CPUC Filings w/ PWN Intervenor Status
Public Water Now is an Intervenor in three CPUC proceedings. Intervenor Status means that PWN is an official and active participant in all CPUC proceedings regarding the particular matter, along with other intervenors. As a ratepayer intervenor, PWN qualifies for reimbursement for work that affects the final decision. All these cases are still active.
A12-04-019 (started in 2012)
PWN is one of 19 intervenors.
Subject: Cal Am's Proposed Monterey Peninsula Water Supply Project (MPWSP) portfolio of three supply sources:
Desal: 7175 acre feet, 62% of need
Pure Water Monterey (reclaimed purified waste water), 3500 af, 30% of need
Aquifer Storage and Recovery (ASR) (captured winter runoff), 900af, 8% of need
Estimated costs are: $4500/acre foot +/- for desal. $2500/af +/- for reclaimed water.
PWN supports Pure Water Monterey and ASR, but its focus is on desal: Cal Am's selected site is CEMEX to use unproven slant well technology. It has no water rights, and is invading the jurisdiction of Marina Coast Water District. PWN researchers discovered a key contractor (Geoscience) has major slant well patents that have caused a conflict of interest. PWN continues to advocate for 1) legitimate 2 year test period (not a short 8-12 month test); 2) state funding for the test slant well since it a State Water Board mandate; 3) further conflict of interest investigations of potential financial arrangements between Geoscience and the international driller Bourt Longyear, since the patents are worldwide; and 4) opposition to the unproven slant wells based on inconsistent and questionable data reliability.
A13-15-017 (started in 2013, now concluded)
PWN was one of 4 intervenors.
Subject: Cal Am and Monterey County jointly requested ratepayer reimbursement of $3.5 million for county legal expenses from the failed Regional Desal Project, which had already cost ratepayers $32 million.
This was a non-transparent, essentially secret, highly redacted proceeding. No details of legal expenses were revealed in the entire CPUC process., yet the claim was for legal expenses. PWN objected to secrecy, inadequate analysis, lack of justification, shoddy work by CPUC, non-response by proponents to questions, and more. ALJ awarded $1.9M, but it is under appeal.
A15-07-019 (started in 2015)
PWN is one of 6 intervenors, but the number is growing.
Subject: Cal Am's latest rate increase that includes the following:
27% increase on average residential customer; 29% increase of average renter in multi-family complexes; 14% reduction in commercial Tier 1; $50 million for under-collection due to conservation (water not used); Cal Am to finance and charge ratepayers $105 million over 20 years; elimination of all allotments for family size, summer use, lot size, more; front loading of bills via higher service charges, higher Tier 1 rates, lower Tier 4-5 rates. PWN opposes the $50 million, loss of family allotments, excessive front loading on lowest tiers, lack of fairness between residential and commercial rates, giving Cal Am the right to add surcharges without CPUC approval, and more.
July 26, 2015
Subject: PWN to Support Alternatives to Slant Well Intake
By George Riley, Managing Director, Public Water Now
Dear Parties,
Background
I am the founder and have been the leader of Citizens for Public Water since its formation in 2005. Citizens for Public Water (CPW) became a community-based intervenor in two proceedings, this one and A.13-05-017. Citizens for Public Water is an original signatory to the 16-party Settlement Agreement (SA) dated July 31, 2013, regarding the Cal Am Monterey Peninsula Water Supply Project (CPUC A.12-04-019).
In 2014, CPW decided to dissolve and transfer its assets, functions and intervenor status to Public Water Now, a 501(c)4 community organization. PWN agreed, but made it clear that the status as signatory to the SA was not its responsibility. The transition was approved by PWN, and completed in 2015, and a name change was submitted and approved by the CPUC.
I am now acting in my role as leader of CPW to notice the settling parties that I personally take this action. Furthermore this action is consistent with PWN research and conclusions, so that together, I and Public Water Now (PWN), successor to Citizens for Public Water (CPW), support this statement.
Action
Paragraph 3.1(b) of the SA describes the condition under which five parties (of the 16 parties) reserved
certain rights to act in their interests regarding source water issues. Specifically the last sentence states: In light of all the foregoing, SVWC, MCFB, MCWRA, LandWatch, and CPW reserve all rights to challenge production of water from the SRGB and/or the Sand Dunes Aquifer by California American Water in any appropriate forum.
(The initials are for Salinas Valley Water Coalition, Monterey County Farm Bureau, Monterey County Water Resources Agency, Salinas River Groundwater Basin.)
I and PWN are giving notice that we intend to exercise rights under Paragraph 3.1(b), and distinctly separate from the SA for water intake issues. I and PWN will actively oppose Cal Am's current plans for slant wells, and will seek and support alternatives that do not include slant wells.
Rationale
1. PWN noted the Cal Am MPWSP Progress Report of July 31, 2014, and the statement by
President Rob MacLean (which is still on the Cal Am website). It stated in part the following: While the (slant well) technology has been used in Europe and tested in the
United States, it is still considered a relatively novel approach. This statement about a Europe site was repeated in the national trade magazine National Driller in September 2014. PWN began asking Cal Am in August to identify the site in Europe. PWN made 6 requests over 3 months. PWN suspected there was no European site. The nonresponses were meaningful. Finally in November, 2014, Cal Am responded referring to “a Spanish colleague” who referred to San Pedro del Pinatar, Murcia, near Cartagena, Spain, claiming it used slant wells. It turned out, PWN suspicions were correct. PWN research revealed this facility used horizontal directional drilling (HDD), a subsurface technique, but definitely not a slant well. The HDD in Spain paralleled the sea floor contour. It was not a slant well drilled at a prescribed angle. Cal Am has not denied, and our research confirms, that there are no operational desal slant wells anywhere in the world.
2. PWN also researched the test slant well at Dana Point in Orange County, the only test slant well in the world. It was closed down in 2012, after 4 years of implementation and another 18 months of test pumping. It did not go into production when the public agency sponsors decided to conduct a more extensive feasibility analysis, to include life cycle costs, before proceeding with or without slant well technology. There were no conclusions of its final feasibility.
3. During PWN research on the Dana Point test slant well project (which operated from 2006 to 2012), we learned that the prime contractor at Dana Point was Geoscience and its President, Dennis Williams. PWN learned that patents for slant well technology were acquired by Dennis Williams in 2011 and 2012. Surely he learned something from Dana Point that was patentable. These patents apply to the Western Hemisphere, Europe and other continents.
4. Mr Williams contracted for Cal Am, developed models for measuring test well data, leads the Hydrogeologic Working Group, and was hired under a CPUC contract to evaluate his own work for the EIR. There apparently were no disclosure of his patents to many involved parties. Williams' continued roles are difficult to accept because of the patents, potential conflicts of interest and non-disclosure. The non-disclosure of potential conflicts of interest was reported by PWN to the public. If Cal Am knew, then its own non-disclosure suggests culpability. This situation undermines confidence in Mr Williams, and in Cal Am. Both have denied the use of any patents in the current test well (which is hard to believe), but Cal Am has indicated their use may occur in future wells. However the public credibility of both Williams' personal and Cal
Am's corporate integrity and trust have been gravely damaged.
5. PWN has been raising questions about the cost of the slant well experiment for a year. Our concern is that without any operating experience anywhere in the world, and without current cost estimates, many risks are ignored and impacts on ratepayers are largely guesses. While Cal Am President MacLean called it a “relatively novel approach,” facts suggest it is overall an experimental and unproven approach. PWN has asked for an assessment of life cycle costs for slant wells, to include maintenance and replacement estimates. The project cost estimates are 3
years old. Cal Am has yet to present updated estimates.
6. Three major state agencies support subsurface intakes, “if feasible” – Stare Water Resources Control Board, CA Coastal Commission, CPUC. All three make reference to cost as a factor of feasibility. PWN continues to be alarmed about the lack of updated cost estimates, and the lack of an existing working slant well as a source of experience. Ratepayers are facing an uncertain, and potentially unreasonably expensive, future with slant wells.
7. Cost and risk unknowns also sharpen PWN's focus on the lack of substantial state partnership or grant support for this unproven science project. The pressures from the CDO, the drought, the easy access to ratepayer pocketbooks by Cal Am, and the appearance of slant wells being a “pet project” of the key state agencies, makes PWN even more doubtful that a serious look at feasibility and costs will occur. This simply compounds the concern PWN has for runaway costs on ratepayers.
8. The history of Cal Am failures on previous water supply projects is well known. Past CPUC decisions to send the entire bill for stranded costs to ratepayers are also well known, and they have been sizable – totaling more than $34 million. Cal Am competence has not been reassuring as it has stumbled mightily through the permitting process for the test well.
Conclusions
1. PWN has documented misleading statements by Cal Am. PWN has documented key patents by a key contractor that calls into question the integrity of the work product and the conclusions drawn from those work products. PWN has continually called for cost updates, but to no avail.
2. PWN perceives a bias by key state agencies whereby they desperately want a subsurface intake project on the California coast. Certain key agencies making key decisions have relied on tarnished sources. PWN perceives an alliance of local interests that willingly defends, or at least overlooks, the stumbles by Cal Am in the hope that there will be a lucky success somehow in the future.
3. PWN has pursued feasibility and cost questions because the bill for the slant well experiment will be sent to ratepayers. PWN opposes the avid pursuit of an unproven infrastructure. And PWN objects to what appears to be a new accumulation of potential stranded or excessive costs that Cal Am is incurring. It is clear that ratepayers are exposed. It is not at all clear that American Water Works investors are exposed.
4. PWN has no reason to continue the illusion that the slant well component will be a success. PWN concludes that the advocacy and credibility for slant wells is damaged permanently. PWN has no confidence that Cal Am has the competence to overcome the risks and carry out its plans successfully. PWN has no confidence that costs will be moderated with sizable grant assistance. Therefore I and Public Water Now will actively oppose Cal Am's current plans for slant wells, and will
seek and support alternatives that do not include slant wells.