d) Cost-benefit Study (Reliability)

In further support of their claim that exempting the Sandhill project from the rate base cap was arbitrary and capricious and not supported by substantial evidence, Joint Parties argue that San Gabriel's cost-benefit study was unreliable. These arguments are identified and addressed below.

The record is extensive on the matter of the cost-benefit study, which was addressed in prepared testimony, rebuttal testimony, and on cross-examination as well as in briefs and comments. DRA argued in comments that we should not afford any weight or consideration to the cost/benefit analysis, saying that San Gabriel failed to refute the issues raised by DRA and the City. (Comments of the Division of Ratepayer Advocates to Commissioner John Bohn's Alternate Decision (February 26, 2007) p. 8.) After weighing the competing evidence and the arguments, we held:

We find the evidence of the cost-effectiveness of the plant to be compelling when compared to the cost of the alternative of additional production of water from Chino wells.

(D.07-04-046, p. 39.)

Joint Parties now are renewing their attack on the study, by raising numerous arguments to support their claim that it is unreliable. (See: Joint Reh. App., pp. 11 - 14.) In resolving the issues before us we consider all of the available evidence. There is evidence in the record addressing the points Joint Parties' raise to support their claims of unreliability. In brief review, the discussion below identifies evidence on the points raised by Joint Parties. Issues related to the Sandhill upgrade project were litigated extensively.¹⁵ We included a thorough discussion about the need for and the advantages of the project. The Decision analyzes matters related to cost-effectiveness at some length. (D.07-04-046, pp. 37 - 41.) There is evidence in the record to support our finding that the Sandhill project is cost effective and that it is reasonable to construct it. (D.07-04-046, p. 118, FOF 42.)¹⁶ Joint Parties have not identified any issue on which the evidentiary record requires us to find that the cost-benefit study is unreliable. Claims that the cost-benefit study is unreliable and that, as a result, the decision to exclude the Sandhill project from the rate base cap is arbitrary and capricious are without merit.

Joint Parties also make the policy recommendation that in the reasonableness review of the Sandhill project San Gabriel be required to "show that Sandhill has performed as promised" by the cost-benefit study. (Joint Reh. App., p. 14.) Joint Parties provide no grounds for the claim that the cost-benefit study is a "promise" of future performance. The suggestion does not identify an error in the Decision and is without merit.

¹⁵ The record relating to the cost benefit study includes all or portions of the following: R.T., vol. 4, pp. 329-345, (Dell'Osa/SG); Ex. 8, pp. 34-40, Attachment B (Dell'Osa/SG); Ex. 20, pp.6-9 (Dell'Osa/SG).

¹⁶ In conjunction with their record argument, Joint Parties include a footnote containing a vaguely worded statement about burden of proof standards. (Joint Reh. App., p. 13, fn. 4) Joint Parties provide no analysis of the record or explanation of the statement.