ITEM:		PUBLIC HEARING
14.	CONSIDER APPROVAL OF APPLICATION TO AMEND CALIFORNIA-AMERICAN WATER COMPANY SYSTEM PERMITS FOR THE RYAN RANCH AND BISHOP UNITS TO CHANGE THE SOURCE OF SUPPLY AND AUTHORIZE PERMANENT CONNECTION TO THE MAIN CALIFORNIA AMERICAN WATER SYSTEM TO RECEIVE DELIVERIES OF NATIVE SEASIDE BASIN GROUNDWATER FROM THE COASTAL SUBAREA
Meeting Date:			September 21, 2020	Budgeted:	N/A
From:			David J. Stoldt	Program/	N/A
			General Manager	Line Item No.:
Prepared By:			Stephanie Locke	Cost Estimate:	N/A
General Counsel Review: Counsel has reviewed
Committee Recommendation: N/A
CEQA Compliance: Class 1 Categorical Exemption for minor alterations to existing facilities for an investor-owned public utility applies to this action (CEQA Guidelines 15301-(b)). Pipeline project was analyzed in revised Monterey Peninsula Water Supply Project EIR.

SUMMARY: The Board will consider an amendment to the California-American Water Company (CAW) Main, Ryan Ranch, and Bishop Water Distribution Systems (WDS). Application #20200501CAW (Exhibit 14-A) was submitted by CAW on July 8, 2020, requesting Board approval to permanently interconnect the Main CAW System to its satellite systems (Ryan Ranch and Bishop Units) to supply native Seaside Coastal Groundwater Basin water in place of Laguna Seca Subarea groundwater. Environmental review of this Project was completed in the amended MPWSP EIR that was submitted by CAW to the California Public Utilities Commission (CPUC) on March 14, 2016. The interconnection was approved by the CPUC in the September 13, 2018 Decision Approving a Modified Monterey Peninsula Water Supply Project, Adopting Settlement Agreements, Issuing Certificate of Public Convenience and Necessity and Certifying Combined Environmental Report (D.18-09-017) as a secondary objective of the Monterey Peninsula Water Supply Project (MPWSP). The interconnection will improve system reliability, ensure adequate water supplies are available to serve the existing needs of the Ryan Ranch Unit and the Bishop Unit, and provide system redundancy to ensure adequate water supplies during emergencies (e.g. fire suppression). No other changes to the systems are proposed. 

CAW has a recognized Standard Production Allocation in the Seaside Basin Adjudication Decision (Adjudication Decision). As a result of the Adjudication Decision, CAW’s subunits in the Laguna Seca Subarea had their production from the Laguna Seca Subarea ramped down to zero in 2018. Since that time, CAW has continued pumping from the subarea and has relied on replenishment assessments to comply with the Adjudication Decision.

There are currently emergency interties between the Main CAW System and the Ryan Ranch Unit and between the Ryan Ranch Unit and the Bishop Unit. The intertie between the Main CAW System and Ryan Ranch was approved in the 1990’s and has been regularly used in recent years to transfer Water Entitlements to Ryan Ranch for two Community Hospital of the Monterey Peninsula projects, as well as to augment supply in the Ryan Ranch Unit, as the Ryan Ranch System has struggled with Well water production for a number of years.

In 2015, the District approved an emergency intertie between the Bishop Unit and the Ryan Ranch Unit to improve supply to Ryan Ranch. Bishop water was moved into the Ryan Ranch system for over a year in 2018-19, which prompted District staff in 2019 to press CAW to complete a permanent solution to the supply issues in the Laguna Seca Subarea.

The new 1.1-mile pipeline from the Main CAW System through the Ryan Ranch Unit and to the Bishop Unit system will provide additional benefits to both systems, including:

· Increased reliability and fire protection for both Ryan Ranch and Bishop water systems;

· More uniform type of operations for Ryan Ranch and Bishop Units;

· Lower Total Dissolved Solids (TDS) for Ryan Ranch and Bishop Units;

· Lower salt concentrations for Bishop wastewater system (used to irrigate the golf course).

CAW’s operation of the interconnection will not conflict with the State Water Resource Control Board’s (SWRCB) Water Right Order No. 2016-0016 (CDO) provided that the water delivered through the interconnection to the Ryan Ranch and Bishop Units is accounted for as native groundwater from the Seaside Coastal Subarea. The Adjudication Decision expressly authorizes CAW to deliver or transfer native groundwater from the Seaside Coastal Subarea for use in place of Laguna Seca Subarea water where Ryan Ranch and Bishop subdivisions are located. The Adjudication Decision requires CAW to account for this production as Coastal Subarea production and not as production from the Laguna Seca Subarea.

The CDO directs CAW to maximize groundwater use over Carmel River diversions in order to reduce Carmel River diversions to authorized limits, and it prohibits CAW from increasing Carmel River diversions in order to offset loss in production from the Basin. The 2016 CDO established an Effective Diversion Limit (EDL) of 8,310 Acre Feet Annually (AFA). As such, CAW cannot exceed the EDL as a result of either reduced groundwater availability from the Seaside Groundwater Basin or increased groundwater demands in the Seaside Groundwater Basin.

The delivery of Seaside Coastal Subarea groundwater through the interconnection will not change CAW’s obligations under the CDO, including the EDL limit, and CAW must abide by the other terms and conditions in the CDO and prior SWB Orders – Water Right Orders 95-10 and 2009-0060. Those orders identify the Seaside Groundwater Basin as one of CAW’s important sources of supply, and they discuss the availability of the Seaside Groundwater Basin supply in relation to Carmel River diversions, noting the Adjudication Decision’s required pumping reductions and the diminishing groundwater supply available to CAW over time as result of the reductions. The SWRCB Orders address CAW’s total rights to the Seaside Basin, but do not differentiate between Coastal and Laguna Seca Subarea allocations. Nor do the orders impose restrictions on CAW’s ability to use the Seaside Basin groundwater as authorized under the Seaside Basin Decision.

There are conditions in the CDO regarding the use of ASR and PWM supplies as it relates to CAW’s Carmel River diversions and the EDL, but the CDO does not condition CAW’s use of native groundwater. As such, it will be important for CAW to account for its deliveries through the interconnection as native Seaside Coastal Basin groundwater and debited from CAW’s Coastal Basin allocation and Watermaster reporting. This accounting should be done monthly, so that CAW does not exceed its annual Coastal Subarea allocation.

District staff met with the Chairman of the Seaside Watermaster to discuss the use of Coastal Subarea groundwater in place of Laguna Seca Subarea water. The conclusion was that the Adjudication Decision allows the water right to be produced from either location, and given the completion of the ramp-down in the Laguna Seca area to zero for CAW, producing native groundwater from the Seaside Coastal Subarea is logical.

MPWMD CEQA Compliance: The Board’s action focuses on approving the connection of the Ryan Ranch and Bishop Units to the Main CAW System. A Class 1 Categorical Exemption for minor alterations to existing facilities for an investor-owned public utility applies to this action (CEQA Guidelines 15301-(b)). For a Class 1 exemption, CEQA Guidelines 15301 states: “The key consideration is whether the project involves negligible or no expansion of an existing use” beyond that existing at the time of the lead agency’s determination.

The rationale for the Class 1 exemption is based on the following facts:

· There will be no change in the System Limits (Production Limit and Expansion Capacity Limit) for either system.

· Emergency transfer of water from the Bishop Unit to Ryan Ranch and from the Main CAW System to Ryan Ranch already occurs when physical supplies and/or treatment capability at Ryan Ranch is inadequate or to transfer Water Entitlements to projects in Ryan Ranch.

· This action would change the Source of Supply from the Laguna Seca Subarea to native groundwater in the Seaside Coastal Subarea.

RECOMMENDATION: Staff recommends the Board authorize the change in the Source of Supply for the Ryan Ranch Unit and the Bishop Unit of CAW from the Laguna Seca Subarea to native groundwater from the Seaside Coastal Subarea to be provided by a permanent main extension from the bottom of Ragsdale Drive in Monterey to the Bishop Unit on York Road in Monterey. District staff recommends that the Board take the following actions:

1. Adopt the MPWMD Findings of Approval for Application #20200501CAW for the CAW/Ryan Ranch and Bishop Units Amendment (Exhibit 14-B).

2. Approve Application #20200501CAW; authorize amendment of MPWMD Permit #M15-03-L3-A for CAW’s Ryan Ranch and Bishop Units to connect to the Main CAW System with amended Conditions of Approval for both the Ryan Ranch and Bishops Units, shown as (Exhibit 14-C) and (Exhibit 14-D), respectively.

3. Direct staff to file a Notice of Exemption with the Monterey County Clerk.

EXHIBITS

14-A Application for Amendment

14-B Findings of Approval

14-C Conditions of Approval for the Ryan Ranch Unit

14-D Conditions of Approval for the Bishop Unit

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