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STATE OF CALIFORNIA ARNOLD SCHWARZENEGGER, Governor

PUBLIC UTILITIES COMMISSION

505 VAN NESS AVENUE

SAN FRANCISCO, CA 94102-3298

April 15, 2004 Agenda ID #3463

TO: PARTIES OF RECORD IN APPLICATION 03-10-017 ET AL.

This is the proposed decision of Administrative Law Judge (ALJ) Thorson, previously designated as the principal hearing officer in this proceeding. It will not appear on the Commission's agenda for at least 30 days after the date it is mailed. This matter was categorized as ratesetting and is subject to Pub. Util. Code § 1701.3(c). Pursuant to Resolution ALJ-180 a Ratesetting Deliberative Meeting to consider this matter may be held upon the request of any Commissioner. If that occurs, the Commission will prepare and mail an agenda for the Ratesetting Deliberative Meeting 10 days before hand, and will advise the parties of this fact, and of the related ex parte communications prohibition period.

The Commission may act at the regular meeting, or it may postpone action until later. If action is postponed, the Commission will announce whether and when there will be a further prohibition on communications.

When the Commission acts on the proposed decision, it may adopt all or part of it as written, amend or modify it, or set it aside and prepare its own decision. Only when the Commission acts does the decision become binding on the parties.

Parties to the proceeding may file comments on the proposed decision as provided in Article 19 of the Commission's "Rules of Practice and Procedure." These rules are accessible on the Commission's website at http://www.cpuc.ca.gov. Pursuant to Rule 77.3 opening comments shall not exceed 15 pages. Finally, comments must be served separately on the ALJ and the assigned Commissioner, and for that purpose I suggest hand delivery, overnight mail, or other expeditious method of service.

/s/ ANGELA K. MINKIN

Angela K. Minkin, Chief

Administrative Law Judge

ANG:sid

ALJ/JET/sid DRAFT Agenda ID #3463

Decision PROPOSED DECISION OF ALJ THORSON (Mailed 4/15/2004)

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Application of California Water Service Company (U 60 W) for an Order Authorizing it to Increase Rates for Water Service in its South San Francisco District.

Application 03-10-017

(Filed October 1, 2003)

Application of California Water Service Company (U 60 W) for an Order Authorizing it to Increase Rates for Water Service in its Stockton District.

Application 03-10-018

(Filed October 1, 2003)

Application of California Water Service Company (U 60 W) for an Order Authorizing it to Increase Rates for Water Service in its Mid-Peninsula District.

Application 03-10-019

(Filed October 1, 2003)

Application of California Water Service Company (U 60 W) for an Order Authorizing it to Increase Rates for Water Service in its Salinas District.

Application 03-10-020

(Filed October 1, 2003)

Application of California Water Service Company (U 60 W) for an Order Authorizing it to Increase Rates for Water Service in its Bakersfield District.

Application 03-10-021

(Filed October 1, 2003)

Application of California Water Service Company (U 60 W) for an Order Authorizing it to Increase Rates for Water Service in its Salinas District (excluding the service areas of the County Meadows Mutual Water System and the Indian Springs Mutual Water System).

Application 03-10-031

(Filed October 1, 2003)

PROPOSED INTERIM DECISION CONCERNING

WATER QUALITY (TCPA) ISSUES AND

DISMISSAL OF CERTAIN APPLICATIONS

PROPOSED INTERIM DECISION CONCERNING

WATER QUALITY (TCPA) ISSUES AND

DISMISSAL OF CERTAIN APPLICATIONS

Summary

This interim proposed decision is entered in a general ratesetting proceeding originally involving five districts of the California Water Service Company (CWS). Water quality testing in some company wells indicated that 1,2,3-Trichloropropane (TCPA), reasonably anticipated to be a human carcinogen, was present at levels exceeding the California Department of Health Service's (DHS) Action Level for this contaminant. An expedited evidentiary hearing was held before the Administrative Law Judge (ALJ) to obtain more complete information about the presence of this substance, particularly in the three districts for which CWS seeks to dismiss its applications. In this decision, we determine that no TCPA has been found in the wells of the Salinas, Stockton, and Mid-Peninsula districts; the applications for these districts may be dismissed. We also determine that the presence of TCPA in certain Bakersfield District and South San Francisco District wells does not pose a significant health risk to people ingesting, on a daily basis, the water produced from those wells. On a related matter, we authorize CWS to establish memoranda accounts to record capital expenses being incurred in the Salinas and Stockton districts for other water quality purposes.

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