Our statutory mission is to obtain the lowest possible rate
for service consistent with reliable and safe service levels. In
fulfilling this goal, DRA also advocates for customer and environmental
protections.
DRA's Policy Position
DRA supports a Monterey Water Supply Project that provides
safe and reliable water to the Peninsula ,
requiring Cal Am to make all reasonable efforts to include a Ground Water
Replenishment strategy, in order to achieve a diversified and potentially
less-costly water supply portfolio. Ground Water Replenishment would be a
joint project between the Monterey Regional Water Pollution Agency (MRWPA) and
the Monterey Peninsula Water Management District (MPWMD), which proposes to
supply water to the peninsula by injecting a highly treated product water from
a new advanced water treatment plant into the Seaside Basin Aquifer, where it
would be diluted and stored.
DRA recommends several ratepayer protections to the Project
related to cost, financing, and ratemaking , including that the CPUC should:
- Direct Cal Am to construct a 6.4 million gallons per day (MGD) desalination plant with an absolute capital cost ceiling of $182.7 million, in which any costs over $146.2 million would require CPUC review.
- Utilize a customer surcharge (Surcharge 2) to offset reasonable project costs as they are incurred in order to lower overall project costs and gradually implement rate increases, which should accrue interest at the same rate as Cal Am’s authorized equity return.
- Mitigate capital risks by requiring Cal Am to contribute capital amounts so that Surcharge 2 is not the exclusive source of funds during the initial stages of the project.
- Prevent Cal Am pipelines and infrastructure necessary to transport water from the desalination plant to customers from receiving preferential ratemaking treatment by not allowing costs to enter rates prior to being determined used and useful, capping costs at an absolute ceiling of $66.1 million.
If the CPUC determines, with input from all parties, that
Ground Water Replenishment strategies are not feasible, Cal Am should be
authorized to proceed with construction of a 9.6 MGD Desalination Plant, with
the CPUC requiring:
- Setting of an absolute capital cost ceiling of $216.6 million.
- Review of the reasonableness of all costs above of $173.3 million via a separate application prior to being recovered from ratepayers.
See DRA’s position on CPUC’s June 2012 Key Foundational Legal Issues.
See DRA’s February 22, 2013 Testimony.
Comparison
Table of 6.4 MGD Desalination Plant: Cal
Comparison
Table of 9.6 MGD Desalination Plant: Cal
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