ITEM:		ACTION ITEM
20.	CONSIDER APPROVAL OF BRINE DISCHARGE SETTLEMENT AGREEMENT UNDER A.12-04-019
Meeting Date:			June 20, 2016	Budgeted:	N/A
From:			David J. Stoldt	Program/
			General Manager	Line Item No.: N/A
Prepared By:			David J. Stoldt	Cost Estimate:	N/A
General Counsel Approval: N/A
Committee Recommendation:
CEQA Compliance: N/A

SUMMARY: On January 22, 2016 supplemental testimony on the issue of "brine disposal" was presented to the California Public Utilities Commission (CPUC) by parties in Application 12-04-019. At that time a draft term sheet on brine disposal was submitted by representatives of Cal Am, the District, the Monterey Regional Water Pollution Control Agency (MRWPCA), the Surfrider Foundation, and the Monterey Peninsula Regional Water Authority. Its purpose was to reduce the likelihood of extensive rebuttal or litigation over brine disposal monitoring, resolve one of the outstanding issues in the "large" Settlement Agreement of 2013, and incur the least possible cost to the ratepayers. Rebuttal testimony on brine disposal was submitted to the CPUC on March 22, 2016 following two months of settlement discussions.

A proposed final brine term sheet was presented to the CPUC at hearings the week of April 11, 2016. Since that time, negotiations led to a motion to the California Public Utilities Commission (CPUC) to approve a Brine Discharge Settlement Agreement (Exhibit 20-A attached) and the proposed Brine Discharge Settlement Agreement (Exhibit 20-B attached).

The proposed Brine Discharge Settlement Agreement does not have any impact on District operations or the District’s interests in the Monterey Peninsula Water Supply Project. District support of the agreement is primarily to demonstrate joint support with the other settling parties in the CPUC proceeding.

RECOMMENDATION: The General Manager recommends the Board authorize its General Counsel to sign the Brine Discharge Settlement Agreement on behalf of the District and to join in the motion to the CPUC to approve the Brine Discharge Settlement Agreement, in both cases subject to non-substantive changes prior to filing.

DISCUSSION: The Settlement Agreement provides for monitoring and, if necessary, mitigation of brine discharge from the Monterey Peninsula Water Supply Project (“Project”) into Monterey Bay. The proposed brine disposal facilities would consist of a 3 million gallon brine storage basin and a brine discharge pipeline, which would connect to a new brine mixing structure that will connect in turn to the existing MRWPCA outfall. The outfall rests on the ocean floor and terminates in a diffuser with 171 2-inch ports, 129 of which are open, spaced 8 feet apart. During the non-irrigation season (approximately November through March), Project brine would be diluted prior to discharge with treated wastewater from the MRWPCA Regional Wastewater Treatment Plant. During the irrigation season that wastewater is diverted for irrigation and undiluted Project brine, or brine diluted with the Pure Water Monterey reject water, would be discharged into boundaries of the Monterey Bay National Marine Sanctuary.

Surfrider Foundation has been concerned with potential impacts from brine discharges into the marine environment. In late 2015 and early 2016, Surfrider and Cal-Am engaged in discussions to develop terms of a potential settlement of contested issues related to the Project’s brine discharge. The proposed Brine Discharge Settlement Agreement is the outcome of those discussions.

EXHIBITS

20-A Settling Parties’ Motion To Approve Brine Discharge Settlement Agreement

20-B Proposed Brine Discharge Settlement Agreement

U:\staff\Boardpacket\2016\20160620\ActionItems\20\Item 20.docx