8. Assignment of Proceeding
Geoffrey Brown is the Assigned Commissioner and Michelle Cooke is the assigned ALJ in this proceeding.
1. The County of Monterey sought to sell three wastewater districts and through a public process issued a "Request for Statement of Qualifications and Submittal of Proposal."
2. On April 2, 2002, the Board of Supervisors for the County voted to approve the sale of the three wastewater districts to Cal-Am for $901,801.
3. Cal-Am is well qualified to provide wastewater services to the public.
4. Cal-Am's acquisition of the three districts will result in a rate decrease from current rates for 95% of customers in the districts.
5. The proposed purchase price is less than the book value of the wastewater assets. Residents of Las Palmas Ranch are dissatisfied with the County's operation of, and rates for, their wastewater services.
6. Cal-Am's proposed tariffs are based on cost estimates under its intended operation of the three districts on a consolidated basis, incorporate planned capital improvements and their impact on operating expenses, and expected labor costs.
7. Cal-Am's proposed tariffs are based on reasonable cost estimates to operate the three wastewater districts.
8. Adoption of a single tariff in all three districts provides rate stability and equitable pricing among neighboring customers without undue discrimination.
9. The existing reclaimed water agreement between the County and Las Palmas Ranch is unclear about whether the obligation covers common areas in both phases of the Las Palmas Ranch development.
1. Cal-Am's CPCN should be expanded to include provision of wastewater service to the public.
2. It is in the public interest for Cal-Am to acquire the three wastewater districts from the County.
3. Cal-Am's proposed tariffs are reasonable.
4. Year 1 of the proposed tariffs in Schedule 8.3 of the Purchase Agreements (Application, Tab G and H) should be effective upon completion of the acquisition and shall be in effect for the remainder of calendar year 2003.
5. Cal-Am should assume all obligations to supply reclaimed water in the districts being acquired consistent with the County's current obligations and should enter into a contract with Las Palmas Ranch to clarify that its obligation to supply reclaimed water at no cost applies to the common areas of both phases of the Las Palmas Ranch development for as long as the treatment plant operates.
ORDER
IT IS ORDERED that:
1. California-American Water Company's (Cal-Am) existing Certificate of Public Convenience and Necessity as approved in Decision 70418 is expanded to include provision of wastewater utility services to the public, including the right to recover rates for such services.
2. Cal-Am may acquire all of the wastewater assets of the following three wastewater districts currently owned by the County of Montery (County): Las Palmas Ranch (CSA 72); Laguna Seca Ranch (CSA 10); and Carmel Valley County Sanitation District at a price not to exceed $901,801.
3. Cal-Am shall record the purchase of the districts described in Ordering Paragraph 2 at a December 31, 2002 net book value not to exceed $901,801, as further set forth in Exhibit 1, Tab G.
4. Upon acquisition of the districts described in Ordering Paragraph 2, Cal-Am shall have the obligation to provide wastewater services to those customers through the creation of its Monterey Wastewater Division.
5. Cal-Am shall file a single rate schedule and related tariffs to serve the customers of the districts described in Ordering Paragraph 2 consistent with the "Five-year Interim Rate Schedule" set forth in Schedule 8.3 of the Purchase Agreements (Application, Tab G and H) and proposed tariff rules (Exhibit 1, Tab D). Year 1 rates shall be effective upon completion of the acquisition and shall be in effect for the remainder of calendar year 2003.
6. Cal-Am shall assume all obligation to supply reclaimed water in the districts described in Ordering Paragraph 2, consistent with the County's current obligations, and shall enter into a contract with Las Palmas Ranch to clarify that its obligation to supply reclaimed water at no cost applies to the common area of both phases of the Las Palmas Ranch development for as long as the treatment plant operates.
7. This proceeding is closed.
This order is effective today.
Dated , at San Francisco, California.
APPENDIX A
(List of Appearances)
************ APPEARANCES ************
David P. Stephenson
CHRISTOPHER G. ALARIO
Director Of Rates & Revenue
AMERICAN WATER WORKS SERVICE COMPANY
880 KUHN DRIVE
CHULA VISTA CA 91914
(619) 656-2436
dstephenson@calamwater.com
John A. Hyland Jr.
Attorney At Law
166 CARMELITO AVENUE, STE. A
MONTEREY CA 93940
(831) 372-5151
hylandpro@aol.com
For: In Pro Per
Richard E. Nosky
Attorney At Law
MONTEREY COUNTY COUNSEL
60 W. MARKET STREET, SUITE 140
SALINAS CA 93901
(831) 755-5045
noskyr@co.monterey.ca.us
For: County of Monterey, Carmel Valley County Sanitation District
Lori Anne Dolqueist
Attorney At Law
STEEFEL, LEVITT & WEISS
ONE EMBARCADERO CENTER, 30TH FLOOR
SAN FRANCISCO CA 94111
(415) 788-0900
LDolqueist@steefel.com
For: California American Water Company
Jasjit S. Sekhon
Office of Ratepayer Advocates
505 VAN NESS AVE , RM. 3200
San Francisco CA 94102
(415) 703-1834
sek@cpuc.ca.gov
For: ORA
********** STATE EMPLOYEE ***********
Michelle Cooke
Administrative Law Judge Division
505 VAN NESS AVE, RM. 5006
San Francisco CA 94102
(415) 703-2637
mlc@cpuc.ca.gov
Fred L. Curry 5
Water Division
RM. 3106
505 VAN NESS AVE
San Francisco CA 94102
(415) 703-1739
flc@cpuc.ca.gov
Sung Han
Office of Ratepayer Advocates
RM. 3200
505 VAN NESS AVE
San Francisco CA 94102
(415) 703-1578
sbh@cpuc.ca.gov
For: ORA
Maria E. Stevens
Executive Division
RM. 500
320 WEST 4TH STREET SUITE 500
Los Angeles CA 90013
(213) 576-7012
mer@cpuc.ca.gov
Rosalina White
Communications & Public Information Divi
AREA 2-B
505 VAN NESS AVE
San Francisco CA 94102
(415) 703-2074
raw@cpuc.ca.gov
For: PUBLIC ADVISOR'S OFFICE
********* INFORMATION ONLY **********
Lenard G. Weiss
Attorney At Law
STEEFEL LEVITT & WEISS
ONE EMBARCADERO CENTER, 30TH FLOOR
SAN FRANCISCO CA 94111
(415) 788-0900
lweiss@steefel.com
For: California American Water Company
Bob Taylor
19242 DOVEWOOD CT.
SALINAS CA 93908
lawyerrct@aol.com
(END OF APPENDIX A)
