Procedural and Substantive Background

The underlying issues about which the present proceeding revolves are not new to the Commission. In September 1998, the Sierra Club filed a complaint against Valencia with the Commission, seeking a determination that Valencia had reached the limit of its capacity to supply water to new customers. (Decision (D.) 99-04-061, p. 1.) Valencia responded that it did have adequate capacity to serve new customers, and in any event, Sierra Club's complaint was premature, as Valencia would prepare and submit an application to the Commission prior to expanding its service to the potential new customers at issue. (Id., pp. 2-3.) The Commission dismissed the complaint, concluding that Valencia had "sufficient supply to serve its current customers in its approved service territory." (Id., Conclusion of Law 2, p. 17.) The Commission also concluded that: "Valencia bears the burden of proving that it has adequate capacity to serve customers in any proposed additional service area," and "The Commission will adjudicate Valencia's capacity to serve additional customers in the proceedings where Valencia seeks authorization to serve those customers." (Id., Conclusions of Law 3 and 4, pp. 17-18.)

In March and April 1999, during the pendency of the complaint, Valencia filed AL 84 and 85, requesting authority to expand its service territory to serve an additional 3,400 homes. Sierra Club protested the advice letters. The Commission approved the advice letters, but noted that: "Clearly, however, the allegations made in the protests could impact long term water demand, and need to be litigated. Consequently, Branch recommends that, although ALs 84 and 85 should be approved, [Valencia] should be ordered to prepare an updated Water Management Program to enable the Commission and all interested parties to evaluate the effects of further expansion of its service area on its water supply." (W-4154, August 5, 1999, p. 6.) Accordingly, the Commission ordered Valencia to file an application for approval of an updated WMP.

Subsequently, in D.99-11-032, the Commission clarified and corrected minor aspects of Resolution W-4154, and denied Sierra Club's Application for Rehearing. In doing so, the Commission stated: "We agree with Sierra Club, however, that certain factual issues concerning future demand and future availability of water in the Santa Clarita basin must be resolved before further extensions of Valencia's service area can be approved. In Resolution W-4154, we ordered Valencia to file an updated Water Management Plan by January 3, 2000. (Ordering Paragraph 2.) The WMP approval process will, in this case, provide the opportunity for a more comprehensive evaluation of the evidence relating to future supply and demand. An evidentiary hearing will be held and interested parties such as Sierra Club will have an opportunity to participate." (Id., pp. 2-3.)

Consistent with Resolution W-4154, Valencia filed the instant application on December 17, 1999, initiating the present proceeding. Ventura, Sierra Club, and the Ratepayer Representation Branch of the Water Division filed protests to Valencia's application.

After prehearing conference (PHC) statements were filed by Valencia and Ventura, a PHC was held on February 8, 2000, before Assigned Commissioner Josiah Neeper and Administrative Law Judge Bertram Patrick. At the PHC, the scope of the proceeding and the issues that were to be subject to evidentiary hearing were discussed at length.

On February 18, 2000, Commissioner Neeper issued his "Scoping Memo and Ruling of Assigned Commissioner." In responding to Ventura and Sierra Club's efforts to broaden the proceeding to address potentially adverse impacts to other users of water in the region, the Scoping Memo quoted extensively from the Commission's discussion of its limited role in water resources planning in last year's decision in Sierra Club's complaint against Valencia, ¹ and noted that "the Commission has the power neither to adjudicate water rights nor to take on the functions of a regional water or land use planning agency." (Scoping Memo, at 5.) Commissioner Neeper concluded that the scope of the proceeding "should be limited to (1) whether Valencia's current and planned water supplies are sufficient to meet future customer needs; and (2) whether the Commission should approve Valencia's updated WMP." (Id.)

Evidentiary hearings commenced on May 22, 2000. Ventura and Sierra Club filed their motions for determination of CEQA applicability on May 22 and May 30, respectively. Valencia filed its response on June 28. Ventura and Sierra Club filed replies on July 7 and 14, 2000, respectively.