ITEM:		CONSENT CALENDAR
16.	CONSIDER FUNDING REBATES IN THE CALIFORNIA AMERICAN WATER SYSTEM BETWEEN JULY 1, 2018, AND THE AVAILABILITY OF FUNDING FROM THE CAL-AM GENERAL RATE CASE
Meeting Date:			June 18, 2018	Budgeted:	No
From:			David J. Stoldt,	Program/	N/A
			General Manager	Line Item No.:
Prepared By:			Stephanie Locke	Cost Estimate:	$700,000
General Counsel Review: N/A
Committee Recommendation: The Administrative Committee reviewed this item on June 11, 2018 and recommended approval.
CEQA Compliance: This action does not constitute a project as defined by the California Environmental Quality Act Guidelines section 15378.

SUMMARY: MPWMD, with California American Water’s (“Cal-Am”) agreement, has been front‐funding the rebates so that the program is not suspended while awaiting Cal-Am’s General Rate Case (“GRC”) decision by the California Public Utilities Commission (“CPUC”). The Rebate Program is funded through a conservation surcharge that is considered every three years as part of Cal-Am’s budget process. The decision on the 2018-2020 GRC (filed in July 2016) has been significantly delayed and is not expected before the end of the year. The pending GRC conservation budget includes $1.6 million for rebates.

On January 24, 2018, the Board authorized to spend $270,000 towards front-funding of the rebate through June 30, 2018. The Board is being asked to continue front‐funding the Rebate Program from the District’s General Fund until the GRC is finalized. At that time, MPWMD will invoice Cal‐Am for the expenditure. The Board was informed in January 2018 that there is a slight risk that rebate funding will not be approved by the CPUC, although all previous requests for funding for the Rebate Program have been approved since 2007 and the CPUC’s Office of Ratepayer Advocates has been supportive of the Peninsula’s need to fund rebates during the Cease and Desist Order (“CDO”).

The Rebate Program on the Monterey Peninsula contributes significantly to water savings and compliance with the CDO. The program provides extensive and generous incentives for property owners/managers to replace older water-guzzling appliances and to install new water efficient equipment. Current programs, such as the multi-family retrofit requirement and the HEART Program promote and utilize the rebate program. An interruption in funding would jeopardize these programs and the associated water savings and would impact the current momentum to participate. In 2011, the program was suspended awaiting the 2012 GRC approval. After funding became available, it took approximately 18 months to return to current participation levels. Given the urgency of conservation and the CDO milestones, staff recommends the Board authorize interim funding.

RECOMMENDATION: Staff recommends that the Board should support the continued front-funding of rebates from the General Fund pending approval of Cal-Am’s GRC budget. The proposed FY 2018-2019 budget includes $700,000 for rebates over the course of the fiscal year.

EXHIBIT

None

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