Meeting Date:

April 20, 2009





Darby Fuerst,




General Manager

Line Item No.:




Prepared By:

Stephanie Pintar

Cost Estimate:



General Counsel Approval:  Approved

Committee Recommendation:  This ordinance was reviewed by the Rules and Regulations Committee on March 20, 2009, and the Water Demand Committee on April 13, 2009.  Both committees recommended approval.

CEQA Compliance:  N/A


SUMMARY:  The joint MPWMD/California American Water (CAW) rebate program is funded by CAW ratepayers through approval of the California Public Utility Commission’s (CPUC). The CPUC is currently considering increasing the amount of funding available to the rebate program in its consideration of CAW’s conservation filing (A07.12.010).  Prior to agreeing on the proposed conservation budget, the CPUC’s Division of Ratepayer Advocates (DRA) raised concerns about funding the rebate program with ratepayer dollars when an applicant could potentially receive both a rebate and a water credit that could be used to offset additional water demand.


Staff is proposing two amendments to address DRA’s concerns.  The first amendment relates to Rule 25.5, whereby an applicant would not qualify for a rebate if a water credit had previously been used for a Qualifying Device[1].  The second amendment would require repayment of the rebate as a fee on a Water Permit.  A draft ordinance incorporating these amendments (Exhibit 22-A) has been prepared for the MPWMD Board’s consideration.


Staff has concerns regarding accounting for rebate program savings when there is the potential to use the same water savings to offset a Water Permit.  Requiring a pay back of rebate funds (and an adjustment of the rebate program water savings) will improve the accuracy of water savings calculations related to the rebate program and will ensure more accurate calculation of water uses on a property.  As proposed, an applicant could receive a rebate and still use the credit from the Qualifying Device(s) in the future to add water fixtures.  However, when the permit is issued, the amount of the previous rebate would be collected as a Water Permit fee surcharge that would be directed to the rebate fund and the water savings resulting from the rebate program would be reduced.  This would achieve the goal of using rebate monies for voluntary conservation only. 


The Rules and Regulations Committee reviewed and supported the draft ordinance on March 20, 2009.  The Rules and Regulations Committee recommended that a date be added so that this amendment applied only to future rebates.  The Water Demand Committee met on April 13, 2009 and recommended the Board adopt the ordinance without any date restrictions.  (Two of the Water Demand Committee members also sit on the Rules and Regulations Committee.)  The Technical Advisory Committee met on April 7, 2009 to review the ordinance, and although there was a very brief discussion on the matter, no action was taken due to lack of a quorum.  The ordinance was also provided to the Government Affairs Director of the Monterey County Association of Realtors for review.


RECOMMENDATION:  Staff recommends that the Board address DRA’s concerns at this time and recommends the Board adopt the first reading of Ordinance No. 139.  The ordinance is scheduled to take effect on July 1, 2009.


This ordinance is not a project under the California Environmental Quality Act (CEQA).


BACKGROUND:  In the January 15, 2009 settlement agreement for the conservation budget for CAW’s Monterey District, MPWMD agreed to track and report on the amount of rebate savings reinvested as Water Credits during years 2009-2011.  If in any year the savings exceed 0.5 acre-feet, MPWMD agreed to revise its Regulation so that Water Users utilizing a Water Credit would refund the money received through the rebate program before a Water Permit was issued.  This agreement was made as a condition to future CPUC authorization for funding for the rebate program.  District staff routinely tracks the amount of water savings anticipated through the rebate program.


Prior to making this agreement, staff reviewed the number of Water Permits that had been issued between June 1 and December 31, 2008 that both received a rebate and a water credit for the same fixture.  Between June and December 2008, 162 Water Permits were issued that involved a water credit, and 16 permits also received a rebate for the same fixture(s).  Although these rebates amounted to less than two percent of the total rebates issued during that time, 0.247 acre-feet per year of savings were reused during those six months.  This trend continued during the first quarter of 2009.  Therefore, MPWMD would likely be required to take action this year.



22-A    Draft Ordinance No. 139






[1]  A Qualifying Device is a fixture or appliance that meets the criteria to receive a rebate.  This term is defined in Rule 11.