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BEFORE THE PUBLIC UTILITIES COMMISSION

OF THE STATE OF CALIFORNIA


FILED
7-11-17
Application of California-American Water 04:59 PM
Company (U210W) for Approval of the Application 12-04-019
Monterey Peninsula Water Supply Project and (Filed April 23, 2012)
Authorization to Recover All Present and Future
Costs in Rates.

COMMENTS OF CITY OF MARINA ON


STATEMENT OF ISSUES AND SCHEDULE

LAYNE P. LONG SARA STECK MYERS


City Manager Attorney at Law
City of Marina 122 - 28th Avenue
211 Hillcrest Avenue San Francisco, CA 94121
Marina, CA 93933 Telephone: 415-387-1904
Telephone: 831-884-1278 Facsimile: 415-387-4708
Email: llong@cityofmarina.org Email: ssmyers@att.net

For: CITY OF MARINA

Dated: July 11, 2017


BEFORE THE PUBLIC UTILITIES COMMISSION
OF THE STATE OF CALIFORNIA

Application of California-American Water


Company (U210W) for Approval of the Application 12-04-019
Monterey Peninsula Water Supply Project and (Filed April 23, 2012)
Authorization to Recover All Present and Future
Costs in Rates.

COMMENTS OF CITY OF MARINA ON


STATEMENT OF ISSUES AND SCHEDULE

The City of Marina (City or Marina) respectfully submits these Comments on the

Joint Statement of Issues filed in Application (A.) 12-04-019 on June 30, 2017, and on a

proposed schedule for further evidentiary hearings. These Comments are filed and served

pursuant to the Commissions Rules of Practice and Procedure, the Administrative Law Judges

(ALJs) Ruling Requesting Parties to Identify Issues for Further Evidentiary Hearings issued on

June 9, 2017 (June 9 ALJs Ruling), and the ALJs Email Ruling issued on June 14, 2017,

granting an extension of time to file Comments on the Statement of Issues and schedule to today,

July 11, 2017.

I.
BACKGROUND

The June 9 ALJs Ruling calls for parties to file a Statement of Issues related to the need

for further evidentiary hearings on identified topics in the Application. Parties were also to

make a reasonable effort to present one joint Statement of Issues. 1

To that end, Marina participated in conference calls scheduled by California-American

Water Company (CalAm) with the parties and provided input to and joined in the submission

of the Joint Statement of Issues filed on June 30. The Joint Statement of Issues includes both

1
June 9 ALJs Ruling, at p. 3.
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procedural suggestions made or agreed to by Marina 2 and, in Exhibit A, recites and includes the

issues that Marina believes are appropriate for the further evidentiary hearings. 3

However, as the Joint Statement of Issues makes clear, the submission of the Joint

Statement did not represent an agreement by each party to issues raised by another party.

Instead, each party, including Marina, reserved the right to identify their respective objections,

or agreements, to the issues identified in Exhibit A and to address schedule issues in their

Comments. 4

To that end, Marina further describes the merits of the issues that it believes should be

included in the further evidentiary hearings, especially because it anticipates that some parties

may object to inclusion of a few issues. Marina does not object to any of the evidentiary hearing

issues raised by other parties indeed, it notes that many of those issues are the same as, or

overlap with, issues raised by Marina. In addition, Marina proposes a specific procedural

schedule approach to ensure the full and fair consideration of these issues.

II.
MERITS OF MARINAS ISSUES

Marina has proposed that nine issues be the subject of the further evidentiary hearings

in this proceeding. 5 The Joint Statement of Issues does include Marinas brief explanation of

why each issue is relevant for inclusion as a non-CEQA (California Environmental Quality Act)

disputed issue of material fact in these further hearings. However, Marina believes that the

Commission would benefit from a further description of why each issue is appropriate and

necessary to be included in these evidentiary hearings, as follows:

2
Joint Statement of Issues, at p. 2.
3
Joint Statement of Issues, Exhibit A, at pp. 4-6.
4
Id., at p. 2.
5
Id., Exhibit A, at pp. 4-6.
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1. Project Water Demand

Based on a review of the Joint Statement of Issues, it appears that nearly all parties agree

that an evidentiary hearing on the current water demand for the Monterey Peninsula Water

Supply Project (Project) is necessary. As the Project has evolved over time and as more water

supply/demand information has become available, it is clear that the early water projections are

now outdated, and it is essential that a current and objective assessment of the true water demand

for the Project be examined in an evidentiary hearing. The latest information presented in the

Draft EIR/EIS reflects that the actual water needs for this Project may have been initially

overestimated by as much as 7,000 acre feet per year (afy). This is an important threshold

issue that must be addressed in the further evidentiary hearings and will require an

examination of the justification for the Project, determination of the Project sizing, and

identification of Project alternatives, including those that do not involve a desalination plant.

2. Reasonable Range of Small Alternatives

Until now, every alternative evaluated in detail for the Project assumed that a 9.6 million

gallon per day (mgd) or a 6.4 mgd (if the Pure Water Monterey project supplied the remainder

of the asserted 9.6 mgd need) desalination plant needed to be built. Since it now appears from

the Draft EIR/EIS that the demand on which this sizing is based was greatly overestimated, a full

range of alternatives to the Project on a smaller scale needs to be explored. This issue is closely

tied to the Project water demand evidentiary hearing issues described above.

3. Nature and Extent of Groundwater Extraction Rights

It is undisputed that the Project would extract large amounts of groundwater from the

Salinas Valley Groundwater Basin (Basin). At the same time, it appears that CalAm does not

have any current right to extract groundwater because it is not an overlying landowner and does

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not have any other existing water extraction or export rights. Although this issue was mentioned

in the Draft EIR/EIS, the authors of that document stated that the nature and extent of

groundwater rights was not an appropriate CEQA topic and that it was only being briefly

mentioned because it related to Project feasibility. Thus, according to the Draft EIR/EIS, this is

a non-CEQA issue, and it should, therefore, be addressed in the further evidentiary hearings.

If, in fact, CalAm does not have a confirmed and fully viable path forward to obtain the

rights to extract and export groundwater from the Basin in the quantity it seeks, this Project as

currently designed cannot proceed. CalAm apparently concedes that there is no permit process it

can pursue that would provide it with the necessary groundwater rights, so it is critical that the

Commission examine this issue closely.

Although the ultimate conclusion as to whether water rights will exist is a legal issue (just

as the adequacy of an EIR is a legal issue), the resolution of that issue depends on a series of

material and disputed factual questions that should be addressed in an evidentiary hearing. Some

of these questions are procedural: (a) Exactly what process does CalAm intend to follow to

obtain such water rights? (b) When is it planning to proceed? (c) How long will the process take

and how viable is it? (d) What delays can be anticipated? Other questions are technical: (a)

Exactly how much groundwater does CalAm plan to extract from the Basin? (b) How much

groundwater is available? (c) Could this proposed extraction cause injury to legal users of the

basin through depletion of groundwater, interference with water quality, injury to water storage,

or other damage?

Since the sole purpose of the Project is to source water for CalAms customers, these

factual questions go to the heart of the Projects viability and must be addressed in an evidentiary

hearing. It is also Marinas position that CalAm bears the burden of proof on all of these factual

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issues, and any schedule adopted for the further evidentiary hearings should reflect that fact in

setting the schedule for testimony (see below).

4. Groundwater Extraction Legal Prohibitions

Both an existing State law (the Monterey County Water Resources Agency Act) and

Monterey County Water Resources Agency Ordinance No. 3709 directly prohibit the extraction

of Basin groundwater for export to users outside of the Basin. As with the groundwater rights

issue, the authors of the Draft EIR/EIS stated that these prohibitions were not CEQA issues and

were only being briefly mentioned because they were Project feasibility issues. These issues

should be addressed in an evidentiary hearing because there are important underlying factual

issues regarding the Project facts and impacts that would necessarily inform the application of

these legal prohibitions.

5. Impact of SGMA

In 2015, California began implementing the Sustainable Groundwater Management Act

(SGMA), which is the first law in Californias history to comprehensively regulate the

extraction of groundwater. One of the first implementation steps was for the Department of

Water Resources to classify each State groundwater basin to prioritize those basins which were

in greatest need of immediate SGMA regulation. The Salinas Valley Groundwater Basin was

one of only 21 basins in the State to receive the critically overdrafted designation, which

identified the basins in the worst shape and which classified it for expedited management under

SGMA.

The water analyses relating to the Project were performed before the California

Legislature adopted SGMA and, for that reason, did not take it into account. The Draft EIR/EIS

made a passing reference to SGMA, but stated without any supporting analysis that it would

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have no impact on the Projects water supply. In fact, however, the law will likely have a

dramatic adverse impact on the Projects feasibility, which has not been analyzed by the

Commission.

According to the Draft EIR/EIS, this is a non-CEQA issue for the reasons stated above.

It is also a fact-based issue that involves the following factual inquiries: (a) How much Basin

groundwater is available for new large extraction sources or for export? (b) What are the

groundwater management plans and associated time frames of the Groundwater Sustainability

Agency in charge of this portion of the Basin? (c) Will the implementation of SGMA likely

delay, limit, or prohibit the Projects proposed extraction of groundwater from the Basin? These

factual issues must be examined in an evidentiary hearing.

6. Quantity of Extracted Groundwater

The Projects extraction and use of Basin groundwater are among the most significant

and most controversial aspects of the Project. Under California law, any water under land is

considered groundwater and, pursuant to State Water Resources Control Board Resolution No.

88-63, is presumptively considered to be suitable for municipal and domestic water supply. In

the last two years, CalAm has modified its Project in several ways, including by moving its

proposed slant wells landward, which results in capturing a much greater percentage of

groundwater.

During roughly the same period of time, a series of scientific studies have been

conducted regarding this Basin, with the results of another study by Stanford Professor

Rosemary Knight expected in the next few months. These and other research results and expert

analyses provide important new evidence relating to the location, interaction, performance, and

amounts of the groundwater aquifers in the immediate vicinity of the Project.

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These twin developments recent modifications to the Project and new scientific/expert

information directly applicable to the groundwater questions mean that the prior Commission

analyses of the amount of groundwater that would be extracted from the Basin is outdated and

not based on the best available scientific data. It is critical that the Commission analyze these

new developments in an evidentiary hearing and make a specific factual determination regarding

the amount of groundwater that the Project would extract. This issue is also an essential factual

element of Issue #3 above.

7. Project Injury to Groundwater Basin Users

One of Californias bedrock legal principles is that a new groundwater extraction right of

the type sought by CalAm cannot be established if it may cause injury to current and future

Basin groundwater users through groundwater depletion, seawater intrusion impacts, water

storage interference, or other similar types of impacts. This is one of the most important factual

predicates underlying Issue #3 above.

Since this factual issue is essential to determining Project viability and will not be

examined by any other public agency because there is no permitting process available to obtain

such rights, it is essential that it be examined in an evidentiary hearing by the Commission.

Given the modified Project location and increased groundwater extractions, along with the new

research and information available referenced above, there is significant new information

available that would be presented in an evidentiary hearing.

8. Slant Well Track Record and Performance

The slant well technology proposed for the Project is new, has no track record, and is

reportedly not currently used in any commercial desalination plant in the world. These facts

were not acknowledged, analyzed, or used as a basis for selecting among desalination plant

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intake alternatives in any study associated with the Draft EIR/EIS. In contrast, these factors have

played an important role in the evaluation of alternative intake technologies for other recent

proposed desalination plants along the California coast. Given the important role that this

technology has with regard to groundwater extraction and Project viability, it is important that an

evidentiary hearing be held regarding its reliability, feasibility, and performance.

9. Environmental Justice/Community Values

Marina is a minority and low-income community that is bearing a very large,

disproportionate, and unfair share of the physical impacts of this Project without any Project

benefit. The most obvious impacts are the anticipated adverse water supply and water quality

impacts to its valuable groundwater basin (on which it is currently 100% dependent), which in

turn will likely translate into severe financial impacts because much more expensive replacement

water (if even available) will need to be found as it is impaired. However, the Project will also

cause a variety of other severe coastal ecosystem, construction, noise, and other impacts.

In fact, the siting and operation of the Project in Marina appears to be a classic

environmental justice situation which to date has been completely unexamined. Indeed, it is not

even acknowledged, much less analyzed, in the Draft EIR/EIS. It is incumbent upon the

Commission to examine the Projects impacts on the community values, particularly in Marina.

III.
PROPOSED PROCEDURAL APPROACH AND SCHEDULE

The June 9 ALJs Ruling also asks parties to provide a proposed schedule (e.g., for

service of testimony, rebuttal testimony, hearing) and anything else the party believes the

Commission needs to make an informed decision. 6 Marina agreed with and supported the

following statements in the Joint Statement of Issues: First, that the adopted schedule should be

6
June 9 ALJs Ruling, at p. 2.
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one that balance[s] competing interests and ensuring the sufficiency of the Commissions

record, permitting adequate time to do so, inclusive of any settlement discussions. 7 Second,

that a prehearing or status conference should be held (a) to develop a procedural schedule

consistent with the issues identified for the further evidentiary hearings, and (2) to provide an

update by the Commission on the current timing of the California Environmental Quality Act

(CEQA) process. 8

Marina further believes that a schedule should be adopted for which the first step would be

a ruling on the issues to be included within the further evidentiary hearings, including the

identification of those issues on which CalAm has the burden of proof. Additionally, it is

Marinas position that CalAm should be required to submit its Opening Testimony prior to

Intervenor Opening Testimony and that a sufficient period should be allowed for discovery to be

conducted at the appropriate times.

Marina, therefore, proposes the following schedule that includes general time guidelines.

A final schedule, however, should be developed at the Prehearing Conference, coincident with

and informed by an update by the Commission on its CEQA review, that should be held after the

initial ruling is issued.

7
Joint Statement of Issues, at p. 2.
8
Id., at p. 2.
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ALJs Ruling on Issues to be Included in 2 Weeks After July 11 Comments
Further Evidentiary Hearings
Prehearing Conference (PHC) (i.e., 2 Weeks After Ruling
Update on Commissions CEQA review)

CalAm Opening Testimony 30 Days After PHC

Intervenor Opening Testimony 45 Days After Cal Am Opening Testimony

Rebuttal Testimony (All Parties) 30 Days After Intervenor Opening Testimony

Hearings Two Weeks After Rebuttal Testimony

Concurrent Opening Briefs 4 Weeks After Hearings Completed

Concurrent Reply Briefs 3 Weeks After Hearings Completed

III.
CONCLUSION

Marina respectfully requests that the Commission include its nine issues in the further

evidentiary hearings for the reasons detailed above. Marina also believes that its proposed

schedule approach (above) is reasonable and should be followed.

Respectfully submitted,

July 11, 2017 /s/ SARA STECK MYERS


SARA STECK MYERS
122 - 28th Avenue
San Francisco, CA 94121
Telephone: 415-387-1904
Facsimile: 415-387-4708
Email: ssmyers@att.net
And
LAYNE P. LONG
City Manager
City of Marina
211 Hillcrest Avenue
Marina, CA 93933
Telephone: 831-884-1278
Email: llong@cityofmarina.org
FOR: CITY OF MARINA

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