11. Region III Issues
11.1. Wrightwood System Water Supply
Initially, Golden State's A.08-07-010 included a request for authorization to construct the Wrightwood Project. The Wrightwood Project is a water exchange program with the Sheep Creek Water Company (SCWC). The exchange program requires certain facilities to be constructed that allow SCWC to provide water to the town of Wrightwood and Golden State would provide replacement water to SCWC. Negotiations for the exchange program were ongoing over a period of years. Prior to the start of the evidentiary hearing phase in the instant application, DRA moved to have the issue removed from the proceeding since the water exchange negotiations had not resulted in a finalized contract. On April 17, 2009, the ALJ ruled that the Wrightwood Project would be removed from consideration, but water supply adequacy would remain as an issue in A.08-07-010.
Golden State states that normal year well capacity in Wrightwood is 2,005 gpm and that is sufficient to meet its MDD of 886 gpm. However, Golden State contends that during dry year conditions, the standing groundwater levels are too low to meet system demand in Wrightwood and the result is that well capacity drops to 669 gpm, a deficit of 217 gpm. (Golden State Ex. 8, App. 5, at 115-16.) Golden State defines "dry year" as a year when supply did not meet demand, and estimates dry year minimum capacity by analyzing well flow data during the dry year.19
DRA argues that Golden State's dry year calculations underestimate the wells' capacity. For example, Golden State's estimate for the Bobolink Well is 100 gpm for dry years. DRA analyzed the Bobolink well data for 91 pumping days. DRA states that on only 5 days during the 91-day period was Bobolink's pumping capacity below 125 gpm. The average supply was 245 gpm. DRA also questions Golden State's estimates for the Heath Creek Well #7. DRA asserts that since Heath Creek Well #7 did not start production until after the first dry year, Golden State's dry year estimate for Heath Creek Well #7 is suspect.
DRA calculates well capacity for dry years based on the average production of the Golden State wells in Wrightwood. Included in DRA's analysis is the Evergreen Well that was not in existence during the dry years when water had to be trucked into Wrightwood. DRA includes the Evergreen Well in its calculations and estimates its average dry year production by using its average production during the low precipitation year of 2007. DRA's estimate for the Evergreen Well is 212 gpm. When added to DRA's estimated Wrightwood dry year water supply of 679 gpm, the total is 891 gpm during a dry year. DRA states that this exceeds Golden State MDD of 886 gpm.
Golden State objects to DRA's dry year calculation because it uses low precipitation years in its estimate of dry year capacity for the Evergreen Well. Golden State asserts that precipitation, although tied to well capacity, cannot be directly linked to dry years. Golden State claims there is a lag between low precipitation and dry years because it takes time for water to reach the water basin to recharge it or for demand and the lack of precipitation to deplete the groundwater supply. In essence, Golden State claims the lag time between rainfall and groundwater recharge could result in low precipitation years having sufficient water supply and high precipitation years having a water supply deficit.
DRA asserts that two new wells, Heath Creek Well #7 and Evergreen Well, have eliminated the water supply deficit. DRA states that even though there has been lower precipitation since those wells went into production, there has been no supply deficiency.
Golden State again refers to the lag time between precipitation and groundwater recharge. Golden State also refutes DRA's claim regarding the new wells adding to supply stating that the water is all drawn from the same supply source. Golden State refers to new wells as additional straws drawing water from the same bucket.
DRA recommends that Golden State address water leaks and institute conservation measures as a means to improve water supply. DRA cites the Master Plan water loss rate for Wrightwood of 17.39% and leaks in its reservoir tank that have been known since 2000.
Golden State asserts that DRA water loss figures do not accurately portray Wrightwood's water loss and a more accurate measure is water lost per mile of pipe.
It is uncontested that Wrightwood had two periods in which there was insufficient water to meet system demand and water had to be trucked in to Wrightwood. Wrightwood is a small mountain community at 5,680 to 6,600 feet above sea level, accessible by a two-lane highway. Given Wrightwood's location, trucking water is a less than optimal solution.
Golden State and DRA differ on how to estimate dry year system capacity. DRA's calculations are based on averaged actual water produced during the time when water was trucked-Golden State's definition of a dry year. The proxy DRA uses to determine the Evergreen Well production is reasonable. Absent a better method to calculate dry year production, DRA used the best information available.
Golden State argues that dry years are the years when supply cannot meet demand and that DRA's estimate should be rejected because using a low precipitation year is inaccurate due to the lag time between precipitation and changes in the groundwater level. However, Golden State did not provide a time frame for the lag time between precipitation and groundwater basin recharge or link precipitation amounts to existing or changed groundwater levels. Golden State provides no data to develop a more accurate estimate of dry year production or predict when a dry year might occur again.
Although Golden State did estimate Evergreen Well's dry year production as a 40% reduction, it provided no basis for the estimate. Interestingly however, Golden State did state that the Evergreen Well went online concurrent with a significant amount of rainfall and shortly thereafter, the standing water level in Wrightwood wells increased by 40 feet. There does not appear to have been a significant lag time between the rainfall and the increased groundwater level at that time.
Golden State also contends that new wells do not add to the water supply because wells are merely straws drawing from the same bucket of water. However, as DRA asserts, once the Heath Creek Well #7 and Evergreen Well went into production, the supply to Wrightwood has been adequate to meet demand, even during long periods of low precipitation. In fact, even though there has been less precipitation in the years since Heath Creek Well #7 and Evergreen Well went online than during the dry years, the water supply has been sufficient to meet MDD.
Golden State has not met its burden of proof regarding inadequate water supply in Wrightwood. Golden State provided no guidelines to predict when a dry year will occur or to estimate the lag time between precipitation and groundwater recharge. Wrightwood has not experienced a dry year since 2004 even though there have been three successive years of low precipitation.
The Wrightwood Project issue was removed from this proceeding by the ruling; however, the GRC application still includes the request for construction funds. Therefore, Golden State's request for $11,313,039 for construction of the Wrightwood Project is denied.
11.2. Conservation Expenses
Golden State requests $738,644 for Region III 2009 conservation expenses.
DRA objects to Golden State's calculation of conservation expenses. DRA requests the Commission to authorize only $463,000 as the conservation expenses for 2009. DRA asserts that $463,000 is the appropriate conservation expense figure because it is derived from the attrition year methodology in the rate case plan rather than the forecasted method used by Golden State.
Golden State objects to DRA's line item application of the attrition year methodology and cites DRA's lack of objection to other line items using the same forecasted methodology. Golden State claims its forecasts were calculated using the previous year's expenses and are based on the Commission's Water Action Plan and the California Urban Water Conservation Council's BMP.
Golden State's forecasts for conservation costs are based on actual previous expenses, the Commission's Water Action Plan and the recommendation of the California Urban Water Conservation Council. Golden State's conservation costs are reasonable and its request for $738,644 for conservation expenses in Region III is granted.
19 Wrightwood experienced "dry years" in July 2002 through January 2003 and again in July and August of 2004.
