VII. Comments on Draft Decision
The draft decision of the Principal Hearing Officer in this matter was 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 have made the following revisions to the draft decision as discussed below.
CWA requests 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 requests that staff's recommended topics for a future OIR be included in the order to open an OIR. We have 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 request that we delete entirely the discussion of Aerojet's position that regulated utilities can be held liable despite any compliance, especially since the opinion releasing them from liability is now under review by the California Supreme Court. We agree 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 et al. desire 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, reply to these requests, contending that to do so changes the focus and purpose of this investigation. The water companies contend the draft decision makes adequate and appropriate findings regarding health risks. They contend to speculate about the health risk during periods when no standards applied is an unwarranted expansion of this proceeding and erroneously implies that there were periods when the regulated utilities were under no standards, ignoring GO 103. The water companies assert that the findings and conclusions in the draft decision reasonably and correctly lead to the conclusion that the minimal exceedances did not constitute a danger to public health.
We conclude that an investigation into whether a health risk to the public existed prior to the establishment of DHS standards in not warranted at this time. The Commission's major focus must remain on assuring the healthfulness of water, and we do not at this time 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 now reflect and incorporate many of the suggested changes.
Citizens and Alisal, in separately filed comments, request correction of factual errors which have been made. Since we clarify or correct the errors alleged by Alisal, its motion to receive the basis upon which certain facts are made is denied.
Lastly, the corrections indicated by RK&M have been made.
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 the enforcement of 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, 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 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 1856, has maintained it 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 signed Memorandums of Understanding in 1986 and 1006 identifying the roles of each party and their mutual, cooperative relationship in addressing water quality issues that involve the delivery of drinking water by public water utilities.
7. On July 28, 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.
10. DHS has set primary and secondary MCLs for numerous known contaminants which are published in the CCR. DHS has also set ALs of 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.
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. 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.
19. 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 not specifically addressed in this proceeding warrant further exploration and investigation in a new a rulemaking proceeding.
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 and other water quality issues not addressed by the Commission in this Decision in a new rulemaking proceeding.
8. This proceeding should be closed.
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) will 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 other water quality issues of concern not addressed by the Commission in this Decision. 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 and convene a workshop.
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.
This order is effective today.
Dated , at San Francisco, California.
