ALJ/BMD/avs Date of Issuance 12/22/2008
Decision 08-12-034 December 18, 2008
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
In the Matter of the Application of Californian-American Water Company (U201W) for an Order Authorizing (1) the Transfer of Already-Incurred Costs for its Long-Term Water Supply Solution for the Monterey District to Its Special Request 1 Surcharge Balancing Account; and (2) An Annual Review Process for the Transfer of Pre-Construction Costs to the Special Request 1 Surcharge Balancing Account. |
Application 08-04-019 (Filed April 10, 2008) |
DECISION APPROVING SETTLEMENT AGREEMENT
1. Summary
Today, we approve a comprehensive settlement agreement (Amended Settlement Agreement)1 entered into by the California-American Water Company (Cal Am), the Division of Ratepayer Advocates (DRA) and the Monterey Peninsula Water Management District (MPWMD) (collectively "Settling Parties") for this proceeding.
Our approval of the Amended Settlement Agreement means that Cal Am is authorized to recover $3,741,714, as compensation in full for all Coastal Water Project (Water Project) costs incurred through December 31, 2007. Cal Am will recover these costs from ratepayers through the Special Request 1 Surcharge (Surcharge 1) authorized by Decision (D.) 06-12-040. The Amended Settlement Agreement adopted today does not affect Cal Am's ability to recover preconstruction costs incurred after December 31, 2007 and tracked in the memorandum account approved in D.03-09-022.
The Amended Settlement Agreement provides that:
1. Cal Am's requested recovery of $3,888,831 is reduced by $137,632, plus related interest of $9,485 for disallowed costs.
2. Cal Am's Special Request 1 Surcharge Balancing Account (SRSBA) is reduced by $185,893 for labor and labor related costs, which may be duplicative of authorized general rate case (GRC) expenses.
3. $309,258.22 represents the full recovery of charges from ASR Systems, LLC (ASR Systems) for work performed through December 31, 2007.
4. Cal Am has provided DRA and MPWMD with certain identified vendor documents relating to the Water Project.
5. DRA and MPWMD have reviewed the vendor documents and determined that already-incurred costs Cal Am has sought for recovery are reasonable.
6. Cal Am will file a separate annual application to address preconstruction costs incurred for the Water Project, and other parties may serve responses or reports according to an agreed upon schedule.
7. Cal Am is required to file a justification for all costs associated with services rendered outside of the annual reporting period.2
8. Cal Am will file an annual application for preconstruction costs for 2008 and additional applications for preconstruction costs beyond 2008, if necessary.
9. Cal Am will provide with its annual applications certain documents3 regarding annual preconstruction costs.
Cal Am shall provide in its Class A Annual Report submitted by March 31 of each year an accounting for its Surcharge 1 including amounts collected from customers and total preconstruction costs charged for each reporting period.
1 The Amended Settlement Agreement is attached as Attachment A.
2 The annual reporting period is from January 1 to December 31.
3 Existing task order contracts will include a budget and a schedule.
