Last week, the California Public Utilities Commission (PUC) released the highly-anticipated report on a new water supply for the Monterey Peninsula, "Plan B." The alternative to the controversial proposed Carmel River dam (Plan A) would build a seawater desalination plant at Moss Landing and a groundwater storage and recovery facility near Seaside.

"The dam is dead," said state Assemblyman Fred Keeley, shortly after Loretta Lynch, PUC president, presented the study to Keeley on Aug. 9.

"The National Marine Fisheries Service have said they would not provide approvals for the dam to go forward," Keeley says. "The dam is never going to be built."

Keeley authored Assembly Bill 1182, directing the PUC to develop an alternative to the proposed Carmel River dam and reservoir project, in 1998. His legislation required the PUC to recommend new water sources yielding 10,730 acre-feet a year-the amount that the state says California-American Water (CalAm) overdrafts from the Carmel River.

The Moss Landing desalination plant would produce about 9,430 acre-feet per year (around 300,000 gallons). The Seaside groundwater storage and recovery facility, called injection wells, would provide 1,300 acre-feet.

Although this will alleviate what has been a major obstacle to growth, Plan B is not a license to build golf courses and mini-mansions, Keeley says.

"I want to be clear on what Plan B is intended to do," he says. "Whatever other debates there are on the Monterey Peninsula about growth and development and remodels and lots-of-record… the fact is, we know that we have to find a replacement for the 10,730 acre feet that was illegally being taken out of the Carmel River. Some people have said, gee, [Plan B] doesn''t take care of build-out. Well guess what, neither does the dam.

"Now, in the course of the California Public Utilities Commission application, if the mayors or the building industry or the Sierra Club want to engage in that argument… they can fight it out," Keeley says. "But what Plan B has to do at a minimum is solve the 10,730 acre-foot problem, and it does."

Cal-Am still has yet to withdraw or amend its application build a dam, which is still pending at the PUC. In a statement released Aug. 9, Chief Operating Officer Judith L. Almond said Cal-Am is in the process of reviewing Plan B.

"We are encouraged to see movement towards a solution to our water- supply problem," she said. Keeley said he expects Cal-Am to amend its application in weeks.

The Monterey Peninsula Water Management District is also reviewing Plan B, according to Keeley and water board members. Although the water district would not act as the lead regulatory agency because Moss Landing is outside the district''s boundaries, it would play some role in implementation and regulation.

"From what I''ve seen, I think it may be indeed what Assemblyman Keeley has said-our water supply project," says Water Board Member Zan Henson.

The Plan B study estimates total construction costs at about $176 million-higher than the costs projected in 1998 for a dam and reservoir project.

Desalination costs could drop if a deal could be made with Duke Energy to get power to the desalination plant at a discount. Such an arrangement is under discussion, Keeley said.

He also repudiates Plan B''s critics'' claims that the dam would cost significantly less than the alternative.

"It''s not true," he says. "Number one, it''s an outdated number. You take the last number published for the cost of the dam, and you adjust that on a basis of inflation, and the consumer price index and other economic indicators, and the dam is approximately the same price as Plan B. But more importantly, the dam is never going to be built. It''s a moot point."