Why Public Ownership Instead of Cal Am?

85% of the water companies in this country are publicly owned for good reason. Public ownership would lower water costs. Our bills would not include Cal Am’s corporate profit, which is guaranteed by the state. We would also benefit because new construction costs of any kind, such as a desal plant, would be vastly reduced under public bond financing (vs corporate financing).     

Cal Am has been taking water illegally from the Carmel River for 20 years. In addition, its greed for Seaside Basin water led to a court adjudication that created a new oversight agency and added new costs for managing that limited supply.   

Cal Am has not developed any new sources of water since it became the owner of our water system in 1966, 50 years ago. The slant wells now being drilled at our expense, to feed their proposed desal plant, may or may not work. Slant wells are experimental and unproven. They are not in operational use for ocean intake desal anywhere in the world.  And the current test well has a proven conflict of interest with the patent holder – Geoscience. 

Cal Am has squandered more than $35 million dollars of our money in three failed supply projects. Furthermore Cal Am benefited from CPUC largesse when it awarded Cal Am maximum profit for San Clemente Dam removal. Cal Am avoided silt management options and related maintenance costs, and ended up profiting handsomely from the more expensive dam removal.        

The California Public Utilities Commission has fined Cal Am $870,000 for making misleading statements. This is the first fine, but not the first time Cal Am has been called out on this. It happened with the San Clemente Dam proceeding in 2012.   

Monterey County has a law requiring any desalination plant to be publicly owned. Cal Am made a deal with the county and got the CPUC to cooperate in bypassing that law and allowing Cal Am to own and profit from its proposed desal plant. Part of that same deal is a new expense of $1.9 million to ratepayers for county debt for the last failed supply project.  

Public ownership and local control would allow us to seek better and less expensive options to improve our water supply, because a public agency could seek solutions that are not driven by corporate profit motives.