2. Background
California-American Water Company (Cal-Am) applied for a Certificate of Public Convenience and Necessity (CPCN) in order to provide a solution to the long-standing constraints on water supply on the Monterey Peninsula. This effort is known as the Coastal Water Project. Cal-Am is under order from the State Water Resources Control Board to cease diverting water to which it has no legal rights, determined in 1995 to be 10,730 acre feet of water per year from the Carmel River. The utility must also replace 2,975 acre feet of water per year in allocations from the Seaside Basin.2
The Commission certified the Final Environmental Impact Report for the Coastal Water Project and various alternative projects in Decision (D.) 09-12-017. The Commission considered Cal-Am's request for a CPCN and a proposed Settlement Agreement regarding a joint proposal by Cal-Am, the Marina Coast Water District (MCWD), the Monterey County Water Resources Agency (MCWRA), the Monterey Regional Water Pollution Control Agency, Surfrider Foundation, the Public Trust Alliance, and Citizens for Public Water3 to construct, operate, and maintain a regional desalination plant, source wells, and distribution facilities. The Commission approved the Settlement Agreement and issued a CPCN to Cal-Am for the Regional Project in D.10-12-016.4
On October 14, 2011, Cal-Am filed a Petition for Clarification and Modification of D.10-12-016 (Petition to Modify), stating that because certain impediments had occurred, it was possible that the Regional Desalination Project could be delayed or replaced with a different project. Cal-Am requested that the Commission confirm that the Cal-Am only facilities could still be built and that the costs could still be recovered, regardless of the ultimate outcome of the Regional Desalination Project. Cal-Am contended that, with the exception of the transfer pipeline, the facilities approved in D.10-12-016 that were to be built by Cal-Am would still be necessary and should be designated as used and useful for ratemaking purposes.
The assigned Commissioner and ALJ issued an Amended Joint Scoping Memo Ruling on October 27, 2011. The Division of Ratepayer Advocates (DRA) and MCWD filed responses on November 14, 2011. With permission of the assigned ALJ, Cal-Am and MCWD filed replies to the responses on
November 28, 2011. The ALJ issued a Ruling on December 14, 2011 convening a prehearing conference (PHC) on January 24, 2012 to discuss the Petition to Modify and to consider the timing for Phase 3 (cost allocation and rate design) as discussed in the Joint Amended Scoping Memo Ruling. On January 18, 2012, Cal-Am filed a compliance filing to provide an update to the mediation efforts of Cal-Am, MCWD, and the MCWRA. MCWD filed a PHC statement on
January 23, 2012.
At the request of the ALJ, Cal-Am filed a compliance filing and status report on March 1, 2012. MCWD and MCWRA filed separate status reports. On March 15, 2012, Cal-Am and MCWD filed responses to each party's status report. MCWRA also filed a response to both status reports. On March 20, 2012, Public Trust Alliance moved to request leave to file a late response to the status reports which was granted by the assigned ALJ. On February 13, 2012, Water Plus filed a notice of intent to claim intervenor compensation which is denied below due to the closing of this proceeding. On April 2, 2012, LandWatch Monterey moved for party status and for leave to file a notice of intent to claim intervenor compensation. That combined motion is denied below for the same reason. On April 23, 2012, Coalition of Peninsula Businesses moved for party status and that motion also is denied below due to the closing of the proceeding.
2 The State Water Resources Control Board issued Order WR 95-10 in 1995 and
Order 2009-0060 in 2009 (Cease and Desist Order). The latter order requires Cal-Am to undertake additional measures to reduce its diversions from the Carmel River and to terminate all such diversions no later than December 31, 2016. In 2006, the Monterey County Superior Court issued a final decision regarding adjudication of water rights of various parties who use groundwater from the Seaside Basin (California American Water v. City of Seaside et al. Case No. 66343).
3 By letter dated July 25, 2011, Citizens for Public Water informed parties to the Settlement Agreement that Citizens for Public Water rescinded its support for the Regional Desalination Project. This letter was appropriately lodged in the Correspondence File by the assigned Administrative Law Judge (ALJ).
4 We also approved D.11-09-036, which modified D.06-12-040 by: 1) setting the Special Request Surcharge at 15% rather than 10%; and 2) setting 4.00% as the carrying costs for the Coastal Water Project Memorandum Account.
