Consider Second Reading and Adoption of Ordinance No. 139 -- Amending the Rebate Program to Require a Refund when Water Savings from Rebated Fixtures are Reused for New or Intensified Uses


Meeting Date:

May 21, 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). Ordinance No. 139 (Exhibit 16-A) proposes two amendments to address 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.  These amendments were contemplated in the conservation budget settlement agreement between MPWMD, CAW and the CPUC Division of Ratepayer Advocates.

The first amendment to Rule 141 disqualifies from the rebate water fixtures used as a credit on a Water Permit.  The second amendment to Rule 25.5 involves Water Permit applications that utilize a credit for a fixture that previously received a rebate.  The amendment to Rule 25.5 adds a requirement to repay the rebate as a fee on a Water Permit.   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, but 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 and the Water Demand Committee both recommend approval of the ordinance.  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 approve the second reading and adopt Ordinance No. 139.  The ordinance is scheduled to take effect on July 1, 2009.  All rebate and Water Permit applications received after that date would be subject to the new rules. 

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.



16-A    Draft Ordinance No. 139