ITEM:		ACTION ITEM
3.	RECEIVE PUBLIC COMMENT AND CONSIDER CHANGES TO PROJECT SIZING BY CALIFORNIA AMERICAN WATER
Meeting Date:			February 12, 2013	Budgeted:	N/A
From:			David J. Stoldt,	Program/	N/A
			General Manager	Line Item:
Prepared By:			David J. Stoldt	Cost Estimate:	None
General Counsel Review: N/A
Committee Recommendation: N/A
CEQA Compliance: N/A

SUMMARY: At the January 30, 2013 Board meeting, the Board directed staff to include several positions in the District testimony due February 22, 2013 in the proceeding of A.12-04-012 at the California Public Utilities Commission (CPUC.) The Board, however, desired greater public input with respect to the sizing of the desalination plant capacity.

Cal-Am indicated that it was increasing the size of the proposed desalination facilities to incorporate replenishment of the Seaside Basin, as well as potential demand they had previously not included in the project sizing. These include build-out of the Pebble Beach project the EIR for which was certified by the County last summer, the potential “bounce back” in tourism resulting from economic recovery and utilizing existing visitor-serving capacity, and legal lots of record. These additions are shown in the table below:

Estimated Demand –Mid Range (AFY)	15,296
5yr Average (AFY)	13,290
Pebble Beach (AFY)	325
Tourism Bounce Back (AFY)	500
Lots of Record (AFY)	1,181

The resulting revised facility size is 6,252 AF with GWR, or 9,752 without GWR.

RECOMMENDATION: The Board should discuss and determine if it would like to adopt a formal position of support, disagreement, or neutrality. Such position will be incorporated into District testimony to be filed in February.

BACKGROUND: As part of its application, Cal-Am indicated it needed new supplies of 9,006 acre foot per year (AFY) in order to meet an annual estimated demand of 15,250 AFY. This estimated demand was derived from the last Environmental Impact Report (“EIR”) and was the amount agreed upon by the parties in the settlement adopted in decision D.10-12-016.

Since Cal-Am filed its application, a couple of items have been brought to their attention that merits an adjustment to the estimated annual demand. These changes are as follows:

• A payback schedule for the Seaside Groundwater Basin was set at 25 years. Essentially, this reduces the available supply from the Seaside Basin from 1,474 AFY to 774 AFY.

• The tourism industry pointed to recent reductions in their occupancy rates that will come back and since they are existing customers, the use of a 5-year historical average may not reflect their true demand. Cal-Am reviewed past water use by commercial class users and has allocated 500 AFY for this updated demand return. MPWMD staff analysis of this amount indicates that it may overstate the water demand that might result from economic recovery. The analysis is attached as Exhibit 3-B.

• Cal-Am has included an additional 325 AFY of potable water demand that needs to be included for the recently approved Pebble Beach build-out.

• Cal-Am provided the estimated demands for the Lots of Records (LOR) of 1,181 AFY. This number is derived from the October 2009 Coastal Water Project Final Environmental Impact Report and cites Cal-Am’s 2006 Urban Water Management Plan (UWMP) referencing a 2001 District analysis as the source. The District does not certify that the 1,181 AFY value is valid. In fact, it was cited from an interim period between the Land Systems Group Phase II reports of August 2000 and June 2002 discussed under “2000 Land Systems Group Report” in Exhibit 3-A attached. The District does not recommend continued use of this number. Instead, the District will examine the results of the “2004-06 Future Water Needs Study” background data and attempt to break out legal lots of record and present those results at the February 12, 2013 Board meeting.

As part of their supplemental testimony, Cal-Am has re-evaluated the plant size to accommodate the above listed supply and demand changes with the assumption that current demands remain equal to the 5-year historical average which is approximately 13,290 AFY.

Summed up, the revised demands are 15,296 AFY, however, due to the reduction in the Seaside Basin supply, the desal plant needs to be sized larger by approximately 700 AFY or 0.6 million gallons per day (MGD) to account for the reduction in supply. Please refer to Exhibit 3-C which is a plant sizing memorandum from RBF Consulting dated January 7, 2013 that discusses the updated sizing of the plant with and without the Groundwater Replenishment (GWR) project.

The resulting revised facility size is 6,252 AF with GWR, or 9,752 without GWR.

EXHIBITS

3-A Overview of Legal Lots of Record Documentation

3-B MPWMD Analysis of Hospitality Bounce-Back

3-C Plant Sizing Memorandum

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