SAN FRANCISCO - California Gov. Jerry Brown has signed a bill that allows the Monterey Peninsula Water Management District to issue water rate relief bonds.
The bonds would finance a portion of the California American Water Company Monterey Peninsula Water Supply Project, which will consist of slant intake wells, a desalination plant, and related facilities, including brackish water pipelines and brine disposal facilities.
Cal-Am is a subsidiary of American Water Works Company. The private firm provides water and wastewater services to approximately 600,000 people.
"Senate Bill 936 will help to address the mandatory water reductions facing the Monterey Peninsula and provide assistance in the development of a desalination plant, as well as conveyance and storage facilities, in conjunction with Cal-Am," said Sen. Bill Monning, D-Carmel, who authored the bill. "By enabling an alternative financing mechanism to be issued, water users could realize rates that are lower than those achieved with traditional utility financing mechanisms."
The bonds will help generate ratepayer savings estimated to be more than $8 million in the first year, and a cumulative savings of up to $66 million, according to Monning.
Sen. Anthony Cannella, R-Ceres, and Assemblymembers Luis Alejo, D-Salinas, and Mark Stone, D-Monterey Bay, co-authored the bill.
"This new law will help the Monterey Peninsula develop new reliable, safe water sources, and it will lower the overall cost to ratepayers," Stone said in a statement.
Cal-Am proposed the desalination plant as a way to meet the reduction in water supply mandated in an order from the State Resources Control Board. Cal-Am said it would seek to permit the desalination facility to produce 9,750 acre-feet of water per year.
The plant is expected to cost around $95 million, and the entire water supply project is estimated to cost $277 to $320 million.
Cal-Am said that as a result of the proposed water supply project, and as a result of all other rate changes proposed between now and 2018, typical customer should expect an approximate 41% increase in their bill, phased in through 2018.