8. Disputed Costs
The assigned ALJ directed Cal-Am to provide an accounting of costs expended thus far on the Regional Desalination Project. Thus far, $26,568,651 has been approved for recovery in pre-construction costs related to the Coastal Water Project. In A.11-06-030, Cal-Am is requesting approval of an additional $5,354,229 in pre-construction costs accrued in 2010. Cal-Am is also tracking post 2010 costs which totaled $687,167 as of January 31, 2012. These are not trivial amounts. Cal-Am has recovered $14,426,284 from its customers through its approved Special Request I surcharge. Cal-Am is required to file separate applications to seek recovery of these costs.20
The amounts described above do not include amounts lent to MCWD and MCWRA under the Water Purchase Agreement or under the Reimbursement Agreement approved in D.10-08-008. According to Cal-Am, MCWD and MCWRA owe Cal-Am $6,244,852 and $1,946,219, respectively. MCWD and MCWRA may dispute these amounts and do dispute the interpretation of the requirements in the Water Purchase Agreement and the Reimbursement Agreement. The parties have stated that they are meeting to discuss these issues and to determine whether they can be settled or must be litigated. We encourage the parties in their settlement discussions and can assign a neutral ALJ to assist in the mediations. To the extent that the disputed costs and associated cost recovery must be addressed by this Commission, Cal-Am should file a new application.
20 On March 31, 2012, the Commission's Executive Director granted Cal-Am's request for a six-month extension of time to file its application to seek recovery of
pre-construction costs accrued in 2011.
