ABSTRACT: The Division of Ratepayer Advocates (DRA) is the independent consumer advocacy division within the California Public Utilities Commission (CPUC). The DRA’s Mission, DRA’s Policy Position and DRA Report on Cal Am 2012 Monterey Peninsula Water Supply Project are featured. The DRA Report on Cal Am 2012 Monterey Peninsula Water Supply Project, EXHIBIT 1-16, EXHIBIT 17-32 and APPENDICES A-C are embedded. And Comparison Table of 6.4 MGD Desalination Plant (Cal Am vs. DRA Cost Estimates) and. Comparison Table of 9.6 MGD Desalination Plant ( Cal Am vs. DRA Cost Estimates) are embedded. Current Proceeding Status: Evidentiary hearings will be held at the CPUC April 2 – 11, 2013. A CPUC Proposed Decision is anticipated by the end of 2013.
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.
