15. Plant F23

SGV proposes to construct perchlorate treatment facilities, a reservoir, and a booster pump station.

The proposed expenditures are $2,600,000 in 2009.

SGV has secured $655,000 from the Department of Defense (DOD) towards construction of the perchlorate treatment facility.

SGV proposes advice letter treatment for this project.

The settlement uses SGV's proposal.

15.1. Positions of Parties

Prior to the settlement, DRA recommended that the reservoir be deferred until after this GRC cycle.

FUSD states the Juniper Pressure Zone, in which Plant F23 is located, has surplus reservoir capacity and perchlorate contamination in the existing well has not exceeded applicable standards. Therefore, it opposes SGV's request. FUSD states that if SGV fears losing DOD funding, it should install perchlorate treatment on a well that needs it.

COF supports FUSD's recommendation.

SGV argues that, since perchlorate levels are near the maximum allowable concentration, it makes sense to install treatment facilities.

SGV states the reservoir is necessary to allow minimum disinfection contact time before the water enters the distribution system, and the booster pump in necessary to pump water from the reservoir into the distribution system.

SGV also points out that it will likely lose the DOD funds if the facility is not constructed.

15.2. Discussion

Since the perchlorate level is increasing, treatment will become necessary. It makes sense to install treatment facilities before they are required rather than waiting until the maximum allowable level is exceeded and the well has to be shut down. The availability of funds from the DOD is a factor in support of the construction of the treatment facilities. As to the reservoir, it is necessary to allow sufficient contact time for disinfection of the water before it flows into the distribution system. The settlement provisions regarding Plant F23 are reasonable.

The settlement provides for advice letter treatment of this project. The ratebase offset advice letter to be filed in accordance with the settlement should be filed only after the project is completed, used and useful. The settlement, without this alternative term, is not in the public interest.