This decision also authorizes Cal-Am to build the Monterey pipeline and Monterey pump station, subject to compliance with a Mitigation Monitoring and Reporting Program to address environmental issues. These facilities are necessary for the efficient and optimal use of the Aquifer Storage and Recovery system as well as the Groundwater Replenishment Project, including conveyance of water over a hydraulic gradient. The decision adopts a cost cap of $50.3 million for the combined pipeline and pump station project. Furthermore, the decision authorizes limited financing and ratemaking features, including cost-recovery of used and useful facilities via two advice letters.
2. California-American Water Company (Cal-Am) shall participate in each Monterey Regional Water Pollution Control Agency (Agency) and Monterey Peninsula Water Management District (District) rate proceeding involving the Revised Water Purchase Agreement (WPA). Cal-Am shall serve written comments to the Agency and District in that rate proceeding. The written comments shall state any and all concerns of Cal-Am with Agency and District proposals, and provide alternative recommendations. If Cal-Am has no concerns, the written comments shall state it has no concerns. At the time Cal-Am serves its comments on the Agency and District, it shall simultaneously serve a copy of the comments on the Commission’s Director of the Division of Water and Audits.
3. California-American Water Company is authorized to upgrade the existing Hilby Avenue Pump Station and construct and operate the Monterey pipeline that was evaluated in the Environmental Impact Report prepared for the Pure Water Monterey Groundwater Replenishment Project as the “Alternative Monterey Pipeline.”
4. Construction of the pipeline and pump station is conditioned on compliance by California-American Water Company with the Mitigation Monitoring and Reporting Program contained in Appendix E.
5. Within 30 days after completion of the pipeline, and the pump station, California-American Water Company shall notify the Division of Water by letter that those facilities are completed.
6. The authorization to build the pipeline and pump station is subject to a cost cap of $50.3 million for the combined pipeline and pump station project. If actual costs exceed the cap, California-American Water Company is authorized to file a Tier 3 advice letter to seek additional recovery.
7. California-American Water Company (Cal-Am) is authorized to make two separate Tier 2 advice letter filings to place the costs of the pipeline and pump station into rates. Cal-Am shall file the first Tier 2 advice letter by April 30, 2017 to cover costs for the pipeline and pump station through March 30, 2017, reflecting the recovery of actual costs for the used and useful portions of the facilities to date. Cal-Am shall include a showing with its advice letter that the expended costs are reasonable, and a showing that the pipeline and pump station are sized appropriately for purposes of maximizing reasonable use of the Pure Water Monterey Groundwater Replenishment Project and the Aquifer Storage and Recovery Project pursuant to terms of the Water Purchase Agreement, including optimizing transfers within applicant’s system. Cal-Am shall file the second Tier 2 advice letter within 90 days after the pipeline and pump station are completed and fully in service, and shall include a showing with its advice letter that the expended costs are reasonable, and a showing that the pipeline and pump station are sized appropriately for purposes of maximizing reasonable use of the Pure Water Monterey Groundwater Replenishment Project and the Aquifer Storage and Recovery Project pursuant to terms of the Water Purchase Agreement, including optimizing transfers within applicant’s system. Commission staff shall follow the guidance stated in the body of this decision in its processing of each Tier 2 advice letter.
8. California-American Water Company (Cal-Am) shall track in a separate section of the its facilities memorandum account: (a) the costs of the pipeline and pump station (including allowance for funds used during construction); (b) a pro-rated portion of the engineering and environmental costs of the entire Cal-Am facilities; and (c) and any portion of the pipeline or pump station placed in service prior to the Commission approving the costs to be included in plant in service and recovered in base rates.
9. The Rulings of the Administrative Law Judge(s), and the Joint Rulings of the assigned Commissioner and the Administrative Law Judge(s), are affirmed.
10. The Commission hereby adopts this Statement of Overriding Considerations, which is attached to Monterey Peninsula Water Management District Resolution No. 2016-12 and incorporated herein by this reference.
11. Application 12-04-019 remains open to address Phase 1 issues.
This order is effective today.
Dated September 15, 2016, at San Francisco, California.
MICHAEL PICKER
President
MICHEL PETER FLORIO
CATHERINE J.K. SANDOVAL
LIANE M. RANDOLPH
Commissioners
Date of Issuance 9/22/2016
DECISION ON CALIFORNIA-AMERICAN WATER COMPANY’S APPLICATION FOR APPROVAL OF THE MONTEREY PENINSULA SUPPLY PROJECT SPECIFICALLY IN REGARDS TO PHASE 2
This proceeding remains open to resolve Phase 1 issues relative to a certificate of public convenience and necessity for a proposed desalination plant and related facilities.
IT IS ORDERED that:
1. California-American Water Company is authorized to enter into the Revised Water Purchase Agreement contained in Appendix C.2. California-American Water Company (Cal-Am) shall participate in each Monterey Regional Water Pollution Control Agency (Agency) and Monterey Peninsula Water Management District (District) rate proceeding involving the Revised Water Purchase Agreement (WPA). Cal-Am shall serve written comments to the Agency and District in that rate proceeding. The written comments shall state any and all concerns of Cal-Am with Agency and District proposals, and provide alternative recommendations. If Cal-Am has no concerns, the written comments shall state it has no concerns. At the time Cal-Am serves its comments on the Agency and District, it shall simultaneously serve a copy of the comments on the Commission’s Director of the Division of Water and Audits.
3. California-American Water Company is authorized to upgrade the existing Hilby Avenue Pump Station and construct and operate the Monterey pipeline that was evaluated in the Environmental Impact Report prepared for the Pure Water Monterey Groundwater Replenishment Project as the “Alternative Monterey Pipeline.”
4. Construction of the pipeline and pump station is conditioned on compliance by California-American Water Company with the Mitigation Monitoring and Reporting Program contained in Appendix E.
5. Within 30 days after completion of the pipeline, and the pump station, California-American Water Company shall notify the Division of Water by letter that those facilities are completed.
6. The authorization to build the pipeline and pump station is subject to a cost cap of $50.3 million for the combined pipeline and pump station project. If actual costs exceed the cap, California-American Water Company is authorized to file a Tier 3 advice letter to seek additional recovery.
7. California-American Water Company (Cal-Am) is authorized to make two separate Tier 2 advice letter filings to place the costs of the pipeline and pump station into rates. Cal-Am shall file the first Tier 2 advice letter by April 30, 2017 to cover costs for the pipeline and pump station through March 30, 2017, reflecting the recovery of actual costs for the used and useful portions of the facilities to date. Cal-Am shall include a showing with its advice letter that the expended costs are reasonable, and a showing that the pipeline and pump station are sized appropriately for purposes of maximizing reasonable use of the Pure Water Monterey Groundwater Replenishment Project and the Aquifer Storage and Recovery Project pursuant to terms of the Water Purchase Agreement, including optimizing transfers within applicant’s system. Cal-Am shall file the second Tier 2 advice letter within 90 days after the pipeline and pump station are completed and fully in service, and shall include a showing with its advice letter that the expended costs are reasonable, and a showing that the pipeline and pump station are sized appropriately for purposes of maximizing reasonable use of the Pure Water Monterey Groundwater Replenishment Project and the Aquifer Storage and Recovery Project pursuant to terms of the Water Purchase Agreement, including optimizing transfers within applicant’s system. Commission staff shall follow the guidance stated in the body of this decision in its processing of each Tier 2 advice letter.
8. California-American Water Company (Cal-Am) shall track in a separate section of the its facilities memorandum account: (a) the costs of the pipeline and pump station (including allowance for funds used during construction); (b) a pro-rated portion of the engineering and environmental costs of the entire Cal-Am facilities; and (c) and any portion of the pipeline or pump station placed in service prior to the Commission approving the costs to be included in plant in service and recovered in base rates.
9. The Rulings of the Administrative Law Judge(s), and the Joint Rulings of the assigned Commissioner and the Administrative Law Judge(s), are affirmed.
10. The Commission hereby adopts this Statement of Overriding Considerations, which is attached to Monterey Peninsula Water Management District Resolution No. 2016-12 and incorporated herein by this reference.
11. Application 12-04-019 remains open to address Phase 1 issues.
This order is effective today.
Dated September 15, 2016, at San Francisco, California.
MICHAEL PICKER
President
MICHEL PETER FLORIO
CATHERINE J.K. SANDOVAL
LIANE M. RANDOLPH
Commissioners
DECISION ON CALIFORNIA-AMERICAN WATER COMPANY’S APPLICATION FOR APPROVAL OF THE MONTEREY PENINSULA SUPPLY PROJECT SPECIFICALLY IN REGARDS TO PHASE 2
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