XIII. IRWUG Exemption from Surcharges
IRWUG8 seeks an exemption from the adopted surcharges for water used to irrigate golf courses located in the Del Monte Forest. According to IRWUG, the exemption is needed to prevent an inequity resulting from the contractual price Del Monte Forest golf courses9 pay MPWMD for reclaimed water, which is being tied to the price of potable water supplied by CalAm.
IRWUG argues that the Del Monte Forest golf courses are not responsible for CalAm needing to build the Coastal Water Project, because they have spent millions of dollars to sponsor, build and purchase reclaimed water from the Carmel Area Wastewater District and the Monterey Peninsula Water Management District (CAWD/MPWMD) Water Reclamation Project (Monterey Reclamation Project). As a result, the Del Monte Forest golf courses have reduced their use of potable water by over 80% since 1994 (an average of 750 acre feet per year), and they will reduce their use of potable water for golf course irrigation to zero in September 2007, when an expansion of the Monterey Reclamation Project (Expansion Project) goes into service. Thereafter, all of their irrigation water needs will be met through the use of reclaimed water, replacing 100% of the Carmel River water previously supplied by CalAm.
Further, IRWUG points out that the Del Monte Forest golf courses have contributed significantly to CalAm's compliance with SWRCB Order 95-10, thereby providing important benefits to CalAm and all other CalAm ratepayers by preventing the imposition of financial penalties CalAm would have incurred if it exceeded the pumping limits imposed by the order.
IRWUG contends that the requested exemption will not unfairly shift costs to other CalAm ratepayers because the Del Monte Forest golf courses will no longer purchase potable water from CalAm for irrigation beginning in September 20007, when the Water Reclamation Expansion Project goes into service. IRWUG points out that as a result, even if the CalAm tariff for water furnished to the Del Monte Forest golf courses did include the surcharges, no additional revenue will be received by CalAm. Instead, the revenue would be paid to the Monterey Reclamation Project as part of the golf courses' purchase of reclaimed water.
In its comments on the proposed decision, MPWMD states that it will work with IRWUG and the Pebble Beach Company to modify the language in the Agreements for Sale of Recycled Water so that the Special Request 1 and 2 Surcharges are not part of the cost of reclaimed water.
We commend MPWMD for offering to address this matter. This is a contract issue which should be resolved by the parties. Hopefully, the parties will reach agreement. Therefore, we deny IRWUG's request for a special tariff exempting the golf courses from the Special Request 1 and 2 Surcharges.
8 IRWUG is an unincorporated association of the Monterey Peninsula Country Club (Monterey Peninsula), the Cypress Hills Country Club (Cypress Hills), and the NCGA Poppy Hills Golf Course (Poppy Hills). The Pebble Beach Company is not a member of IRWUG.
9 The Del Monte Forest golf courses include not only the three golf courses that make up IRWUG, but also the Pebble Beach Company. All four golf course owners are major participants in the Monterey Reclamation Project as large purchasers of reclaimed water. In addition, the Pebble Beach Company provided a financial guaranty for the revenue bonds MPWMD issued to finance the construction of the Water Reclamation Project. Those bonds are repaid with revenue from the sale of reclaimed water, most of which is purchased by the four Del Monte Forest golf courses.
