monterey rate application satellite systems may 13, 2008

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Monterey Rate Application Satellite Systems May 13, 2008

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Page 1: Monterey Rate Application Satellite Systems May 13, 2008

Monterey Rate Application

Satellite Systems

May 13, 2008

Page 2: Monterey Rate Application Satellite Systems May 13, 2008

2

Setting Your Water Rates: A 20-month Process

• Initial proposal filed November 30, 2007

• Final application filed January 30, 2008

• Public hearings in Monterey May 28 & 29, 2008

• DRA report on their findings and review August 2008

• Evidentiary hearings October 2008

• Proposed decision by Administrative Law Judge April 2009

• Final decision by CPUC Commissioners in June 2009

• Final rates effective July 2009

* DRA = Division of Ratepayer Advocates, an independent entity of the CPUC

Page 3: Monterey Rate Application Satellite Systems May 13, 2008

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Filings for a Sustainable System

1. Conservation December 14, 2007

2. Current GRC + General Office January 30, 2008

For rates in 2009 – 2011

3. Rate of Return May 2008

4. San Clemente Dam Total Cost Recovery Future

5. Next GRC + Support Functions May 2010

For rates in 2012 - 2014

6. Coastal Water Project EIR & CPCN On-going review

7. CWP Total Cost Recovery Future

– Monterey Customers currently pay for Coastal Water Project preconstruction costs through a surcharge on the bill

Page 4: Monterey Rate Application Satellite Systems May 13, 2008

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Map of Satellite Systems

Satellite systems

Also: 1) Ralph Lane – 29 customer system located in Salinas

2) Chualar – 189 customer system located in So. Mo. Co.

Page 5: Monterey Rate Application Satellite Systems May 13, 2008

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Satellite Systems by the Numbers

• Total of seven separate water systems• 15 wells with various treatment measures• 27 storage tanks• Multiple pressure zones• 2,000 total customers • 1,153 AF of water used per year• 0.5 AFY per customer usage vs. 0.17 AF per customer on main

system - 3 times higher• Satellite peak day demands = 300% higher than average day

demand• Main system = 60% higher than average day demand• Supported and operated by employees of the Monterey main

system

Page 6: Monterey Rate Application Satellite Systems May 13, 2008

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Water Supply Sources• Ryan Ranch, Hidden Hills, Bishop

Seaside Basin (Laguna Seca Subsystem) Zero water allotment from adjudication Allocations and tiered rates proposed

• Ambler Park & Toro El Toro Groundwater Basin Hydrologically contiguous to the Seaside Basin Overdraft (removing more water than is being replenished each year) Allocations and tiered rates proposed in Ambler Park, not Toro

• Ralph Lane & Chualar Salinas Basin groundwater Currently no water restrictions on use No allocations proposed; No tiered rates proposed for Chualar

Page 7: Monterey Rate Application Satellite Systems May 13, 2008

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Seaside Basin Adjudication Changed SupplyFor Ryan Ranch, Hidden Hills & Bishop

• Decision issued March 2006

• 2,500 AF total reduction from recent pumping levels required by 2021

• Zero AF allocation for Satellite Systems (Currently Use = 761 AF)

• Seaside Basin Satellite Systems will use the Seaside Basin customers

(non-satellite) allotment for their water supply

• Seaside Basin Satellite System rates will be the same as main system

rates (except Coastal Water Project and San Clemente Dam

surcharges)

• Interconnects system with main system to alleviate Laguna Seca

situation

Page 8: Monterey Rate Application Satellite Systems May 13, 2008

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Regulatory Impacts to Seaside Basin Supply

1979 – 1988

Historic

1995 – 2006 WY 2009

1st Seaside Reduction

ULTIMATE

SeasideReduction

Seaside BasinCoastal 2,700 AFY 4,000 AFY 3,191 AFY 1,494 AFY

Seaside BasinLaguna SecaSatellite Systems

210 AFY 700 AFY 271 AFY 0 AFY

TOTAL 2,910 AFY 4,700 AFY 3,462 AFY 1,494 AFY

Over 50% reduction needed from 2009 WY

Page 9: Monterey Rate Application Satellite Systems May 13, 2008

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Ambler Park & Toro

• Water supply is from the El Toro basin

• Hydraulically connected to the Laguna Seca subarea of the Seaside Basin

• California American Water has 800 customers in the two systems

• Declining water levels while pumping is increasing

• El Toro Basin also have the following: Hundreds of individual well users

2 commercial well systems

150 community water systems (mutuals)

• Geographic area of El Toro Basin greater than the Seaside Basin area

• Monterey County Water Resources Agency (MCWRA) conducted hydrologic study of Basin in 2007

Page 10: Monterey Rate Application Satellite Systems May 13, 2008

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El Toro Basin Hydrologic Study

• Conducted by Geosyntec for MCWRA

• Study completed in July 2007

• Major source of groundwater replenishment is precipitation

• Groundwater overdraft conditions exist

• Water supply being maintained by reducing groundwater storage

• Hydraulically contiguous with the Laguna Seca area of the Seaside Basin

• Recommends a collaborative groundwater management program with Laguna Seca sub-area producers

• Need to asses potential risk of ground subsidence near Highway 68 due to continued decline of groundwater levels

• Need to evaluate alternatives to enhance water supply and promote conservation measures

Page 11: Monterey Rate Application Satellite Systems May 13, 2008

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California American Water Ambler Park & Toro Recommendations

• No water supply quantity enhancements proposed in this filing

• Continue to supply customers with water from the El Toro Basin through 2011

• Currently systems are not interconnected• Toro interconnected to Hidden Hills• Rates less than main system customers• Allocations and tiered rates proposed in Ambler Park• No allocations or tiered rates proposed in Toro

Page 12: Monterey Rate Application Satellite Systems May 13, 2008

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Chualar & Ralph Lane

• Water supply from Salinas Groundwater Basin• No current restrictions or fees imposed on use of

groundwater basin water• Cost to produce water through 2011 anticipated to be

inexpensive• Proposed rates are considerably less than other satellite

systems and main system No tiered rate structure proposed in Chualar No allocations proposed No mandatory conservation required

• No interconnection to other systems currently or proposed

Page 13: Monterey Rate Application Satellite Systems May 13, 2008

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Main System (35,000 Customers)Draft CDO Proposed Reduction Schedule

Water Year Percent Reductionfrom 11,285 Goal

Max End of Year Diversion Amount

2008-0915% 9,592 AFY

2009-10

2010-1120% 9,028 AFY

2011-12

2012-1335% 7,335 AFY

2013-14

2014- 50% 5,642 AFY

Page 14: Monterey Rate Application Satellite Systems May 13, 2008

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Major Drivers of Rate Request 2009 - 2011

$/Customer in Satellite Systems $4,500$/Customer in Main System $4,600

Loss of Consumption 3%

Capital Investment 62%

Seaside Basin & Sand City 16%

Labor 8%

General Office 7%

Other 4%

Page 15: Monterey Rate Application Satellite Systems May 13, 2008

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Rate Comparison for 20 ccf Residential3x more than main system average use

SystemCurrent

Rate2009 2010 2011

2011 % Increase

Main $131.18 $153.16 $170.21 $192.21 47%

Bishop $96.16 $139.67 $155.18 $175.17 82%

Hidden Hills $123.41 $139.67 $155.18 $175.17 42%

Ambler Park $88.07 $129.08 $143.42 $161.89 84%

Toro $57.56 $123.74 $128.41 $137.10 138%

Ralph Lane $85.66 $100.19 $102.10 $103.83 21%

Chualar $33.70 $39.23 $39.98 $40.65 21%

Ryan Ranch does not have residential customers

Page 16: Monterey Rate Application Satellite Systems May 13, 2008

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Summary of major items

• Total Overall Revenue Increase requested = 120%

• Satellite systems and main system customers could be more,

depending on use and water allocations

• Satellite systems of Chualar and Ralph Lane – lower rates due to

water supply situation

• Allocations and conservation rates (5 tier structure) implemented for

all except Chualar, Ralph Lane and Toro

• Satellite Systems are high users of water, complicated systems, high

amount of facilities, lack a long-term water supply (except Ralph

Lane and Chualar)

• Customers on tiered rates could experience a 1,000% increase in bill

if most of their water use is in the 5th tier.

Page 17: Monterey Rate Application Satellite Systems May 13, 2008

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Conservation application filing

• Further conservation needed due to reduced water supply

• $1.7M additional annual expenses for conservation items

• 5% rate increase for conservation expenses

in addition to GRC

• Rates will impact large users more than average users

• Accelerated timeline; interim phased decision

• Rebates for water saving devices available and encouraged

• Allocations established for all customers except Ralph Lane

and Chualar due to water supply situation

Page 18: Monterey Rate Application Satellite Systems May 13, 2008

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Public Participation

California Public Utilities Commission

Public Advisor’s Office

505 Van Ness Avenue

San Francisco, California 94102

1-866-849-8390 (toll-free)

(415) 703-2074

Email: [email protected]

Case Numbers: A.08-01-027; A.07-12-010

CPUC Public Participation Hearings

May 28 – Chualar Elementary School, 7pm

24285 Lincoln Street, Chualar

May 29 – Monterey City Council Chambers, 2 pm & 6pm

580 Pacific Street, Monterey