ALJ/MOD-POD-LRR/hkr Date of Issuance 4/20/2009
Decision 09-04-035 April 16, 2009
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
In the Matter of the Order Instituting Investigation into the Water and Service Quality of Alco Water Company (Alco). |
Investigation 07-06-020 (Filed June 21, 2007) |
(See Attachment for a List of Appearances.)
MODIFIED PRESIDING OFFICER'S DECISION
FINDING IT IN THE PUBLIC INTEREST FOR ALCO
TO SERVE ADDITIONAL CUSTOMERS
IN ITS NEWLY FILED SERVICE AREA,
TAKING STEPS TO IMPROVE SERVICE QUALITY
AND FINING ALCO FOR DISCOVERY ABUSES
TABLE OF CONTENTS
Title Page
MODIFIED PRESIDING OFFICER'S DECISION FINDING IT IN THE PUBLIC INTEREST FOR ALCO TO SERVE ADDITIONAL CUSTOMERS IN ITS NEWLY FILED SERVICE AREA, TAKING STEPS TO IMPROVE SERVICE QUALITY AND FINING ALCO FOR DISCOVERY ABUSES 22
2. Issues Before the Commission 66
2.3. Water Quantity Needed to Serve Existing and New Customers 1818
2.6. Miscellaneous Issues 2929
Attachment
MODIFIED PRESIDING OFFICER'S DECISION
FINDING IT IN THE PUBLIC INTEREST FOR ALCO
TO SERVE ADDITIONAL CUSTOMERS
IN ITS NEWLY FILED SERVICE AREA,
TAKING STEPS TO IMPROVE SERVICE QUALITY
AND FINING ALCO FOR DISCOVERY ABUSES
This decision finds that Alisal Water Company, doing business as Alco Water Company (Alco), has water of sufficient quality and quantity and that it is in the public interest to allow Alco to serve additional customers in the service area that was added to Alco's existing certified service area through Advice Letter 107. However, to provide heightened oversight of Alco's operations, and to improve its customer service and compliance with General Order 103, this decision orders Alco to improve its customer service by revising its existing customer complaint tracking system or developing a new one, and by instituting a consumer information program with the aid of the Commission's Public Advisor. Pursuant to Pub. Util. Code § 2107, Alco is fined $5,000.00 for abuse of the discovery process in this proceeding. Alco is also required to file a General Rate Case in compliance with the provisions of the Rate Case Plan for Class A water companies. This proceeding is closed.
1. Background
Alco is a Class B water company regulated by the California Public Utilities Commission (Commission) serving approximately 8,800 customers in the eastern portion of the City of Salinas (Salinas). Alco was originally certified as Adcock Water Company in December 1934. In January 1953, Adcock Water Company was transferred to Alisal Water Corporation and began doing business as Alco Water Company.
Salinas updated its General Plan in 2002 and identified three future growth areas: the West Area, Central Area and East Area. These areas are known as the Salinas Future Growth Area (SFGA). On March 23, 2006, Alco filed Advice Letter (AL) 107, seeking an extension of its existing service territory. The expansion area sought by Alco in AL 107 is a portion of the Central Area and all of the East Area identified in the Salinas General Plan. Both areas identified in Alco's AL 107 are contiguous to Alco's Salinas district and not currently served by a public utility of like character as defined in General Order (GO) 96-B and Pub. Util. Code § 1001. AL 107 also sought to expand Alco's service territory to encompass the Bubar, Chemical Lime and Rancho Cielo properties, whose owners or representatives specifically requested Alco to provide service.1 In total, the SFGA and the three properties encompass 2,179 acres comprising approximately 7,465 lots, developable over 20 years.
On April 6, 2006, California Water Service Company (Cal Water) filed a protest to AL 107, requesting it be rejected as premature since Alco had not been asked to provide service to the SFGA. On April 19, 2006, Salinas filed a late protest similar to that of Cal Water. The Salinas protest also questioned Alco's ability to serve additional territory based on a 1990 lawsuit with a developer and a 1997 federal court judgment requiring Alco to make specific improvements to its Salinas district system.
The Division of Water and Audits (DWA) accepted Alco's AL 107 on April 25, 2006, essentially rejecting Cal Water's and Salinas's protests. On May 3, 2006, Cal Water filed a request for full Commission review of DWA's disposition of AL 107, pursuant to GO 96-B, Rule 5.1.
By Resolution W-4630, dated April 12, 2007, the Commission affirmed DWA's disposition of AL 107. However, the resolution ordered staff to prepare an Order Instituting Investigation (OII) examining Alco's customer relations, customer service, and service and water quality, and to determine if Alco's provision of water service to the newly filed territory is consistent with the public interest. The resolution affirmed the authorization for Alco to extend non-potable water service to the Rancho Cielo, Chemical Lime, and Bubar properties, but ordered Alco not to extend service to additional customers in the new service area without Commission approval.
In the meantime, on April 10, 2007, Cal Water filed Application (A.) 07-04-010 for authority to extend its service territory into the portion of the SFGA that is the subject of Alco's AL 107. Alco filed a timely protest to Cal Water's application and asked the Commission to dismiss the application
On June 21, 2007, the Commission issued an OII commencing investigation (I.) 07-06-020 to determine if Alco is competent and capable of serving additional water customers in Salinas and whether such service is in the public interest. I.07-06-020 was also to determine if Alco has violated any order, law, regulation or standard regarding its water and service quality and if so, whether any fines or penalties should be imposed to ensure that Alco's service is in the public interest. The Commission ordered the DWA to prepare a report on Alco's water and service quality and present it in the proceeding.
On July 19, 2007, a ruling by the Administrative Law Judge (ALJ) denied Alco's motion to dismiss Cal Water's application to extend its service into the SFGA. The ruling coordinated A.07-04-010 with I.07-06-020 since both proceedings involve a desire to serve the SFGA. Cal Water's application is inactive pending the outcome of this investigation.
On August 30, 2007, a prehearing conference was held in I.07-06-020 to discuss the scope of the proceeding, set a schedule, and determine the category of the proceeding and the need for hearings. At the PHC, it was announced that the Division of Ratepayer Advocates (DRA) would assume the DWA role in preparing the report ordered by the OII.
The Scoping Memo and Ruling of the Assigned Commissioner and Administrative Law Judge was issued in I.07-06-020 on October 15, 2007. The scoping memo determined the scope and schedule of the investigation and set two public participation hearings. The scoping memo included specific questions to determine whether Alco's water and service quality were sufficient to serve an expanded customer base. By email on December 20, 2007, DRA sought a five-week extension to the deadline for filing the report based on the unexpected and necessary absence of a key member of the project team. Parties stipulated to the extension. On January 10, 2008, an ALJ ruling granted DRA's request for an extension, but limited the extension to three weeks and limited discovery to only an additional week. The ruling also extended by three weeks the timetable for all other milestones in the proceeding. The evidentiary hearings were reset to begin on March 17, 2008.
Two public participation hearings were noticed and held in Salinas on February 21, 2007. Both the afternoon and evening sessions were well attended with many Salinas residents relating their water and service quality experiences as Alco customers.
On March 14, 2008, three days before the evidentiary hearings were to begin, the parties contacted the ALJ and requested time to consider Alternative Dispute Resolution (ADR). The request was granted, but a vote of approval from the Salinas City Council was required before the parties could enter into ADR. The Salinas City Council met on Tuesday evening, March 18, 2008 and rejected ADR. Because ADR was rejected two days into what would have been the evidentiary hearings, it was necessary to reschedule the evidentiary hearings. The hearings were reset to begin on May 12, 2008, the earliest date available, but resulting in a six-week delay in the proceeding. All subsequent filing dates were also pushed out. Due to the extensions of time granted to the parties, it was impossible for this proceeding to be resolved within the 12-month statutory deadline which expired on June 20, 2008. On May 16, 2008, the Commission issued an order extending the statutory deadline to December 22, 2008.
Evidentiary hearings were held May 12 - 16, 2008. Initial briefs were filed on June 30, 2008 and reply briefs were filed on July 22, 2008.
On December 4, 2008, the Commission issued Resolution W-4725, which authorized Alco to supply potable water to five properties, including the Rancho Cielo property, in the service area added to Alco's existing certified service area through its AL 107. Resolution W-4725 reiterated that Alco shall not provide service to additional customers in its new service area without Commission approval. On December 18, 2008, the Commission issued an order extending the statutory deadline for this proceeding to April 30, 2009.
1 The Bubar, Chemical Lime and Rancho Cielo properties are not within the SFGA.
