Comments of Proposed Decision
The proposed decision of Administrative Law Judge Patrick in this matter was mailed to the parties in accordance with Section 311(d) of the Public Utilities Code and Rule 77.1 of the Rules of Practice and Procedure. Comments were filed by ____________ and reply comments were filed by ______________.
1. In D. 89-11-017, the Commission authorized SCWC to construct a treatment plant at a cost of $1.275 million with a capacity of 1,050 gpm.
2. In 1992, SCWC completed a treatment plant at a cost of $3.1 million with a capacity of 1500 gpm.
3. In SCWC's 1992 general rate case application, the Commission concluded that the plant had excess capacity of approximately 500 gpm or one-third of its total capacity, (D.93-06-035, 49 CPUC2d 511, 519).
4. The Commission allowed the inclusion of $1.5 million of the plant cost in ratebase, and deferred recovery of the remaining $1.6 million.
5. When the plant was constructed in 1992, the Surface Water Treatment Rule required that the finished water not exceed a 0.5 NTU turbidity standard.
6. In 1993, the Legislature changed the Surface Water Treatment Rule to require that plants constructed in 1993 and thereafter provide finished water that did not exceed a 0.2 NTU turbidity standard, a more stringent requirement.
7. In April 1995, DHS issued its Cryptosporidium Action Plan which sets forth an optimization goal that requires plants to achieve a finished water turbidity not to exceed a 0.1 NTU standard. DHS reiterated these requirements in its February 1997 Treatment Plant Optimization Criteria and Guidelines.
8. In 1996, the California Legislature enacted Section 116360 of the Health and Safety Code, which requires DHS to take action in response to the health risks posed by Cryptosporidium and other microbiological organisms.
9. Following a 1997 inspection, DHS recommended that the sedimentation basin be limited to a rate of 720 gpm (0.5 gpm/square foot surface overflow rate) due to the depth of only 8 feet.
10. The 720 gpm capacity of the sedimentation basin now determines the overall capacity of the plant since all parts of the plant must operate at the same flow rate.
11. Except for the sedimentation basin, the rest of the plant still has excess capacity.
12. The number of customers in Clearlake District has not increased since 1992 and the recorded output of the plant has not exceeded 674 gpm since September 1993. Thus, there has been no increase in water requirements.
1. SCWC should not be allowed to reap the full benefit of its initial mistake in oversizing the plant.
2. Notwithstanding SCWC's initial mistake in oversizing the plant, Clearlake customers are receiving the benefit of a water supply that fully meets the requirements of the Cryptosporidium Action Plan.
3. A reasonable resolution of this matter is for SCWC to be allowed to include in ratebase $2.0 million of the $3.1 million cost of the plant on the basis that 100% of the sedimentation basin is utilized and 50% of the rest of the plant is utilized.
IT IS ORDERED that:
1. Southern California Water Company is authorized to include in ratebase $2.0 million of the $3.1 million cost related to its Sonoma Treatment Plant. Decision 93-06-035, is modified accordingly.
2. This proceeding is closed.
This order is effective today.
Dated , at San Francisco, California.
