Discussion
Pursuant to the Scoping Memo, CWS filed its Motion for Relief Concerning TCPA Levels in Bakersfield and South San Francisco Districts (January 2, 2004). In the motion, CWS represented that additional testing had confirmed
non-detectable levels of TCPA in the Stockton and Salinas water systems. This additional testing affords the Commission with the information necessary to approve the dismissal of the Stockton and Salinas applications. Having no known TCPA problem, the Mid-Peninsula application should be dismissed in any event. The Office of Ratepayer Advocates (ORA) filed its response indicating that the Commission "has a sound basis to find that continued use of [the South San Francisco and Bakersfield] wells does not pose a threat to public health" and confirming that the Mid-Peninsula, Salinas, and Stockton applications should be dismissed. (Response to Motion for Relief Concerning TCPA Levels in Bakersfield and South San Francisco Districts (February 2, 2004).)
The expedited evidentiary hearing on TCPA issues in the South San Francisco and Bakersfield water systems was held on February 10, 2004, and both CWS and ORA participated. CWS offered Chet W. Auckly, its Director of Water Quality and Environmental Affairs, as its sole witness. CWS' motion was submitted on February 10, 2004.
The Commission's inquiry into these water quality issues is appropriate under the holding of the California Supreme Court in Hartwell Corp. v. Superior Court (2002) 27 Cal.4th 256, 272 (the Commission has "the authority to adopt a policy on water quality and to take the appropriate actions, if any, to ensure water safety"). See also D.99-06-054 (June 10, 1999) (jurisdiction of the Commission to inquire into the safety of drinking water provided by public utilities).
1,2,3-Trichloropropane (TCPA) is a chemical historically used as a solvent and in the manufacturing of pesticides. The substance has been known to cause cancer in laboratory animals and is reasonably anticipated to be a human carcinogen. (Auckly Prepared Testimony (Ex. No. 1 at 2).) In California, DHS has not established a Maximum Contaminant Level (MCL) to regulate TCPA. Rather, DHS considers TCPA to be an unregulated contaminant for which monitoring is required. (Cal. Code Regs. tit. 22, § 12000 (2004); Auckly Prepared Testimony (Ex. No. 1 at Ex. 1).)
In situations where MCLs have not been set, because of ongoing scientific evaluation of the exposure-health risk relationship for a contaminant, DHS may establish Action Levels, which are health-based advisory levels for chemicals in drinking water. An Action Level is the level of a contaminant in drinking water that is considered not to pose a significant health risk to people ingesting that water on a daily basis. DHS considers the risk at this level to be de minimis. (Auckly Prepared Testimony (Ex. No. 1 at 2-3).) If the Action Level is exceeded by 100 times, DHS recommends that the water source be taken out of service.
For TCPA, DHS has established an Action Level of 5 parts per trillion (ppt) or 0.005 micrograms per liter (μg/L). Based on risk assessment methods, this Action Level is the level that would result in one additional case of cancer per million people. (Auckly Prepared Testimony (Ex. No. 1 at 2-3).)
Company testing and monitoring have disclosed that certain wells in the Bakersfield and South San Francisco districts have TCPA levels that exceeded the Action Level. Twenty-three of the Bakersfield wells (out of a total of 110 wells) showed contamination in excess of the Action Level. None of the wells exceeded 100 times the Action Level (0.5 μg/L). The four wells with the highest levels were registered at 0.28, 0.25, 0.14, and 0.057 μg/L. (Auckly Prepared Testimony (Ex. No. 1 at 4).)
Three of the South San Francisco wells showed contamination in excess of the Action Level. None of the wells exceeded 100 times the Action Level (0.5 μg/L). The wells registered levels of 0.150, 0.142, and 0.052 μg/L. (Auckly Prepared Testimony (Ex. No. 1 at 4).)
While the water from the 23 Bakersfield and three South San Francisco wells exceeds the Action Level, this water is intermixed with water from other
wells and sources of supply before it is delivered to customers. In the process, the levels of TCPA are diminished by the higher quality sources. (Auckly Testimony (Tr. 22:28-24:2).)
We, therefore, conclude that the presence of TCPA in certain Bakersfield and South San Francisco district wells does not pose a significant health risk to people ingesting water from those wells daily. It is prudent and reasonable for CWS to use these wells as a source of supply.
The testing and monitoring of wells in the Mid-Peninsula, Salinas, and Stockton districts have disclosed no measurable amounts of TCPA. (Auckly Prepared Testimony (Ex. No. 1 at Ex. 3).)
When the Action Level is exceeded for a drinking water source, certain mandatory and recommended steps are imposed on the system operator. First, water quality monitoring is required. Second, California Health and Safety Code § 116455 (2004) requires the drinking water system operator to notify the governing body of the local agency in which users of the drinking water reside. This notification is to occur within 30 days of the discovery of the Action Level exceedance. Third, DHS recommends that the utility inform its customers about the presence of the contaminant and its potential for adverse health effects at high levels of exposure. Fourth, as previously mentioned, if the Action Level is based on cancer risk (as is the case for TCPA), DHS recommends that the source of water be taken out of service if the contaminant is present at 100 times or more of the Action Level. For TCPA, 100 times the Action Level is 0.5 μg/L. (Auckly Prepared Testimony (Ex. No. 1 at 3); Letter to City of South San Francisco (Ex. No. 2 at 1).) Since test results indicate that TCPA registers at levels far below 100 times the Action Level, this recommendation is not applicable and will not be discussed further.
CWS has performed two of the three remaining steps. The company does have an ongoing quarterly monitoring program for any well where TCPA has been detected above the Action Level. (Auckly Testimony (Transcript (Tr.) 6:27-7:1).) Also, CWS represented that it intends to notify its customers in any district where the presence of TCPA has exceeded the Action Level. This notification will be sent by July 1, 2004, as part of the utility's annual Consumer Confidence Report. DHS recognizes the use of the Consumer Confidence Report as an appropriate method for notifying customers. (Auckly Testimony (Tr. 7:15-8; 26:11).)
The preponderance of the evidence, however, indicates that CWS failed to notify the local officials of South San Francisco and Bakersfield within 30 days of discovering that TCPA was present in excess of the Action Level in some of the districts' wells, as required by Health and Safety Code § 116455. CWS began unregulated contaminant monitoring (UCMR) in its water systems in May 2002, followed by additional testing five to seven months later. Monitoring was not completed until 2003. (Auckly Testimony (Tr. 4:16-22).) CWS also had knowledge of the presence of TCPA in wells in the Bakersfield and South San Francisco districts when it filed it ratesetting applications on October 1, 2003. (A.03-10-017, A.03-10-018, A.03-10-020, A.03-10-021 and A.03-10-031.) In the proposed final decision on the South San Francisco and Bakersfield applications, the ALJ will recommend whether any sanction should be imposed against the company for failing to timely notify local officials.
Thus, CWS was aware of Action Level exceedances by the beginning of 2003, but the company did not notify local officials until January 2004. ((A.03-10-017, A.03-10-018, A.03-10-020, A.03-10-021 and A.03-10-031; Letter to City of South San Francisco (Ex. No. 2); Letter to City of Bakersfield (Ex. No. 2).)
Throughout this proceeding, CWS has been forthcoming in providing information about the presence of TCPA in district wells. (CWS, Motion for Relief Concerning TCPA Levels in Bakersfield and South San Francisco Districts (January 2, 2004); Auckly Prepared Testimony (Ex. No. 1).)
TCPA can be treated by the use of Granular Activated Carbon technologies. The cost of GAC treatment likely would be $300,000-350,000 per well. The cost per well can be reduced if the supply from two or more wells is combined before treatment. (Auckly Prepared Testimony (Ex. No. 1 at 5).) ORA indicated in its response that, "[i]f CWS had proposed treatment of these
wells . . . , it is unlikely that the Commission would have found . . . that such costs were reasonable in light of the low levels of contamination." (Response to Motion for Relief Concerning TCPA Levels in Bakersfield and South San Francisco Districts at 6 (February 2, 2004).
Although we dismiss the applications concerning the Salinas and Stockton districts, the company has asked for permission to maintain memoranda accounts for capital expenses related to other water quality problems including the presence of arsenic, nitrates, MTBE, and other contaminants. In the Stockton District, these capital costs are estimated at $6.1 million in 2004 and $11.2 million in 2005, a total of $17.3 million. In the Salinas District, these capital costs are estimated at $3.2 million in 2004 and $2.7 million in 2005, a total of $5.9 million. We agree that such accounts should be created although we will later review these expenditures for need and reasonableness.
