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The Monterey Peninsula has a "water poverty" problem. Managers disagree on solutions.

The Carmel River watershed, fed by numerous creeks, has served the Monterey Peninsula as its primary water source for more than a century.
Suzanne Saunders
The Carmel River watershed, fed by numerous creeks, has served the Monterey Peninsula as its primary water source for more than a century.

As small as it is, the Carmel River has been the Monterey Peninsula’s primary source of water for more than a century. That will come to an end on Jan. 1, 2022. The State Water Resources Control Board has ordered the area’s private water utility, California American Water (Cal Am), to reduce its draws from the river by two-thirds of what it pumped a decade ago.

The historic move will help restore the Carmel River habitat, damaged by years of illegal over pumping by Cal Am. But it is also expected to leave the Peninsula’s water supply so tight that customers could face rate hikes, rationing and fines if they use too much water.

Could Rate Hikes and Rationing Be Next?

Dave Stoldt, general manager of the Monterey Regional Water Management District, said everything depends on how much rain we get during the next two winters.

“If they are dry years, then we're just going to be scrambling to fill that gap. But it would be right on the edge,” he said.

The Cal Am service area encompasses the Peninsula’s six cities including Carmel-by-the-Sea, Monterey, Pacific Grove, Sand City, Del Rey Oaks and Seaside, along with the unincorporated areas of Pebble Beach, the Carmel Highlands and Carmel Valley.

If the water shortage triggers mandatory conservation measures, more than 100,000 customers would be affected, along with the area’s roughly 9 million annual visitors.

“It's really water poverty at this point,” said Chris Cook, director of operations for Cal Am’s Monterey region.

Cook said he hopes for heavy rainfall in the coming months so that the company can add water to its currently low storage levels. But he added that rationing is not off the table.

“We really don't want to go to water rationing. We understand the community's done so much already to conserve,” Cook said.

Pure Water Monterey, the publicly owned wastewater treatment facility in Marina, is being expanded to keep up with the Peninsula’s water demands.
Monterey One Water
Pure Water Monterey, the publicly owned wastewater treatment facility in Marina, is being expanded to meet the Peninsula’s water demands.

Stoldt, the manager of Monterey’s water district, said he believes that wastewater management is the solution. Pure Water Monterey is a wastewater recycling plant that uses advanced technology to purify wastewater from household drains, agricultural fields, and sewage. The purification methods ensure that once treated, the wastewater is safe to drink.

The project is currently planning its second phase — an expansion expected to take another 30 months to complete. Until that time in early 2024, Stoldt warns, “we will have just enough to cover demand here on the Monterey Peninsula.”

When diversions from the Carmel River are sharply reduced at the end of this year, Pure Water Monterey will become the area’s main water supply. Stoldt said the district’s projections show that once complete, Pure Water Monterey will meet the Peninsula’s needs for “decades to come.”

Cal Am’s engineers disagree with those projections, suggesting demand will outpace supply.

A map showing the Carmel River watershed
Monterey Regional Waste Management District
A map showing the Carmel River watershed

The State Water Board has reduced Cal Am’s draws from both the river’s surface and its underground aquifer. The orders are intended to preserve riparian habitat for federally protected species, like steelhead trout and California red-legged frogs.

Cal Am’s illegal diversions from the river were documented in 1995 by the State Water Board, which then directed the utility to establish alternative water sources. In 2003, the company began proposing desalination as the most drought-resistant solution.

Desalination removes salt and other impurities from seawater to make it safe to drink. Cal Am’s plans for a “desal” plant, as it’s commonly called, have been delayed by environmental issues, as well as disagreements over where the plant should be placed and who should own it.

Proponents of desal, including numerous business and hospitality groups, tend to support the efforts of Cal Am. The company’s opponents include those who believe desal is too expensive and unnecessary. The District is preparing a feasibility study for a possible takeover of Cal Am, whereby the private utility would be bought out and owned publicly. Cal Am has vowed to fight any such maneuver.

The water shortage has caused a separate state agency — the California Public Utilities Commission — to place heavy restrictions on construction throughout the Monterey Peninsula. It’s what Stoldt described as “a prohibition on growth.”

“There's a lot of individuals who own lots that they've been unable to build on,” he said.

In 2010, the California Public Utilities Commission banned all new water connections on the Peninsula. The order was intended to force Cal Am to develop new water sources.

Eleven years later, properties that are not already connected to Cal Am’s water system are still unable to get hooked up for service. Exceptions include property owners who buy legal rights to water from owners who turn land into open space.

“That's what the state wanted,” Stoldt said. “They said, “We want you to solve the river's problem by getting a replacement permanent water supply, and then we'll let you grow.’”

John Tilley is a banker and president of the Monterey Commercial Property Owners Association. He said he’s concerned that even basic water needs are not going to be met. Disagreements between parties are so deep, he said, we can’t make progress.

“It's going to deteriorate the community, rather than give it a chance to expand,” he said.

State orders also prevent remodeling projects that increase water use. For example, owners of office buildings are not allowed to convert their properties to apartments or condominiums because the change would increase demands on water.

“We couldn't build affordable housing on three or four spots here in the city of Monterey... because of a lack of water,” Tilley said.

Tilley believes that Santa Cruz, also pinched with tight water supplies, appears to be doing a better job managing the complex challenges of water and housing.  

“There's a lot of housing being built, affordable housing and other housing in Santa Cruz. And we're handcuffed down here. We don't know when it's going to end,he said.

There’s no sign when water restrictions might ease on the Monterey Peninsula. Pure Water Monterey expansion is expected to be operational in 2024. At that time, water managers will have a better gauge on the new water supply and whether it can keep pace with demand.

Following decades of disagreements over how much growth and how much water the Peninsula needs, any long-term solution could still be a long way off.