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Water Committee


Committee Chair: Ron Green

Committee Member: Larry Versaw
 
The committee stays abreast of water  issues in Cypress Ridge; reviews and comments on correspondence between the CPUC and Rural Water Company which are primarily their requests for rate increases or reimbursements for expenses; interfaces with an attorney to represent CROA as necessary.
 
If you have any question, contact Ron at water@cypressridgeoa.org
 

STATUS OF WATER ISSUES AS OF JANUARY 21, 2014
 
This up-date does not include all the advice letters, protests, etc. that preceded the CPUC actions discussed below. It only includes the latest actions of the last few months which are really the CPUC’s response to the earlier actions. The CPUC did not act on any of the advice letters, etc. for well over a year.

The CPUC issued draft Resolution W-4950 (Attachment #1) on May 6, 2013 in response to Rural Water Company’s (Rural) request to be reimbursed for legal fees incurred for the Santa Maria Groundwater Adjudication (Stipulation) and for the costs of the NMMA Technical Group to produce the 2008 annual report. The CPUC is recommending that Rural be reimbursed $49,260 for the NMMA fees and $128,612 for legal fees. One half of the legal fees, $64,306, would be collected with a surcharge and the other half would be placed in its plant account as rate base. The $109,464 surcharge (plus interest) would be $3.26 a month for thirty-six months beginning July 1, 2013 ($4,101 has already been collected). The draft resolution was scheduled to be heard by the Commission several times but has been withdrawn from the agenda.

The larger issue is whether the CPUC should authorize Rural to participate in the Stipulation. If authorized, Rural’s monthly rates will at least double, if not triple.  Subsequent to the draft Resolution being issued, the CPUC issued a Resolution authorizing Golden State Water Company to participate in the Stipulation (Attachment #2). Rural subsequently filed comments on draft Resolution W-4950 to incorporate the Golden State authorizations, even though the draft Resolution only requests reimbursement of legal fees and NMMA expenses.

 CROA filed a protest (Attachment #3). Again, Rural did not book the expenses in a properly established memorandum account and therefore violates the rule against retroactive ratemaking. Most of the legal fees were incurred before the December 31, 2005 date the CPUC authorized Golden State to be reimbursed.  In fact, some were from as far back as 1999. The draft Resolution did not include back-up or justify the reasonableness of the expenses. In addition, Rural did not provide adequate notice to each individual customer as required. Rural should have requested CPUC authorization to participate in the Stipulation many years ago as required by the Stipulation. CROA requested that Rural should seek authority to proceed with any major expenditure related to the Stipulation by filing an application for a formal proceeding before an Administrative Law Judge (ALJ).

On October 10, 2013 Golden State Water Company and Rural Water Company filed an application with the CPUC for Golden State to acquire Rural Water for $1.7 million (Attachment #4). The Joint Applicants requested that the Commission address the Application on an expedited, ex parte basis. In other words, no hearings if no material issues of fact are contested. Golden State responded to our protest (Attachment #5) that neither CROA nor the Office of Ratepayer Advocates (ORA) raised any material issues (Attachment #6). The CPUC has yet to rule on the requests, but it looks like the issue will be heard by an ALJ.
 
One of the conditions of the acquisition is that the CPUC must authorize Rural Water’s participation in the Santa Maria Groundwater Adjudication. CROA has protested the acquisition based on the cost of the Stipulation to Rural Water customers.  CROA has requested the matter be heard before an ALJ and the involvement of the ORA.  In the purchase agreement, $302,054 is listed as a liability to NCSD (This is probably Rural’s share of the fees for NMMA’s subsequent annual reports). Adding that to the request for $177,872 in legal fees discussed above, the impact on Rural Water customers would total $479,926, or $515 per customer. That doesn’t include the cost of NCSD’s pipeline from Santa Maria or the expensive water that Rural Water customers must pay for but can’t receive.