MP Regional Water Authority TAC Meeting

MINUTES MONTEREY PENINSULA WATER AUTHORITY (MPRWA) TECHNICAL ADVISORY COMMITTEE (TAC) , FEW MEMORIAL HALL MONTEREY, CALIFORNIA Members Present: Burnett, Stoldt, Riedl, Siegfried, Israel, Narigi, Riley Members Absent: None Staff Present: Legal Counsel, Interim Executive Director, Clerk to the Authority CALL TO ORDER ROLL CALL PLEDGE OF ALLEGIANCE PUBLIC COMMENTS Chair Burnett invited public comments for items not on the agenda. David Armanasco spoke representing Deep Water Desal to communicate the status of the DWD project. They filed their application with State Lands Commission to begin the CEQA process which will begin developing an EIR for their project. They have also been responsive to the CPUC requests to supply information for use as alternative information for the Cal Am MPWSP EIR. He then described how the DWD project will have reduced facility energy costs. The intake facility will bring raw, cold sea water to cool down the data center which will in turn pre head the water which would proceed to the desal unit. DWD is also in the process of securing a power purchase agreement with the City of Salinas, to purchase directly from a power wholesaler further reducing costs. The plant will be located on the Dynagy property, which will eliminate the need to pipe across Elkhorn Slough. Member Reichmuth questioned screenings for marine life and chemical pre treatment abilities. Mr. Armanasco responded that the process includes a screen open intake and the results are published on the DWD website but they are continuing the studies as well as conducing live monitoring. Conclusion of first study indicated that there was a .007% chance of entrainment or impingement. If there is pre-treatment required, it would happen after the water went through the data center. Interim Executive Director Meurer requested an update of the status of the permitting and the current proposed time line. Mr. Armanasco responded that DWD will not apply for permits until the project has completed the environmental review. Once they have completed the EIR, they will apply for necessary permits from the Coastal Commission. With no further requests to speak, Chair Burnett closed public comment. AGENDA ITEMS  MPRWA TAC Minutes Thursday, January 24, 2013 1. Discuss Project Decision Matrix and Provide Recommendation to Authority Action: Discussed and Drafted Recommendation to Authority Directors TAC Chair Burnett introduced the item explaining the purpose of the agenda item and recused himself from decisions made at the TAC today due to his position on the Authority Board. He indicated that the Monterey Peninsula Water Management District was not able to complete the matrix due to time and scheduling constraints therefore only two matrix would be presented to the directors. The Purpose of the matrix is to illustrate the range of opinions, which could be beneficial in a full rounded judgment and to be a tool to use as a side by side comparison, with a number of key variables, assumptions and decision points. Understanding it is an ambitious task to be completed in one meeting he thanked the TAC members for their effort. Chair Burnett then answered questions from the TAC. Member Riley questioned the usefulness of the exercise concerned it will reflect more opinion rather than research. Chair Burnett responded that information has changed and before the TAC identified questions and now it's time to shift from asking the questions to answering the questions and provide recommendations, with opinions and judgment. Chair Burnett opened the item for public comment. Sue McCloud questioned the status of the People's Moss Landing project asking if it changed from information that the SPI report. Burnett questioned if any member of the public was present representing the People's project and could answer the question posed by Ms. McCloud. With no further requests to speak, closed public comment and Member Stoldt spoke to Ms. McClouds question saying that The proponent with JDL has been working to pull together a project team, unfortunately there is not a project team in place at this time, so there is nothing really there that we can analyze, those working with the a qualified purchaser of this project. Previous project is gone, replacement project does not yet exist. Within 6 to 7 weeks there will be a project proposal available. In response to the discussion Chair Burnett indicated the focus today will be on two projects, Cal Am and the DWD project only as there is questionable information about the PML project’s viability and wants to present accurate data to the Authority directors. Member Riley expressed concern concerned that the Authority is focusing on only one project and not making room for a contingency plan. Legal Counsel Freemen responded that the Authority requested the CPUC to look at all three projects in the environmental review and the question is not what is up for discussion today. The TAC discussed and completed the matrix line by line discussing what the TAC felt was missing or was different than the SPI matrix. The first topic discussed was facility size and TAC questioned if changing the size of Cal Am's project change parameters of CEQA process. Also discussed replenishment rates of the Seaside Basin and operating levels of the facility. TAC agreed the facility should not run at 98% capacity but the norm should to run at 80% capacity due to regular maintenance, daily operations of back flushing and long term maintenance requirements. Chair Burnett opened the item regarding facility sizing for public comment. Dennis Ing responded that desalination plants have a number of trains of reverse osmosis that is equivalent to 2,000 acre feet and will always have a 25% back up ready for demand or maintenance. The 98% operation capacity is how you run your main system, not your total capacity. 2 MPRWA TAC Minutes Thursday, January 24, 2013 Doug Wilhelm spoke to demands to change the plant operating capacity indicating it will only increase the cost, but demand will not change and referenced Cal Am’s presentation on the price elasticity of demand. Tom Rowley said consumption has been consistent for the last 10 to 15 years and the community has demonstrated voluntary cutbacks on consumption, but has not significantly been reflected in the demand. Eric Sabolsey spoke to the operation of the facility indicating there is a peak capacity that the plant will have. Using those numbers in critically dry years for the function to ensure that they have capacity in the critically dry years. On GWR and go no go, our schedule is fluid and may shift. The 2015 no/no go was accurate. With no more requests to speak, Chair Burnett closed public comment and responded that the TAC is not designing the plant but want to ensure that regardless of which option is chosen, the capacity factor is not an issue again in a few years, that the redundancy is accurate. TAC discussed the different methods of intake and agreed that there are problems with the proposed intake methods and agreed that it is necessary to have modeling over a period of time to determine if there are any long term potential damages. They concluded that this is a policy question and that the State Water Board and The Coastal Commission are determining policies for this issue. Chair Burnett opened the item of Intake for public comment. Dennis Ing spoke about the presentation of entrapment and impingement and explained how DWD will use a passive intake system which will reject any organism that comes near it. He explained that with a wedge/wire passive intake system, as long as the flow rate is less than 1/2 foot per second organisms can swim away. There is an abundance of laboratories that has given 10 years of data with organisms and flow rates available. All species are documented from peer reviewed research labs. Additional studies are being done beginning with Tamera Environmental and are 9 months into the study. He closed comment by indicating that open ocean intake was approved in Southern California this week (after 10 years of debate). Nancy Isakson, Salinas Valley Water Coalition questioned the recommendation for intake source and expressed appreciation for addressing Hydrologist Tim Durbin's concerns. She then requested the TAC to look beyond that as there are issues with the shallow aquifer and test wells need to be monitored for at least 2 years for real world results. She closed by saying it would be in everyone's best interest to look for a source that is outside of the Salinas basin. Chair Burnett closed public comment and continued to the next topic of pretreatment. Member Seigfried shared skepticism about the SPI report on this item of pretreatment as it will change over time unless you have a dynamic situation as occasional blooms reduce O2 level, constant nitrate source from the Salinas river, which feeds blooms. Member Israel indicated it is important to ensure specific chemicals are neutralized so that the water has the ability to be recycled. Member Reichmuth indicated at the Santa Cruz/Soquel Creek project there were unanticipated manganese/boron pretreatment needs, which do not pre-treat well. Regardless of the types of wells, pretreatment is not significant. Importance is organisms. TAC agreed that they would support and require a partial second pass. 3 MPRWA TAC Minutes Thursday, January 24, 2013 TAC Member Burnett called a recess for 10 minutes at 3:18 p.m. and reconvened at 3:28 p.m. and temporarily tabled item one to take up item two. When finished, returned to item one. TAC took up the discussion of economics. And discussed from the November to the December report, the Cal Am annualized costs had a huge increase. Unclear if the other projects have commitments for financing. Still unclear if the other two projects have the financial ability to complete the project as well a determination of the final cost of water and acknowledged that many of the details could be flushed out after a project is supported. Interim Director Meurer responded it should be very uncomfortable for the JPA to look at water rates based on hopes vs. a true provable financing plan. The public needs to know the reliability of those cost abilities. Member Stoldt clarified the financial strategies of the DWD and PML projects indicating their intentions for public ownership access to public financing. Mr. Meurer responded about the unknown viability and the fact the lowest price to the consumer cannot be determined as there are too many variables unknown that affect the price. The TAC agreed to request in writing the ability of Cal Am project have access to SRF Funds. The item was opened for public comment and Dennis Ing spoke about the DWD being a private venture supported by entrepreneurs. Funds come from strategic investors with an interest in the region, seeing the water problem solved permanently. Been in operation for 27 months and have paid all of their expenses to date and have not incurred any debt. All money is currently at risk, unlike Cal Am. The project structure is going to be a joint power authority and wants to partner with the public authority to finance the project with municipal bonds, with ways to accomplish with no equity investors. This is a regional project and is trying to solve regional issues with no guarantee of a return, but believe in the science and ability to deliver and on time. Member Riley followed up on a previous comment about no demonstrated ability to finance the project and asked Mr. Ing to respond to that. Mr. Ing stated that they have demonstrated they have the funds by always being able to meet all costs when they are encountered. TAC then took up the discussion of the Surcharge 2 proposed by Cal Am. TAC Agreed that in order to avoid rate shock and to reduce risk that the surcharge 2 be structured such that it goes to low risk parts or phases of the project and Cal Am equity goes to higher risk parts/phases of the project. The item was opened for public comment, with no requests to speak on schedule and permitting, closed public comment. Dennis Ing spoke about a meeting with the county November 2011 in preparation about the process. Their approach, if you are using an existing facility, it is a use issue. The coastal development permit will take the lead on the project. If they approve, the MC review is much less. They are not the primary permit, the CDP is. It comes down to permits related to pipelines and structures which are very straightforward. Time analysis should have captured that in the SPI report. Ultimately for cal am, a one or two year delay possible if test well needs to be operational for a longer period. Cal Am: Plan right now to go up to two years with the testing and design. 6 months to flesh out 4 MPRWA TAC Minutes Thursday, January 24, 2013 the contentions with up to two years if significant changes with quality and time. Permits are not the problem, litigation is the problem. Permit proces is fairly well understsood. Moving on to technical feasibility can you produce the quantity of water from slant wells while not harming the aquifer. With the cal am project, only a fraction of water be returned to the salinas basisn. What is key is returning the amount of water to the aquifer as necessary. sometimes taking on lawsuits with a good factual basis establishes good law. Open technical questions include situations such as sea level rise, earthquakes, aquifer replenishment and and amount of water that can be returned to the aquifers and basins. State of project development: discussion of request of a bulleted update of each projects status. Requesting reports about the current MOUs for Deep water. Discussion of all the porjectsd being relativley immature and young in their process. It is unlikely that they will meet their C&D. Current state of project develomnet is currently unimportant to picking the right prooject and facilitating it's development. Two have the potential to finish if they have the full support to facilitate the project. TAC discussed the imporance of the Authority finally suporting a project. Don freeman identified that the Cal am project has discussed with us and revealed their hurdles. The other projects have not been as forthcoming therefore it would be diffuclt to make an equal comparison. Opened public comment: Cal am we have contemplatd running it for up to two years (test well). the 2017 proposal does include the test well runnig nfor two years. : Dennis Ing The question of triggering nepa and ceqa lead agency. Who is the local Ceqa lead agency? NEPA may be triggered with iether slant wells or brine discharge. Is NEPA triggered and if so, who sit he federal agency. State lands for CeQA. national marine Sanctuar for NEPA questions wheater need for local lead agency for CEQA. On question, Meure resonded that the monterey city council made a statement of policy position to support public ownership of a desalination facility. The policy was not made based on a true analysis but by emotion. Riley: the reasons for favoring public ownership based on the laws that require access to the public information, meetings, elections, and everything related to the Interim Director Meurer: Public agencies are supposed to provide for the required services. In ideology. In practical aspects, a manufactured government structure would only go so far. With public ownership it is all there. Public financing is more tsable. it is a public agnecy resposibility to provide these services. Cal am has a bad track record for environmental protection. Public records, access, transparency, etc. 5  MPRWA TAC Minutes Thursday, January 24, 2013 There are great public agencies and less, we are getting wrapped around an emotional issue of ownership that will take our eye of the ball of getting water supply. Need a non emotional analysis 2. Discuss and Provide Recommendation of Options for Providing Source Water for Ground Water Replenishment Project Action: Tabled In the respect of time, TAC Chair Burnett postponed item 1 to take up item 2. He invited public comment on the item. Nancy Isakson from the Salinas Valley Water Coalition presented comments from Dave Chardavoyne of the Monterey County Water Resources Agency position on ground water replenishment. A copy of the correspondence was provided to the Authority Clerk. Legal Counsel Freeman spoke to a comment Mrs. Isakson made at the previous meeting regarding the participation of recently appointed Member Dale Huss. Ms. Isakson clarified that she does not have a personal conflict with is participation, but wants the public to have full disclosure of his affiliations. With no further comments on the item, TAC Chair Burnett and the TAC agreed to table the item. ADJOURNMENT Respectfully Submitted, Approved, Lesley Milton, Clerk to the Authority TAC Chair 6