9. Assignment of Proceeding
Susan P. Kennedy is the Assigned Commissioner in this proceeding. The assigned ALJ for the current phase of this proceeding is Glen Walker.
1. The Commission in D.03-05-001 approved a settlement between the City and SCWC that, among other things, conveyed SCWC's water rights in the Charnock Basin to the City.
2. The City is to pay approximately $5.9 million to SCWC for conveyance of the water rights and SCWC wells and other facilities at the Charnock Basin.
3. Ratemaking treatment of the City's payment to SCWC and ratemaking treatment of PRP payments to SCWC were deferred to this phase of the proceeding.
4. Since 1928 and until 1996, SCWC relied on groundwater pumped from the Charnock Basin for a portion of its water supply for its Culver City customer service area.
5. In 1996, the Charnock Basin groundwater was found to be contaminated with the gasoline additive MTBE.
6. The City and SCWC filed lawsuits against various oil companies and other PRPs.
7. PRPs in interim settlement agreements in 1998 agreed to make payments to the City and SCWC for the loss of Basin water.
8. PRPs in 1999 disavowed the settlement agreements and refused to make further payments to the City and to SCWC.
9. An EPA order in 1999 required one or more PRPs to provide water replacement or water replacement payments to the City and to SCWC.
10. SCWC has received approximately $5 million in PRP payments, and monthly payments of $21,974 are to continue until the year 2005.
11. SCWC has booked approximately $4.2 million of PRP payments to its Account 704 (purchased water) and approximately $800,000 to its Account 798 (legal expenses).
12. In its last two general rate cases for the Culver City service area, SCWC has provided only for water purchased from MWD and has included no groundwater in its supply.
13. Historically, pumped water from Charnock Basin has cost less than purchased water.
1. SCWC's water rights in the Charnock Basin are a form of real property.
2. Pub. Util. Code § 790 governs the disposition of net proceeds that a public water utility receives from the sale of real property that was at any time but is no longer necessary or useful in the performance of the utility's duties to the public.
3. Pub. Util. Code § 790 does not apply to the sale by SCWC of its water rights and related facilities in Charnock Basin because they have not been show to be no longer necessary or useful.
4. SCWC should be directed to refund to ratepayers proceeds received from the City for SCWC's Charnock Basin cause of action.
5. The Commission deals with ratemaking treatment of damage awards in contamination lawsuits and settlements on a case-by-case basis.
6. As a general principle, the Commission in dealing with contamination settlements or awards generally seeks first to make ratepayers whole for amounts that they have paid in rates because of contamination.
7. SCWC ratepayers have since 1996 paid water rates higher than the rates would have been had unpolluted water from Charnock Basin been available to supplement water purchased from the MWD.
8. SCWC should be directed to transfer net proceeds of the PRP payments at issue from Account 704 (purchased water) to Account 704.02 (purchased water balancing account) for refund to ratepayers.
IT IS ORDERED that:
1. SCWC shall refund to ratepayers the net proceeds received from the City for SCWC's Charnock Basin cause of action.
2. SCWC is directed to remove relevant Charnock Basin assets from rate base in its current general rate case for the region, Application (A.) 03-10-006.
3. SCWC is directed to transfer net proceeds received from Potentially Responsible Parties (PRPs) with respect to the Charnock Basin contamination from Account 704 (purchased water) to Account 704.02 (purchased water balancing account) for later refund to ratepayers of the excess shown in Account 704.02.
4. SCWC is directed to book future net proceeds to be received from PRPs with respect to the Charnock Basin contamination to Account 704.02 for later refund to ratepayers of the excess shown in Account 704.02.
5. A.02-07-021 is closed.
This order is effective today.
Dated , at San Francisco, California.
CERTIFICATE OF SERVICE
I certify that I have by mail, and by electronic mail to the parties of which an electronic mail address has been provided; this day served a true copy of the original attached Alternate Proposed Decision of Commissioner Lynch on all parties of record for proceeding A.02-7-021 or their attorneys of record.
Dated April 8, 2004, at San Francisco, California.
/s/ ERNESTO MELENDEZ |
Ernesto Melendez |
NOTICE
Parties should notify the Process Office, Public Utilities Commission, 505 Van Ness Avenue, Room 2000, San Francisco, CA 94102, of any change of address to insure that they continue to receive documents. You must indicate the proceeding number on the service list on which your name appears.
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The Commission's policy is to schedule hearings (meetings, workshops, etc.) in locations that are accessible to people with disabilities. To verify that a particular location is accessible, call: Calendar Clerk (415) 703-1203.
If specialized accommodations for the disabled are needed, e.g., sign language interpreters, those making the arrangements must call the Public Advisor at (415) 703-2074, TTY 1-866-836-7825 or (415) 703-5282 at least three working days in advance of the event.
