THE PEOPLE S DESAL PROJECT

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1 THE PEOPLE S DESAL PROJECT COMMENTS Cost Cost effective because it is a private development given to over to the public. Low cost options available to fund development. Cal Am s involvement in the project increases costs. Where will the money come from to pay for this project? What is the operational budget for this project? Not associated with Cal Am so cost will be lower. Project can produce water at $1,350 per acre foot per year. If more agencies join, the cost will drop. Estimated project cost of 61 million (excludes cost of land, solar farm and the pipe from Moss Landing to Seaside). Cost of project includes pipeline. Infrastructure Cost per household will not be any higher than it is now. Infrastructure already in place. Utility buildings could be built onsite. Spurs available from railroad which could be used to build infrastructure to bring materials to the site. Longevity of infrastructure, maintenance. How will the infrastructure be developed that will deliver the water? Is the conveyance infrastructure needed for the project included in the project cost and design? Where will the solar collectors be located? How much acreage is needed for the solar collectors? Capacity 45 million gallons of storage capacity. How much water will the project yield? Permitting 200 acre site is zoned industrial. Project has an EIR consultant on board, estimated to prepare EIR at cost of $65,000. Length of time needed for the Environmental Impact Report process. Will the water from the project serve only the peninsula or include other parts of Monterey County? What is the environmental permitting process for this project? What are the major permitting hurdles for this project?

2 Are the intake and outfall pipes currently permitted? If so, when do the permits expire? Governance Public will control it. Won t be subject to outside agencies raising the prices. No private sector royalties. Financially responsible to allow public ownership. Lack of leadership in overall process. Has Cal Am been involved in project development? If not, are there plans to include Cal Am in the discussion? Can this project be a public owned entity, where public can invest in the project directly? Who will govern the project after it goes public? What will happen if the process of finding a solution (to the overall water problem) does not work? Who will manage the construction of the project? Who will operate the project in the long-term? Which public agency is involved with this project? Which public agency will govern this project? Location Proximity to Dyenergy Plant where energy could be purchased at a low price. Has any other project received site and drought proof recommendation from California Public Utility Commission? Good location to pull up water. Project owns a portion of the Moss Landing harbor, therefore Moss Landing harbor will benefit monetarily. Company Reputation The Water Division of the California Public Utility Commission selected the project site as the best on the central coast and deemed the project to be drought proof. Excellent website. Site is available for public tours. Project information and statistics readily available. Professional, international team of engineers working on the project.

3 Environmental Operation Based on recommendations from Surfrider, existing pipeline used for outfall. Green and sustainable. Lots of environmental benefits. Protection of intake. Ability to remove salt out of brine to reduce environmental impacts. Minimal impacts from construction because a considerable amount of infrastructure is already built and onsite. Solar will provide approximately 75% of project energy, Dyenery will provide remaining energy. 30 acres have been set aside to build infrastructure to generate 6 megawatts of solar energy to power the project. How will the project minimize impingement and entrainment from the ocean? How will the project dispose of brine? What are the environmental impacts associated with brine disposal? What makes this project sustainable and green? What are the environmental impacts to marine life and marine ecosystem from this project? Will plant operate only during daylight hours since it depends on solar energy? Where will the offshore water come from? How will the project manage open intake? How much water will the project take in versus how much water will come out clean? Will the proposed solar energy portion of the project generate enough energy to operate the project? Will the project operate only during daylight hours since it will depend on solar energy? What are the similarities between this project and the Dynergy project?

4 DEEP WATER DESAL PROJECT COMMENTS Cost Project costs are low. Costs are competitive compared to other projects. Project can be financed by Munimarket financing which will lower costs and is an understood method. Direct power purchase will lower costs to consumers. Total cost for capital to develop project is yet to be determined. Cost and profit to private corporation after the transfer occurs is unknown. ANSWERS (GIVEN AT PUBLIC MEETING) What is the cost of the project? A: Precise cost of project not known at this time, but costs are predicted to be lower because of: 1) direct power purchase of water, 2) cost to heat the water is lower 3) project won t need large prefiltration system, 4) if project is scaled to be larger, the costs will be lower, 5) desal has a large carbon footprint and project will be involved in cap and trade system. What is the cost of water at acre foot per year? A: $1,730 per acre foot can be delivered to the fence line, add $200 to deliver to Cal Am = $1,930 per acre foot per year to the common user. What will the cost be to the rate-payer? A: Approximately $500 per user per year. How will this project be successful in financing when regional project failed? A: Several factors to consider in financing that are different in this project compared to the regional project. DWD has been working with Orrick Law firm, who are experienced in forming JPAs. Is $1,900 sufficient for operational costs and financing? A: Cost includes payment of bonds. About half for bond principal and interest. Infrastructure Infrastructure in place. Is the project associated with the People s Desal Project, including it s site and infrastructure? A: No, this project is not associated with the People s Desal Project. The People s Desal Project was evaluated to be a part of this project but was found to be insufficient for the following reasons: no permits, not available for direct power purchase, can t pump water out of harbor, leaking tanks, concrete is corroded and overall analysis deemed site not viable. Capacity Will provide additional water beyond cease and desist order.

5 Permitting Private corporation will permit the project. No water rights issues. Approval of all necessary permits seems too optimistic. ANSWERS (GIVEN AT PUBLIC MEETING) Can the certified EIR for the Coastal Water Project be used for the regional desal project? A: The project began as the Coastal Water Project but has since morphed to regional desal project because the initial plan of intake of shallow water has been shown to decrease fish populations. The regional desal project proposes a sandwell to reduce impacts to fish, but projects in sandwells have failed worldwide. What is the timeline for the project? What has been done thus far in terms of land and infrastructure acquisition and the EIR process? A: A pipeline, maintained with distilled water and electric potential is currently in place. Pipeline includes easement from former oil plant. A new pipeline will be needed along highway 1, on a TAMC easement, to connect to Cal Am. Project team has a history of successful permitting and experienced project managers. What lawsuits are anticipated in the process? A: Water rights suits are not anticipated. What is the largest hurdle in moving the project forward? A: Making sure the science is sound before moving forward to the permitting stage. Working to insure entrapment and entrainment of fish will not occur. Governance Public ownership. Future governance of project is unclear and could result in dispute due to the project s regional nature. Lack of clarity on who will operate the project. A public partner has yet to be determined. The difficulties associated with forming an organization How committed is NOAA and Monterey Bay Sanctuary to the project? A: The Monterey Bay Sanctuary is committed to be lead agency in NEPA process, and Lance Commission committed to be lead agency in CEQA process. Will the plant be sold to a public agency or partner with a public agency? Does the California Public Utilities Commission or Monterey County require public ownership? If so, how will the public agency be chosen?

6 (similar to the JPA) to manage the project. ANSWERS (GIVEN AT PUBLIC MEETING) A: An ordinance was passed in in the late 1970 s requiring public ownership. DWD plans to work with relevant agencies to form a Joint Powers Association (JPA). Additionally, both Pajaro Valley and Santa Cruz are considering desal. DWD will be responsible for obtaining entitlements and permits. Location There are uses already existing onsite. Company Reputation Experiences and impressive team working on project development. Project is associated with NOAA and Monterey Bay Sanctuary. Is Deep Water Desal a public agency or connected to a public agency? A: DWD is a private company, not a public agency. Project will be owned by a public agency. A private company assists in permitting and project management. Where can public find information regarding the science explaining deep water desal? A: Oceanographic Data will be posted on DWD website. Larva abundance data has been analyzed and the report is currently under review by NPS. Is DWD a new company and what is their track record? A: DWD is a corporation formed specifically for this project. Individuals within the corporation have extensive experience. Environmental Minimal environmental impacts. Project is AB32 infill compliant. How does the project reduce carbon emissions given the age of the power plant? A: Moss Landing towers are old oil plants and only operational 45 days per year. Plants located on Dolan Road are co-generational, high efficiency, clean energy, and operate 24 hours a day. These plants are suitable through approximately What will the impacts be to the PH (hydrogen potential), salinity and temperature of water? Operation Proven technology to operate the project. Project is scalable. Scientific technology to operate the project has not been made available to public or completely proven to work. Has this technology been proven and used in practice elsewhere? A: Deep water desal technology has been used in the Mediterranean and the Great Lakes where water is 1 NTU (nephelometric turbidity unit) or

7 ANSWERS (GIVEN AT PUBLIC MEETING) below. Deep water desal is a reliable process, lowers costs and minimizes impacts to the environment. Deep water does not contain as many contaminants as river water. Deep water does not need to be treated by the reverse osmosis process, which lowers costs. It is a sound engineering process with ecological benefits. Is the intake in the sanctuary? A: Yes, the intake is in the sanctuary. What happens if power plant shuts down temporarily or permanently? Moss Landing Harbor controls a lot of the land onsite. Plant will produce less than 2 gigawatts of transmission. Option for solar capacity onsite.

8 GROUNDWATER RECHARGE COMMENTS Cost Cost will be lower. What are the costs associated with the treatment options? Infrastructure What will the benefits of the project be to those in Salinas Valley who bought the initial treatment plant? Capacity What is the total storage capacity of the basin? How much groundwater recharge available if at 100%? How much blackwater is being processed while at current capacity? Permitting Less permitting requirements when used as a storage vessel compared to a damn. What are the issues that the scoping process of the EIR identified? Governance Location Industry regulations are often far more stringent that government standards because the market influences exert guidance on the process. Political and legal issues have confounded the projects, despite the availability of engineering solutions. A compromised water supply decreases real estate property values. Who has what rights to the treated water now? Is it possible to have a cap and trade type of system for water usage where users above required water limit pay additional money for their water usage? Company Reputation Keith Israel is well regarded by his peers and has experience managing water programs. Keith Israel is capable, authoritative, credible leader and has superb credentials. Environmental Project addresses a concern of the CDO, by increasing the Seaside groundwater basin to optimal levels. This project may have a longer life and less impact on the environment compared to a desal project which deposits brine into the ocean. Greywater should be infiltrated into the aquifer and composting toilets instead of blackwater because greywater is a minimally impacted water source. Public perceives greywater to How many people are comfortable with proposed quality of water compared to those who have concerns?

9 Project is incentivized to prevent discharge of contaminated water into the ocean and protects the biological preserve in Pacific Grove while avoiding penalties. Project uses approximately half of the energy that is needed for a desal project. Many alternative uses for greywater including non-potable uses. be safer than blackwater. Health department has concerns about the problems associated with home usage of greywater. Long-term or chronic exposure to low-level chemicals may have a significant impact over time. Safety concerns of treated water used for irrigation and impacts to human health. Operation Orange County facility has an impressive program that has been used for years. Very rigid testing process of water assures that water is clean before injecting it into the ground. Research may show that the bonding agents change composition after contact with radioactive materials compared to contact with pristine aquifer water. Will toxins and radioactive materials from source water be removed in the treatment process? If more storm water was sent to the sewage plant to be introduced to the system, would that dilute the system and the blackwater? Treatment process removes more chemicals than the natural dilution process. Concerns regarding the impacts from filtration from the injection process versus infiltration from the surface. Will there be a problem with water volume? How many ACF can be injected into the basin? What is the basis for the using the proposed treatment options? How does this system integrate with systems, such as desal, that put clean water into the ground?

10 DESAL IN NORTH MARINA COMMENTS Cost What is the cost of the project? How will the project be funded? If nothing is done, what will water cost? Are there any limitations on rates? How accurate are the cost estimates from Cal Am? How will consumers be protected from fluctuations in rates? Are there any legal protections available to consumers for rate increases? Is there a plan to protect lower income consumers from rate increases? Infrastructure Plant is already onsite and can use the existing outfall. Why hasn t replenishment of the seaside basin been considered? Capacity What is the aquifer storage capacity? What was the maximum extraction analyzed in the EIR? Are the capacity numbers accurate, especially considering past performance of hotels? Do projections consider a fully sustainable water source in the event of a century drought? Will water be provided to promote future business needs? How much water will the plant produce? Has the project considered a bigger plant to produce more water? As a result of the project, will homeowners be able to increase the number of bathrooms in their homes?

11 Why doesn t Cal Am take the full capacity that PCA can produce and decrease the number? Permitting Court overturned project EIR. How long will it take for the project to be up and running? How does Cal Am plan to resolve the issues in the EIR? How are future uses, needs and growth being considered in project development? Governance How can Cal Am own a desal project when it is illegal for a private party to own a desal plant project? How does Cal Am interpret the law regarding public ownership of a public utility? What was the intent of the law? Can the law be changed? Has the project considered partnering with other desal plants that are up and running? What public agency will Cal Am partner with? How will future regulations be managed? Location What happens if the project is moved down the coast? Company Reputation Environmental Operation Communication with the public. Can the plant be located on the Monterey Peninsula to avoid water rights issue? How can we be sure Cal Am will maintain estimated rates? Why isn t Cal Am tracking the amount of legal lots of water used? What will the discharge be as a result of the project? Will the project discharge brine? What is the power source for the project? Will feed water be a part of this project? Why don t other counties use desal? Is recycled water double counted as both outfall dilution

12 and groundwater recharge? Where will the brackish water come from? Will the use of slantwells be used at the high tide line where the ocean begins and zone 2C ends? How will the ban on export be resolved? Will current solutions become a problem in the future?

13 AQUIFER STORAGE AND RECOVERY COMMENTS Cost Initial costs are low: less than $1,000 acre foot per year for Aquifer Storage and Recovery (ASR) capital facilities including injection well (does not include Cal-Am pipe or treatment facilities). Lower operation and maintenance costs than desal. Incremental costs increase as new wells are established due to lack of infrastructure. Treatment and transportation costs associated with transporting water from Carmel River to injection wells. What is the point of diminishing return considering the pumping rate versus facility costs? Will ASR be financed separately or jointly with other water projects? Will today s rate payers pay for tomorrow s rate payers? Infrastructure Fewer wells required due to water output from aquifer. High costs associated with wells. Requires new infrastructure for new wells and distribution. Will the pipeline from Seaside water basin be built? Project is compatible with infrastructure from other water projects. Capacity Management of wet and dry years allows water from wet years to be banked and credit earned from dry years. Amount of water that can be injected or stored is 50,000 acre/feet. What is the ultimate size of ASR and what phases of ASR are required? Deep and prolific aquifer at 3,000 gallon a minute. Water rights are established based on a minimum flow; water cannot be pumped if water levels are too low. Difficulty of balancing capacity between wet and dry years. Permitting Project can be implemented quicker than other projects. Governance Water rights from Carmel River already established. Location Company Reputation Environmental No significant or adverse impacts to Carmel River or Seaside groundwater. Project is not drought proof.

14 Operation Will ASR store water as well as treat water? Will rainfall determine the amount of water to be injected or and stored?

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