WATER DEMAND COMMITTEE

 

ITEM:

ACTION ITEMS

 

2.

DEVELOP RECOMMENDATION TO THE BOARD ADDRESSING SWRCB CEASE AND DESIST ORDER ISSUES:

 

A.

ORDINANCE NO. 142 – AN ORDINANCE OF THE BOARD OF DIRECTORS OF THE MONTEREY PENINSULA WATER MANAGEMENT DISTRICT AMENDING REGULATION XV, THE EXPANDED WATER CONSERVATION AND STANDBY RATIONING PLAN TO ALLOW AN EXCEPTION TO THE MANDATORY REQUIREMENT FOR IMPLEMENTION OF STAGE 5, 6 or 7 WHEN A FINAL CEASE AND DESIST ORDER IS ISSUED

 

 

 

 

B.

RESOLUTION AMENDING TABLES XV-1 AND XV-2 TO REDUCE PRODUCTION TARGETS TO CDO COMPLIANCE LEVEL

 

 

 

 

C.

RESOLUTION IMPLEMENTING STAGE 3 WATER CONSERVATION TO REDUCE OUTDOOR WATER USE

 

Meeting Date:
December 7, 2009

Budgeted: 

N/A

 

From:

Darby Fuerst,

Program/

 

 

General Manager

Line Item No.:

 

Prepared By:

Stephanie Pintar

Cost Estimate:

N/A

 

General Counsel Review:  Yes

Committee Recommendation:  PAC/TAC recommendations from November 30, 2009 are summarized below.

CEQA Compliance:  The ordinance and resolution to implement Stage 3 Conservation are exempt under CEQA Section 15269, Emergency Projects;  The resolution to amend production targets is exempt under CEQA Section 15307, Regulatory Protection of Natural Resources (Class 7).

 

A.                 ORDINANCE NO. 142 – AN ORDINANCE OF THE BOARD OF DIRECTORS OF THE MONTEREY PENINSULA WATER MANAGEMENT DISTRICT AMENDING REGULATION XV, THE EXPANDED WATER CONSERVATION AND STANDBY RATIONING PLAN TO ALLOW AN EXCEPTION TO THE MANDATORY REQUIREMENT FOR IMPLEMENTION OF STAGE 5, 6 or 7 WHEN A FINAL CEASE AND DESIST ORDER IS ISSUED.

 

SUMMARY:  On November 16, 2009, the MPWMD Board directed staff to present an ordinance to the Board at its December meeting to modify the automatic triggers required by the existing Expanded Water Conservation and Standby Rationing Plan (Regulation XV) (Exhibit 2-A).  The modifications provide an alternative to rationing Stages 5, 6 or 7 when there is evidence that increased conservation, or a lesser rationing Stage, is sufficient to achieve regulatory compliance.  Stage 5 (Rule 165) is the first water rationing stage and is required to take automatical effect when a final Cease and Desist Order (CDO) is issued that requires reductions of more than 15 percent of base year use.  The CDO issued against California American Water (Cal-Am) by the State Water Resources Control Board (SWRCB) in October 2009 shall trigger Stage 5 if the court Stay of the SWRCB Order is lifted. 

 

Automatic regulatory triggers currently exist in Stages 5-7; each automatic trigger requires the District to implement that Stage of water rationing when there is a final CDO that mandates water supply targets associated with that Stage.  The proposed ordinance provides a mechanism for the General Manager to implement a lower conservation or rationing stage when credible evidence shows that the community is likely to achieve compliance with regulatory production limits.  At this time, evidence supports a position that production during this Water Year shall comply with the CDO during without the need to implement Stage 5 water rationing.  This potential is supported by the last year’s production, imposition of new rates that will discourage high use, and a plan to focus on high outdoor water users, rather than all Cal-Am customers.  The proposed ordinance allows the General Manager to declare a rationing Stage by memorandum, but the decision can be appealed to the Board.

 

The draft ordinance was reviewed by the Policy Advisory Committee and the Technical Advisory Committee (PAC/TAC) on November 30, 3009.  The PAC/TAC supported the ordinance and recommended that it be approved on first reading, but that it not be enacted as on an urgency basis. 

 

Cal-Am indicates that it supports the ordinance and is also prepared to modify its Rule 14.1.1 to match the proposed changes.  The District and Cal-Am have been meeting with the Public Utility Commission’s Division of Ratepayer Advocates (DRA) to gain their support for the proposed amendments.  It appears that DRA will support the changes.  Staff shall convey the definitive position from DRA before the Board meeting.

 

RECOMMENDATION:  Staff recommends the Water Demand Committee support draft Ordinance No. 142, and that the Board act on it through the regular ordinance process (as opposed to considering the matter as an urgency ordinance).  The need to adopt the ordinance on an urgency basis no longer exists as the court-ordered stay of the CDO shall be in place at least through January 2010.  Even if the Stay were then lifted, sufficient time will elapse under existing rules to enable the ordinance to have second reading on January 28, 2010, and thereafter be timely implemented .

 

B.                 RESOLUTION AMENDING TABLES XV-1 AND XV-2 TO REDUCE PRODUCTION TARGETS TO CDO COMPLIANCE LEVEL

 

SUMMARY:  Regulation XIV includes two tables that provide daily production targets for the main Cal-Am Water system and the Laguna Seca subarea systems to ensure compliance with regulatory limits, both in Carmel Valley and in the Seaside Groundwater Basin.  The monthly distribution of water production is approved by the Board as part of the Quarterly Water Supply Strategy and Budget process.  The Board holds public hearings during the regular meetings in September, December, March, and June, at which time the Board may modify Table XV-1 by Resolution.

 

Staff proposes the Board revise water production targets for Water Year 2010 that reflect recent action by the Seaside Watermaster and the CDO production level.  Production targets are monitored daily.  The proposed amended targets are shown as Exhibit 2-B and 2-C.  Review and amendments to Tables XV-1 and XV-2 take place quarterly, including at the December Board meeting.  A set of similar targets apply to the water systems in the Laguna Seca Subarea.  The proposed amendments reduce production targets to the levels contemplated in the CDO.

 

RECOMMENDATION:  Staff recommends the Water Demand Committee recommend adoption of the revised tables to facilitate compliance with the SWRCB CDO.  This action would provide additional security and ensure the community shall remain below the CDO regulatory limits while the matter is being decided in the courts.  Cal-Am supports this action.  The PAC/TAC did not support this action.  PAC/TAC instead recommends action on this Resolution be delayed until the CDO has been resolved.  PAC/TAC recommended that staff can monitor compliance with the CDO without adopting revised tables, and noted that adoption of the Resolution may be counter productive to the challenges to the CDO

 

C.                 RESOLUTION IMPLEMENTING STAGE 3 WATER CONSERVATION TO REDUCE OUTDOOR WATER USE

 

SUMMARY:  Staff recommends deferring consideration of Stage 3 Conservation until the January 28, 2009 Board meeting.  Stage 3 would implement the maximum level of non-rationing conservation on outdoor water use, short of rationing.  Although the District has been successful in having the court issue a stay on the Order, at its November meeting a majority of Board members directed staff to take further action to reduce water use in the event the court-ordered Stay is overturned.  Cal-Am has also expressed support for Stage 3 implementation.  The District and Cal-Am are working with the District’s contractors to complete the Landscape Water Audits and Landscape Water Budgets required prior to successfully implementing Stage 3.  The audits are expected to be completed by January 15, 2010.

 

Stage 3 impacts large outdoor water users, but would have minimal impact on the majority of water users.  Stage 3 implements both the requirement for certain water users to maintain outdoor water use within a “water budget,” and implements Public Utilities Commission (PUC)-approved Emergency Rates.  Emergency Rates double the top two tiers of the 5-tiered rate structure, providing a strong disincentive for excessive water use.  According to Cal-Am General Manager Craig Anthony, approximately 2,000 of 38,000 customers use water in Cal-Am’s 4th and 5th rate tiers.  Most of this use is for outdoor watering.  Stage 3 requires Large Residential Water Users (average use of 32 units per month), Dedicated Irrigation Meters, and irrigated areas over three acres to adhere to Water Budgets set by a Certified Landscape Irrigation Auditor.  Finally, Stage 3 increases the availability of outreach funding which is minimal during lower stages.

 

Reduced outdoor demand and higher levels of water conservation awareness while the court decides the validity of the CDO will ensure that the community is not placed in a no-win situation if the court decides against the District and California American Water.

 

RECOMMENDATION:  The Water Demand Committee should recommend that consideration of Stage 3 be delayed until the January 28, 2010 Board meeting.  At that time, the issue can be considered a Resolution to enact Stage 3 by reason of the emergency ed by the SWRCB CDO.  The emergency trigger is currently available in Rule 163 when an immediate water use reduction is needed.  If enacted by emergency trigger, Cal-Am must provide a 30 day notice to customers before Emergency Rates are imposed.  The PAC/TAC recommended that Stage 3 not be triggered at this time, as community water use remains below CDO regulatory limits.

 

IMPACT ON STAFF/RESOURCES:  The cost and impact of rationing on the community is high.  Beyond the cost of labor and overhead to run a rationing program, rationing triggers unavoidable economic costs, particularly to local businesses who may not qualify for rationing variances and to Jurisdictions who have planned use of their remaining water allocations.  To avoid water rationing (and the corresponding moratorium) at the outset, staff is proposing interim measures that will reduce demand and ideally maintain water demand below regulatory limits.

 

EXHIBITS 

2-A      Draft Ordinance No. 142

2-B      Table XV-1 – Regulatory Water Production Targets/Cal-Am Water System

2-C      Table XV-2 – Regulatory Water Production Targets/Cal-Am Satellite Systems

 

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