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GW2/RWH/DH7/sf3 11/21/2017 FILED

11:09 AM


Application of California-American Water

Company (U210W) for Approval of the
Monterey Peninsula Water Supply Project Application 12-04-019
and Authorization to Recover All Present
and Future Costs in Rates.



On Monday November 6, 2017, pursuant to instructions provided prior to

the commencement of evidentiary hearings on October 25, 2017, and as modified
at those hearings, the parties submitted a proposed joint outline for briefs related
to the issues covered at the evidentiary hearings. The parties submitting the
proposed outline stated that they had worked to develop a mutually agreeable
briefing outline, but were unable to agree on certain issues, and not all parties
provided input.1
We continue to find that having parties brief the Certificate of Public
Convenience and Necessity (CPCN) issues that were the subject of the recent
evidentiary hearings are beneficial for the timely completion of this case. Parties
wishing to address all CPCN issues (absent environmental matters that will be
briefed later), including the nine issues that were the subject of the recent

1See November 6, 2017, e-mail from Cathy Hongola-Baptista to Administrative Law Judges
Weatherford, Haga, and Houck with copies to the service list of Application (A.) 12-04-019.

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A.12-04-019 GW2/RWH/DH7/sf3

evidentiary hearings, should submit briefs on those issues. This includes any
updated briefs on CPCN issues that have been briefed previously. Current briefs
need to be comprehensive of all CPCN issues (except environmental and issues
resolved in Decision (D.) 16-09-021).2
The proposed outline is the outline adopted for briefs, as modified below.
Parties should follow the adopted outline in submitting their briefs. If a party
has no argument with respect to a specific issue it should so state so as to
maintain the structure and numbering of the outline. Issues that were
highlighted in the proposed outline are not included in the adopted outline.
Parties wishing to include other issues in their brief (not including the
highlighted items in the proposed outline that are excluded from the adopted
outline) should do so in a separate section after Section IV, in the outline,
accordingly we have eliminated Other as a separate category in Sections II. and
III. As stated in the August 28, 2017 Ruling (at 3): Parties have addressed
influence on the environment in comments on the draft EIR/EIS, and will
address it again in briefs after publication of the FEIR/FEIS. The Commission
will consider the environmental factor when it considers the FEIR/FEIS.
Therefore, briefs should include the remaining three issues required by Pub. Util.
Code 1002 as bases for granting a CPCN: community values, recreational and
park areas, and historical and aesthetic values.
In Section IV. Settlements, to the extent relevant for the CPCN portion of
the proceeding, the briefs should address parties positions on pending
settlements (e.g., Comprehensive Settlement Agreement, Sizing Settlement

2 Parties filed opening and reply briefs in June 2016 (after the hearings in May 2016 on Phase 2
issues in A.12-04-019). Those briefs addressed the Phase 2 issues and the Phase 2 issues were
addressed in D.16-09-021, and do not need to be addressed here.

A.12-04-019 GW2/RWH/DH7/sf3

Agreement, Return Water Settlement Agreement, Brine Settlement Agreement).

In addition, we have added a new Section 3. under B. Cost and Financing Issues.
Based on the testimony received regarding slant wells we ask the parties to brief
the apportionment of risk in the event production from any significant and major
element of the plant (e.g., slant wells) is insufficient in whole or in part during the
operating life of the desalination plant. While the focus is on slant wells, parties
should address insufficient production or failure of any major element of the
Monterey Peninsula Water Supply Project. Parties should address
apportionment of risk in the form of shared cost, adjustments to rate of return,
removal of items from ratebase, or in any other relevant form. The dates we
adopted at the end of the evidentiary hearings of December 15, 2017, for opening
briefs, and January 9, 2018, for reply briefs, remain in effect.
Parties are instructed to make the briefs organized, complete, and clear.
Please be specific, lucid, and exact in statements, requests, proposals, and
recommendations. In addition, please note Rule 13.11 of the Commission's Rules
of Practice and Procedure:
Factual statements must be supported by identified evidence
of record. Citations to the transcript must indicate the
transcript page number(s) and identify the party and witness
sponsoring the cited testimony. Citations to exhibits must
indicate the exhibit number and exhibit page number. A brief
of more than 20 pages shall contain a subject index, table of
authorities, and a summary of the briefing party's
recommendations following the table of authorities.
(Emphasis added.)
Parties can make the summary reasonably concise but it must be clear, specific,
exact, and complete.
Parties may address environmental issues, including impacts to
groundwater, through the California Environmental Quality Act/National

A.12-04-019 GW2/RWH/DH7/sf3

Environmental Policy Act environmental review process, comments on the

hydro working group report, and briefing on the Final Environmental Impact
Statement/Final Environmental Impact Report (FEIS/FEIR) to occur next year.
As noted in the November 13, 2017 Ruling on the motions to strike
testimony during the hearings, testimony addressing the hydro working group is
outside the scope of the issues considered at the recent evidentiary hearings.
However, we allow an opportunity for parties to provide comment and reply
comments on the hydro working group report dated October 12, 2017. The dates
we adopted at the end of the evidentiary hearings of December 8, 2017, for
opening comments, and January 4, 2018, for reply comments, remain in effect.
Finally, we remind parties that they are to agree on a common outline for
briefs on FEIR/FEIS issues by March 1, 2018, or submit disputes to the
Administrative Law Judges. In the event there are no disputes, we direct
Applicant to serve a copy of the agreed-upon outline on the service list by
March 1, 2018. We reiterate that parties may file and serve opening briefs on
FEIR/FEIS issues ten days after the publication of the FEIR/FEIS. Parties may
file and serve closing briefs on FEIR/FEIS issues seven days after the filing of
opening briefs.

IT IS SO RULED, including that parties shall use the following outline for
their briefs:


Table of Authorities


I. Introduction

II. Present and future public convenience and necessity of the project

A.12-04-019 GW2/RWH/DH7/sf3

A. Reasonableness of the projection of demand and proposed plant size

1. Estimates and analysis of demand

(a) Future use by existing customers
(b) Growth, including legal lots of record,
Pebble Beach, and economic recovery of
hospitality industry
2. Estimates and analysis of supply alternatives
(a) The potential expansion of Pure Water
Monterey, including amounts and costs of
available water
(b) Availability of water for purchase,
including from Marina Coast Water District
3. Need for and appropriateness of proposed plant and plant
(a) Potential methods of reduction from
proposed size
(i) Postponement of one or more wells
(ii) Operation of plant at lower rate
(iii) Construction in modular increments
(iv) Other
B. Cost and financing issues

1. Reasonableness of proposed cost cap

2. Financing issues
3. Apportionment of risk (e.g., between
shareholders and ratepayers in the form of shared
costs, adjustments in rate of return, removal of
items from rate base, or other) in the event
production is insufficient in whole or part of a
significant plant component during the operating
life of the MPWSP (e.g., slant wells)
C. Feasibility and desirability of using solar and renewables
D. Section 1002 Factors

A.12-04-019 GW2/RWH/DH7/sf3

1. Community values
2. Recreational and park areas
3. Historical and aesthetic values
III. Legal Principles in Support of and in Opposition to MPWSP
A. Site restrictions, including California American Waters
access to CEMEX site
B. Agency Act
IV. Settlements
A. Comprehensive Settlement Agreement
B. Sizing Settlement Agreement
C. Return Water Settlement Agreement
D. Brine Settlement Agreement
V. Other
VI. Conclusion.

Dated November 21, 2017, at San Francisco, California.


Gary Weatherford Robert W. Haga
Administrative Law Judge Administrative Law Judge


Darcie L. Houck
Administrative Law Judge