Morro Bay Mutual Water

by Kari Olsen

Synopsis:  Morro Bay Mutual Water Company, a PG&E affiliate located on Morro Bay Power Plant (MBPP) property, supplies water to the PG&E substation and the Dynegy power plant.  The water is drawn from wells on power plant property and is used for domestic purposes, irrigation, and fire protection.  The power plant's riparian rights to the water source under its property are superior to those of the City of Morro Bay because it began using the water began before  Morro Bay was incorporated as a City.  Resident concerns include the apparent fact that even in a drought situation, the City has no control over the water company's use of a water source that lies within City limits.  

Morro Bay Mutual Water Company, a PG&E affiliate located on Morro Bay Power Plant (MBPP) property, supplies water to the PG&E substation and the Dynegy power plant.  The water is drawn from wells and is used for domestic purposes, irrigation, and fire protection.  Discussion of a permit request at the May 3, 2010 Morro Bay Planning Commission meeting was the first time most Morro Bay residents had heard of the facility, which had requested a Coastal Development Permit for the abandonment of a well, and the drilling of another to replace it.

The facility currently provides about 5,150 gallons of water per day to its "customers."  According to Robert Schultz, Morro Bay City Attorney, "this usage is much lower than it has been in the past, generally because there are fewer people on site."  In 1990, about 140 people worked at the power plant. At present, the plant has 43 employees.  Schultz also stated that, "The Mutual Water Company maintains wells, piping, tanks, does regulatory required testing etc and charges it's two 'customers' (now PG&E and Dynegy) in proportion to how much water they use (currently 95% Dynegy and 5% PG&E). "

A document filed with the California Public Utilities Commission by PG&E indicates that Morro Bay Mutual Water is, "A non-profit mutual benefit corporation formed to jointly hold property rights such as easements in connection with the divestiture of the Morro Bay Power Plant." The corporation was formed on April 15, 1998.

Old news reports and charts of the area indicate that an underground river runs under power plant property.   According to the May 3 Planning Commission meeting minutes, Schultz advised the Planning Commissioners that the riparian rights of the power plant are superior to the City's rights.  A discussion of riparian rights published on the State Water Resources Control Board (SWRCB) website indicates that riparian rights are assigned priority according to the order in which claims to the water were established. Mr. Schultz has indicated that the rights to the water that runs beneath power plant property were established prior to Morro Bay's incorporation as a city.

The SWRCB site indicates that, "A riparian right entitles the landowner to use a correlative share of the water flowing past his or her property. Riparian rights do not require permits, licenses, or government approval, but they apply only to the water which would naturally flow in the stream. Riparian rights do not entitle a water use to divert water to storage in a reservoir for use in the dry season or to use water on land outside of the watershed. Riparian rights remain with the property when it changes hands, although parcels severed from the adjacent water source generally lose their right to the water" 

According to Schultz, "The only connection outside the MBPP property boundaries is an interconnection to the city system so that the City can use their wells to provide additional water to the city system in an emergency drought situation. Pursuant to their permit conditions no other water services can be provided outside the MBPP property boundaries." In 1990, the City of Morro Bay established a temporary contract with PG&E to allow the City to use the wells under specific conditions.  That agreement was extended once, and expired in February, 1991. In a July 2010, in response to a resident inquiry, Schultz indicated that City staffers have been unable to locate any more recent contracts with the water company.

In 1990, the City of Morro Bay established a temporary contract with PG&E to allow the City to use the wells under specific conditions.  That agreement was extended once, and expired in February, 1991. In a July 2010, in response to a resident inquiry, Schultz indicated that City staffers have been unable to locate any more recent contracts with the water company.

Morro Bay Mutual Water Company does not appear in recent Morro Bay Consumer Confidence Reports, the annual municipal water quality reports sent to residents. However, according to a California Department of Public Health spokesperson, municipal water systems need not report sources unless they are used within the year in which the reports are produced.

 Resident concerns regarding the water company include the apparent fact that, even in a drought situation, the City has no control over the water company's use of a water source that lies within City limits.   At the Planning Commission hearing, Commissioners Lucas and Diodati expressed concern for the environment and asked if they could condition the well permit on the applicant's agreement to conserve water.  The response from the City Attorney was that no such condition can be imposed.