2. Procedural Background
This proceeding is a successor proceeding to Application (A.) 97-03-052, which was California-American Water Company's (Cal-Am) application for a certificate of public convenience and necessity (CPCN) to construct the Carmel River Dam and Reservoir. Because of several intervening events, including legislation directing the Commission to identify a long-term water supply contingency plan to replace the diversions from the Carmel River,1 Decision (D.) 03-09-022 dismissed that application without prejudice and expressly directed Cal-Am to file a new application to seek Commission authorization to pursue the Coastal Water Project.
On September 20, 2004, Cal-Am filed A.04-09-019 which, among other things, sought the issuance of a CPCN to construct and operate its proposed Coastal Water Project and also sought approval to increase rates to fund the proposed project. Because the application did not include a Proponent's Environmental Assessment (PEA), a necessary precursor to evaluating the merits of the proposed project and associated proposed rate increase, the assigned Administrative Law Judge (ALJ) suspended the procedural process for this matter until such time as the PEA was filed.
On July 14, 2005, Cal-Am filed an amended application, its PEA, and a Motion for Interim Rate Relief. Cal-Am concurrently began the Public Notice process required by Rule 24 of the Commission's Rules of Practice and Procedure (Rules).2 On July 29, 2005, the Division of Ratepayer Advocates (DRA)3 and the Monterey County Water Resources Agency (MCWRA) filed responses to the motion. On August 8, 2005, Cal-Am filed a reply to the responses, which was supplemented on August 10, 2005. On August 15, 2005, several parties filed protests to Cal-Am's amended application.4 On August 25, 2005, Cal-Am filed a reply to the protests.
On September 6, 2005, the assigned ALJ determined that there should be two distinct phases to this proceeding. Phase 1 addressed interim rate relief and the Commission has issued D.06-12-040, which authorized Cal-Am to implement the Special Request 1 Surcharge commencing January 1, 2007, to collect authorized preconstruction costs. That decision also authorized Cal-Am to implement the Special Request 2 Surcharge if the Commission issues a CPCN for the Coastal Water Project, or alternative long-term supply solution, in Phase 2 of this proceeding.5
On March 29, 2006, the assigned ALJ issued a ruling indicating that when more information was available about the schedule for the environmental review documents, a scoping memo ruling would be issued for Phase 2. The Draft Environmental Impact Report (DEIR) was issued on January 30, 2009. A prehearing conference was held on March 13, 2009, and the Assigned Commissioner and ALJ's Joint Scoping Memo Ruling was issued on March 26, 2009. Facilitated cost workshops were held on July 7 and 8, 2009, and public participation hearings were held in Monterey and Seaside on July 13 and July 14, respectively. The schedule set forth in the Scoping Memo Ruling was subsequently revised by ALJ Ruling on July 21, 2009, and again on August 10, 2009, in response to the Marina Coast Water District's (MCWD) motion to address the environmental review documents in a decision separate from the decision addressing the remainder of the CPCN issues. Because issuance of the Final Environmental Impact Report (FEIR) was delayed by 30 days, the schedule was again revised on September 14, 2009.
Finally, on October 30, 2009, on behalf of itself, Cal-Am, MCWRA, and MCWD filed and served a motion on October 30, 2009 requesting to hold the procedural schedule in abeyance to afford the parties additional time to conduct settlement discussions. Parties filed and served responses on November 4, 2009. On November 6, 2009, the ALJ issued a ruling that extended the procedural schedule, required the parties to participate in alternative dispute resolution, required Cal-Am to convene a settlement conference by year-end 2009, required Cal-Am to provide joint status reports on a biweekly basis, and scheduled a formal status conference for January 4, 2010.
1 Assembly Bill 1182, Chapter 797, Stats. 1998.
2 Rule 24 is now codified as Rule 3.2(b), (c), and (d) in the Commission's most recent publication of its Rules of Practice and Procedure.
3 DRA was formerly known as the Office of Ratepayer Advocates.
4 Protests were filed by the following parties: DRA, the MCWRA, the Monterey Peninsula Water Management District, (MPWMD), the Pajaro/Sunny Mesa Community Services District, Public Citizen, and Independent Reclaimed Water Users Group.
5 The Commission has also issued D.08-01-007, which adopted a settlement between Cal-Am and DRA, whereby Cal-Am was authorized to recover $9.31 million as compensation in full for all Coastal Water Project preconstruction costs incurred through December 31, 2006. Cal-Am continues to track preconstruction costs and files annual applications to request recovery of these costs. Cal-Am filed A.08-04-019 to recover preconstruction costs incurred in 2007, and the Commission approved a settlement in D.08-12-034 that allows Cal-Am to recover $3.74 million for those costs. Cal-Am has also filed A.09-04-015, which is currently pending before the Commission.
