMD factors are based on a range of uses within each non-residential use.

pp. 3-23 and 3-24 (Existing ASR System)

• The description of the MPWMD Phase 1 ASR Project operation status will be corrected.

pp. 3-24 and 3-25 (Proposed ASR System)

• The description of project construction–related impacts of the proposed ASR expansion project will be corrected.

p. 4.1-6 (Carmel River Flow)

• Effects of reducing Carmel River diversions upstream diversions on the volume and water quality of the Carmel River lagoon should be added to this section. The effect of increased flows to the lagoon due to a project should be described in terms of the potential need for more frequent beach management to prevent flooding of low-lying structures around the lagoon.

p. 4.1-47 through 4.1-48 (Stream Bank Stability)

• The effects of existing and proposed Cal-Am diversions in the lower Carmel River on vegetation and streambank stability need to be clarified.

Sections 4.1 (Surface Water Resources) and 4.2 (Groundwater Resources)

• MPWMD is not mentioned in the “local regulatory setting” section for surface water and ground water in Chapter 4, though the District’s regulatory role is addressed in Chapter 5 (regional project) and Chapter 8 (growth). Certain other local special districts with a potential regulatory role are also not mentioned.
• Effects of the existing MPWMD ASR program are described in the DEIR, but an analysis of the planned additional wells (two more injection/recovery wells for all alternatives, and an additional three more wells for the regional alternative) do not appear to have been addressed.

Section 4.4 (Biological Resources)

• Riparian habitat on the Carmel River would benefit if a desalination project reduced the diversions from the Carmel River system. However, this section is silent on this issue and focuses primarily on steelhead. It is possible that many of the riparian irrigation systems now in place would not be necessary once a desalination project was brought on-line. However, as storage capacity at Los Padres Reservoir is reduced due to sedimentation and less water is available to maintain in-stream flows, some systems may need to be operated to offset impacts associated with legal groundwater pumping in the lower reaches of the Carmel River.
• On the other hand, increased riparian vegetation growth would result in the need for additional maintenance of the riparian corridor (removal of snags and debris).

Section 4.4.4 (Impacts and Mitigation Measures)

• The December 2003 MPWMD Board Review Administrative DEIR for the MPWMD Water Supply Project (the 8,400 AFY seawater desalination project proposed to be located in Sand City) states that increased flows resulting from reduced Carmel River diversions could change the seasonal nature of the in-channel and off-channel habitat for California red-legged frogs (CRLF) and bullfrogs. Even though CRLF stand to benefit from more water in the system, bullfrogs, an invasive species, could benefit as well, and may be able to out-compete CRLF in certain areas. Therefore, a bullfrog management program may need to be developed as a mitigation measure.

p. 5-11 (Table 5-2, Phase 1 Regional Program)

· The DEIR indicates up to 1,000 AFA in conservation. A breakout of this estimate should be provided.

· The existing settlement between California American Water and CPUC’s Division of Rate Payers (DRA) for the water conservation budget included in A.07-12-010 (dated January 16, 2009) estimates water savings of 397-794 AF over a three-year period. This is a cumulative savings estimate, not an annual savings estimate.

· Does this estimate include the effects of rates? CAW’s rates will be changing and will impact/increase conservation. The proposed rates respond to the existing illegal water situation. That said, there could be a relaxation of the rates when the water supply is legalized. At that time, the conservation savings currently seen due to rates may be reduced.

p. 5-12 (Regional Urban Water Augmentation Project (RUWAP))

• In the past, the RUWAP has included supplying 300 AFA of recycled water to the CAW service area to replace potable uses in parks, schoolgrounds, etc. As described in the DEIR for the CWP, the RUWAP would not directly benefit the CAW system as it does not have capacity sufficient to replace existing CAW uses with recycled water.

Section 7.6.2, pages 742 through 7-53 (Alternative Projects Analyzed in This EIR)

• The DEIR did not discuss the MPWMD 95-10 Seawater Desalination Project, which is under investigation and is a high priority of the MPWMD Board.

Chapter 9 (Cumulative Impacts)

• The Seaside Basin Adjudication is mentioned in earlier chapters as part of the overall environmental setting, but the Adjudication is not addressed in the context of cumulative impacts, i.e., what would the effect be if the Alternative Producers actually exercised their rights and physically extracted water in the future from parcels which have been vacant for many years. Some Alternative Producers have requested that CAW serve their property based on the owner’s water rights. Also, the State Water Resources Control Board (SWRCB), in its letter of February 5, 2009, urged CAW to obtain available Seaside Basin water rights from Alternative Producers to help offset Carmel River pumping. How would such activities affect the ability of the CAW system to serve its customers in the context of the CWP and other projects evaluated in the DEIR?

General Comment

The document contains a number of quantitative characterizations where qualitative information would be more appropriate. As an example, in the analysis for Impact 6.2-1 (Components of the Regional Project may violate water quality standards or waste discharge requirements) on p. 6.2-24, the text states that the TDS concentration of the desalination feedwater extracted by the five Regional Project wells will average approximately 29,000 mg/L. However, no similar impact or information is provided in the analysis of the North Marina alternative provided in Section 4.24 (pp. 4.2-35 through 4.2-50). The comparable information provided for the North Marina Project is as follows: “Due to the configuration of the slant wells, the proposed NWA would extract water from both the Monterey Bay and the SVGB [Salinas Valley Groundwater Basin], however, the majority of the product water would originate in the ocean. The fraction of water extracted from the SVGB would be minor compared to the volume of ocean water and would not contribute to an imbalance of recharge and extraction in the SVGB.” (p. 4.2-48; emphasis added). The document does not include a quantitative analysis that supports this statement.

IMPACT TO DISTRICT STAFF/RESOURCES: The principal impact of this item is staff time to prepare comments on the DEIR. Staff of the Planning and Engineering Division, Water Resources Division, Water Demand Division, and the General Manager’s office have reviewed the document and prepared preliminary comments. No additional costs other than reproduction and mailing of the District’s comment letter are anticipated.

EXHIBITS

2-A Table 3-1 in the Draft EIR – Project Facilities

2-B Table 5-2: Components of the Phase 1 Monterey Regional Water Supply Program

2-C Table 5-4: Components of the Phase 2 Monterey Regional Water Supply Program

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