VIII. Comments on Draft Decision
On February 1, 2000, the initial draft decision of the Principal Hearing Officer in this matter was filed and mailed to the parties in accordance with Public Utilities Code § 311(g) of the Rules of Practice and Procedure. The following comments and one reply were timely filed and we made the following revisions to the initial draft decision as discussed below.
CWA requested that the draft include more expansive statements regarding our conclusions regarding jurisdiction and drinking water policies as described in the Interim Opinion in this proceeding. CWA requested that staff's recommended topics for a future OIR be included in the order to open an OIR. We added language regarding jurisdiction and clarified that topics suggested by staff for a future OIR are acceptable. Moreover, the future OIR/OII will include additional topics specified in the past as those of concern to the Commission and will also undertake the currently planned revision of GO 103.
The water utilities filing joint comments requested that we delete entirely the discussion of Aerojet's position that regulated utilities can be held liable despite any compliance. We agreed that this language may be removed.
Aerojet, Huffy and McDonnell Douglas Corporations and Wynn Oil Company (Aerojet) filed joint comments requesting that we take the following action in this proceeding:
1. Analyze the potential health risk associated with the limited exceedances summarized in the record for periods during which existing DHS maximum contaminant levels and other regulatory standards were in place.
2. Analyze monitoring data available to the Commission for those periods during which there were no standards governing particular contaminants, using existing DHS standards to assess the potential health risk associated with those data.
3. Consider what conclusions, if any, can be drawn regarding the health risk associated with water served by the regulated utilities during periods for which monitoring data may not be available.
4. Institute sanctions against EL&L and RK&M for not responding to discovery requests, but do not bar them from participating in the proceeding.
Aerojet desired further hearings to receive testimony from expert witnesses on the issue of whether a health risk to the public existed prior to the establishment of DHS standards and to more fully discuss the health impact of the exceedances, an area in which it contends DHS is not fully informed.
The water companies, filing jointly, replied to Aerojet's requests, contending that to adopt them changed the focus and purpose of this investigation. The water companies contended the initial draft decision made adequate and appropriate findings regarding health risks. They contend that to speculate about the health risk during periods when no standards applied was an unwarranted expansion of this proceeding and erroneously implied that there were periods when the regulated utilities were under no standards, ignoring GO 103. The water companies asserted that the findings and conclusions in the initial draft decision reasonably and correctly lead to the conclusion that the minimal exceedances did not constitute a danger to public health.
We concluded that an investigation into whether a health risk to the public existed prior to the establishment of DHS standards was not warranted at this time. The Commission's major focus must remain on assuring the healthfulness of water, and we did not see the relevance of further investigations into events distant in time.
In addition, Aerojet made critical comments to clarify the discussion of the science of public health at various points in the draft decision. We reflected and incorporated many of the suggested changes.
Citizens and Alisal, in separately filed comments, requested correction of factual errors which were made. Since we clarified or corrected the errors alleged by Alisal, its motion to receive the basis upon which certain facts are determined in the initial draft decision was denied.
Lastly, the corrections indicated by RK&M's letter were made, and evidentiary sanctions against RK&M and EL&L are removed.
A. Second Round of Comments
On June 26, 2000, the assigned Commissioner made a major revision to the initial draft decision of the Principal Hearing Officer. This revised draft was filed and mailed to the parties. The sole revision was to issue two separate opinions, one for the substantive water quality issues, including compliance, and another for the outstanding procedural matters. Parties were allowed to comment solely on the bifurcation. Four parties made the following comments on the bifurcation and we have made the following further revisions to the revised draft opinions as discussed below.
Aerojet, Huffy and Wynn (Aerojet) in jointly filed comments requested an opportunity to file additional comments on the substance of the bifurcated drafts issued on June 26. They contended that the orders remain unclear in the following critical areas: whether compliance with DHS standards always means that water is not harmful or dangerous to public health; what standard is used when there is no DHS standard; and, what conclusions can be reached when either there were no DHS standards or no test data was available. Aerojet requested to submit comments on these issues and whether the record can answer these inquiries or whether further analysis is needed.
Aerojet's request for findings on matters outside the period reviewed in this OII is one we previously rejected. DHS standards were required in 1974. The period we reviewed was 1974-1999, roughly 25 years. Thus, to make findings on water quality when there were no standards is to extend the period of review identified in the OII without the approval of all Commissioners who instituted this investigation. To the extent Aerojet reargues this point, we are not persuaded to make any different conclusions.
Suburban, as the remaining commenters, preferred one opinion but had no objection to bifurcating the initial draft decision, provided the Commission expedite approving at least a final opinion on substantive issues.
Suburban, as the other commenters, point out an error of including the discussion of evidentiary sanctions against EL&L and RK&M while not ordering the imposition of such sanctions. We removed the discussion, as intended, and do not impose evidentiary sanctions against these intervenors, as requested in the initial comments. Cal-Am appropriately points out that in any future reintervention, EL&L and RK&M will need to show a willingness held by any party in a Commission proceeding to abide by Commission orders.
Suburban and other commenters requested that the opinion on substantive matters be made final and be available for appeal, as we did with the opinion on jurisdiction. We made this revision, since this was our intent. To this end, we changed the heading of the opinion from "Second Interim Opinion..." to "Final Opinion..." and revised the pertinent text.
B. Third Round of Comments
On August 7, 2000, after further review of the two opinions, we again revised the final opinion on substantive issues including revision of technical language and to clarify that staff may follow-up in the new OIR/OII on matters they considered incomplete in this phase, namely responses to Questions 26 and 27, regarding compliance with Commission orders involving water quality corrective and preventive measures. We mailed this order to allow parties an opportunity to comment on these revisions since they affected the substance of this opinion. In response, a third round of comments was filed.
1. On December 4, 1998, EL&L and RK&M filed motions challenging the Commission's jurisdiction to conduct this proceeding, alleging, among other things, that DHS and EPA are responsible for setting water quality standards and enforcing laws related to the Safe Drinking Water Acts.
2. In D.99-06-054 (as later corrected by D.99-07-004), the Commission denied EL&L's and RK&M's motions challenging the Commission's jurisdiction to conduct this investigation, holding that the jurisdictional challenges are without merit and that the Commission's and DHS's authority and responsibilities are intertwined and complementary to each other.
3. EL&L and RK&M timely filed applications for rehearing of D.99-06-054, alleging various legal errors.
4. In D.99-09-073, the Commission modified D.99-06-054 and denied EL&L's and RK&M's applications for rehearing of D.99-06-054, again affirming its jurisdiction to conduct this investigation, jurisdiction it shares with DHS on issues relating to the enforcement of water quality standards. No further appeals were filed.
5. The Commission adopted General Order 103 in 1956 as its basic policy on water supply and water quality issues and implemented that policy by rules, regulations, and decision orders.
6. The Commission and DHS entered into a Memoranda of Understanding in 1986 and 1996 identifying the roles of each agency and describe their mutual, cooperative relationship in addressing water quality issues and the delivery of drinking water by public water utilities.
7. On July 28, 1999, the Ratepayer Representation Branch of the Water Division filed a motion for leave to file its numerous reports and data requests in this proceeding since they inadvertently were not filed. These reports were timely mailed to parties on the various dates completed. No party opposes this motion.
8. General Order 103, P.U. Code 770(b), and a multitude of individual Commission decisions establish overall Commission policy and also require that all regulated water utilities comply with DHS rules, regulations, and orders.
9. DHS is the primacy state agency authorized to implement statewide water quality requirements under federal guidelines and to monitor and enforce state and federal requirements related to drinking water.
10. DHS has set primary and secondary MCLs for numerous known contaminants which are published in Title 22 of the California Code of Regulations. DHS has also set ALs for specified contaminants and requires monitoring of unregulated contaminants on this list. DHS has also set testing, sample-taker, follow-up after contamination detection and monitoring requirements applicable to regulated water utilities.
11. DHS sets MCLs and ALs under procedures prescribed by the Administrative Procedures Act. (Government Code §§ 11,340 et seq.)
12. DHS sets MCLs and ALs based upon a health risk analysis including a threshold level of one excess case of cancer per one million people exposed by drinking two liters of water per day for 70 years, special impacts of contaminants on infants, and the increased effect of certain contaminants on humans. This threshold level for each contaminant with special considerations is reasonable.
13. When the level of an organic chemical exceeds 10 times the MCL and this is confirmed by a sample taken within 48 hours of receiving the results from the initial sample, the source is taken out of service, with customer notification. An exceedance less than 10 times the MCL requires customer notification and increased frequency of sampling. The 10-times-the-MCL criterion follows the convention in risk assessment for noncarcinogens that includes uncertainty factors that are in units of 10, and for carcinogens that includes 10-fold expressions of risk, such as one excess case of cancer per million, one per hundred thousand, or one per ten thousand. This criterion provides a second tier to the MCL to address contamination that significantly exceeds the MCL and could potentially reduce the "safety cushion" built in by the risk assessment.
14. Because the threshold level for an MCL or AL is set near zero contamination, where levels of contamination are below an MCL or AL or temporarily exceed these levels, no health hazard is reasonably expected to occur.
15. Parties commenting on existing water quality regulation make no recommendations for additional MCLs, ALs or unregulated chemicals.
16. DHS' existing requirements for drinking water quality adequately protect the public and no additional MCLs, ALs or unregulated contaminants are warranted. However, the detection of new contaminants and procedures to monitor newly discovered contaminants that have no DHS requirements warrant additional consideration in workshops or a new rulemaking proceeding.
17. Respondents adequately reported results of contamination testing during the past 25 years. Numerous respondents have detected numerous levels of contaminants exceeding DHS requirements without committing violations of those requirements. Numerous respondents have incurred citations from DHS. However, these results do not show a pattern of unreasonable violations of DHS water quality regulation.
18. Based upon the information provided by respondents and verification by staff and DHS, all Class A and Class B regulated water utilities, except Alco Water Company, have satisfactorily complied with DHS regulation and requirements.
19. Alco Water Company has challenged the propriety of DHS actions regarding a 1993 citation. This matter is currently pending in federal court. Alco Water Company should report in its next rate proceeding before this Commission on this federal litigation and any DHS citations regarding public notice for the alleged 1993 past contamination as described in this proceeding. Staff should recommend further investigation of this matter should DHS fines be warranted, enforceable, not paid or otherwise resolved at the time of Alco Water Company's next rate case filing.
20. The recommendations of parties and DHS for supplementing existing procedures and to follow-up for detection of new contaminants and for possible new rules governing customer complaints regarding water quality, plus possible new rules or policies on the blending of supply courses, balancing the costs of best available treatment technology (BATT) against increased rates for ratepayers, revising GO 103, and other water quality issues of current Commission concern not specifically addressed in this proceeding warrant further exploration and investigation in a new rulemaking and or investigation proceeding.
21. Staff may follow-up on any perceived incomplete utility responses to Questions 26 and 27 of the May 3 Scoping Memo in the next phase of this proceeding, the new OII/OIR.
1. Pursuant to provision of the Constitution of the State of California and the California Public Utilities Code, including but not limited to Sections 451, 761, and 768, the Commission has the jurisdiction to regulate the service of water utilities with respect to the health and safety of that service.
2. The Commission has exercised concurrent jurisdiction with DHS over the quality of drinking water provided by regulated water utilities.
3. The motion by the Ratepayer Representation Branch of the Water Division for leave to retroactively file its reports should be granted.
4. DHS requirements governing drinking water quality adequately protect the public health and safety.
5. Regulated water utilities except Alco Water Company have satisfactorily complied with past and present drinking water quality requirements.
6. Staff should pursue Alco Water Company's compliance with DHS orders in its next rate proceeding or a future separate investigation.
7. The Commission should explore the recommendations made by parties in this proceeding, other water quality issues not addressed by the Commission in this Decision and allow staff follow-up on utility responses to Questions 26 and 27 in a new rulemaking and or investigation proceeding.
IT IS ORDERED that:
1. The motion by the Ratepayer Representation Branch of the Water Division for leave to retroactively file its reports is granted.
2. Within six months after the effective date of this order, the Commission Water Division (staff) shall present to the Commission a draft Order Instituting Investigation and/or Rulemaking that addresses the recommendations for follow-up on water quality regulation and monitoring made in this proceeding and those other water quality issues of concern and G.O. 103 revisions currently discussed by the Commission and not addressed in this proceeding. In preparation for drafting such a proposed order, staff will timely provide notice to the service list in this proceeding and other known interested parties to convene a workshop to explore outlined issues in a new OIR/OII and any proposed resolution of those issues.
3. In its next rate case proceeding, Alco Water Company will report on the status of pending federal litigation involving the 1993 Department of Health Services (DHS) citation discussed in this proceeding and any resolution of this matter, including whether any fines assessed by DHS are warranted and have been paid or otherwise resolved and the date of any payment.
4. This decision regarding DHS regulation and respondent utility compliance with that regulation is the final opinion on these issues. This docket remains open for resolution of outstanding procedural matters.
This order is effective today.
Dated , at San Francisco, California.
