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California American Water's got a new proposal for Monterey Peninsula's future water supply in the wake of the failed Regional Desalination Project.

In an application filed today with the California Public Utilities Commission, Cal Am unveils the Monterey Peninsula Water Supply Project, namely:

-A 5,500-acre-foot-per-year desal plant in North Marina, with energy-recovery devices to lower power consumption, and slant wells to draw water from under the sea floor;

-Expansion of the current Aquifer Storage and Recovery program, in partnership with the Monterey Peninsula Water Management District, to produce about 900 acre-feet per year;

-Water purchases from the Groundwater Replenishment Project being undertaken by MPWMD and the Monterey Regional Water Pollution Control Agency.

Cal Am has asked the CPUC to permit an expansion of the desal plant to 9,000 acre-feet per year in case the groundwater recharge project is delayed. Construction of both the desal and GWR facilities would have to begin by early 2015 in order to meet state deadlines, the press release states.

The desal plant and related infrastructure would cost $320 million to $370 million, by Cal Am estimates. Cal Am proposes to finance the project with State Revolving Fund loans and a customer surcharge, rather than through the rate base. The surcharge would begin at 30 percent in 2012 and grow to 60 percent by late 2014, hiking up the average water bill by $26.50 to $38.50 per month.

"The surcharge will not be subject to the company’s authorized rate of return and both the surcharge amount and the SRF loans would be exempt from real property taxes providing customers an estimated annual savings of $2.5 million," the press release states. "Over the next several years, the company estimates it will need to approximately double its annual revenues in order to fund the Monterey Peninsula Water Supply Project."

The process is subject to CPUC approval, which is expected to take about a year and include public hearings and environmental review.

Cal Am is under state orders to reduce its Carmel River pumping 70 percent by late 2016. Company President Rob MacLean will present details of the proposal tonight at the Monterey Peninsula Regional Water Authority meeting: 6pm, Monterey City Hall, 580 Pacific St., Monterey.