Agenda
Monterey Peninsula Regional Water Authority (MPRWA)
Special Meeting
7:00 PM, Thursday, January 31, 2013
Few Memorial Hall of Records
580 Pacific Street
Monterey, California
ROLL CALL
PLEDGE OF ALLEGIANCE
PUBLIC COMMENTS
PUBLIC COMMENTS allows you, the public, to speak for a maximum of three minutes on any
subject which is within the jurisdiction of the MPRWA and which is not on the agenda. Any person
or group desiring to bring an item to the attention of the Authority may do so by addressing the
Authority during Public Comments or by addressing a letter of explanation to: MPRWA, Attn:
Monterey City Clerk, 580 Pacific St, Monterey, CA 93940. The appropriate staff person will contact
the sender concerning the details.
AGENDA ITEMS
1. Approve Budget Adjustment Necessary to Fund Separation Processes Inc. and Kris Helm
Consulting to Prepare Testimony To Be Submitted To the California Public Utilities
Commission on February 22, 2013 and Appear at Subsequent Hearings in April.
(CPUC A 12-04-019)
2. Discuss Status of Desalination Project Proposals and Provide Direction to Staff for
Submission of Testimony to the California Public Utilities Commission on
February 22, 2013 (CPUC A 12-04-019)
ADJOURNMENT
The Monterey Peninsula Regional Water Authority is committed to include the disabled in all of
its services, programs and activities. For disabled access, dial 711 to use the California Relay
Service (CRS) to speak to staff at the Monterey City Clerks Office, the Principal Office of the
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meeting, dial 711 to use CRS to talk to staff at the Monterey City Clerks Office at
(831) 646-3935 to coordinate use of a device or for information on an agenda.
Agenda related writings or documents provided to the MPRWA are available for public
inspection during the meeting or may be requested from the Monterey City Clerks Office at 580
Pacific St, Room 6, Monterey, CA 93940. This agenda is posted in compliance with California
Government Code Section 54954.2(a) or Section 54956.
Monterey Peninsula Regional Water Authority
Amended Agenda Report
Date: January 31, 2013
Item No: 1.
08/12
FROM: Prepared By: Clerk to the Authority
SUBJECT: Approve Budget Adjustment Necessary to Fund Separation Processes Inc. and
Kris Helm Consulting to Prepare Testimony To Be Submitted To the California
Public Utilities Commission on February 22, 2013 and Appear at Subsequent
Hearings in April. (CPUC A 12-04-019)
RECCOMENDATION:
That the Authority amends the adopted FY 2012-13 budget by reallocating a maximum of
$15,440 from the contingency line item to pay for consultants from Separation Processes Inc.
(SPI) and Kris Helm to prepare testimony to be submitted to the California Public Utilities
Commission on February 22, 2013 and appear at subsequent hearings in April.
DISCUSSION:
The California Public Utilities Commission deadline to submit intervenor testimony regarding
CPUC Application 12-04-019 concerning the Cal Am Monterey Peninsula Water Supply Project
is February 22, 2013. The Authority has directed staff to work with consultants Separation
Processes Inc and Kris Helm Consulting to prepare testimony relating to the finalized report,
Evaluation of Seawater Desalination Facilities. Staff further anticipates requesting that these
consultants appear at the evidentiary hearing in CPUC A.12-04-019 scheduled for April.
Funding necessary to facilitate this request is listed below. It has been estimated that the
consultants will expend between 30 and 40 hours each at a rate of $193 per hour. The budget
reflects the maximum cost that will be incurred in this, but the actual cost will likely be
significantly less. This expense was not included in the Fiscal year 2012-13 budget adopted on
January 10, 2013.
MPRWA Budget Adjustment
Description
Total Consultant Hrs to Attend CPUC Hearing 40 hrs each
Cost Per hour $193
Total Costs $15,440
Contingency Budget $22,295
Consultant Costs of Attendance $15,440
Contingency Ending Balance $6,855
Staff recommends approving the amendment to the budget to allocate funds from the
contingency fund to pay for these services. This will not exhaust the contingency line item.
MPRWA Meeting, 1/31/2013 , tem No. 1., tem Page 1, Packet Page 1
Monterey Peninsula Regional Water Authority
Amended Agenda Report
Date: January 31, 2013
Item No: 2.
08/12
FROM: Prepared By: W. M. Reichmuth, Executive Director
SUBJECT: Discuss Status of Desalination Project Proposals and Provide Direction to Staff
for February 22, 2013 California Public Utilities Commission Testimony (CPUC
A12-04-019)
DISCUSSION:
Staff requests that the Board provide substantive guidance regarding present understandings
concerning the proposed desalination project proposals for the Monterey Peninsula for the
purpose of developing testimony to be submitted in CPUC A. 12-04-019.
The sole desalination project pending before the CPUC is the project proposed in Cal-Ams
application (A.12-04-019) to serve its Monterey District customers. Two additional projects have
been proposed, Deep Water Desal (DWD) and Peoples Moss Landing (PML), but are not
before the CPUC for approval.
Staff recommends that the Board provide staff with guidance as to the direction of testimony to
be submitted to the CPUC. Enclosed is a deliberative document that explains staffs view as to:
(1) the conditions that would be necessary to garner the Authoritys support for the proposed
Cal Am project; and (2) if those conditions were accepted by Cal-Am, why the proposed Cal-Am
project appears to be preferable to the DWD and PML alternatives projects, under the current
state of knowledge. Should the Board concur; the deliberative document will serve as guidance
in the preparation of testimony to be submitted to the CPUC. The Board is, of course, free to
revise the enclosed document or to direct another course of action.
ATTACHMENTS:
1. Proposed Position Statement
2. Cost Sensitivity, Power and Financing
3. Decision Matrix Completed by the TAC
4. Decision Matrix Completed by SPI and Kris Helm Consultants
MPRWA Meeting, 1/31/2013 , tem No. 2., tem Page 1, Packet Page 3
Deliberative Document
The following draft position statement is provided to stimulate discussion. The
Water Authority is considering this position statement as potential direction to our
staff and consultants in preparing PUC testimony due February 22
nd
, 2013. This
position is being proposed now, in advance of a completed EIR and in recognition
that more information will be forthcoming, because the PUC decision process is
underway and the Water Authority seeks to have a voice in that process.
Proposed Position Statement:
Any project must meet four basic criteria:
1. Project economics must be competitive.
2. Project must have suitable public governance, public accountability and
public transparency.
3. Project must have clear path to permitting and constructing the facility as
near to the CDO deadline as feasible.
4. Project must have contingency plans to address significant technical,
permitting and legal risks.
None of the three projects (Cal-Am, Deepwater Desal or DWD, or Peoples Moss
Landing or PML) as proposed meet these criteria. Therefore, none of the three
projects as proposed warrant Water Authority support. However, at this time Cal-
Ams proposed project appears to be closest to meeting these four criteria. Cal-Ams
Project would earn our support if Cal-Am makes certain modifications.
Consequently, the Authoritys support for the Cal-Am Project is subject to the
following conditions:
1. Cal-Am must accept a significant contribution of public funds. Without the
interest rate advantages afforded by such approach, the costs of water from
the Cal-Am Project will be materially higher, and likely substantially in excess
of the cost of water from the alternative projects. A significant contribution of
public funds will avoid such an unwarranted expense to Cal-Ams rate
payers;
2. Cal-Am must agree, upon mutually-acceptable terms, to form a Governance
Committee to provide publicly-accountable oversight of the project;
3. Cal-Am must diligently seek to secure lower electricity rates for the project
(e.g., $0.08-$0.09 cents/kWh as most recently estimated by Cal-Am)
including agreement to purchasing power through a municipal electrical
utility or generation of on-site power if necessary;
4. Cal-Am must agree to limit the use of revenue from Cal-Ams Surcharge 2 to
reduce risk to Cal-Am ratepayers in the event the Cal-Am project does not
move forward. For example, Cal-Am could agree to only fund lower risk parts
and phases of the project (such as only the construction phase after the
issuance of a Coastal Development Permit from the Coastal Commission) or
could provide other mechanisms of reducing the risk to Cal-Am ratepayers.
5. To promptly address concerns pertaining to Cal-Ams proposed intake wells,
Cal-Am must:
MPRWA Meeting, 1/31/2013 , tem No. 2., tem Page 2, Packet Page 4
Deliberative Document
Address or cause to be address all issues raised in the December 2012
Tim Durbin testimony;
proceed with the planned test wells and any other advanced
geotechnical work to support the proposed intake wells as soon as
practically feasible;
collaborate with local public agencies to advance permitting efforts
with other responsible agencies, including the California Coastal
Commission;
seek to clarify whether the installation of Cal-Ams intake wells will
require approval from any federal agency, which would, in turn,
require NEPA compliance; and
continue to explore and advance alternative intake strategies as a
contingency if Cal-Am's proposed intake wells prove legally or
technically infeasible.
Cal-Am must fully develop a contingency plan or plans for source
water that do not involve wells in the Salinas Basin. This must be done
concurrently along with Cal-Am planning and testing of slant wells.
6. Cal-Am must show something in writing from the State demonstrating its
ability to secure SRF financing. Absent such a document, the Water Authority
will work with the Water Management District to secure SRF financing as
public agencies. Cal-Am must accept a public agency partner for SRF
purposes if necessary, even if doing so results in a reduction in Cal-Ams
equity position.
7. Cal-Am must address questions about sea level rise and coastal erosion with
respect to the placement and longevity of their proposed slant wells. Coastal
sands are also prone to liquefaction in seismic events and coastal facilities
are susceptible to damage from tsunami events as well.
If Cal-Am meets the above conditions, the Authority conditionally supports the Cal-
Am Project because:
1. Cal-Ams desal project size appears to be consistent with the Water
Authoritys position of focusing on water for replacement and
replenishment and accommodates the policy desire to pursue a portfolio of
projects to meet the needs of our communities, thereby reducing the risk
associated with any project failing or being delayed. The Coastal Commission
identifies proposed projects with a defined service area with a known level
of build-out as involving an easier review while projects with an
unknown or extensive service area as involving a more difficult review.
Cal-Ams project would involve this easier review while DWD would
involve a more difficult review.
2. Cal-Ams project, DWD project and PML project are all in the planning stage
although Cal-Ams project is the most advanced according to both SPI and
the TAC.
3. permitting agencies will require the least environmentally harmful feasible
alternative for source water intake. The Coastal Commission states that a
MPRWA Meeting, 1/31/2013 , tem No. 2., tem Page 3, Packet Page 5
Deliberative Document
subsurface intake (such as Cal-Ams proposed slant wells) involve an easier
review while an open-water intake involves a more difficult review. State
Water Board staff likely will recommend that subsurface is preferred. If
subsurface is not feasible, consider Track 2 (infiltration galleries or open
water intake). It is unlikely that open water intake will be permitted unless
test slant wells have shown subsurface intake to be infeasible. Any project
must therefore include a test slant well. Only Cal-Ams project proposes to do
so.
4. only Cal-Am has demonstrated ability to finance a project. Their financing
plan is comprised of four different sources of capital; short-term construction
financing, Surcharge 2, SRF, and equity. Neither of the other two projects
have a detailed financing plan and neither would likely have access to short-
term construction financing, Surcharge 2 or SRF, all advantageous forms of
financing (Cal-Am offers the short-term construction financing but only for
their project. Surcharge 2 is only permitted for a Cal-Am facility. SRF is
unlikely to be available for open water intake.) We propose to include a
significant public contribution as a fifth source of capital. Doing so would
significantly lower the Net Present Value (NPV) cost of the project.
5. Cal-Am has the capital necessary to complete the permitting of its project.
Neither of the other projects have demonstrated this ability.
6. Cal-Am has indicated the potential for securing electricity at $0.087 per kwh
and could possibly purchase electricity at a lower rate through a municipal
electrical utility formed by a local public agency. DWDs proposed municipal
electrical utility involves the City of Salinas and its success is therefore
outside of the direct control of the Water Authority.
7. the ultimate unit cost of water from the Cal-Am Project in comparison to the
cost of water from the DWD and PML projects are close in amount presuming
a significant public contribution is made to lower the financing costs of the
Cal-Am Project and that Cal-Am secures electricity in the $0.08-0.09 per kwh
range.
a. SPI estimates that Cal-Ams production cost would be $2,310/$3,015
per acre foot for the larger/smaller desal projects respectively if the
cost of financing is brought down to 4% and the cost of electricity is
reduced to $0.087 per kwh. This is within about 10% of the unit
production costs of DWD ($2,100/$2,670) and is largely due to the
increased cost of slant wells.
b. The range of these estimates is minus 30% to plus 50%. The TAC
recommends the Water Authority focus its attention on the ranges.
c. For the larger plant, the range of the cost per acre foot of Cal-Ams
project with Water Authority conditions is $1617 to $3465. The
corresponding range for DWD is $1470 to $3150.
d. For the smaller plant, the range of the cost per acre foot of Cal-Ams
project with Water Authority conditions is $2110 to $4522. The
corresponding range for DWD is $1870 to $4005.
8. The DWD project involves a complex relationship of various entities,
including a municipal electrical utility, a data center, the formation of a
MPRWA Meeting, 1/31/2013 , tem No. 2., tem Page 4, Packet Page 6
Deliberative Document
regional JPA, a water purchase agreement with Cal-Am. The Water Authority
is not aware that any of these relationships have been established. This
unresolved complexity leaves more room for possible delay or failure. In
contrast, Cal-Ams organization structure is described as good by SPI.
9. Both DWD and PML will likely face questions from permitting agencies
regarding the placement of the desalination plant in relationship to the 100
year flood plain and sea level rise. It is unclear how either project will
respond to such questions.
10. The CEQA review for Cal-Ams project is well underway and is being handled
by the Public Utility Commission as the lead agency. Any court challenge to
the CPUCs EIR must be made by a petition directly to the State Supreme
Court (very few petition are granted), reducing the legal risk of a challenge
and also reducing the likelihood of project delay in comparison to a CEQA
challenge to a project involving a local lead agency. Moreover, the Authority
has requested that both alternatives be reviewed at a project level such that
no further environmental review would be required if the Cal-Am project
fails in whole or part.
11. The Governance Committee agreement strikes the right balance of ensuring
that the most important decisions are either made by public agencies or are
fully informed by recommendations from public agencies. The Governance
Committee agreement avoids inserting the public agencies into decisions that
are judged to be better made by a private entity.
MPRWA Meeting, 1/31/2013 , tem No. 2., tem Page 5, Packet Page 7
Summary of Cal-Am Cost Sensitivity Evaluation
Cost Element
1
Base Case
Power & Financing
Cost Alt.
2
9 kAFY 5.5 kAFY 9 kAFY 5.5 kAFY
Energy $5.38 $3.26 $3.68 $2.24
Chemicals $0.32 $0.19 $0.32 $0.19
Expendables $0.69 $0.45 $0.69 $0.45
Other
O & M Labor
Equipment Replacement
$2.69
$1.50
$2.36
$1.23
$2.69
$1.50
$2.36
$1.23
TOTAL $10.6 $7.49 $8.88 $6.47
Capital Recovery
3
$19.1 $16.2 $11.9 $10.1
Total Annual Cost $29.7 $23.7 $20.8 $16.6
Production Cost of Water
($/AF)
$3,300 $4,310 $2,310 $3,015
1
All costs are presented in millions of 2012 dollars.
2
Energy costs computed based on an annual average rate of $0.087/kW-hr. Alternative financing described in Note 4 below.
3
Annual capital recovery extracted directly from Table 5-2 for Base Case; for the alternative, based on Total capital cost figures
from Table 5-2 and financing at an interest rate of 4.0% and term of 30 years..
MPRWA Meeting, 1/31/2013 , tem No. 2., tem Page 6, Packet Page 8
MPRWA TAC
Desalination Project Matrix
Project
(alphabetical order) CalAm DWD PML Notes and references
Size
CEQA must address lots of record. Sizing
depends on results of test wells and
production of actual wells over time.
Somewhat easier to become a regional
solution (economies of scale) and reduce the
total number of discharge points into the Bay.
Capacity factor at 95%. Norm is 80% tp 85%. Clarify whether
capacity factor includes or excludes redundant units. GWR as
they affect sizing of desal. Possible regulatory restriction?
Intake Source
WRA, CalAm and/or PUC EIR team must
address issues raised in Tim Durbin's
testimony. Follow modeling with real world
monitoring over time of test well and
production wells. Can wells be designed
to improve conditions in aquifer?
Is 45/85 feet deep enough? Matters not only
fraction of an individual species entrapped
but also overall abundance of that individual
species. How does DWD propose to
demonstrate compliance with State Water
Board's and Coastal's policies?
Can PML justify their prior
approval for their intake? If
true, could provide schedule
advantages.
Should consider alternate intake source other than open ocean
intake.
Pretreatment
Long-term needs for pretreatment
unknown (Mn especially). May require
more than CalAm or SPI assume. CalAm
has a contingency plan if more
pretreatment is necessary.
Would require a partial second pass. This is
included in SPI estimates.
Would require a partial
second pass. This is
included in SPI estimates.
Concern that reducing pretreatment may be false economy
because doing so may decrease useful life of RO filters.
Economics
Capital Cost
Operating Cost
Interest rate
Annualized cost
Cost per acre foot
Financing
Financial ability to deliver project
Cost of electricity (confirmed?)
Option of purchasing power from the
Waste Management District. Possibility of
installing transmission line and acquiring
power at lower rate. $.13 to $.08 reduces
cost per acre foot by $XXX. Municipal electricity utility (Salinas) proposed.
Should any or all of the projects look at alternative sources of
electricity including generating electricity on site (for example,
natural gas)?
Access of SRF funds
CalAm has been asked to show
something in writing that they have access
to SRF funds. Water Authority may want
to join with Water Management District in
being the public agency to gain access to
SRF funds.
Surcharge 2
Surcharge 2 lowers NPV of project.
Should it scale with size/cost of project?
Intertemporal equity? Can Surcharge 2 be
structured such that it goes to low risk
parts/phases of the project and CalAm
equity goes to higher risk parts/phases of
the project?
No demonstrated ability to finance project. No true, provable financing plan
Question about initial capital for doing permitting, etc. before earning public
Focus should be on full range (-30% to +50%) rather than the point estimate within the range.
Open water intake may not be eligible for SRF.
Not available for desal plant. May be available for pipeline or other common
facilities. Manage rate shock by pre-borrowing. Debt repayment starts
during construction (cannot be done through water bills).
MPRWA TAC Completed 1/24/2013
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MPRWA TAC
Desalination Project Matrix
Permitting / Schedule
Estimated permit schedule
(assuming no lawsuits)
Lawsuits possible with all projects. Possible help with parallel
track on permits.
Major permitting hurdles
Test wells. Brine discharge permit. Few
other permitting hurdles relative to other
projects.
Possible delay associated with
permitting hurdles
CalAm has allocated 2 years of testing for
its test wells.
DWD gathering data and approaching
permitting agencies early.
Need to incorporate time for processing of Monterey County
permits.
Technical Feasibility
Open technical questions
Quantity of water from perched aquifer. If
not, ability to draw from 180 aquifer while
not harming aquifer. Fraction of product
water returned to Salinas basin.
Sea level rise (1.4m by 2100). That may be
optimistic. 100 year flood plain. Question
about the impact of temperature on the
membranes distillation. Potential earthquake issues?
State of project development Most advanced.
Reports of MOUs. Not generally available to
public. Not aware of any contracts.
All projects at planning stage. All would greatly benefit if JPA
backs project and facilitates project development.
Legal
CEQA / NEPA
NEPA may be triggered with either slant
wells or brine discharge. Is NEPA
triggered and, if so, who is federal
agency? Is CEQA/NEPA still on
schedule? PUC EIR challenges go to
State Supreme Court, not lower courts.
State Lands for CEQA. National Marine
Sanctuary for NEPA. Question whether need
for local lead agency for CEQA. Could be
challenged at lower courts if a local lead
agency is involved. Lower courts take all
cases. Possibility of an appeal and
associated delay.
Water Rights
See comments above. TAC not providing
legal advice.
Other
Ownership / Management
Public vs. Private Owner
Ownership does not necessarily imply public
entity management. Avoids PUC process.
Advocates of public ownership state benefits of public
ownership include: Public agency law governs (for example,
PRA, Brown Act), audit ability, public input, keep water in public
trust, low-cost financing, local control. Advocates say public
ownership is "cleaner" than trying to accomplish same goals
through contracts. Private ownership with public oversight
(provided locally and/or by PUC) involves asymmetry of
information and that puts the public agency's oversight at an
insurmountable disadvantage. Removed profit motive.
Decision points
Advocates of private ownership state benefits include: CalAm
are experts in water supply, CDO applies to CalAm, generally
efficiency benefits associated with private enterprise, not clear
public role for many decisions that need to be made, public
process has rejected projects in the past. Public oversight and
public financing can be provided even with a private ownership
structure.
Accountability
Transparency
Detailed Proposal
Organizational capacity
Deliverability
Coastal Development Permit especially for open water intake. Brine
discharge permit. Coastal Commission may raise questions about sea level
rise.
MPRWA TAC Completed 1/24/2013
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SPI Consultants/Kris Helm Consulting
Desalination Project Matrix
Project
(alphabetical order) CalAm DWD PML Notes and references
Size 5.4/9.0 mgd 4.9/9.1/22.0 mgd 4.8/9.4 mgd
Values are from the SPI-KHC report, Sect. 2; we are aware of reports the Cal-Am may be increasing the
proposed size of its facility somewhat.
Intake Source Slant Wells
Screened Open
Intake
Existing Shallow
Surface Intake
Detailed descriptions in Section 3 of SPI-KHC report. Cal/Am and PML intakes are within their direct project
control; while DWD's intake would be constructed and owned by a third party.
Pretreatment Media Filtration Media Filtration Media Filtration-UF
Detailed descriptions in Section 3 of SPI-KHC report. Cal/Am may bypass filters during operation if iron and
manganese levels are low. The filters are primarily a contingency measure. PML has proposed media filtraion in
combination with UF; but also proposes to conduct a one-year pilot test prior to final determination of
pretreatment requiremetns. The pilot test is considered warranted; given the likely poor water quality extracted
from the Moss Landing Harbor.
Economics
All values and information extracted from Section 5 of the SPI-KHC report (January 2013 update). Note all costs
based on uniform plant capacity criteria; not the proponent proposed capacities listed above. Cal-Am 5.4/9.0
mgd; DWD and PML 5.0/8.2 mgd
Capital Cost $206M/$174M $151M/$122M $190M/$161M
Operating Cost $10.6M/$7.49M $10.2M/7.68M $9.85M/6.93M
DWD actually has lower costs than PML in the Energy, Chemical, Expendable, and Equipment Replacement
Categories; but their lese payments for the Dynegy facilities and sewater intake along with proposed ownership
fees increase their cost above PML. Cal-Am's high cost is primarily associated with their comparatively higher
electricity rate, discussed further below. Under the sensitivity analyses conducted as part of the January Update;
Cal-Am's annual O&M cost could decrease to $8.88M/$6.47M as a result of acheiving lower cost power; and
DWD's cost could likewise be reduced somewhere in the range of $8.5M - $9.4M/$6.6M-$7.2M) depending on
their final cost of power.
Interest rate 8.49% 4.00% 4.00%
Annualized cost $29.7M/$23.7M $18.9M/$14.7M $20.9M/$16.3M
Cost per acre foot $3,300/$4,310 $2,100/$2,670 $2,320/$2,965
Financing Assumpitons for the cost of financing were provided to SPI-KHC via the Technical Advisory Committee.
Financial ability to deliver
project
As noted on p. 6-2 of the SPI-KHC report, the financing capabilities of the applicants were not assessed. It was
assumed that the applicants had sufficient financial resources to pursue project development including
preliminary design prior to obtaining financing. It was further assumed that public agency participation would
inculde access to project financing.
Cost of electricity (confirmed?) $0.131/kW-hr $0.08 kW-hr $0.08 kW-hr
Listed rate are those confirmed and considered to be likley maxima for 2012 pricing contained in the report. Cal-
Am beliieves they can likely source a lower rate of $0.087 kW-hr; and has provided documentation from PG&E
with pricing based on an E-20 Transmission rate schedule. This could be acheived if Cal/Am provides a new
transmission line to the site. This would have the effect of lowering Cal/Am's cost of water in the above analysis
by roughly $200/AF.
DWD also believes it could achieve a lower rate by a form of direct power purchase from Dynegy. Dynegy cannot
sell power directly to a private company, but could sell it to a public agency, who could then sell it to DWD.
Salinas has offered to work with DWD in this regard. DWD provided documentation indicating a likely rate
between 0$0.04 and $0.06 kW-hr. The lower rates would lower DWD's water production cost somewhere in the
range of $100 to $200/AF depending on the final power cost achieved.
Access of SRF funds Not Independently Assessed
Permiting / Schedule
Estimated permit schedule Jul-15 Jul-15 Jul-16 Major Permits Obtained. Project Completion follows by approximately 24 months.
SPI Consultants/Kris Helm Consulting 01/24/2013
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SPI Consultants/Kris Helm Consulting
Desalination Project Matrix
Major permiting hurdles
Intake Wells,
Coastal
Development Permit
Open Intake,
Coastal
Development Permit
Intake and Brine
Disposal, Coastal
Development Permit
Cal-Am -- Intake wells include test-well phase which will define intake design. Coastal Development Permits must
be obtained for both test wells and final intake design. Coastal Commission is likely very concerned about
stewardship and oversight of privately owned intake system and desalter. Agreements with Public Agency
Partner could address these concerns.
DWD Open Water Intake must be shown to be preferable to subsurface intake to satisfy Coastal Commission
concerns. Mulitple purposes for intake of seawater requires definition of porject purpose in CEQA/NEPA.
PML Permitting of intake and discharge systems will require detailed assessments of impacts. Coastal
Commission will evaluate proposal against impacts of alternative methods of intake and disposal.
Possible delay associated with Major uncertainty exists in the timing for Coastal Commission Review and Approval.
Technical Feasibility
Open technical questions Slant Wells Heat Exchange
Pretreatment; outfall
condition
As discussed in Section 3 of the SPI-KHC report, Cal-Am plans a test well to help develop design criteria for their
proposed slant well intakes. Until testing is done, there is some uncertainty in their approach; though we do not
guage it as significant.
DWD is relying on third parties for construction of their intake and a planned data center which use the seawater
supply for cooling. As discussed in Section 3 of the rpeort, heating of seawater can increase biological activity to
an uncertain degree.
As described above, PML's overall process design requires pilot investigation to help define challenges with
treating water from the Moss Landing Harbor. Further, their existing intake appears to be in substantial dis-repair
and requires further investigatiion/assessment (report Sections 3 and 5).
State of project development Advanced Adequate Preliminary
Legal
CEQA / NEPA CEQA CEQA / NEPA CEQA
Cal-Am project alteration of seabed floor may trigger review under NEPA. DWD requires NEPA review of new
intake. PML may trigger NEPA review depending on method of intake and brine disposal.
Water Rights Present Concern None None
Cal-Am must complete the proposed test well installation and operation, and other relevant geotechnical work, to
determine whether the production from the propose intake wells is likely to cause legal "injury" to other users of
groundwater within the Salinas Groundwater Basin. If the results show that injury to other groundwater users is
unlikely, or if a "physical solution" can be implented to mitigate any likley injury, then Cal-Am's proposed intake
wells should not be subject to injunction by competing groundwater users.
Other
Ownership / Management
Public vs Private Owner Private JPA
Public, but agency
not identified.
Decision points
Accountability
Transparency Very open. Somewhat open. Very open.
On the basis of technical information. Cal-Am through the CPUC process has had to publically disclose and
defend much of its technical approach. DWD has been open from a process design perspective; but the
complexities of its third pary agreements are still not fully disclosed.
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Desalination Project Matrix
Detailed Proposal Yes Yes; but partial No
The availability of technical information is summarized in Sections 2 and 3 of the SPI-KHC report. Cal-Am has
supplied very detailed information for this stage of project development. DWD's technical process information is
good; but details of it's integratioin with the planned data center are less developed. PML has provided what
information it has developed, but it is still preliminary pending their planned pilot investigation.
Organizational capacity Good Complex Unkown
Cal-Am is a large, proficient organization. DWD's team is competent; but their overall organization structure with
Dynegy, its data center partner, and Salinas is still developing; along with their proposed JPA to own/operate the
facility.
Deliverability
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