March
25, 2011 Update Carmel River Mitigation Program and Water Project User Fee
– CPUC Decision, March 24, 2011
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On March 24, 2011, the California Public Utilities
Commission (CPUC) approved a Revised
Proposed Decision that adversely affects funding for the MPWMD Carmel River Mitigation Program and Water Project 1 (also known as Aquifer Storage and
Recovery). This required Mitigation Program reduces adverse impacts to
the Carmel River that result from community water use. For more than
two decades, a MPWMD surcharge on the California American Water Company
(Cal-Am) water bill has been the source of funding for the Mitigation
Program. This practice was questioned in 2008 and the MPWMD User Fee
was removed in late July 2009. In January 2010, Cal-Am submitted Application No. 10-01-012 to reinstate the MPWMD User Fee. In May 2010,
Cal-Am, MPWMD and CPUC’s watchdog entity called the Division of Ratepayer
Advocates (DRA) signed a Settlement Agreement that supported the MPWMD User
Fee and Cal-Am application (Motion and Agreement).
In December 2010, the assigned Administrative Law Judge issued an initial
decision denying Cal-Am’s application for
reinstatement of the MPWMD User Fee. In January and February 2011, many
groups and members of the public wrote the CPUC expressing support for the
User Fee. On March 24, 2011, a Revised
Proposed Decision was issued by the CPUC, which includes three key
components: (1)
It denies the
settlement agreement among MPWMD, Cal-Am and DRA. (2)
It authorizes
Cal-Am to amend Application 10-01-012 within 60 days to either: (a) propose a
joint Mitigation Program with MPWMD, including an updated budget; or (b)
propose a program where Cal-Am is solely responsible for the Mitigation
Program. If an amended application is
not received within 60 days, the original application will be denied without
prejudice. (3)
Cal-Am will
be able to recover the payments made to MPWMD for Mitigation Program
activities from July 2009 through May 23, 2011. Cal-Am can be reimbursed for
these payments (roughly $5 million) by placing a surcharge on water bills
over a 12-month period. MPWMD is disappointed that the Revised
Proposed Decision was made public only one day before CPUC action. The District, Cal-Am and other parties
were not allowed to address the Commission on this matter. It was approved as a Consent Calendar item,
and no public hearing was held to set the record straight on a variety of
inaccurate assertions. MPWMD supports the recovery of
payments to Cal-Am, but continues to disagree with the CPUC regarding the
rights and authority of MPWMD as clearly enunciated in State Law. The District plans to request a
reconsideration of the CPUC’s action, and litigation is possible. The MPWMD Board will address these issues in
detail in closed session on March 31, 2011.
MPWMD and Cal-Am also plan to meet to discuss this new ruling, and how
to coordinate action in the near future.
Other Background Information: The original
Proposed Decision contained many errors, was legally flawed, and did not
provide the opportunity for a public hearing.
The MPWMD sponsored a January 2, 2011 advertisement
urging the public to get involved. A sample
letter of support for the Cal-Am application was made available,
and detailed Questions & Answers
were prepared. MPWMD prepared formal
comments to the CPUC. |
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List of Documents in Reverse
Sequential Order |
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Revised
Proposed Decision by Administrative Law Judge Bushey,
Issued on March 23, 2011 and Adopted by CPUC on March 24, 2011 |
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February 2, 2011 Q&A on Proposed CPUC
Decision |
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January 10, 2011 Formal Comments
Submitted to the CPUC Regarding the Proposed Decision |
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Submitted by Monterey
Peninsula Water Management District |
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Submitted by Division
of Ratepayer Advocates |
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Submitted by California
American Water |
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January
5, 2011 Sample Letter of Support prepared by MPWMD |
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January 2, 2011 Advertisement in
Monterey Herald by MPWMD |
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December
2010 Proposed Decision by Administrative Law Judge Bushey |
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May
18, 2010 Motion to Approve Settlement Agreement between Cal-Am, MPWMD and
DRA |
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May
18, 2010 Settlement Agreement between Cal-Am, MPWMD and DRA |
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January
5, 2010 Cal-Am Application No. 10-01-012 to Reinstate User Fee |
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Other Mitigation Program
information is available on the website as follows: |
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Mitigation
Program (environmental protection) |
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MPWMD
Water Allocation Program Final EIR -- April 1990 |
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