1. Management Objectives

The Monterey Peninsula Water Management District (District) desires to maximize the long-term production potential and protect the environmental quality of the Carmel River and Seaside Groundwater Basins. In addition, the District desires to maximize the amount of water that can be diverted from the Carmel River Basin and injected into the Seaside Groundwater Basin while complying with the instream flow requirements recommended by the National Marine Fisheries Service (NMFS) to protect the Carmel River steelhead population. To accomplish these goals, a water supply strategy and budget for production within California American Water’s (CAW) Main and Laguna Seca Subarea water distribution systems is reviewed quarterly to determine the optimal strategy for operations, given the current hydrologic and system conditions.

2. Quarterly Water Supply Strategy: April - June 2010

On March 11, 2010, staff from the District, CAW, California Department of Fish and Game (CDFG), and National Marine Fisheries Service (NMFS) met and discussed the proposed water supply strategy and related topics for the remainder of March 2010 and the April-June 2010 period. Currently, flow in the Carmel River is unregulated, with San Clemente Reservoir and Los Padres Reservoir full and spilling. Flow in the Carmel River is continuous from the headwaters to the ocean, with approximately 436 cubic feet per second (cfs) flowing to the ocean on March 9, 2010. Rainfall during Water Year 2010 to date through the end of February at San Clemente Dam in the upper watershed has totaled 19.91 inches or 128% of the long-term average at this site. Further, unimpaired runoff at San Clemente Dam for WY 2010 to date through the end of February has totaled approximately 49,460 AF or about 134% of the long-term average for this site.

Carmel River Basin Given these conditions, it was agreed that “ normal year” inflows would be used to conservatively assess CAW’s operations during the April through June 2010 period. To meet customer demand, CAW would operate its wells in the Lower Carmel Valley in a downstream-to-upstream sequence, as needed. For the quarterly budget, it was agreed that CAW would produce approximately 106, 0, and 0 AF of groundwater from its wells in the Upper Carmel Valley during April, May, and June 2010, respectively. These amounts are consistent with CAW management’s intent to minimize production in the Upper Carmel Valley at all times.

In addition, it was agreed that CAW would produce approximately 1,086, 998, and 991 AF of groundwater from its wells in the Lower Carmel Valley during April, May, and June 2010, respectively. Table 1 shows actual and projected monthly releases and diversions from Los Padres and San Clemente Reservoirs for the October 2009 through June 2010 period.

Lastly, it was assumed that 186 AF of water would be diverted from the Carmel River Basin and injected into the Seaside Groundwater Basin in April 2010, but that river flows in May would be insufficient to sustain any diversions for ASR, and the diversion season ends May 31. Because of the uncertainty in predicting future rainfall and runoff amounts, this assumption is subject to change. Initial recovery of ASR storage for the Calendar Year would begin in June 2010, with approximately 225 AF to be utilized for customer service that month.

Seaside Groundwater Basin It was also agreed that, subject to rainfall and runoff conditions in the Carmel River, CAW would produce 100, 400, and 500 AF from the Coastal Subareas of the Seaside Basin, respectively, during this period. The June production from the Coastal Subareas of the Seaside Groundwater Basin would be comprised of 275 AF of native groundwater, combined with 225 AF of storage recovered from ASR.

It was also agreed that CAW would produce 17, 24, and 27 AF of groundwater from its wells in the Laguna Seca Subarea of the Seaside Basin for customers in the Ryan Ranch, Bishop, and Hidden Hills systems during April, May, and June 2010, respectively. It is recognized that, based on recent historical use, CAW’s actual production from the Laguna Seca Subarea during this period will likely exceed the proposed monthly targets, which are based on CAW’s allocation specified in the Seaside Basin Adjudication Decision. For example, in the April through June 2009 period, CAW produced 41, 47, and 53 AF from the Laguna Seca Subarea to meet customer demand in the Ryan Ranch, Bishop, and Hidden Hills systems. In this context, the production targets represent the maximum monthly production that should occur so that CAW remains within its adjudicated allocation for the Laguna Seca Subarea. Under the amended Seaside Basin Decision, CAW is allowed to use production savings in the Coastal Subareas to offset over-production in the Laguna Seca Subarea.

U:\staff\word\boardpacket\2010\20100315\PubHrgs\20\item20_exh20c.doc