Background
The ratemaking treatment for the abandonment of Hill Street Water Treatment Facility (Hill Street) and the replacement water agreement were both deferred to this proceeding in Decision (D.) 10-06-031 in Application (A.) 09-08-004. (See Procedural History.) The Commission otherwise approved the water purchase agreement between Golden State Water Company (Golden State) with Contra Costa Water District (Contra Costa), finding that the replacement water agreement was the "preferred alternative." (Findings of Facts (FOF) 4 and 5.) The reasons and need to abandon Hill Street have already been adjudicated and need not be repeated in full here. After determining Hill Street cannot provide drinkable water1 (FOF 1 and 3), and must therefore be abandoned, D.10-06-031 found that, of the various replacement options, the preferred option is Golden State's agreement to acquire excess capacity available from Contra Costa.2 The approved agreement requires Golden State to prepay Contra Costa the full agreement cost of $4.7 million in capacity charges in either a lump sum or over four years. (D.10-06-031 at 19.)3
1 Specifically, the California Department of Public Health ordered Golden State to cease violating California Health and Safety Code § 11655 and California Code of Regulations § 64533. (See, Ex. G-1 at 5 in A.09-08-004.)
2 Specifically, water would be provided by Contra Costa from its Randall Bold Plant (see, Ex. G-1 at 2-3 in A.09-08-004), however, the specifics of the plant are not germane: what is essential is that Golden State is buying water from Contra Costa pursuant to a negotiated long term agreement. It does not matter where or how treated water gets from Contra Costa; only that Contra Costa provides it to Golden State to replace the defunct Hill Street facility.
3 Golden State filed Advice Letter 1428-W which included an executed copy of the agreement with Contra Costa. Resolution W-4877 approved the advice letter. The Resolution noted that the ratemaking treatment of the agreement was deferred to this proceeding. On July 11, 2011 Golden State informed the Division of Water and Audits that the transaction was completed.
