II. Background
Del Oro is a corporation, owned by Robert Fortino, providing water service to approximately 7,000 customers across California in Butte, Humboldt, Shasta, Kern, Tulare, Colusa, and Tuolumne Counties.
The current application was filed on January 23, 2008. Del Oro proposes to purchase the water distribution operations, for the Mt. Lassen Woods Subdivision (Subdivision), from R.H. Emmerson & Son, LLC (Emmerson or developer), for $165,000. Del Oro intends to make payments of $1,250 per connection to Emmerson, as each lot is sold.
As the undeveloped lots are sold, Del Oro proposes that the lot buyers commence payment of a water service stand-by charge. Del Oro proposes a Monthly Flat Stand-By Rate of $35.67 for the stand-by charge, consisting of $25.25 to cover operating expenses, plus a profit of $10.42. Until all of the lots are sold, Emmerson would pay Del Oro a stand-by fee of $30.46 per month for each unsold lot1, for the first 60 months. After 60 months, if there are any remaining unsold lots, Emmerson would pay Del Oro $35.67 per month for the stand-by charge for each unsold lot.
Del Oro plans to install meters starting in 2009, when water service is requested by the lot owner, charging customers $750 for this hook-up service. Once the meter is installed, Del Oro requests the customer begin to pay an initial quantity rate of $0.96/100 cubit feet of use, plus a monthly service charge of $32.88, and cease paying the stand-by charge.
Emmerson is owned by the same family that owns Sierra Pacific Industries (SPI), a privately owned logging company. SPI is the largest private landowner in California, owning approximately 1.7 million acres of California's forest land. 2 In addition to logging, SPI operates sawmills and cogeneration plants, and manufactures lumber, fencing, polls, logs, molding, millwork, windows, doors, and decorative bark. SPI also develops commercial and residential real estate.
This proceeding addresses the issues of: (1) whether Del Oro should be issued a CPCN; (2) what initial rates should be authorized; and (3) environmental compliance concerning water quality and the applicability of the California Environmental Quality Act (CEQA).3
1 $25.25 + (50% $10.42) = $25.25 + $5.21 = $30.46.
2 SFGate.com, 2/29/08, Getting clear with Sierra Pacific Industries, by Jonathan Curiel.
3 Cal. Pub. Res. Code §§ 21000-21177 (2005).
