Chevron to Pay City Another $550,000

could be headed San Juan Capistrano's way in the wake of a leak of potential carcinogen into the city's drinking water.

Under an agreement signed in March, the energy corporation is scheduled to write a check for $550,000 once the city files notice that it has installed massive filters designed to remove the methyl tertiary butyl ether, MTBE, from the local water supply.

Installed only recently, the filter has reportedly helped boost the amount of water the city's treatment plant produces daily. Now that it's online, the city is tapping two wells that it turned off upon being contimated with the gasoline additive three years ago.

On Tuesday, West Curry, San Juan Capistrano's assistant utilities director said, "in this quarter alone we will have made more water than we did last year."

At the time of the settlement, Chevron agreed to a seperate payment of $1.5 million to recover costs associated with the leak of MTBE.

The settlement also states that Chevron could pay an additional $1.6 million in a series of payments if certain milestones are met, among them a benchmark to install a granular actived carbon filtration system.

The city installed a GAC on Aug. 24, which according to city report, has since been treating water 24/7.

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In August, the plant pumped an average of 3.46 million gallons of water per day. In October, the daily production rate jumped to averaging 4.11 million gallons. The goal is 5.2 million gallons daily.

The Utilities Commission filed a notice of completion on Tuesday, and the City Council is set to do the same next week, which it said should trigger the payment.

Other milestones include:

• $50,000 if Chevron's name is removed from San Juan Capistrano's "Chevron MTBE Water Commodity Surcharge"—a surcharge levied by the City Council in the fall of 2010 to pay for the treatment of MTBE. 
• $500,000 if the city "actively" participates in a meeting with the San Diego Regional Water Quality Control Board and Chevron to discuss the city's operation of its own granular activated carbon treatment system. 
• $500,000 within 45 business days after the city gives Chevron notice that it has operated the treatment system for one year. During that year, the city is obligated to pump the Dance Hall well at least 80 percent of the time.