The Monterey Peninsula mayors' water authority decided Thursday night to back California American Water's proposed desalination plant project, provided company officials agree to a series of conditions.

By a unanimous vote, the regional water authority agreed that Cal Am's project is the furthest along and could be worthy of the mayors' backing if it includes a number of changes designed to lower costs through the use of cheaper public financing, offer independent oversight through a public governance proposal, and provide a viable and concurrent back-up plan in case the current proposal falls through.

Carmel Mayor Jason Burnett lauded the vote as a "significant step forward," and said he heard someone refer to the meeting as the most important on the Peninsula in 30 years.

Burnett said he believed the reason past efforts to resolve the water supply issue had failed was the lack of a united front.

"Now we have a very strong united front, and hopefully that will help us make a persuasive argument to the (state Public Utilities Commission). Now we have a lot of work to do to see this through to completion."

Only Sand City Mayor David Pendergrass questioned the conditions at any length, and Seaside Mayor Ralph Rubio asked how far the authority would, or could, go in holding Cal Am accountable for all or even most of them.

Burnett said the county Board of Supervisors and the Monterey Peninsula Water Management District board will be asked to approve the authority's policy statement.

Cal Am spokeswoman Catherine Bowie said company officials were still considering the proposed conditions and would respond at some point.

The authority, formed nearly a year ago, spent several months engaged in a comparison study of three desal proposals: Cal Am's north Marina project and two projects in Moss Landing. The mayors are poised to submit testimony later this month to the PUC, which is considering Cal Am's project permit.

The Peninsula is facing the impending loss of its main source of potable water because of a state-ordered cutback in pumping from the Carmel River that is slated to take full effect at the start of 2017.

The authority made its decision before a near-capacity crowd at Monterey City Hall. Many of those in attendance spoke in favor of backing the Cal Am project, with most also agreeing with the authority's conditions, particularly in regard to a back-up plan.

Supporters included Peninsula hotelier John Narigi, who served on the authority's technical advisory committee, and other hospitality and business leaders.

But a few speakers, including Monterey Councilwoman Libby Downey and Councilman Alan Haffa, urged the authority to take a stronger stance on the conditions and continue to leave the door open for the alternatives.

During the public comment period, Peninsula water activist George Riley told the authority Cal Am's project still had too many hurdles and should have included public ownership.

He said he would be spending his time on the water management district's quest for an alternative, parallel desal project. Riley, who also served on the authority's technical advisory committee, then walked out of the meeting with Malek Safwat of Ratepayers First and several others.

A document considered by the authority essentially set out the reasons for supporting Cal Am's project over the others and the conditions attached to that support.

In the paper, written largely by Burnett, the authority argued that Cal Am's project is clearly further along in the review process, and employs a superior source-water intake method more likely to get through permitting because it is preferred by state officials.

Cal Am, Burnett said, is the only one of the three entities to clearly demonstrate the ability to finance a project and have adequate capital to complete the permitting phase.

Burnett suggested that too many questions remained regarding the other two proposals — DeepWater Desal and the Regional Desal Project, formerly known as the People's Desal Project — and their backers. Burnett said the authority had repeatedly asked for more detailed information from both entities, and was rebuffed.

He said there hadn't been enough information offered to determine the exact scope of the DeepWater Desal proposal and whether the Regional Desal Project was still viable.

However, Burnett said the authority shouldn't offer its backing for Cal Am's project unless the company agreed to several "non-negotiable" conditions.

Cal Am would be required to fully address all concerns pertaining to its plans to pump desal source water from the Salinas Valley groundwater basin — staunchly opposed by powerful agricultural interests — and proceed with test wells and other work designed to prove whether its intake plans are technically and legally feasible.

The company would also be required to collaborate with local public agencies in a bid for a quicker, simultaneous permitting process.

Cal Am would have to commit to a "robust" contingency plan, Burnett said, including a plan for source water outside the Salinas Valley basin, concurrently with its test well efforts.

To lower the estimated project cost, the paper called for requiring Cal Am to accept a $100 million public contribution designed to lower the project's interest rate and rate of return, and to seek lower-cost power. Burnett said that would lower the estimated cost of Cal Am's project to within about 5 to 10 percent of the alternatives.

In addition, Cal Am would be required to submit written proof that it could secure low-cost state loan funding or agree to allow the authority or the Monterey Peninsula Water Management District to seek that portion of the financing.

And Cal Am would have to limit its use of a planned $99 million surcharge on Peninsula customers' water bills to lower-risk portions of the project to protect the ratepayers' interests.

Finally, Cal Am would have to accept a public oversight plan that would include a three-person committee with members representing the Peninsula cities, the county and the water management district, which would have a say over virtually every aspect of the project.