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Home My WebLink About1823-WA Notice - SM Steelhead Recovery Plan Legal Expenses Memorandum Account - SupplementCALIFORNIA PUBLIC UTILITIES COMMISSION DIVISION OF WATER AND AUDITS Advice Letter Cover Sheet Utility Name: GOLDEN STATE WATER COMPANY District: SANTA MARIA CPUC Utility #: 133 W Advice Letter #: 1823-WA Tier ❑1 N2 ❑3 ❑ Compliance Authorization Description: STEELHEAD RECOVERY PLAN LEGAL EXPENSES MEMORANDUM ACCOUNT Date Mailed to Service List: 7/16/2020 Protest Deadline (20th Day): 7/30/2020 Review Deadline (30th Day): 8/9/2020 Requested Effective Date: 4/17/2020 Rate Impact: N/A The protest or response deadline for this advice letter is 20 days from the date that this advice letter was mailed to the service list. Please see the "Response or Protest" section in the advice letter for more information. Utility Contact: Ronald Moore Phone: (909) 394-3600 x 682 Email: rkmoore@gswater.com DWA Contact: Tariff Unit Phone: (415) 703-1133 Email: Water.Division@cpuc.ca.gov DATE STAFF [ ] APPROVED Signature: DWA USE ONLY [ ] WITHDRAWN Comments: Utility Contact: Nguyen Quan Phone: (909) 394-3600 x 664 Email: nquan@gswater.com COMMENTS [ ] REJECTED Date: oo Golden State July 16, 2020 Advice Letter No.1823-WA (U 133 W) California Public Utilities Commission Golden State Water Company ("GSWC) hereby transmits the following tariff sheets applicable to its Water Operations: Canceling CPUC Sheet No. Title of Sheet CPUC Sheet No. Original No. 8721-W* Preliminary Statement Part MMMM Revised No. 8722-W* Table of Contents Revised No. 8720-W Page 1 of 4 SUBJECT: Steelhead Recovery Plan Legal Expenses Memorandum Account SUPPLEMENT GSWC is supplementing Advice Letter No. 1823-W to change the effective date of the memorandum account to April 17, 2020, to coincide with the date that the United States District Court Central District of California denied the Motions to Dismiss, filed by GSWC and the City of Santa Maria (case no. CV-19-8696-AB (JPRx) for the Federal Endangered Species Act lawsuit. This supplemental filing will replace Advice Letter No. 1823-W in its entirety. PURPOSE GSWC is seeking authorization from the California Public Utilities Commission ("Commission") to establish the Steelhead Recovery Plan Legal Expenses Memorandum Account ("SRPLEMA"), to track the anticipated legal expenses due to the recent developments involving the Steelhead Salmon Recovery Plan. On March 30, 2011, GSWC filed Advice Letter No. 1442-W, to establish the Santa Maria Steelhead Recovery Plan Memorandum Account ("SMSRPMA") to track all outside services related to the Santa Maria Steelhead Recovery Plan including consultants and legal services associated with legal expenses,- prepare for and attend meetings and hearings including committee (e.g., finance committee, water resources, administrative, interagency and other committees); Review and respond to board and committee Advice Letter No.1823-WA -2- July 16, 2020 memoranda; Meetings with stakeholders regarding same including area cities and water rights holders, local elected officials, water board members, utilities and industry; Provide public testimony as needed; Legal and policy research to defend and support positions to protect ratepayers; Identify, analyze, and propose statutory changes to defend and support positions to protect ratepayers; attend meetings and hearings, including committee meetings, as needed; Legal research and other actions including employment of experts to defend against any legislation that has a negative impact on rates, water supply reliability or water rights affecting ratepayers; Review and preparation of legal documents; Review and preparation of technical documents; Meetings with technical staff and experts; Review and respond to various settlement approaches; Legal research to support and defend positions; Policy research to support and defend positions; Legal research regarding potential litigation to protect ratepayers' long term storage costs; Identify, analyze, defend and propose statutory changes to protect long term storage benefits to ratepayers; Draft pleadings and other court documents regarding same; Prepare for and attend meetings with potential litigants; Conduct discovery and file motions; Employ expert witnesses as necessary. Advice Letter No.1442-W was filed pursuant to the Settlement Agreement adopted in Decision No. 10-12-059, in GSWC's General Rate Case Application No.10-01-009. Advice Letter No. 1442-W was approved with an effective date of January 1, 2011. In GSWC's General Rate Case Applications No.11-07-017, A. 14-07-006, and A.17-07-010, GSWC was authorized to continue the SMSRPMA for years 2013-2021, via Decision No. 13-05-011, issued May 13, 2013, D.16-12-067, issued December 21, 2016 and D.19-05-044, effective May 22, 2019, respectively. DISCUSSION Two Steelhead habitat lawsuits have been filed, to date, regarding the Santa Maria River. The first by the San Luis Obispo Coastkeeper and the Los Padres Forest Watch groups against the Conservation District in State Court and a second Federal Endangered Species Act lawsuit by the San Luis Obispo Coastkeeper, the Environmental Defense Center and the Los Padres Forest Watch against the Conservation District and the Bureau of Reclamation to require releases of water from Twitchell Reservoir, a key element in ensuring groundwater basin recharge under the Santa Maria Adjudication (which GSWC has rights to under the adjudication). GSWC and the City of Santa Maria have intervened in the Federal lawsuit to protect their water rights. The intent of the Steelhead Recovery Plan litigation ("Plan') was to obtain a court order imposing a recovery plan on the operation of Twitchell Reservoir in GSWC's Santa Maria customer service area. The Plan was initiated because the state and federal agencies responsible for the Steelhead Recovery Plan had not taken any action to implement it. Adjusting the operations of Twitchell Advice Letter No.1823-WA -3- July 16, 2020 Reservoir to accommodate the elements of the Steelhead Recovery Plan will have direct, negative water supply reliability impacts on GSWC's customers. On April 17, 2020, the United States District Court Central District of California denied the Motions to Dismiss, filed by GSWC and the City of Santa Maria (case no. CV-19-8696-AB (JPRx) for the Federal Endangered Species Act lawsuit, therefore, GSWC will litigate the release of water from Twitchell Reservoir, a key element in ensuring groundwater basin recharge under the Santa Maria Adjudication (which GSWC has rights to under the Stipulation). As a result of this lawsuit's continuation, GSWC believes that it will incur (and record in the SMSRPMA) legal expenses in excess of $1,000,000, starting in 2020. The aforementioned legal ruling has triggered the need to establish the SRPLEMA. The SRPLEMA will track the following: All outside services including experts and legal fees and costs associated with Legal expenses related to the Santa Maria Steelhead Recovery Plan, and all associated proceedings or efforts focused on fisheries resource recovery, including litigation and / or other proceedings intended to restore fisheries resources. These activities, and related expenses, include but are not limited to: testimony to defend and support positions to protect ratepayers and the water supplies dedicated to serve those ratepayers; Legal activities (research, advocacy and litigation) and other actions, litigation or initiatives that may have negative impacts on rates; Review and preparation of all necessary legal and technical documents related to or arising out of litigation, legislative or regulatory proceedings; Meetings with or among technical staff, legal representatives, consultants and experts, opposing or involved parties; Legal activities (research, advocacy, and litigation) to support and defend positions; Legal activities (research, advocacy, and litigation) to protect ratepayers' interests in the integrity of the water rights and water supplies dedicated to benefit those ratepayers; Identify, analyze, defend and propose statutory changes to protect long term water supplies and ratepayers' interests; Prepare pleadings and other court documents regarding same; Prepare for and attend meetings with litigants; Conduct discovery and file motions and attend court hearings and trial. TRACKING OF COSTS GSWC will track the costs being recorded in the proposed Steelhead Recovery Legal Expenses Plan Memorandum Account by coding invoices with a specific subledger. REQUEST TO ESTABLISH THE STEELHEAD RECOVERY PLAN LEGAL EXPENSES MEMORANDUM ACCOUNT Advice Letter No.1823-WA -4- July 16, 2020 In accordance with the Commission Standard Practice U-27-W, GSWC requests to establish a memorandum account to track the anticipated legal expenses due to the recent litigation developments involving the Steelhead Recovery Plan. a. are not under the utility's control, The costs to be tracked in the SRPLEMA are not under the control of GSWC. As stated above, under the Federal Endangered Species Act lawsuit by the San Luis Obispo Coastkeeper, the Environmental Defense Center and the Los Padres Forest Watch against the Conservation District and the Bureau of Reclamation to require releases of water from Twitchell Reservoir, a key element in ensuring groundwater basin recharge under the Santa Maria Adjudication (which GSWC has rights to under the adjudication). GSWC is responsible for protecting its interest in the Santa Maria Adjudication. b. could not have been reasonably foreseen in the utility's last general rate case, GSWC was unaware of these legal expenses in its last General Rate Case Application filed in 2017. c. that will occur before the utility's next scheduled rate case GSWC's next scheduled rate case is expected to be filed in July 2020. The continuation of the Federal lawsuit in April 2020 was initiated when United States District Court Central District of California denied the Motions to Dismiss, filed by GSWC and the City of Santa Maria (case no. CV-19-8696-AB (JPRx) for the Federal Endangered Species Act lawsuit. GSWC believes that it will incur (and record in the SRPLEMA) legal expenses in excess of $1,000,000, starting in 2020. d. are of a substantial nature in that the amount of money involved is worth the effort of processing a memo account GSWC estimates that it expects to record legal expenses in excess of $1,000,000 for outside services, including, but not limited to, all associated proceedings or efforts focused on fisheries resource recovery, including litigation and/or other proceedings intended to restore fisheries resources. These activities, and related expenses, include testimony to defend and support positions to protect ratepayers and the water supplies dedicated to serve those ratepayers; Legal activities (research, advocacy and litigation); Review and preparation of all necessary legal and technical documents related to or arising out of litigation, legislative or regulatory proceedings; Meetings with or among technical staff, legal representatives, consultants and experts, opposing or involved parties; Legal activities (research, advocacy, and litigation) to support and defend positions; Legal activities (research, advocacy, and litigation) to protect ratepayers' interests in the integrity of the water rights and water supplies dedicated to benefit those ratepayers; Identify, analyze, defend and propose statutory changes to protect Advice Letter No.1823-WA -5- July 16, 2020 long term water supplies and ratepayers' interests; Prepare pleadings and other court documents re: same; Prepare for and attend meetings with litigants; Conduct discovery and file motions and attend court hearings and trial. e. have ratepayer benefits GSWC customers will benefit from the establishment of this memo account. A portion of the legal costs incurred will be to protect ratepayers and the water supplies dedicated to serve those ratepayers. Additionally, before recovery is granted, the expenses tracked in the memo account go through a prudency review by the Public Advocates Office and the Commission's Water Division to make sure the company did not spend money without discretion; because of this clear benefit, GSWC's request meets Standard Practice U-27 Ws fifth criterion. REVISIONS TO PRELIMINARY STATEMENT GSWC is seeking to add the Steelhead Recovery Plan Legal Expenses Memorandum Account to its Preliminary Statement. This memorandum account will track legal expenses it expects to incur in years 2020, 2021 and beyond. MEMORANDUM ACCOUNT TREATMENT GSWC is aware that a memorandum account is not a guarantee of eventual recovery of expenses, nor is it carried as a regular account under the uniform system of accounts for water utilities. It is carried "off the books" as a memorandum account. Further, it is also known that the California Public Utilities Commission policy on memorandum account treatment has always been that the burden of proof of the reasonableness of expenses charged to the account is the responsibility of the utility requesting reimbursement of such expenses. EFFECTIVE DATE GSWC request that this filing become effective upon regular statutory notice. TIER DESIGNATION Pursuant to D. 07-01-024, this advice letter is submitted with a Tier 2 designation. CUSTOMER NOTICE Pursuant to Water Industry Rule No. 3.2 in the Commission's General Order 96-13, this advice letter does not require a customer notice nor a customer notice verification. RESPONSE OR PROTEST Anyone may submit a response or protest for this Advice Letter (AL). When submitting a response or protest, please include the utility name and advice letter number in the subject line. Advice Letter No.1823-WA -6- July 16, 2020 A response supports the filing and may contain information that proves useful to the Commission in evaluating the advice letter. A protest objects to the AL in whole or in part and must set forth the specific grounds on which it is based. These grounds are: 1. The utility did not properly serve or give notice of the AL; 2. The relief requested in the AL would violate statute or Commission order, or is not authorized by statute or Commission order on which the utility relies; 3. The analysis, calculations, or data in the AL contain material error or omissions; 4. The relief requested in the AL is pending before the Commission in a formal proceeding; or 5. The relief requested in the AL requires consideration in a formal hearing, or is otherwise inappropriate for the AL process; or 6. The relief requested in the AL is unjust, unreasonable, or discriminatory, provided that such a protest may not be made where it would require re -litigating a prior order of the Commission. A protest may not rely on policy objections to an AL where the relief requested in the AL follows rules or directions established by statute or Commission order applicable to the utility. A protest shall provide citations or proofs where available to allow staff to properly consider the protest. DWA must receive a response or protest via email (or postal mail) within 20 days of the date the AL is filed. When submitting a response or protest, please include the utility name and advice letter number in the subject line. The addresses for submitting a response or protest are: Email Address: Mailing Address: ater.ivisio@cc.ca.gov CA Public Utilities Commission Division of Water and Audits 505 Van Ness Avenue San Francisco, CA 94102 On the same day the response or protest is submitted to DWA, the respondent or protestant shall send a copy of the protest to Golden State Water Company at: Advice Letter No.1823-WA -7- July 16, 2020 Email Address: regulatorvaffairs@gswater.com Mailing Address: Golden State Water Company Ronald Moore 630 East Foothill Blvd. San Dimas, CA 91773 Cities and counties that need Board of Supervisors or Board of Commissioners approval to protest should inform DWA, within the 20-day protest period, so that a late filed protest can be entertained. The informing document should include an estimate of the date the proposed protest might be voted on. REPLIES The utility shall reply to each protest and may reply to any response. Any reply must be received by DWA within five business days after the end of the protest period, and shall be served on the same day on each person who filed the protest or response to the AL. Cities and counties that need Board of Supervisors or Board of Commissioners approval to protest should inform the Water Division, within the 20-day protest period, so that a late filed protest can be entertained. The informing document should include an estimate of the date the proposed protest might be voted on. The actions requested in this advice letter are not now the subject of any formal filings with the California Public Utilities Commission, including a formal complaint, nor action in any court of law. No individuals or utilities have requested notification of filing of tariffs. Distribution of this advice letter is being made to the attached service list in accordance with General Order No. 96-B. Sincerely, / s / Ronald Moore Ronald Moore Regulatory Affairs Department Golden State Water Company Advice Letter No.1823-WA -8- July 16, 2020 c: Jim Boothe, CPUC - Water Division Bruce DeBerry, CPUC- Water Division Eileen Odell, CPUC- PAO Victor Chan, CPUC- PAO Richard Rauschmeier, CPUC- PAO GOLDEN STATE WATER COMPANY (U 133 W) 630 E. FOOTHILL BLVD. - P.O. BOX 9016 SAN DIMAS, CALIFORNIA 91773-9016 Original Cal. P.U.C. Sheet No. 8721-W* Pre]iminary Statement Steelhead Recovery Plan Leizal Expenses Memorandum Account MMMM. Steelhead Recovery Plan Legal Expenses Memorandum Account 1. PURPOSE The purpose of the Steelhead Recovery Plan Legal Expenses Memorandum Account ("SRPLEMA") is to track all legal and related expenses associated with the litigation proceedings for the Steelhead Recovery Plan and all related proceedings or efforts focused on fisheries resource recovery. On April 17, 2020, the United States District Court Central District of California denied the Motions to Dismiss, filed by GSWC and the City of Santa Maria (case no. CV-19-8696-AB (JPRx) for the Federal Endangered Species Act lawsuit, therefore, GSWC will litigate the release of water from Twitchell Reservoir, a key element in ensuring groundwater basin recharge under the Santa Maria Adjudication, which GSWC has rights to. The SRPLEMA shall include all outside services including experts and legal fees and costs associated with Legal expenses related to the Santa Maria Steelhead Recovery Plan, and all associated proceedings or efforts focused on fisheries resource recovery, including litigation and /or other proceedings intended to restore fisheries resources. These activities, and related expenses, include but are not limited to: testimony to defend and support positions to protect ratepayers and the water supplies dedicated to serve those ratepayers; Legal activities (research, advocacy and litigation) and other actions, litigation or initiatives that may have negative impacts on rates; Review and preparation of all necessary legal and technical documents related to or arising out of litigation, legislative or regulatory proceedings; Meetings with or among technical staff, legal representatives, consultants and experts, opposing or involved parties; Legal activities (research, advocacy, and litigation) to support and defend positions; Legal activities (research, advocacy, and litigation) to protect ratepayers' interests in the integrity of the water rights and water supplies dedicated to benefit those ratepayers; Identify, analyze, defend and propose statutory changes to protect long term water supplies and ratepayers' interests; Prepare pleadings and other court documents re: same; Prepare for and attend meetings with litigants; Conduct discovery and file motions and attend court hearings and trial. 2. APPLICABILITY The SRPLEMA does not have a rate component. GSWC shall maintain the SRPLEMA making entries at the end of each month as follows: a. A debit entry shall be made to the SRPLEMA at the end of each month to record the expenses. b. A debit entry equal to interest on the balance in the account at the beginning of the month and half the balance after the above entry (a.), at a rate equal to one -twelfth of the rate on three-month Commercial Paper, as reported in the Federal Reserve Statistical Release, H.15 or its successor. 3. EFFECTIVE DATE The SRPLEMA shall have the effective date of April 17, 2020. Page 1 (N) 4. DISPOSITION Disposition of amounts recorded in the SRPLEMA shall be determined in GSWC's next General Rate Case application or by as otherwise determined by the Commission, if the account's cumulative balance exceeds 2% of GSWC's adopted gross revenues. (N) (To be inserted by utility) Issued By (To be inserted by P.U.C.) Advice Letter No. 1823-WA R. J. Sprowls Date Filed Decision No. President Effective Resolution No. GOLDEN STATE WATER COMPANY (U 133 W) Revised Cal. P.U.C. Sheet No. 8722-W* 630 E. FOOTHILL BLVD. - P.O. BOX 9016 Cancelling Revised Cal. P.U.C. Sheet No. 8720-W SAN DIMAS, CALIFORNIA 91773-9016 Page 1 Table of Contents The following tariff sheets contain all effective rates and rules affecting rates and service of the utility, together with information relating thereto Subiect Matter of Sheet Sheet No. Title Page 4905-W Table of Contents 8722-W*, 8719-W, 8711-W, 8682-W (T) Preliminary Statements: 8370-W, 7005-W, 3140-W, 3141-W, 3142-W, 6940-W, 5096-W*, 5097-W*, 5102-W, 5223 -W, 5322-W, 6477-W, 6478-W, 6479-W, 7075-W, 7076-W, 5607-W, 5848-W, 5937-W, 6101-W, 8685-W, 8686-w, 6123-W, 6225-W, 6475-W, 6559-W, 6652-W, 6858-W, 7129-W, 6938-W, 7368-W, 7441-W, 7442-W, 7451-W, 7481-W, 7728-W, 7730-W, 7747-W, 7748-W, 7749-W, 7750-W, 7756-W, 7994-W, 8007-W, 8246-W, 8365-W, 8366-W, 8367-W, 8418-W, 8419-W, 8494-W, 8495-W, 8721-W* (C) Tariff Area Maps: Arden - Cordova Arden 6837-W Cordova 6838-W Barstow 5560-W Bay 8189-W Calipatria-Niland 6846-W Clearlake 6839-W Claremont 8487-W Desert Morongo Valley 8223-W, 6427-W Apple Valley North 5802-W Apple Valley South 8221-W Desert View 8222-W Lucerne Valley 5805-W Los Osos Edna Road 8198-W Los Osos 5253-W Metropolitan Artesia 8292-W Norwalk 7732-W Bell -Bell Gardens 6675-W Florence -Graham 8294-W Hollydale 8295-W Culver Citv 8293-W Southwest 8196-W Willowbrook 6842-W Orange County Bolsa Chica 4381-W Cowan Heights 8251-W Cypress -Los Alamitos -Stanton 8252-W Placentia-Yorba Linda 6844-W San Dimas 8226-W San Gabriel Vallev South Arcadia 8285-W South San Gabriel 8005-W Santa Maria Cypress Ridge 8254-W Lake Marie 5705-W Orcutt 5558-W Sisquoc 5257-W Tanglewood 8638-W Nipomo 8637-W Simi Vallev 8639-W Wrightwood 6428-W (To be inserted by utility) Issued By (To be inserted by P.U.C.) Advice Letter No. 1823-WA R. J. Sprowls Date Filed Decision No. President Effective Resolution No. GOLDEN STATE WATER COMPANY SERVICE LIST SANTA MARIA DISTRICT City ufSanta Maria NipomuCommunity Services Dist. 2005Eaot Main Street P.O. Box320 Santa Maria, CA 93454 Nipumo'CA 93444 |m|onq()ci.santa'mnria.ca.us Mik*(d),ahivaeyandeeitz.00m mia|emiaa(@,noad.oa.00v County Counsel County Clerk 1O5East AnopamuStreet, Rm. 201 County nfSan Luis Obispo Santa Barbara, CA 93101 1055Monterey Street -#D-12O San Luis Obispo, C/\ 93408 County Counsel County of San Luis Obispo County Government Center, #D-32U San Luis Obispo, CA 93408 City Clerk & City Attorney City ofGuadalupe U18Obispo Street Guadalupe, CA 03434 Santa Barbara LAFCO 105E.AnopamuRoom 4O6 Santa Barbara, CA 03101 County Government Center 10GOMonterey Street — Room 207 San Luis Obispo, CA 93408 Thomas J.K4anBhdoJr. 505SansnmoSL.Suite 9O0 San Francisco, CA 94111 Ann Watson: watonnaultVd�ahcohbal.net Larry Versaw Ron Green: ron*en2275(o),chadecnet City Clerk & City Attorney City ofSanta Maria 110East Cook Street Santa Maria, CA 03454 rciahmbc(o)oi.santa-mmrio.oa.us Peinco(a)citvohaantamoriaoro—City interim Attorney LAFCO 1O42Pacific Street, Suite /\ San Luis Obispo, CA 03401 Cypress Ridge Owner's Association Attn: President 140NMadonna Road San Luis Obispo, CA 93405 Robert Miller, VVa|laoeGp NipumuMesa Management Area 812Clarion Court San Luis Obispo, CA 93401 Megan Sornogyi Goodin, Moo0hda.Soueh&Day, LLP 5U5GanoomaStreet, Suite QU8 8onFranoiaoo.CA 94111 MSomuqy(a)qnodinmacbride. corn Jose Guzman Jr. JEGuzmanJr(a)qmuiioom County mfVentura 8O0S.Victoria Street Ventura, CA 93009