Mayors' consultant: Cal Am project
would cost the most but could be built the fastest
Published: November 9, 2012
A CONSULTANT tasked with analyzing the
three water project proposals for the Monterey Peninsula found
that none of them would be able to meet a crucial 2016 deadline,
although California American Water’s plan could be up and
running the quickest.
A 60-page report by consultant Separation Processes Inc.
released Tuesday indicates Cal Am’s proposed water project could
be operating by the fourth quarter of 2017.
The Monterey Peninsula Regional Water Authority, a group
composed of the six Peninsula mayors to find the most feasible
water project for the Peninsula, commissioned the detailed
A deepwater desal operation north of Elkhorn Slough in Moss
Landing couldn’t be operational until the third quarter of 2018,
while another desal plant in Moss Landing proposed by developer
Nader Agha, called the People’s Moss Landing Water Desal
Project, couldn’t be operational until the third quarter of
2019, according to SPI.
The consultant evaluated each proposal in terms of “project
purpose, customers identified, adequacy of treatment approach,
residuals handling, feed water characterization, quality of
project information and any omissions or fatal flaws.” None of
the projects was fatally flawed, according to SPI.
Cal Am spokeswoman Catherine Bowie said the company is still
reviewing the lengthy document, but said it appeared to be “very
fair and thorough.”
“There was a lot of effort to do an apples-to-apples
comparison, and we appreciate that,” Bowie said.
In October 2009, the State Water Resources Control Board
imposed a deadline of Dec. 31, 2016, to secure an alternative
water supply source to the Carmel River, the Peninsula’s primary
water source. After that, water supplies could be sharply
curtailed, or fines imposed.
Carmel Mayor Jason Burnett, who sits on the mayors’ water
group, said the group’s technical advisory committee will
discuss the SPI report next week, including the ramifications of
missing the state’s deadline.
“How much of a premium should we put on the project that is
more likely to get built sooner?” Burnett asked.
Cost of projects
In terms of cost, SPI found that Cal Am’s capital cost would be
around $207 million for a 9 million-gallon-per-day plant or $175
million for a smaller 5.5 million-gallon-per-day operation.
Agha’s project would be the second highest at $190 million for
the larger plant or $161 million for the smaller one. Agha has
boasted the project would cost $129 million.
George Schroeder, a partner in Agha’s project, said he took a
quick look at the report but hasn’t yet read it thoroughly.
“Probably in a couple of days we will have digested it and
figured how they came to their conclusions,” Schroeder said.
DeepWater Desal came in at the lowest estimated capital costs
at $160 million for the larger plant or $134 million for a
Bowie said Cal Am estimated higher PG&E electricity costs
for its project. The company is looking at options to reduce
those costs, she said.
“It does show ours is the highest,” Bowie said. “But if you
make that substitution of electricity cost, we will be the
lowest. We are taking very conservative estimates on power
costs, and the other two [projects] are using the best case
Overall, SPI found that the final production costs of water for
the three projects “are fairly equivalent.” The cost per
acre-foot (about 327,000 gallons) for the larger desal project
option would be about $3,250 with Cal Am’s project, $3,120 for
DeepWater’s project and $2,980 per acre-foot for Agha’s
proposal. Agha has said his project could produce an acre- foot
of water for about $1,349.
The yearly cost to maintain and operate each plant was also
found to be in the same ballpark, although Agha’s project would
be the lowest at $10.1 million. It would cost about $12.3
million per year for DeepWater Desal’s larger operation and $11
million for Cal Am’s, according to SPI.
SPI said Cal Am produced the most detailed information for its
plan, followed by DeepWater desal, which “prepared a fair amount
of predesign data on their system along with active
environmental investigations for their intake.”
DeepWater Desal CEO Brent Constantz said his project is bound
by confidentiality agreements with its partners, and therefore,
he was “not able to share a couple a key aspects of our project,
both of which affect the timeline and cost.”
SPI found Agha’s project “is at a more preliminary level of
engineering and planning in comparison.”
While Cal Am has a “very well defined” implementation path,
sticky bits with the project include uncertainty in the use of
slant wells for the project and the complexities of obtaining a
coastal development permit from the California Coastal
“Moreover, there are a number of legal uncertainties related to
the path of development” for Cal Am’s project “that can be
assessed but not resolved at this time,” SPI found.
“There are conceptual advantages to public ownership” of Cal
Am’s project, “which may significantly enhance the prospects for
political and legal approvals necessary for the project to
succeed,” according to SPI.
The consultant also found that “the simplicity of the
commercial agreements when Cal Am owns all facilities creates
schedule advantages,” but the “ownership structure creates
contingent risk and political opposition to the project which
could delay ultimate approval.”
DeepWater Desal’s proposal displays a “sophisticated
understanding” of the process and pitfalls associated in
completing environmental review and obtaining permits for the
project, according to SPI.
But the consultant also determined that “given the level of
controversy” with DeepWater Desal’s proposed new seawater intake
system involving a “screened open ocean intake” — which would
draw water from about 60 feet below the surface — it’s likely
that scoping hearings, preparation of a draft environmental
document and other factors would take much longer than the
Constantz told The Pine Cone there were “some obvious mistakes”
in the SPI analysis, “like water temperature, confusion on
financials, etc.,” but that he was confident they would be
Though Agha claims his desal plant would substantially reduce
potential environmental impacts from brine discharge, the
consultant said Agha’s team did not describe how that would
work. “It is thus not possible to independently assess potential
impacts from the proposed discharge of brine,” according to the
report. “This leads to a great deal of uncertainty with respect
to our assessment of [Agha’s] plan for implementation.”
As more details about Agha’s project emerge and environmental
assessments are completed, SPI found, “controversial issues will
arise that will require re-assessments and analyses which will
delay processing of the environmental compliance documents and
In contrast, according to SPI, those issues in Cal Am’s
proposal are “well understood,” and the “potential areas for
controversy are well documented.”
The Monterey Peninsula Water Authority’s technical advisory
committee will meet to discuss the report Tuesday at 1:30 p.m.
at Monterey City Hall, 580 Pacific St.