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MONTEREY PENINSULA residents would face even more water restrictions if a proposed decision issued this week by a judge is approved by the California Public Utilities Commission.

In a ruling released Tuesday, Administrative Law Judge Gary Weatherford said California American Water cannot provide water for any new uses until a desal plant is built to eliminate overpumping from the Carmel River.

Though the Monterey Peninsula Water Management District put a stop to most new connections after a state cutback order in 1995, the latest moratorium would be even more prohibitive, cutting off access to the small amounts of water set aside by some cities for emergencies and important civic projects.

“Anybody who was going to get water through the cities’ allocations would be affected,” said Cal Am spokeswoman Catherine Bowie said.

It’s possible that even those few homeowners who have water credits to use for additions to their houses or to add a bathroom, for example, might be prevented from using the credits if the moratorium is approved.

“We are going to have to go to the State Water Resources Control Board and get clarification” on that issue, Bowie said.

Cal Am had requested the moratorium on hookups to make sure water use doesn’t surpass state-mandated limits, which would expose the company and its customers to fines.

“We think this underscores the urgency for getting a new water project and demonstrates how serious the restrictions are,” Bowie said.

At a public hearing in December in Monterey, opponents of a moratorium, including city mayors, business owners and representatives of the hospitality industry, blasted the proposal, saying it would severely impact business and tourism.

Weatherford acknowledged their concerns in his proposed decision, noting that many people believe water credits and entitlements should be honored and that imposing the a hookup moratorium would result in a serious drop in revenues from temporary occupancy, sales and property taxes and hamper cities’ efforts to build affordable housing.

His proposed ruling would exempt Pebble Beach, Sand City and an area referred to as the Laguna Seca corridor from the moratorium. Water use in Pebble Beach is way down from historic levels, thanks to the use of recycled water on golf courses, so new hookups in Pebble Beach aren’t impacting the Carmel River, Weatherford said, while Sand City (including the proposed Ecoresort across from Seaside High School) and Laguna Seca get their water from sources outside Carmel Valley. Projects considered a matter of public health and safety would also get exemptions.

On Dec. 2, 2010, the CPUC approved a regional water project, which includes a desalination plant in Marina and would allow Cal Am to stop illegal diversions from the Carmel River.

However, the project — if not halted by lawsuits or other delays — won’t be complete until at least 2015. The moratorium would be in effect until a new water project is online.

Even if the CPUC approves the moratorium — which it’s expected to do in late February or March — it’s possible it could be undone if a Santa Clara judge rules in favor of Cal Am and the MPWMD, which sued the SWRCB over the cease and desist order.