mprwa tac 7-16-12 packet

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BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Application of California-American WaterCompany (U210W) for Approval of theMonterey Peninsula Water Supply Projectand Authorization to Recover All Presentand Future Costs in Rates.

Application 12-04-019(Filed April 23, 2012)

ADMINISTRATIVE LAW JUDGES RULING CONCERNING

WORKSHOP AGENDA AND OTHER MATTERS

This ruling proposes in Attachment A an agenda and invites comments

regarding the Workshop scheduled for July 26-27, 2012. It also instructs

California-American Water Company to prepare and file a cumulative rate

impact table by July 20, 2012, and confirms the granting of party status in

response to motions.

IT IS RULED that:

1. This confirms the granting of motions for party status by the Planning andConservation League, the Monterey Peninsula Water Management District,

Latino Water Use Coalition, Monterey Peninsula Latino Seaside Merchants

Association, Comunidad en Accion and the Monterey County Farm Bureau.

2. Comments by Parties regarding the Workshop Agenda proposed inAttachment A are invited, and should be filed by July 12, 2012. A final

Workshop Agenda will be circulated to the Service List on or about July 18, 2012.

3. California-American Water Company shall prepare and file by July 20,2012, a table displaying the cumulative impact on the average residential

F I L E D06-29-12

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customer bill in the Monterey District for the years 2011-2017 of the revenue

requirements authorized in Advice Letter (AL) 903, AL 918, AL 939,

AL 953, Application (A.) 10-09-017, AL 929, Decision (D.) 09-07-022, AL 924,

A.10-07-007, D.10-12-016, A.10-09-018, A.10-01-012, A.10-04-019, A.11-05-001.

Any questions that arise in the preparation of the table should be resolved by

conferring with Mr. Ravi Kumra ([email protected] or 415-703-2571) from

the Division of Water and Audits.

Dated June 29, 2012, at San Francisco, California.

/s/ GARY WEATHERFORD

Gary WeatherfordAdministrative Law Judge

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ATTACHMENT A

Proposed Topics for July 26-27, 2012 Technical Workshopin A.12-04-019

The technical workshop will cover the following topics:

1. Demand projections2. Available water supply3. Project sizing, costs and ratepayer impacts4. Project governance5. Contingency planning in light of possible impediments to

project completion and to meeting the December 2016

deadline

Substantive discussion of legal issues will not be within the ambit of thisworkshop.The following sub-issues, among others that undoubtedly will arise during theworkshop discussion, should be addressed within the above topics.

Demand projections

What are the current, short-term and long-term demandprojections for the Monterey District?

What are the bases for those demand projections? How do the demand projections compare with various

filings at the Commission?

What assumptions concerning growth, conservation,infrastructure improvements and better management ofnon-revenue producing water underly the demandprojections?

How might changes in demand projections affect the sizingof the Monterey Peninsula Water Supply Project?

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Available water supply

What possible impediments lie in the path of receivingwater, on a dependable basis, from the following sources?

o Recycled watero Aquifer Storage Recovery (ASR) Replenishmento Sand City Desalination Planto Slant wellso California-American Water Company (Cal-Am) owned

Desalination plant facilities.

Project Sizing, costs and ratepayer impacts

Based on the net demand and available supply, what is theoptimal size of the project and estimated cost of the totalproject and Cal-Am only facilities?

What is the cumulative impact on ratepayers if all currentCal-Am requested rate increases were approved by theCommission?

Project governance

What are Cal-Ams plans for governance related issues onthe project?

What possible impediments face Cal-Ams proposedgovernance structure?

Contingency planning in light of possible impediments to project completion andto meeting December 2016 deadline

What are potential issues that could delay or derail the project?

What are Cal-Ams contingency plans, and related cost andscheduling implications, if:

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o State Revolving Funds are not available or aresignificantly limited or delayed?

o ASR replenishment water is significantlylimited or not available?

o Grey water is not available for recycling?o Slant wells do not meet project technical criteria?o Environmental issues require relocation of desalination

facilities or slant wells?

o Project delays occur due to water rights relatedissues; ownership related issues; permitting;

acquisition of land for slant wells; acquisition of land

for desalination facilities.

(END OF ATTACHMENT A)

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MP1/lil 6/28/2012

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Application of California-American WaterCompany (U210W) for Approval of theMonterey Peninsula Water Supply Projectand Authorization to Recover All Presentand Future Costs in Rates.

Application 12-04-019(Filed April 23, 2012)

ASSIGNED COMMISSIONERS SCOPING MEMO AND RULING

1. Summary

This ruling defines the scope of the proceeding, designates the proceeding

as a ratesetting matter, determines that evidentiary hearings are necessary and

sets a schedule for the proceeding.

2. Background

The California-American Water Company (Cal-Am) filed this application

on April 23, 2012, seeking the Commissions approval of the Monterey Peninsula

Water Supply Project and authorization to recover costs in rates. Protests to the

application were filed by Water Plus, LandWatch Monterey County, Division of

Ratepayer Advocates and the Marina Coast Water District.

3. Categorization, Need for Hearings, Ex Parte Rulesand Designation of Presiding Officer

The Commission preliminarily categorized the proceeding as ratesetting

under Rule 1.3(e) of the Commissions Rules of Practice and Procedure (Rules)

and determined that the matter should be set for hearing. I confirm those

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determinations here. The ratesetting categorization means that the ex parte

reporting requirements and other restrictions of Rule 8.3(c) apply.

4. Scoping Memo

The scope of the proceeding shall be confined to resolving the following

questions:

Is the proposed Monterey Peninsula Water Supply Project areasonable and prudent means of securing replacement water forthe Monterey District of Cal-Am, and would the granting of theapplication be in the public interest?

Feasible alternatives to the Monterey Peninsula Water Supply Project will

be considered in the California Environmental Quality Act (CEQA) track of the

proceeding and by the Commission.1 This proceeding is for the purpose of

determining whether the applied-for project should be approved; it is not a

general forum for entertaining water supply options unrelated to the application

of a Commission-regulated utility. Local public agencies and other entities are

and have been free to conduct such fora, to pursue water supply alternatives on

their own or in concert and to influence Cal-Ams shaping of its project

application. Cal-Ams application is now before us and the December 2016

Cease and Desist deadline approaches.

The assigned Administrative Law Judge (ALJ) may make any revisions or

provide further direction regarding the manner in which issues are to be

addressed, as necessary for a full and complete development of the record.

1 PHC R.T. 38-40, 42-43.

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5. Schedule

The following schedule shall govern the non-CEQA2 part of the

proceeding.

Opening Briefs on Selected LegalIssues

July 11, 2012

Reply Briefs July 20, 2012

Workshop on Technical Issues July 26-27, 2012, 10:00 a.m., Auditorium,505 Van Ness Avenue, San Francisco, CA

Comments: Interim Rate Relief andTest Well Requests

August 9, 2012

Amended/Supplemental ApplicantTestimony (Optional)

August 16, 2012

Reply Comments: Interim Rate Reliefand Test Well Requests

August 21, 2012

DRA/Intervenor Testimony September 18, 2012

Settlement (Optional) September 24-October 5, 2012

Public Participation Hearings September 19 -20, 2012, Monterey

Proposed Interim Decision: InterimRate Relief and Test Well Requests

September 25, 2012

Evidentiary Hearings *November 26-30, December 3-5, 2012,10:00 a.m., Hearing Room A, 505 Van

Ness Avenue, San Francisco, CA (*If thecombination of a reporter and suitablehearing room becomes available duringthe October 15-November 16 period withsufficient notice, the hearing dates may beadvanced)

Briefing December 2012/January 2013

Proposed Decision February 2013 (Mailing date subject toprior completion of CEQA process)

2 Notice of the schedule for the California Environmental Policy Act complianceprocess will be given in due course to the Service List in Application (A.) 12-04-019 bythe CEQA Team of the Commissions Energy Division.

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A proposed agenda for the July 26-27, 2012 Workshop, containing key

technical issues for discussion, will be circulated for comment in a separate

ruling by the assigned ALJ.

The assigned ALJ may make any revisions or provide further direction

regarding the schedule, as necessary for a full and complete development of the

record. The date of the final decision in this rulemaking, however, shall not

exceed 18 months from the date of this Scoping Memo and Ruling.

6. Filing, Service and Service List

When you serve a document, use the official service list published at the

Commissions website as of the date of service. You must comply with Rules 1.9

and 1.10 when you serve a document to be filed with the Commissions Docket

Office. The Commission encourages electronic filing and e-mail service in this

Application. You may find information about electronic filing at

http://www.cpuc.ca.gov/PUC/efiling. E-mail service is governed by Rule 1.10.

If you use e-mail service, you must also provide a paper copy to the assigned

Commissioner and ALJ. The electronic copy should be in Microsoft Word or

Excel formats to the extent possible. The paper copy should be double-sided.

E-mail service of documents must occur no later than 5:00 p.m. on the date that

service is scheduled to occur. If no email address was provided, service should

be made by United States mail. In this proceeding, I require concurrent e-mail

service to ALL persons on the service list for whom an e-mail address is

available, including those listed under Information Only. Parties are expected

to provide paper copies of served documents upon request.

E-mail communication about this proceeding should include, at a

minimum, the following information on the subject line of the e-mail:

A.12-04-019. In addition, the party sending the e-mail should briefly describe the

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attached communication; for example, Reply Comments. Paper format copies, in

addition to electronic copies, shall be served on the assigned Commissioner and

the assigned ALJ.

The official service list for this proceeding is available on the Commissions

web page. Parties should confirm that their information on the service list is

correct, and serve notice of any errors on the Commissions Process Office, the

service list, and the assigned ALJ. Prior to serving any document, each party

must ensure that it is using the most up-to-date service list. The list on the

Commissions website meets that definition.

Any person interested in participating in this proceeding who is

unfamiliar with the Commissions procedures or who has questions about the

electronic filing procedures should contact the Commissions Public Advisor

([email protected]). If you have questions about the Commissions

filing and service procedures, contact the Docket Office.

7. Intervenor Compensation

The Prehearing Conference (PHC) in this matter was held on June 6, 2012.

Under Rule 17.1 notice of intent to claim intervenor compensation may be filed

up until 30 days after the PHC. As a reminder to parties, the Legislature has

instructed the Commission to administer the intervenor compensation program

in a manner that avoids unproductive or unnecessary participation of similar

interests otherwise adequately represented 3 We expect all parties to closely

coordinate their work to avoid unproductive or unnecessary participation.

Furthermore, we expect each party requesting compensation to distinguish its

3 Section 1801.3(f). Decision 06-12-041, at 13-14.

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contributions from those of other parties in its request for compensation. Parties

are also reminded that work on issues determined to be outside the scope of this

proceeding will not be compensated. A separate ruling will address eligibility to

claim compensation.

IT IS RULED that:1. The final categorization of this proceeding is ratesetting and hearings will

be required. This ruling on category may be appealed, as provided in Rule 7.6 of

the Commissions Rules of Practice and Procedure.

2.Ex parte Communications are subject to the reporting requirements andother restrictions of Rule 8.3(c).

3. The scope of this proceeding is as set forth in Section 4 of this Ruling.While this scoping memo provides guidance regarding the manner in which

each identified issue will be considered, the assigned Administrative Law Judge

may make any revisions or provide further direction regarding the manner in

which the issues are to be addressed, as necessary for a full and complete

development of the record.

4. The schedule for this proceeding is as set forth in Section 5 of this Ruling.The assigned Administrative Law Judge may make revisions to the schedule

where circumstances warrant.

5. Parties must serve all filings as set forth in Section 6 of this Ruling.6. The deadline for filing a notice of intent to claim compensation in this

proceeding is July 6, 2012, the 30th

day following the Prehearing Conference.7. A proposed agenda for the July 26-27, 2012 Workshop, containing key

technical issues for discussion, will be circulated for comment in a separate

ruling by the assigned Administrative Law Judge.

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8. Assigned Administrative Law Judge Gary Weatherford is designated thePresiding Officer in this proceeding.

Dated June 28, 2012, at San Francisco, California.

/s/ MICHAEL R. PEEVEY

Michael R. PeeveyAssigned Commissioner

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ContractConsultProfServicesTemp RR120709.docx

CONTRACT FOR PROFESSIONAL SERVICES

Name of the Contract Agreement

THIS AGREEMENT is executed this ____ day of ___________, 2012, by and

between the Monterey Peninsula Regional Water Authority, a California Joint PowersAgency, hereinafter called "MPRWA", and [Name of Consultant], hereinafter called"Consultant".

IT IS HEREBY MUTUALLY AGREED AS FOLLOWS:

1. Scope. Consultant hereby agrees to provide to the MPRWA , as thescope of services under this Agreement, the following services: [General description ofthe scope of work], as further described on the following attachments: MPRWAsRequest for Proposal which outlines the scope of services and work under this contract(attached hereto as Exhibit A), and the approved Consultants Proposal dated [insertdate] (attached hereto as Exhibit B). In case of any conflict between these documents,

the Request for Proposal shall take first precedence over the Consultants proposal.

2. Timely Work. Consultant shall perform all tasks in a timely fashion, as setforth more specifically in paragraph 3 below. Failure to so perform is hereby deemed amaterial breach of this Agreement, and MPRWA may terminate this Agreement with nofurther liability hereunder, or may agree in writing with Consultant to an extension oftime.

3. Term. The work under this Agreement shall commence [Start date ofcontract] and shall be completed by [End date of contract] unless MPRWA grants awritten extension of time as forth in paragraph 2 above.

4. Compensation. MPRWA agrees to pay and Consultant agrees to acceptas full and fair consideration for the performance of this Agreement, compensation asset forth in Consultants Proposal (Exhibit B), in a total amount not to exceed _________Thousand Dollars ($______.00). Compensation under this Agreement shall becomedue and payable 30 days after MPRWAs approval of Consultants submission ofmonthly written invoices to the ______________ (name/title of MPRWA representative).Written invoices shall clearly itemize each charge and shall include a copy of timesheetsor invoices from sub-consultants or other appropriate documentation to substantiateitemized charges. The payment of any compensation to Consultant hereunder shall becontingent upon performance of the terms and conditions of this Agreement to thesatisfaction of the MPRWA Contract Administrator. If MPRWA determines that the workset forth in the written invoice has not been performed in accordance with the terms of

this Agreement, MPRWA shall not be responsible for payment until such time as thework has been satisfactorily performed.

5. Additional Services. In the event that MPRWA should request additionalservices not covered by the terms of this Agreement, said services will be provided byConsultant and paid for by MPRWA only after a fee for said services has been agreedupon between Consultant and MPRWA Contract Administrator and the ContractAdministrator provides written authorization for the additional work.

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6. Meet and Confer. Consultant agrees to meet and confer with MPRWA orits agents or employees with regard to services as set forth herein as may be requiredby MPRWA Contract Administrator to insure timely and adequate performance of thisAgreement.

7. Indemnification. Consultant hereby agrees to the following

indemnification clause:

To the fullest extent permitted by law (including, without limitation, California CivilCode Sections 2782 and 2782.6), Consultant shall defend (with legal counselreasonably acceptable to the MPRWA), indemnify and hold harmless the MPRWA andits officers, designated agents, departments, officials, representatives and employees(collectively "Indemnitees") from and against claims, loss, cost, damage, injuryexpense and liability (including incidental and consequential damages, court costs,reasonable attorneys' fees, litigation expenses and fees of expert consultants or expertwitnesses incurred in connection therewith and costs of investigation) to the extentthey arise out of, pertain to, or relate to, the negligence, recklessness, or willfulmisconduct of Consultant, any Subconsultant, anyone directly or indirectly employed

by them, or anyone that they control (collectively "Liabilities"). Such obligations todefend, hold harmless and indemnify any Indemnitee shall not apply to the extent thatsuch Liabilities are caused in part by the negligence, or willful misconduct of suchIndemnitee.

Notwithstanding the provisions of the above paragraph, Consultant agrees toindemnify and hold harmless the MPRWA from and against any and all claims,demands, defense costs, liability, expense, or damages arising out of or in connectionwith damage to or loss of any property belonging to Consultant or Consultant'semployees, contractors, representatives, patrons, guests or invitees.

Consultant further agrees to indemnify MPRWA for damage to or loss of MPRWA

of Monterey property to the proportionate extent they arise out of Consultant'snegligent performance of the work associated with this agreement or to theproportionate extent they arise out of any negligent act or omission of Consultant orany of Consultant's employees, agents, contractors, representatives, patrons, guestsor invitees; excepting such damage or loss arising out of the negligence of theMPRWA.

8. Insurance. Consultant shall submit and maintain in full force all insuranceas described herein. Without altering or limiting Consultant's duty to indemnify,Consultant shall maintain in effect throughout the term of this Agreement a policy orpolicies of insurance with the following minimum limits of liability:

Commercial general liability insurance including but not limited to premises,personal injuries, bodily injuries, products, and completed operations, with acombined single limit of not less than $1,000,000 per occurrence and $2,000,000in the aggregate.

Professional Liability Insurance. Consultant shall maintain in effect throughoutthe term of this Agreement professional liability insurance with limits of not lessthan $1,000,000 per claim and $2,000,000 in the aggregate. Consultant willeither maintain or cause to be maintained professional liability coverage in full

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force or obtain extended reporting (tail) coverage (with the same liability limits)for at least three years following MPRWA's acceptance of the work.

Commercial automobile liability insurance covering all automobiles, includingowned, leased, non-owned, and hired automobiles, used in providing servicesunder this Agreement, with a combined single limit of not less than $1,000,000

per occurrence.

Workers' Compensation Insurance. If Consultant employs others in theperformance of this Agreement, Consultant shall maintain workers' compensationinsurance in accordance with California Labor Code section 3700 and with aminimum of $100,000 per occurrence for employer's liability.

Other Insurance Requirements

A. All insurance required under this Agreement must be written by aninsurance company either:

admitted to do business in California with a current A.M. Bestrating of no less than A:VI;

or

an insurance company with a current A.M. Best rating of no lessthan A:VII.

Exception may be made for the State Compensation Insurance Fundwhen not specifically rated.

B. Each insurance policy required by this agreement shall be endorsedto state that MPRWA shall be given notice in writing at least thirty

days in advance of any cancellationthereof, except 10-day notice fornonpayment of the premium.

C. The general liability and auto policies shall:

Provide an endorsement naming the MPRWA, its officers, officials,and employees as additional insureds under an ISO CG 20 10 07 04or ISO 20 37 07 04 or their equivalent.

Provide that such insurance is primary and non-contributing insuranceto any insurance or self-insurance maintained by the MPRWA.

Contain a "Separation of Insureds" provision substantially equivalentto that used in the ISO form CG 00 01 10 01 or their equivalent.

Provide for a waiver of any subrogation rights against the MPRWA viaan ISO CG 24 01 10 93 or its equivalent.

D. Prior to the start of work under this Agreement, Consultant shall filecertificates of insurance and endorsements evidencing the coveragerequired by this agreement with the MPRWA Risk Management

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Office. Consultant shall file a new or amended certificate of insurancepromptly after any change is made in any insurance policy whichwould alter the information on the certificate then on file.

E. Neither the insurance requirements hereunder, nor acceptance orapproval of Consultants insurance, nor whether any claims are

covered under any insurance, shall in any way modify or changeConsultants obligations under the indemnification clause in thisAgreement, which shall continue in full force and effect.Notwithstanding the insurance requirements contained herein,Consultant is financially liable for its indemnity obligations under thisAgreement.

F. Any deductibles or self-insured retentions must be declared to andapproved by the MPRWA. At the option of the MPRWA, either: theinsured shall reduce or eliminate such deductibles or self-insuredretentions as respects the MPRWA, its officers, officials, employeesand volunteers; or Consultant shall provide a financial guarantee

satisfactory to the MPRWA guaranteeing payment of losses andrelated investigations, claim administration, and defense expenses.

9. Ownership of Work. Upon completion of the work under this Agreement,ownership and title to all materials and deliverables produced as part of this Agreementwill automatically be vested in the MPRWA and no further agreement will be necessaryto transfer ownership to MPRWA.

10. Licensing. Consultant represents that it is properly licensed to performthe work specified under this Agreement, including but not limited to possession of acurrent MPRWA business license.

11. Termination. This agreement may be terminated by either party uponthirty [30] days written notice to the other party. In the event of such termination,MPRWA shall pay Consultant for all services performed to the satisfaction of MPRWA tothe date of receipt of notice of termination. An itemized statement of the work performedto the date of termination shall be submitted to the MPRWA. In ascertaining the servicesactually rendered hereunder up to the date of termination of this agreement,consideration shall be given to both completed work and work in process of completionand to complete and incomplete drawings and other documents whether delivered to theMPRWA or in the possession of the Consultant.

12. Agency. In performing the services specified under this Agreement,Consultant is hereby deemed to be an independent Consultant and not an agent or

employee of MPRWA.

13. Authority of the Contract Administrator. The Consultant shall perform allnecessary services provided under the contract and outlined in the proposal and shalldo, perform, and carry out said work in a satisfactory and proper manner as determinedby and to the satisfaction of the Contract Administrator. The Contract Administratorreserves the right to make changes, additions or deletions, of the scope of work asdeemed to be necessary or advisable to implement and carry out the purposes of thecontract. The Contract Administrator is authorized to execute the change orders.

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14. Responsibility of Consultant. By executing this agreement, Consultantrepresents and states to MPRWA that he possesses or will arrange to secure fromothers all necessary professional capabilities, experience, resources and facilitiesnecessary to provide to MPRWA the services contemplated under this agreement.Consultant further warrants that he will follow the current generally accepted practices of

the profession to make findings, render opinions, prepare factual presentations, andprovide professional advice and recommendations regarding the project for whichservices are rendered under this agreement.

15. Materials and Equipment. Consultant shall furnish at his own expense allmaterials and equipment necessary to carry out the terms of this agreement.

16. Digital Files. Consultant shall furnish copies of all deliverables oncompact disks (for example, final report) in digital format. Files shall be compatible withthe current versions used by PC computers.

17. Audit Authority. Consultant shall keep full and detailed accounts and

exercise such controls as may be necessary for proper financial management under thisagreement; the accounting and control systems shall be satisfactory to the MPRWA.The MPRWA and the MPRWAs auditor shall be afforded access to the Consultantsrecords, books, correspondence and other data relating to this agreement. TheConsultant shall preserve these records, books, correspondence and other data relatingto this agreement for a period of four (4) years after final payment, or for such longerperiod as may be required by law. In addition, Consultant agrees to make said records,books correspondence and other data relating to this agreement available to MPRWA atMPRWAs principal place of business upon seventy-two (72) hours written notice. TheContract Administrator, or his or her designee, shall at all times have the right to inspectthe work, services, or materials. Consultant shall furnish all reasonable aid andassistance required by MPRWA for the proper examination of the work or services and

all parts thereof. Such inspection shall not relieve Consultant from any obligation toperform said work or services strictly in accordance with the specifications or anymodifications thereof and in compliance with the law.

18. Notices. All notices herein provided to be given, or which may be givenby either party to the other, shall be considered fully received when made in writing anddeposited in the United States mail, certified and postage prepaid, and addressed to therespective parties as follows:

Monterey Peninsula Regional Water Authority.Contract Administrator c/o Monterey City Clerk

Monterey City HallMonterey, CA 93940(831) 646-3935

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Consultant

19. Entire Agreement. This Agreement constitutes the entire Agreementbetween the parties hereto and supersedes any and all prior agreements, whether oralor written, relating to the subject matter thereof. Any modification of this Agreement willbe effective only if it is in writing signed by both parties hereto.

20. Validity. If any provision in this Agreement is held by a court ofcompetent jurisdiction to be invalid, void or unenforceable, the remaining provisions willcontinue in full force without being impaired or invalidated in any way.

21. Assignment of Interest. The duties under this Agreement shall not beassignable, delegable, or transferable without the prior written consent of MPRWA. Any

such purported assignment, delegation, or transfer shall constitute a material breach ofthis Agreement upon which MPRWAmay terminate this Agreement and be entitled todamages.

22. Conflict of Interest. Consultant hereby certifies that it does not now have,nor shall it acquire any financial or business interest that would conflict with theperformance of services under this Agreement.

23. Counterparts. This Agreement may be executed in multiple originals,each of which is deemed to be an original, and may be signed in counterparts.

24 Laws. Consultant agrees that in the performance of this Agreement it will

reasonably comply with all applicable State, Federal and local laws and regulations.This Agreement shall be governed by and construed in accordance with the laws of theState of California and the MPRWA.

IN WITNESS WHEREOF, this Agreement is entered into by the parties hereto onthe day and year first above written in Monterey, California.

MPRWA CONSULTANT

__________________________ __________________________

Mayor or MPRWA Chair Consultant Name

Approved as to form:

_______________________Attorneys Office

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Monterey Peninsula Regional Water Authority

Technical Advisory Committee (TAC)

Desalination Project Risk Assessment

Below is presented a summary of TAC qualitative judgments of relative risk on selected desalination

project issues. In trying to compare projects, consider how each issue will present higher or lower,

more or less, risk. 1 = highest risk; 5 = lowest risk. Rate each issue relative to the factual or understood

situation when compared to other desalination projects. The selected issues have not been determined

to be equal, therefore totaling the columns is premature.

Rating:

1 = Risk is high, problems are expected and would have serious consequences.

2 = Risk is substantial, problems are likely, could cause concern or delay.

3 = Risk is above average, will require special attention to avoid problems.

4 = Risk is average or normal. Problems can be overcome with adequate attention.

5 = Risk is low or not substantive. Problems are not expected.

All averages were based on six raters, except as noted with *.

Section A: TECHNICAL

A1. Water Source / Water Rights

Cal-Am DeepWater Peoples Comments

Slant Wells 70 Open

Ocean

Surface

Open Ocean

1

21

1

2

2

1.5

4

25

3

4

2

3.33

2

25

2

3

2

2.67

Salinas River Basin has unique issues Surface intake has changing regulations Slant wells unproven, water rights issues,

environmental issues for open ocean as well (especially

sea life entrapment)

Moss Landing Harbor intake will have high impacts No confirmation that DeepWater Desal has had

impingement/entrainment data reviewed

Open water intakes will require NEPA review Ocean intake is common throughout world, without

water rights issues

Peoples has option for surface or deep water intake Cal-Am has resources to resolve relevant issues. Forother two, expect issues to surface during permitting Believe Cal-Am test will be approved at Coastal

Commission to determine validity. DeepWater and

Peoples permitting process could pose challenges

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A2. Pre-Treatment / Water Quality


1

4

4

45

4

3.67

4

4

4

43

3

3.67

2

2

4

23

2

2.5

Harbor intake pre-treatment nearly impossible,DeepWater sources by far best option Surface intake

has changing regulations

Concerns over Peoples turbidity and marine life from aMoss Landing Harbor Intake

Desal filters are standard technology and variouslyfabricated to meet common needs.

Peoples project source water intake from the harborwould require more extensive pre-treatment due to

the High organic levels in the feed water.[Mickley]

The concern raised is for the organic content of the

feed water and the variability of feed water content

with time.[Mickley]

Cal-Am has ability to determine. Testing of DeepWaterand Peoples needed. Concern with Harbor intake with

Peoples.

A3. Discharge


5

4

4

2

4

4

3.83

3

3

2

4

3

3

3.0

3

3

4

4

3

3

3.33

Cal-Am has access to existing outfall. DeepWaterneeds new outfall. Peoples needs new permit and

retrofit

Cal-Am uses MRWPCA (best/easiest to permit), othershave issues

Peoples retrofit may be extensive based onphotographic evidence from 2006 study

Peoples has existing outfall and permit for previoususe. Renewal is easier than new

Cal-Am has access to existing outfall, however,sufficient dilution water may not be available during

times when MRWPCA has zero discharge. DeepWater

needs new outfall. Peoples needs new permit &

retrofitting

People's and DeepWater will need some work toconfirm permitting

Outfall for DeepWater and Peoples needs additionalwork and permitting.

A4. Proven Technology

Cal-Am DeepWater Peoples Comments2

3

1

1

3

4

2.33

5

5

5

3

4

4

4.33

5

5

5

3

4

4

4.33

Slant well technology for water has not been proven inCal-Am. Ocean intake is proven worldwide.

Proven technology for DeepWater and Peoplesapproaches. Cal-Am proven except for slant wells

No proven slant well technology for water Technology for slant wells looks promising but need

pilot work to confirm water quality %. Also, don't

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know how long wells will last. For DeepWater and

Peoples, existing technology is good but need pilot

data to show it works in this application

Technical knowledge-- test well planned by Cal-Am.DeepWater and Peoples has proven technology but

not tested on specific sites

A5. Permits


5

3

3

3

3

3

3.33

3

3

4

2

3

3

3.0

3

3

5

1

3

2

2.83

Cal-Am should permit easiest if slant wells proven.DeepWater should permit next easiest because of

depth of intake. Peoples' will be difficult unless

offshore option is chosen vs. harbor intakes

Dont see much differential in the permits as it relatesto the technology

Cal-Am will require more permits from land usejurisdictions and for access under Bay

All will have complex permitting issues None proven, Harbor intake questionable

Section B: SCHEDULE

B1. Environmental Impact Report (EIR)


Supplemental Full Full

5

3

1

2

3

3

2.83

2

1

5

4

1

1

2.33

2

1

5

4

1

1

2.33

Cal-Am can do supplemental EIR; others start new DeepWater and Peoples will need full EIR both CEQA

and NEPA

Cal-Am partial EIR expected to be contested, causedelays. Full EIR from the start will avoid later problems

The risk for a full EIR is not as great a supplementalbecause it will be vetted through the public review

process

Expect full EIR for DeepWater and Peoples. Cal-Amsupplement should be much faster

Cal-Am supplement OK; DeepWater and Peoples needfull EIR within allowed time-frame

B2. Permits - Difficulty


4

3

3

2

3

2

2.83

3

3

3

3

3

3

3.0

2

3

4

3

4

3

3.17

Nod to Cal-Am (if slant wells work, easiest to permit);DeepWater has NOAA on their side but discharge

questionable w/ Dynegy; Peoples has storm water

discharge but no intake or brine discharge permits (but

wonder how they discharge existing package plant)

Peoples has an existing discharge permit and historyof prior use

Cal-Am is at greater risk because their proposal to

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operate a desal facility may be contrary to County

Ordinance prohibiting operation by private entity

Cal-Am has lots of issues but good resources. Permitswill likely require some pilot work for both DeepWater

and P

Each has challenges. Cal-Am, if slant well test notsuccessful

B3. Litigation Risk


1

2

1

1

2

3

1.67

1

4

5

2

3

3

3.0

1

4

5

2

3

3

3.0

All equally bad Expect some litigation over open water intakes Litigation exposure by Cal-Am for EIR, water rights,

public ownership, and ongoing inter-party from RDP

Cal-Am has resources to resolve litigation All subject to potential litigation. Cal-Am has resources

to handle

B4. Site Control / Easements


In process Partial Full

3

3

3

2

3

3

2.83

3

3

3

2

3

3

2.83

4

4

5

3

4

4

4.0

Cal-Am has identified locations, but no signatures.Peoples owns site. All can discuss easements, etc

Peoples is owned and zoned industrial Sites determined. Peoples owns

B5. Date to DeliverCal-Am DeepWater Peoples Comments

Jan 2017 Dec 2016 Jan 2016

1

1

2

5

2.25*

1

3

1

1

1.5

1

4

1

1

1.75

Consultant will review this, along with costs Because of litigation potential, don't really think

anyone can meet deadline. Peoples is most optimistic

and least realistic

Shorter Peoples schedule allows time for dealing withproblems. Cal-Am schedule is extremely tight and

requires smooth path on every issue, which is unlikely

Don't know how DeepWater and Peoples cancomplete in time without pilot data and permits. Cal-Am has already started and has resources to get most

issues resolved but likely that at least one could cause

some delay

Cal-Am only project in front of PUC. Litigationpotential for all

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B6. CPUC Process


4

5

4

35

5

4.67

2

2

1

12

2

1.67

2

4

5

34

4

4.0

CPUC process has authority to approve. Other two areoutside CPUC process with no ready-made process

Can change if Moss Landing desal projects are includedin CPUC EIR process. Cal-Am needs to force everyapproval, even within CPUC

Cal-Am knows and is part of CPUC process. Otherswould need to find a way to be added in

Section C: COMMUNITY CONCERNS

C1. Public Ownership


No Yes Yes

1

2

1

3

2

3

2.0

3

4

3

1

4

3

2.83

1

4

5

1

4

2

2.83

Cal-Am has decided to own, w/o public partner Cal-Am says public ownership not needed; don't

believe it. Peoples deal with PG very "iffy." DeepWater

deal with Moss Landing Harbor best chance because it

offers revenue potential for MLH for easements for

intakes

Cal-Am could prevail in legal test; County has startedlitigation to make determination

Peoples is in active negotiation with PG No project currently has a public partner. CPUC may

act as public partner for Cal-Am project

Cal-Am has issues to resolve. Others still need firmpartner

Courts will determine Cal-Am rights. Peoples noagreement signed with PG. DeepWater Moss

Landing Harbor District, not sure of status

C2. Governance Structure


None Wants JPA Talking to

PG

1

2

14

2

4

2.33

3

3

32

3

3

2.83

3

3

41

3

3

2.83

Cal-Am wants no part of local gov't. Peoples andDeepWater recognize need

Most relevant agency is one within Cal-Am service area Cal-Am is governed by CPUC and California regulations

that give it the exclusive right (i.e. franchise) to build,

own, and operate water delivery to its customers.

Other projects are in active negotiations for public

partner for governance

Cal-Am might welcome some local limitedinput. Others need a firm local partner

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Cal-Am portfolio has public representation within twoof the three components. If partnership required,

should be Water Management. CPUC authority will be

determined vs County. DeepWater andPeoples same

as C-1

mprwa tac 7-16-12 packet

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