5. Assignment of Proceeding
John A. Bohn is the assigned Commissioner and Christine M. Walwyn is the assigned ALJ in this proceeding.
1. On January 16, 2009, Cal-Am, DRA, and the MPWMD submitted the Settlement at Appendices A and B to this decision.
2. On February 17, 2009, in its opening comments on the Settlement, the IRWUG requested modifications to the Settlement.
3. The Settlement is comprehensive and reflects a thoughtful compromise among Cal-Am, DRA, and MPWMD of their initial positions; it also incorporates a website proposal that was discussed at the hearings.
4. The total dollars requested in the Settlement are substantially less than initially requested by both Cal-Am and MPWMD.
5. In the Settlement, the largest funding for Cal-Am is for customer rebates, a program that parties assert is one of the most cost-effective water savings programs.
6. The Settlement recognizes that public outreach is an area where more analysis is needed to ensure the funding is being spent effectively and takes specific steps to address this need.
7. The Settlement contains detailed monitoring and reporting requirements with timely annual submissions of reports to the Commission and parties.
8. The Settlement continues the collaboration and cooperation between Cal-Am and MPWMD.
9. We are concerned that the Settlement contains a water savings goal of only 3% to 6% reduction in per customer consumption over the three-year period.
10. The conservation surcharge and balancing account mechanisms set forth in the Settlement are reasonable.
11. The existing "MPWMD Special Conservation Balancing Account" and the corresponding surcharge should be closed.
12. Cal-Am should retain its rationing memorandum account to track Cal-Am's own rationing-related expenditures, as authorized in D.03-02-030 and under the same terms as set forth in D.08-07-010.
13. The existing memorandum account for expanded conservation and rationing costs billed by MPWMD established pursuant to D.06-11-050 (Special Request 6) should be closed.
14. This proceeding should remain open for outstanding Phase 1 issues.
1. The Commission regulates water service provided by Cal-Am pursuant to Article XII of the California Constitution, the Public Utilities Code, and the rules and regulations of the Commission.
2. We reviewed the proposed Settlement under the requirements set forth in Rule 12.1(d) of the Commission's "Rules of Practice and Procedure."
3. The modifications requested by IRWUG are beyond the scope of this proceeding.
4. The Settlement at Appendices A and B is reasonable in light of the whole record, consistent with the law, and in the public interest.
5. The Settlement should be adopted, and should be effective immediately.
IT IS ORDERED that:
1. The Settlement Agreement attached to this decision as Appendices A and B is adopted. Consistent with the adopted Settlement Agreement:
a. A three-year conservation budget of $2,424,678 for California-American Water Company and $1,156,000 for the Monterey Peninsula Water Management District is adopted for the Monterey District.
b. California-American Water Company shall collaborate with the Monterey Peninsula Water Management District to satisfy the California Urban Water Conservation Council requirements for Best Management Practices 1-3, 5-9, and 11-14.
c. The spending caps for specific conservation program categories and the overall budget in Tables 1-3 of the Settlement Agreement are adopted.
d. One hundred percent of the $924,925 Rebate budget and the associated $50,000 for the Weather Based Irrigation Controller pilot study shall be used for rebate dollars given to customers. If after one year California-American Water Company has spent more than one third of this amount, or after two years California-American Water Company has spent more than two-thirds of this amount, and projects that it will overspend in this category, California-American Water Company may file an advice letter to increase the budget by the rate of overspending, or $250,000, whichever is smaller.
e. California-American Water Company shall not spend a majority of the public outreach and education budget on one promotional campaign or in one quarter.
f. California-American Water Company may file an advice letter requesting an additional $100,000 for emergency public outreach if the criteria listed in Section 11(i) of the Settlement are met. At such time that the advice letter goes into effect, California-American Water Company shall place a notice on the customer bill stating that it is a water conservation emergency and that customers should help conserve water.
g. The reporting requirements in Section 4 of the Settlement Agreement are adopted.
h. California-American Water Company shall assess a volumetric surcharge to fund the conservation budget.
i. A one-way balancing account for the efforts undertaken by California-American Water Company and a separate one-way balancing account for the efforts undertaken by the Monterey Peninsula Water Management District shall be used to track the difference between their actual conservation expenses and surcharge collections.
j. The "MPWMD Special Conservation Surcharge Balancing Account" established pursuant to Decision 06-11-050 (Special Request 7) and the corresponding surcharge shall be closed.
k. California-American Water Company shall retain its existing rationing memorandum account to track its rationing-related expenditures.
l. The memorandum account for expanded conservation and rationing costs billed by the Monterey Peninsula Water Management District established pursuant to Decision 06-11-050 (Special Request 6) shall be closed.
m. To the extent that the memorandum account described in the preceding paragraph has been combined with any other memorandum account in California-American Water Company's tariffs, the tariffed memorandum account shall be revised to eliminate the portion of it relating to Special Request 6 in Decision 06-11-050.
2. California-American Water Company is directed to file an Advice Letter within ten days that shall be effective on filing, subject to review by the Commission's Division of Water and Audits for compliance with this decision. The Advice Letter shall contain tariff schedules to:
(a) Establish on a going-forward basis a volumetric surcharge to fund the conservation programs adopted in this Order, with California-American Water Company's and Monterey Peninsula Water Management District's spending separately tracked in one-way balancing accounts. The level of the volumetric surcharge may be changed by Advice Letter on an annual basis in order to equalize collection of the three-year conservation budgets specified in Ordering Paragraph 1.
(b) Close the existing "MPWMD Special Conservation Surcharge Balancing Account" and the corresponding surcharge.
(c) Close the memorandum account for expanded conservation and rationing costs billed by the Monterey Peninsula Water Management District established pursuant to Decision 06-11-050 (Special Request 6) in a manner consistent with the directions contained in paragraphs l. and m. of Ordering Paragraph 1 of this decision.
3. California-American Water Company shall monitor and report the customer consumption and water savings calculations specified in Section 4 of the Settlement Agreement in Annual Summary Reports and in its next Monterey District general rate case application. The Annual Summary Reports shall be submitted to the Commission's Division of Water and Audits, with copies served on this proceeding's service list.
4. Application 07-12-010 remains open.
This order is effective today.
Dated May 21, 2009, at San Francisco, California.
MICHAEL R. PEEVEY
President
DIAN M. GRUENEICH
JOHN A. BOHN
RACHELLE B. CHONG
TIMOTHY ALAN SIMON
Commissioners
