Procedural History
CalAm filed the application on April 1, 1999, and the Commission in Resolution ALJ 176-3014 preliminarily determined this to be a ratesetting proceeding expected to go to hearing. Assigned Commissioner Henry Duque's June 9, 1999 scoping ruling confirmed the category and need for hearing, defined the issues, established a schedule, and designated assigned Administrative Law Judge (ALJ) McVicar as the principal hearing officer and thus the presiding officer.
ALJ McVicar conducted public participation hearings in Pacific Grove and Seaside on May 27, 1999. Customer attendance was moderate in both locations, with water planning, conservation rate design, and general rate levels drawing the greatest customer attention. Many speakers commented on different aspects of water planning, including CalAm's current and historical Carmel River proposals and expenditures; reclaimed water and desalinated water as supply alternatives; CalAm's role in SWRCB's Order 95-10 requirements and penalties; the need to limit new users, particularly golf courses; and the need for CalAm to pursue alternative water rights. Several speakers supported increasing rate block tiers, saying they are working and reward customers who conserve, while others denounced them as unfair to gardeners and those with landscaping. One characterized CalAm's proposal as "conservation by gouging," one suggested that conservation rate design should only be addressed by the state legislature, and several simply expressed their frustration at not being able to understand the proposed new rate design and its effect on them. Not surprisingly, the general consensus seemed to be against raising rates, with comments that CalAm needs to tighten its belt, improve productivity, keep increases at or below inflation levels, better manage pipe breaks, reduce its overall lost water percentage, eliminate treatment chemicals, and absorb any SWRCB fines and Endangered Species Act costs. Many of the speakers' public participation hearing topics are being addressed directly or indirectly as part of this decision and the Settlement described below, or have been or will be addressed by the Commission in other proceedings completed or pending.
Parties David Dilworth and George T. Krieger filed formal appearances at the Public Participation hearings but, other than Krieger's comments on the proposed decision, did not again attend or participate during the remainder of the proceeding.
The ALJ held a prehearing conference on June 3, 1999. Evidentiary hearings were convened on August 9th, at which time the active parties (CalAm, RRB, MPWMD and DOD/FEA) announced they had reached firm agreement on all issues and were in the process of reviewing a draft settlement document. Evidentiary hearings were continued to September 1st to allow the parties to complete and file their settlement proposal. At the September 1st evidentiary hearing, the active parties announced they had not been able to reach closure on rate design and desired to present evidence on that issue alone. The parties' pre-served prepared testimony on all issues was admitted by mutual agreement and rate design evidence was taken on September 1st and 2nd.
At the close of hearings the proceeding was submitted upon receipt of concurrent briefs due October 1, 1999. The active parties filed their Motion for Adoption of Partial Settlement with an accompanying settlement document on September 23, 1999, and served it on all parties. Neither of the inactive parties, who did not join in the settlement, submitted comments as permitted under Rule 51.4.
In early-November it was determined that there were certain errors and discrepancies in the settlement document as filed, and the parties subsequently informed the ALJ that they would file a revised settlement. On December 8, 1999, the active parties filed a Petition to Set Aside Submission, a new Motion for Adoption of Settlement, and the Settlement included in this decision as Appendix D. By ruling dated December 13, 1999 the ALJ granted the motion, set aside submission, accepted the new Settlement into the record, and submitted the proceeding anew as of that date. Because the primary revisions were minor adjustments to the underlying results of operations figures and revenue accounting shifts, and because the revisions caused an insignificant overall revenue requirement decrease, the ALJ ruled that the revised settlement introduced no new issues that would justify reopening the Rule 51.4 comment period. For purposes of this decision, only the more-recently filed Settlement will be referred to.
