8. Environmental Review
D.03-09-022, issued in A.97-03-052, designated the Commission as the lead agency for environmental review of the Coastal Water Project. Cal-Am's proposal to build, own, and operate the Coastal Water Project is subject to environmental review under CEQA.36 The CEQA review evaluates the proposed project and other alternatives that can address the water supply situation, as well as a no project alternative.
Pursuant to its usual practice, the Commission retained outside consultants to prepare the DEIR and FEIR for the proposed project and alternatives. The Commission's Energy Division Staff managed the environmental review process. As discussed in D.09-12-017, the process of preparing the DEIR and FEIR included numerous opportunities for public involvement which were designed to maximize agency and public input for the Coastal Water Project environmental review process.
We concluded in D.09-12-017 that the FEIR for the Coastal Water Project complied with CEQA, and found that the FEIR is the competent and comprehensive informational tool that CEQA requires it to be. We therefore determined that the FEIR was completed in compliance with CEQA; that the FEIR has been presented to the Commissioners (the decision-making body of the Commission), and has been reviewed, considered, and applied prior to action on the project; and that the FEIR reflects the Commission's independent judgment and analysis. Accordingly, the Commission certified the FEIR on December 17, 2009 in D.09-12-017.
8.1. Proposed Project and the Alternatives
As described in the FEIR, the Coastal Water Project proposal and alternatives are the result of a multi-year planning effort that has included the analysis and consideration of several alternatives in the context of several different proposed projects and related documents. The project objectives are as follows:
1. Satisfy Cal-Am's obligations to meet the requirements of SWRCB Order 95-10;
2. Diversify and create a reliable drought-proof water supply;
3. Protect the Seaside basin for long-term reliability;
4. Protect listed species in the riparian and aquatic habitat below San Clemente Dam;
5. Protect the local economy from the effects of an uncertain water supply;
6. Minimize water rate increases by creating a diversified water supply portfolio;
7. Minimize energy requirements and greenhouse gas emissions per unit of water delivered to the extent possible;
8. Explore opportunities for regional partnerships, consistent with D.03-09-022; and
9. Avoid duplicative facilities and infrastructure.37
The FEIR sets forth three water supply projects that have been analyzed at an equal level of detail, each of which can satisfy the objectives described above. As described in the FEIR, while each of the three projects would provide the majority of water required, none of the three projects that are analyzed would meet total demand on their own. There are certain other project components and measures that are assumed to be operational under all of the alternatives studied in the FEIR.
In addition to the three project options described below, the FEIR analyzes several other alternatives to the project, as well as multiple alternatives "of the project," i.e., alternatives to select elements or locations of the project.
As described in D.09-12-017, the Moss Landing Project would be sited on 16 acres at the Moss Landing Power Plant and would be owned and operated by Cal-Am. The proposed project includes a desalination plant sized to produce 10 million gallons per day (mgd) of desalinated water. The proposed project also includes a seawater intake system using source water supplied from the existing Moss Landing Power Plant once-through cooling water return system, an open-water brine discharge system through the Moss Landing Power Plant, and a variety of conveyance and storage facilities, including approximately 28 miles of pipeline and an aquifer storage and recovery system. The aquifer storage and recovery system consists of two existing and two proposed injection/extraction wells.38 The proposed project would produce 8,800 afy of desalinated water in non-drought years (and 10,900 afy in drought years) that would be delivered to Cal-Am's Terminal Reservoir for distribution to its customers. We note that the proposed project and the alternative projects include certain storage, delivery and distribution components that would be owned and operated by Cal-Am. Because these elements are common to all projects, these are known as "common" components, or the Cal-Am only facilities.
Several parties have pointed out that the proposed project is unlikely to be permitted.39 The FEIR explains that § 316(b) of the Federal Clean Water Act requires the Environmental Protection Agency to ensure that the location, design, construction, and capacity of cooling water intake structures for power plants reflect the best technology available to protect aquatic organisms from being killed or injured by impingement or entrainment. Impingement refers to aquatic organisms being pinned against screens or other parts of a cooling water intake structure; entrainment refers to aquatic organisms being drawn into cooling water systems and subjected to thermal, physical, or chemical stress. The Moss Landing Power Plant currently takes in water for cooling and in that process, impinges and entrains numerous fish and aquatic organisms.40
There is no longer support for the Moss Landing project. Cal-Am acknowledges that the "California American Water-owned water supply alternatives would likely result in extensive delays and costs from permitting requirements and other obstructions. The Moss Landing Project's open intake and once-through cooling design is environmentally controversial and subject to increasingly restrictive regulations."41
The North Marina alternative consists of much of the same infrastructure as described above. The North Marina alternative would also be owned and operated by Cal-Am, but the desalination plant would be sited on 10 acres at the Armstrong Ranch (near the MRWPCA site) and sized to produce 11 mgd of desalinated water. The North Marina alternative utilizes a seawater intake system consisting of six new subsurface beach slant wells, an open-water brine discharge system through the existing MRWPCA outfall, project water conveyance and storage infrastructure, including several miles of pipeline and an aquifer storage and recovery system, as described above. The main differences between the Moss Landing Project and the North Marina alternative are location and size of the desalination plant, the intake technology, and the outfall.
The North Marina alternative would also produce 8,800 afy of desalinated water in non-drought years (and 10,900 afy in drought years) that would be delivered to Cal-Am customers. The desalination plant is larger, because any source water that originated from the Salinas Valley Groundwater Basin would be returned to the Basin through deliveries to the Castroville Seawater Intrusion Project (CSIP). Because groundwater modeling indicates that source water pumped from the slant wells over the long term could include a small amount of intruded groundwater from the Salinas Valley Groundwater Basin, the North Marina alternative includes a provision for excess desalinated water to be returned to the Salinas Valley Groundwater Basin via the CSIP's storage pond. Thus, desalinated water would be delivered to the Cal-Am Terminal Reservoir for distribution to its customers and to the CSIP pond for distribution to the Salinas Valley Groundwater Basin.
Given the complexity of the water supply issues facing the Monterey Peninsula, D.03-09-022 directed Cal-Am to "thoroughly explore opportunities for partnerships with other regional water supply entities as it prepares its PEA and to incorporate such partnerships into the project, if appropriate."42 Cal-Am included a preliminary assessment of such a regional approach in its PEA. DRA built on this work and worked with the University of California, Santa Cruz Center for Integrated Water Research to determine whether a more cost-effective and fully developed regional approach could be developed as an alternative to the proposed project. Accordingly, the Regional Project would address water supply demands within the Cal-Am service area and in other areas of northern Monterey County.
The Regional Project analyzed in the environmental documents was developed after extensive public input through the establishment of several community-based working groups, now known collectively as Water for Monterey County Coalition. The Regional Project has been envisioned as having two phases, and Phase 1 is analyzed at a level of detail consistent with the proposed project and the North Marina alternative. Due to the legal constraints on diversions from the Carmel River and the Seaside Basin, the various components of Phase 1 of the Regional Project would, taken together, provide "regulatory replacement" water supply of 15,200 afy (12,500 afy to Cal-Am customers and 2,700 afy of water supply to the Ord Community); therefore, Phase 1 is the first priority for project implementation.43 In addition to the primary objectives described above, the Phase 1 Regional Project is designed to address the following objectives and opportunities:
· Satisfy MCWD's obligation to provide a water supply adequate to meet the approved redevelopment of the former Fort Ord;
· Satisfy MCWRA's obligation to maintain hydrologic balance of the Salinas Groundwater Basin;
· Satisfy MCWRA's obligation to protect agricultural water users' utilization of water resources;
· Maximize regional reliability;
· Maximize use of recycled and freshwater sources;
· Maximize funding opportunities through regional cooperation; and
· Integrate urban, agricultural and environmental objectives.44
Phase 1 of the Regional Project includes previously analyzed and permitted water supply projects that will be undertaken whether or not the Coastal Water Project is implemented. These projects include the Sand City desalination plant,45 the Regional Urban Water Augmentation Project (RUWAP),46 and two existing aquifer storage and recovery wells, as well as potential demand offset of up to 1000 afy from conservation. New aspects of Phase 1 of the Regional Project that were analyzed in the environmental documents include a 10-mgd desalination plant, to be owned and operated by MCWD and six vertical intake wells to provide source water. The desalinated water (8,800 afy in non-drought years and 10,900 afy in drought years) would be delivered to the Cal-Am Terminal Reservoir system for distribution to its customers and to the MCWD system (approximately 1,700 afy in non-drought years) for distribution to its customers.
Phase 2 of the Regional Project has been studied at a more general or programmatic level, consistent with the information that is available at this time. As explained in the FEIR, the components of Phase 2 of the Regional Project have been included for context and for informational purposes; they would not function as an alternative that would meet the project objectives and are not subject to our approval at this time. The anticipated components of Phase 2 are:
· 13 mgd total desalination plant (expanded by 3 mgd);
· 8 total new subsurface intake wells (expanded by 2 wells);
· 5 additional injection wells for Seaside Groundwater ASR Expansion I and II;
· Existing Salinas River Diversion Facility and new 14 mgd Surface Water Treatment Plant at North Marina;
· Expansion of the CSIP and perched water storage at the Armstrong Ranch, additional distribution pipelines to provide additional Salinas Basin Groundwater for north Monterey County; and
· The Seaside Groundwater Basin Replenishment Project, which is a planned reverse osmosis treatment of recycled water from MRWPCA treatment plant at an Advanced Water Treatment Plant and injection of treated water for groundwater recharge.
An important component of Phase 2 of the Regional Project will consider an expanded use of recycled water to serve agricultural and landscape irrigation. Appropriate use of recycled water and recycled water infrastructure remains controversial. While there are multiple ways to utilize the unallocated balance of the recycled water produced at the Salinas Valley Reclamation Project (operated by the MRWPCA), some believe it should be used for agricultural use and some believe it should be used for urban irrigation and landscaping use. How the recycled water is used, who has rights to use it or deliver it, and what facilities are used for this delivery remain controversial issues to be addressed in Phase 2 of the Regional Project. We note that additional environmental review will be required for specific projects in Phase 2. At the programmatic level, the FEIR has found that there may be significant and unavoidable impacts associated with water quality, growth, and liquefaction in Phase 2 of the Regional Project. We do not address those issues in this decision; here, we address only the environmental impacts associated with the new aspects of the Regional Project, as defined.
Under the No-Project Alternative, water management in the Cal-Am service area would be severely curtailed, in order to comply with the SWRCB Cease and Desist Order. If adopted, the Cease and Desist Order would impose a phased ramp-down from Cal-Am's existing interim pumping limit on the Carmel River, as we discuss above. Implementation of the No-Project Alternative would eliminate all of the impacts for the three projects analyzed in the FEIR. However, the resulting water supply deficit would lead to severe rationing and possible water shortages. These conditions, in turn, would potentially have significant effects on the local economies within the Monterey Peninsula.
Many of the speakers at the PPHs remarked on the potential harm to the area, if no project were built. Several speakers pointed out their concerns with the economic impact if there is not a water supply replacement project before the restrictions required by the Cease and Desist Order are imposed.47
The evidence corroborates the concerns expressed by the community. As stated by Berkman and Sunding in Exhibit 326:
Finally, we think that it is important to consider that the failure to proceed with the regional facility will have substantial economic impacts on CAW's residential, commercial and industrial customers. A conservatively-estimated 50% water reduction of this magnitude will have negative consequences for residential customers. A reduction of this magnitude will create substantial hardships including reduced bathing, clothes washing, and waste removal and eliminate recreational and aesthetic benefits of water use. A conservative quantification of this hardship is between $17 and $51 million annually. Industrial and commercial customers will be forced to reduce output and employment to cope with reduced water supplies. We estimate that annual industrial sales losses within the CAW service territory will be $261 million, annual commercial sales losses will be $742 million and employment losses will total almost 6,000 jobs.48
We concur with the findings of the FEIR: the No-Project Alternative would fail to meet any of the Coastal Water Project objectives, including the objective to protect the local economy from the effects of an uncertain water supply. In addition, the No-Project Alternative would not satisfy the requirements of Order 95-10, would not protect the Seaside Basin, would not result in a drought-proof water supply, and would not protect the listed species in the riparian and aquatic habitat below the San Clemente dam. We find that the No-Project Alternative is not a tenable option.
36 The CEQA statute appears at Cal. Pub. Res. Code §§ 21000 et seq.
37 FEIR at ES-2, ES-3. The last three objectives were developed by Staff during the process of compiling the EIR.
38 The existing injection/extraction wells supply 920 afy. The proposed wells are expected to provide a long-term average of 380 afy.
39 On May 10, 2010, the SWRCB issued Resolution No. 2010-0020, adopting a Proposed Water Quality Control Policy on the Use of Coastal And Estuarine Water for Power Plant Cooling and Associated Certified Regulatory Program Environmental Analysis. The SWRCB is designated as the state water pollution control agency for all purposes stated in the Clean Water Act and the Regional Water Boards are authorized to issue National Pollutant Discharge Elimination System permits. According to the SWRCB, the intent of the adopted policy is to ensure that beneficial uses of California's coastal and estuarine waters are protected, while also ensuring that the state's electrical supply needs continue to be met. Overall, the goal of the adopted policy is to ensure that the owner or operator of an existing power plant can reduce impingement mortality and entrainment by either reductions in velocity, flow, or control technologies. The regulations were approved by the Office of Administrative Law on September 27, 2010. The SWRCB has proposed certain amendments to the policy, which will be considered on December 14, 2010.
40 FEIR at 4.3-15.
41 Exhibit 100 at 7.
42 D.03-09-022 at 12.
43 As noted in the FEIR, Cal-Am, MCWD, and MCWRA have continued to work together to refine the components of Phase 1 of the Regional Project, and the FEIR has been updated to reflect those changes. FEIR at 5-1.
44 These objectives were developed by Water for Monterey County Coalition in developing its goals for the Regional Project and were not included in the alternative analysis considered in the FEIR. Water for Monterey County is a group of regional stakeholders (federal, state, local government representatives, water agencies, citizen groups, nonprofit groups) that evolved from the Regional Project Plenary Oversight Group, a project initiated by DRA and University of California at Santa Cruz in 2007 to pursue the Regional Project.
45 The FEIR for the Sand City desalination plant was certified by the City of Sand City in 2005, with an addendum approved in 2007. Construction began in 2008 and the desalination plant became operational in 2010. The Sand City desalination plant will provide 300 afy.
46 The Regional Urban Water Augmentation Project was approved by the MCWD in 2004 (with addenda in 2006 and 2009) and will provide delivery of recycled water from the Salinas Valley Reclamation Plant for urban irrigation uses.
47 See, e.g., RT at 1922, 1986, 1988-89.
48 Exhibit 326 at 3.
