GW2/lil 2/28/2017

FILED
2-28-17
11:50 AM

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

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 (Filed April 23, 2012)
and Future Costs in Rates.

ADMINISTRATIVE LAW JUDGES RULING DENYING

JOINT MOTION TO STRIKE MARINA COAST WATER DISTRICT
CONSOLIDATED COMMENTS AND REQUEST FOR DEFERRED HEARING

Summary
The July 22, 2016, Joint Motion to Strike Marina Coast Water Districts
Consolidated Comments is denied. The Marina Coast Water Districts request
for deferred hearing on motions to approve the Brine Discharge Settlement
Agreement and the Settlement Agreement on Desalination Plant Return Water is
denied. Parties may file motions for hearing and those motions, if any, shall
follow the guidance in this Ruling.

Background
The following 14 pleadings have been filed and are addressed in this
Ruling:

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Line Date Title

No.
1 June 14, 2016 Settling Parties Motion to Approve Brine Discharge Settlement
Agreement
2 June 14, 2016 Joint Motion for Approval of Settlement Agreement on
Desalination Plant Return Water
3 June 28, 2016 Comments by Water Plus on Joint Motion for Approval of
Settlement Agreement on Desalination Plant Return Water
4 July 1, 2016 Surfrider Foundations Motion of Updated Settlement
Agreement [re: Brine Discharge]
5 July 13, 2016 Marina Coast Water Districts Consolidated Comments and
Request for Deferred Hearing on Motions to Approve Brine
Discharge Settlement Agreement and Settlement Agreement on
Desalination Plant Return Water
6 July 18, 2016 Marina Coast Water Districts Amended Consolidated
Comments and Request for Deferred Hearing on Motions to
Approve Brine Discharge Settlement Agreement and Settlement
Agreement on Desalination Plant Return Water
7 July 22, 2016 Joint Motion to Strike Marina Coast Water Districts
Consolidated Comments and Request for Deferred Hearing on
Motions to Approve Settlement Agreement on Desalination
Plant Return Water
8 July 26, 2016 Marina Coast Water Districts Response in Opposition to the
July 22, 2016 Joint Motion to Strike Its Consolidated Comments
and Request for Deferred Hearing on Motions to Approve Brine
Discharge Settlement Agreement and Settlement Agreement on
Desalination Plant Return Water
9 July 27, 2016 Public Water Now Reply Comments to Marina Coast Comments
and Request for Deferred Hearing on Motion to Approve
Settlement Agreement on Desalination Plant Return Water
10 July 28, 2016 Public Trust Alliance Reply to MCWD Consolidated Comment
on Proposed Settlement Agreements
11 July 29, 2016 Joint Consolidated Reply Comments in Support of the Joint
Motion for Approval of the Settlement Agreement on
Desalination Plant Return Water
12 July 29, 2016 Joint Reply Comments in Support of Brine Discharge Settlement
Agreement
13 August 2, 2016 California-American Water Companys Notice of Updated
Settlement Agreement [re: Return Water]
14 August 5, 2016 Public Trust Alliance Response to Motion to Strike MCWD
Consolidated Comment on Proposed Settlement Agreements

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Discussion
The pleadings noted above include those seeking approval of
two proposed settlement agreements along with those in support and
opposition. They include pleadings that seek evidentiary hearings on possible
factual disputes in the proposed settlements, and pleadings in opposition. They
also include motions to strike certain pleadings, and responses in opposition.
Finally, they seek an order limiting certain future argument. These are
addressed in order.
1. Motions for Approval of Two Settlement Agreements
Motions for approval of settlement agreements have been filed with
respect to: (1) Brine Discharge and (2) Return Water. Marina Coast Water
District (MCWD) and others oppose the motions arguing that the motions cannot
be considered separately from the grant or denial of the application for the
Monterey Peninsula Water Supply Project (MPWSP) itself.
Joint Parties disagree, arguing that the Commission could approve either
agreement before determining the final outcome of this proceeding. (Joint
Parties July 29, 2016 Reply Comments at 2-4. 1) Joint Parties also point out that
the motion relative to the Return Water Settlement contains no expectation the
Commission will necessarily rule on the Settlement Agreement before issuing its
final decision in the proceeding. (Id., at 4.) This is also true of the other motion.

1There are seven Joint Parties in this pleading: California-American Water Company,
Coalition of Peninsula Businesses, LandWatch Monterey County, Monterey County Farm
Bureau, Monterey County Water Resources Agency, Monterey Peninsula Regional Water
Authority, and Salinas Valley Water Coalition.

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As a result, whether the Commission may approve the agreements now, or

whether it must wait, is not an issue that needs to be decided here. On the other
hand, waiting could permit the Commission to consider comments made by
parties on the draft Environmental Impact Report (EIR), along with the treatment
of those comments in the final EIR, as they may relate to the two settlements. It
could permit the Commission to consider final legal arguments provided in
briefs (to be filed after close of the evidentiary record) as they relate to the two
settlements.
Thus, there is no compelling reason to act on the two motions for approval
of settlement agreements now. Rather, the motions will be considered when
appropriate later.
2. Motion for Deferred Hearings
MCWD requests evidentiary hearing on each of the settlement motions
following completion of the joint federal/state environmental review process
and further development of the relevant factual record. (July 13, 2016 MCWD
Comments at 1.) MCWD says a more robust record will be available at that time
on at least two issues: (1) factual information from the test slant well regarding
groundwater issues and impacts (including expert evaluation of the test well and
groundwater monitoring data in the EIR) and (2) updated factual information
concerning demand and supply (e.g., water available from the Groundwater
Replenishment Project). This information, according to MCWD, affects the
public convenience and necessity for the MPWSP as a whole as well as issues
related to mitigation, return water, and brine discharge. (Id., at 22-24.)
The request is denied, but motions for hearing may be made at an
appropriate later time with guidance provided below. The request is denied
because it is premature. It is premature since it is not now known whether

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disputed issues of material fact will later remain (e.g., after considering expert
evaluation of test well and groundwater monitoring data in the EIR, and
updated demand and supply information). It is also denied because the request
fails to make the scope of the hearing clear. That is, the disputed issues of
material fact are not stated with enough specificity to permit a clear ruling to
identify and limit the scope of proposed testimony for future hearing.
Parties may, however, later file motions for evidentiary hearing. Such
motions, if any, must:
a. Briefly state the specific issue(s) that requires evidentiary
hearing, the position(s) that will be taken on the issue(s), and the
fact(s) that will be offered in support of the position(s);
b. State each specific disputed material fact and
i. Explain why the fact is disputed,
ii. Explain why the fact is material;
c. Estimate the amount of time needed for evidentiary hearing,
proposed order of witnesses, and anything else needed to
schedule hearings; and
d. State anything else that the Commission must reasonably
consider in deciding whether to grant or deny the motion.

Parties seeking evidentiary hearing should make every reasonable effort to

file one joint motion. If unable to agree on all items, parties should agree on as
much as possible and file one joint motion that reflects those agreements, while
also identifying the limited areas of disagreement.

3. Joint Parties Motion to Strike MCWD Consolidated Comments

Joint Parties move to strike portions of the July 13, 2016, MCWD
Consolidated Comments, and all of the attachments, as improper and
immaterial. In addition, Joint Parties ask for an order directing MCWD not to
reargue the alleged necessity of evidentiary hearings on environmental review.

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MCWD and others file oppositions. The motion to strike is denied.

Joint Parties state that Rule 12.2 of the Commissions Rules of Practice and
Procedure (Rules) limit comments on the proposed settlements to the settlements
themselves. Joint Parties contend that the comments must specify the portions of
the settlement the party opposes, along with the legal basis of the opposition and
the factual issues that it contests. Joint Parties assert that MCWD disregards the
limits stated in Rule 12.2 by focusing not on the settlements but purported
defects of the MPWSP as a whole.
To the contrary, MCWDs comments are relevant to the settlement
agreements themselves. Groundwater impacts and mitigation of those impacts
by providing desalinated water to Castroville may be related to the proposed
return water settlement. The volume of desalinated water for applicants
ratepayers may affect both brine discharge and return water and the related
proposed settlements. The attachments illustrate a fact or factual dispute. To the
extent the comments and attachments stray from a strict reading of Rule 12.2, we
liberally construe Rule 12.2 to secure just, speedy, and inexpensive determination
of the issues presented. (Rule 1.2.)
Joint Parties are concerned that failing to strike the attachments permits
submission of new evidence. Their concern is misplaced. The attachments are
not part of the evidentiary record.

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4. Limit Future Argument

Joint Parties also ask for an order directing MCWD not to reargue the
alleged necessity of evidentiary hearings on environmental review. While no
order prohibiting such re-argument is made here, MCWD is cautioned to
reasonably limit its re-argument.
The assigned Commissioners Scoping Memo and Ruling provided for
bifurcated processing of this matter, with one track addressing the request for a
certificate of public convenience and necessity and the other track addressing
environmental issues. (See June 28, 2012 Scoping Memo and Ruling at 3 and
footnote 2.) This was affirmed and clarified in the September 25, 2013 Amended
Scoping Memo and Assigned Commissioner Ruling. It has been addressed
several other times, including the June 29, 2015 Ruling granting the motion of
California Unions for Reliable Energy for party status with guidance regarding
comments on the draft EIR comments and issues to address in briefs. Most
recently, it was addressed in the January 13, 2017 Ruling Providing Guidance to
Citizens for Just Water Concerning Party Status.
MCWDs motion for evidentiary hearing on environmental issues has been
made and denied more than once. The motion has been denied because the
Commission administers its authority and responsibilities for this proceeding
under the California Environmental Quality Act through the Energy Division.
The Commission administers its authority and responsibilities for this
proceeding under the Public Utilities Code through the Administrative Law
Judge Division. The Commission considers the final EIR in its determination
whether to grant or deny a certificate of public convenience and necessity for the
requested project in this proceeding. This approach is the standard procedure

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used by the Commission in certificate of public convenience and necessity

matters.
Because MCWDs argument has been made and been rejected more than
once, further argument by MCWD should clearly and specifically state the
factual and/or legal circumstances that have changed since the last ruling that
denied MCWDs motion for evidentiary hearing on environmental issues.
Merely rearguing the same position absent new facts or law wastes the limited
time and resources of the Commission and parties.

IT IS RULED that:
1. The July 22, 2016, Joint Motion to Strike Marina Coast Water Districts
Consolidated Comments is denied.
2. The July 13, 2016, Marina Coast Water District request for deferred hearing
on motions to approve the Brine Discharge Settlement Agreement and the
Settlement Agreement on Desalination Plant Return Water is denied.
3. Parties may file motions for evidentiary hearing and those motions, if any,
shall follow the guidance stated in this Ruling.
4. In any future motion for evidentiary hearing on environmental issues,
Marina Coast Water District (MCWD) shall clearly and specifically state the
factual and/or legal circumstances that have changed since the last ruling that
denied MCWDs similar motion.
Dated February 28, 2017, at San Francisco, California.

/s/ GARY WEATHERFORD

Gary Weatherford
Administrative Law Judge

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