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BEFORE THE PUBLIC UTLITIES COMMISSION

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OF THE STATE OF CALIFORNIA

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Application of California-American Water
Company (U210W) for Authorization to
Increase its Revenues for Water Service by
$34,559,200 or 16.29% in the year 2018, by
$8,478,500 or 3.43% in the year 2019, and
by $7,742,600 or 3.03% in the year 2020.

Application 16-07(Filed July 1, 2016)

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DIRECT TESTIMONY OF F. MARK SCHUBERT, P.E.

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(FINAL APPLICATION)

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Sarah Leeper
Nicholas A. Subias
California-American Water Company
555 Montgomery Street, Suite 816
San Francisco, CA 94111
Telephone: 415.863.2960
Facsimile:415.397.1586
sarah.leeper@amwater.com
nicholas.subias@amwater.com
Attorneys for Applicant CaliforniaAmerican Water Company
Dated: July 1, 2016

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Lori Anne Dolqueist
Nossaman LLP
50 California Street, 34th Floor
San Francisco, CA 94111
Telephone: 415.398.3600
Facsimile: 415.398.2438
ldolqueist@nossaman.com
Attorney for Applicant California-American
Water Company

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TABLE OF CONTENTS

2

I.

INTRODUCTION ....................................................................................................... 2

3

II.

PURPOSE AND ORGANIZATION OF TESTIMONY ............................................ 5

III.

CALIFORNIA AMERICAN WATER ENGINEERING GROUP ............................. 6

IV.

CAPITAL INVESTMENT MANAGEMENT PROCESS.......................................... 7

V.

INFRASTRUCTURE STATUS AND PLANNING................................................... 7

VI.

DEVELOPER AND CONTRIBUTED PROJECTS – ALL DISTRICTS ................ 23

VII.

RECURRING PROJECTS ........................................................................................ 23

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A.

Project Code R15-xxA1 – Mains – New. .......................................... 25

11

B.

Project Code R15-xxB1 – Mains – Replacement/Renewal. .............. 25

12

C.

Project Code R15-xxC1 – Mains – Unscheduled. ............................. 25

13

D.

Project Code R15-xxD1 – Mains – Relocated................................... 26

14

E.

Project Code R15-xxE1 – Hydrants – New. ...................................... 26

15

F.

Project Code R15-xxF1 – Hydrants – Replacement.......................... 26

16

G.

Project Code R15-xxG1 – Services – New........................................ 26

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H.

Project Code R15-xxH1 – Services – Replacement. ......................... 26

I.

Project Code R15-xxI1 – Meters – New............................................ 27

J.

Project Code R15-xxJ1 – Meters – Replacement. ............................. 27

K.

Project Code R15-xxK1 – ITS Equipment and Systems ................... 27

L.

Project Code R15-xxL1 – SCADA.................................................... 27

M.

Project Code R15-xxM1 –Security.................................................... 27

N.

Project Code R15-xxN1 –Offices and Operations Center. ................ 28

O.

Project Code R15-xxP1 –Tools and Equipment. ............................... 28

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P.
Project Code R15-xxQ1 –Plant –
Replacements/Additions. ........................................................................................... 28

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Q.

Project Code R15-xxR1 –Tank Rehabilitation. ................................. 28

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VIII.

CAPITAL INVESTMENT PROJECTS (IPS) .......................................................... 32
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IX.

CARRY-OVER AND IN-PROGRESS CAPITAL INVESTMENT
PROJECTS ADOPTED IN 2013 GRC – ALL DISTRICTS .................................... 32
A.

3

San Diego County District................................................................. 33
1.

I15-300007 - Hollister Street 20-inch Main Replacement
Project Phase 2 (COMPLETED) ....................................................... 33

2.

I15-300004 - Hollister Street 20-inch Main Replacement
Project Phase 3 (COMPLETED) ....................................................... 34

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B.

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Los Angeles County District.............................................................. 35
1.

I15-500010 – Olympiad Booster Station Replacement
(COMPLETED)................................................................................. 35

2.

I15-500032 - Redrill Winston Well at Danford Reservoir
(CARRY-OVER PROJECT, COMPLETION IN 2019)................... 37

3.

I15-500006 - Redrill Lamanda Well (CARRYOVER
PROJECT, COMPLETION IN 2016 OR 2017)................................ 37

4.

I15-500022 - Lemon and Crownhaven Wells (Duarte
Water Supply Improvement Project, IP-0550-170)
(CARRYOVER PROJECT, COMPLETION IN 2016 OR
2017 ................................................................................................... 39

5.

Project Code: IP-0550-35, Duarte - Lemon Domestic
Reservoir Improvements (CARRY-OVER PROJECT,
COMPLETION IN 2016 OR 2017)................................................... 41

6.

Project Code: IP-0550-112, San Marino – Richardson
Well Redrill (COMPLETED)............................................................ 42

7.

Project Code: IP-0550-113, San Marino – Oak Knoll
Circle Well Rehabilitation (POSTPONED
INDEFINITELY)............................................................................... 43

8.

Investment Project I15-500021 LA-Rosemead Reservoir
Reconstruction. (CARRY-OVER).................................................... 44

9.

Investment Project IP-0550-118 LA - Santa Fe Well
Replacement (CARRY-OVER PROJECT,
COMPLETION IN 2018). ................................................................. 45

10.

Investment Project IP-0550-158 LA-Spinks Reservoir
Booster Station Improvements. (CARRY-OVER
PROJECT, COMPLETION IN 2016 OR 2017)................................ 46

11.

Investment Project IP-0550-38 LA-Oswego Well
Replacement and Treatment (SM). (CARRY-OVER

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18168912.v1

 PROJECT, COMPLETION IN 2018) ............................................... 47

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12.

Project Code I15-500045, San Gabriel Boulevard Light
Rail Line Main Relocation – ACE (COMPLETED) ......................... 47

13.

Project Code I15-500046, Crenshaw Boulevard Light Rail
Line Main Relocation – Metro Blue Line (COMPLETED) .............. 48

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C.

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Ventura County District..................................................................... 49
1.

Project Code 05510101 - Los Robles Tank #1
Replacement (COMPLETED)........................................................... 49

2.

Project Code 05510084 - White Stallion Transmission
Booster Station Replacement (COMPLETED) ................................. 50

3.

Investment Project IP-0551-92 (I15-510018) Calle Yucca
Turnout 14” Main Improvements (COMPLETED)........................... 51

4.

Project Code 05510086 - Pace Reservoir Rehabilitation
(COMPLETED)................................................................................. 52

5.

Investment Project IP-0551-93 (I15-510019) Wildwood
Tank Rehabilitation (COMPLETED)................................................ 53

6.

IP 05510509 Improvements to Shopping Center Reservoir
1 (COMPLETED).............................................................................. 54

7.

Project Code 05510018 - Moorpark Reservoir
Rehabilitation (Construction is Underway) ....................................... 55

8.

Project Code 05510094 – Potrero #1 Reservoir
Rehabilitation (Construction is Underway) ....................................... 57

9.

IP-0551-100 (I15-510002) Improve Low Pressure in
Gainsborough Zone (CARRY-OVER PROJECT,
COMPLETION IN 2016 OR 2017)................................................... 58

10.

Investment Project IP-0551-79 (I15-510014) Ventura
Improvements to CMWD Interconnections (CARRYOVER PROJECT, COMPLETION IN 2016 OR 2017).................... 60

11.

Investment Project IP-0551-88 (I15-510017) Connect 12"
Main between Hillcrest and Lawrence Dr (CARRYOVER PROJECT, COMPLETION IN 2016 OR 2017).................... 60

12.

Investment Project IP-0551-96 (I15-510021) 1200’ of
main in Rolling Oaks & Los Padres Drive (CARRYOVER PROJECT, COMPLETION IN 2016 OR 2017).................... 61

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D.

Monterey County Water District ....................................................... 62
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E.

Monterey County Wastewater District .............................................. 62

F.

Sacramento County District............................................................... 63

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1.

Project Code I15-600007 Elverta Road Bridge Water
Main (CARRY-OVER PROJECT, COMPLETION IN
2019) .................................................................................................. 63

2.

Project Code I15-600051 Arden Intertie (CARRY-OVER
PROJECT, COMPLETION IN 2019) ............................................... 64

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X.

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CAPITAL INVESTMENT PROJECTS PERFORMED OR PLANNED
BUT NOT ADOPTED – ALL DISTRICTS.............................................................. 65
A.

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Los Angeles County District.............................................................. 66
1.

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B.

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Project Code I15-500044, Baldwin Avenue Light Rail
Line Main Relocation – Alameda Corridor East (ACE)
(COMPLETED)................................................................................. 66
San Diego County District................................................................. 67

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1.

I15-300006 San Diego PRV Modernization Program....................... 67

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2.

Leasehold Improvements for New San Diego County
Operations Building – R15-30N1 (COMPLETED) .......................... 69

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C.

VENTURA County District............................................................... 71

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1.

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D.

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MONTEREY COUNTY WATER District ....................................... 72
1.

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E.

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XI.

Project Code I15-400111, Retire Carmel Valley Filter
Plant (2015-2017) .............................................................................. 72
Sonoma County (Larkfield) District .................................................. 73

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Project Code 05510200 - Moorpark Booster Station
Replacement (COMPLETED)........................................................... 71

Project Code 05510200 – Replacement of the Backwash
Tank at the Larkfield Water Treatment Plant (In Progress) .............. 73

ADVICE LETTER CAPITAL INVESTMENT PROJECTS.................................... 75
A.

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MONTEREY COUNTY WATER DISTRICT ................................. 75
1.

Project Code I15-400034 (IP-0540-194), Replace Carmel
Woods Tank (COMPLETED) ........................................................... 75

2.

Project Code I15-400004 (05400509), (2) 200,000 Gallon
Tanks in Ambler Park (COMPLETED) ............................................ 76
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3.

I15-400083 (IP-0540-90), Upper Rimrock Storage Tanks
(COMPLETED)................................................................................. 77

4.

I15-400015 (IP-0540-155), Chualar 150K Gal Tank
(Currently In-Progress) ...................................................................... 77

5.

I15-400006 (IP-0540-101), Ryan Ranch – Bishop Intertie
(Currently In-Progress) ...................................................................... 78

6.

I15-400049 – Los Padres Dam Fish Passage Advice Letter
Project (COMPLETED) .................................................................... 79

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B.

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SACRAMENTO COUNTY DISTRICT ........................................... 81
1.

IP-0560-100 – Walnut Grove System Improvements
(COMPLETED)................................................................................. 81

2.

IP-0560-38 – Walnut Grove 120,000 Gal Tank (INPROGRESS/NEARLY COMPLETE) .............................................. 83

3.

IP-0540-74 – Lincoln Oaks 1.5 MG Tank, BPS, and Well
(COMPLETED)................................................................................. 84

4.

I15-600032 Walerga Road Bridge Pipeline
(TEMPORARILY DEFERRED)....................................................... 85

5.

IP-0560-88 – Crowder Lane Controls (COMPLETED).................... 86

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C.

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Sonoma County District (Larkfield) .................................................. 87
1.

XII.

Project Code I15-610002 Faught Road Well..................................... 87

CARRY-OVER CAPITAL INVESTMENT PROJECTS ADOPTED IN
2013 GRC (CONTINUING INTO 2018 AND BEYOND)....................................... 88
A.
Over IPs

Los Angeles County District Previously Approved Carry89

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1.

Project Code I15-500036, Rehabilitate/Redrill Longden
Well (CARRY-OVER) ...................................................................... 89

2.

Project Code I15-500037, Combine Domestic/Irrigation
System in Duarte (Carryover)............................................................ 90

3.

Project Code I15-500038, Booster Station Upgrades
(Project A-4, Baldwin Hills; Project A-5, Baldwin Hills;
Project A-5, Duarte ............................................................................ 93

4.

Project Code I15-500039 – Main Replacement Program
(Project A-6, Baldwin Hills; Project A-3, Duarte; and
Project A-4, Duarte)........................................................................... 94

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5.

Project Code I15-500041, Upgrade SCADA System........................ 97

6.

Project Code I15-500042, Purchase Groundwater Rights
(Annually).......................................................................................... 99

7.

Project Code I15-500048, Arlington Well TCE Treatment
(Project A-3, Baldwin Hills)............................................................ 102

8.

Project Code I15-500050, Patton Tank
Reconstruction/Rehabilitation (Project B-x, San Marino)............... 103

9.

Project Code I15-500051, Oak Knoll Reservoir
Rehabilitation (Project B-x, San Marino) ........................................ 104

10.

Project Code I15-500052, Retire Fairfax Tank (Project B2, Baldwin Hills).............................................................................. 105

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B.

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San Diego County District Carry-over IPs ...................................... 106
1.

Project Code I15-300002, Small Main Replacement
Program............................................................................................ 106

2.

Project Code I15-300008, Replace 2,450 Feet of 18-inch
diameter main in Elm Avenue (Project A-2) ................................... 107

3.

Project Code I15-300010, Replace 16-inch diameter
Transmission Main along the Silver Strand (Project A-3) .............. 108

4.

Project Code I15-300011, Upgrade SCADA System...................... 113

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C.
Ventura County District (Currently in Progress Capital
Investment Projects) ................................................................................................ 114

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1.

Project Code I15-510026, Replace Los Robles Booster
Station (Currently in Progress) ........................................................ 114

2.

Project Code I15-510027, Upgrade Mayfield Booster
Station (Currently in Progress) ........................................................ 115

3.

Project Code I15-510028, Replace 1,400 Feet of 10-inch
Main to Los Posas Tanks (Project B-1) ........................................... 116

4.

Project Code I15-510029, Replace 1,200 Feet of 8-inch
Main in Rolling Oaks Drive (Project B-2)....................................... 117

5.

Project Code I15-510030, Upgrade Springwood Booster
Station (Project B-3) ........................................................................ 118

6.

Project Code I15-510031, Upgrade Wildwood Hydro
Booster Station (Project B-4)........................................................... 119

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7.

Project Code I15-510032, Replace White Stallion
Domestic Booster Station (Project B-5) .......................................... 120

8.

Project Code I15-510033, Upgrade Wildwood Booster
Station (Project B-6) ........................................................................ 120

9.

Project Code I15-510034, Upgrade SCADA System...................... 121

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D.

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Monterey County Water District Carry-Over Capital IPs ............... 123
1.

Project Code I15-400093 Well Rehabilitation (20152017). ............................................................................................... 123

2.

Project Code I15-400090 Booster Station Rehabilitation
Program (2015-2017)....................................................................... 123

3.

Project Code I15-40097 Interconnect the Ryan Ranch,
Hidden Hills, and Bishop Satellite Systems to the Main
Monterey System)............................................................................ 124

4.

Project Code I15-400089 Main Replacement Program
(2015-2017) ..................................................................................... 126

5.

Project Code I15-400094, Redrill Ralph Lane Well........................ 127

6.

Project Code I15-40092 Valve and PRV Replacement
Program............................................................................................ 128

7.

Project Code I15-400095 Fire Flow Improvement
Program............................................................................................ 129

8.

Project Code I15-400096 SCADA Upgrade Program..................... 130

9.

Project Code IP I15-40091 Service Line Replacement
Program (2015-2017)....................................................................... 131

10.

Project Codes I15-400098, I15-400099, I15-400100.
Carmel Valley ESA, 2015, 2016 and 2017...................................... 131

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E.

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Toro Water District Carry-Over IPs ................................................ 132
1.

Project Code I15-480006 Access Road Improvements at
Vista Dorado Tank (COMPLETED) ............................................... 132

2.

Project Code I15-480007 Altitude Valve for Corte
Cordillera Tank (CARRY-OVER) .................................................. 132

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F.

Sacramento County District Carry-Over IPs ................................... 133

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1.
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Project Code I15-600063, Walnut Grove System Tank
Construction..................................................................................... 133
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2.

Project Code I15-600076, Construct Isleton Chemical
Building Enclosure .......................................................................... 134

3.

Project Code I15-600067, Isleton Distribution System
Improvement.................................................................................... 135

4.

Project Code I15-600077, Isleton Pumped Storage Tank
and Booster Station.......................................................................... 136

5.

Project Code I15-600070, Lincoln Oaks SCADA
Improvements at SSWS Interconnection......................................... 137

6.

Project Code I15-600064, Lincoln Oaks Wellhead
Treatment ......................................................................................... 138

7.

Project Code I15-600065, Security Park Pump Station
Upgrade/ Rehabilitation (COMPLETED) ....................................... 139

8.

Project Code I15-600066, Suburban-Rosemont Route 50
Crossing (16-inch Diameter Main) .................................................. 140

9.

Project Code I15-600075, Antelope Backyard Main
Replacement Program...................................................................... 141

10.

Project Code I15-600073, Antelope 1MG Tank, Booster
Station and Well (Elverta Road)...................................................... 142

11.

Project Code I15-600071, Sacramento District Annual
Well Rehabilitation Program ........................................................... 143

12.

Project Code I15-600068, Sacramento District Annual
SCADA Maintenance Program ....................................................... 144

13.

Project Code I15-600072, Sacramento District Main
Replacement Program...................................................................... 145

14.

Project Code I15-600074, Sacramento District Beloit
Office Solar Project ......................................................................... 146

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G.

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XIII.

Sonoma County District (Larkfield) Carry-Over IPs ...................... 147
1.

I15-610009 Londonberry Drive Creek Crossing ............................ 147

2.

I15-610010 SCWA Interconnection Improvement......................... 148

PROPOSED NEW CAPITAL INVESTMENT PROJECTS .................................. 149
A.

Los Angeles County District Proposed IPs...................................... 150

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1.
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Project Code I15-500056, Advanced Metering
Infrastructure (AMI) ........................................................................ 150
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2.

Project Code I15-500038, Booster Station Upgrades
Program............................................................................................ 151

3.

Project Code I15-500057 – Annual Main Replacement
Program............................................................................................ 152

4.

Project Code I15-500042, Purchase Groundwater Rights
(Annually)........................................................................................ 153

5.

Project Code I15-500058, Tier 4 Compliance/Standby
Power (Project A-4, All Three Service Areas) ................................ 154

6.

Project Code I15-500059, Baldwin Hills Recycle Water
Project .............................................................................................. 156

7.

Project Code I15-500060, Reconstruct Rosemead
Operations Center ............................................................................ 157

8.

Project Code I15-500062, Mission View Well 2
Treatment ......................................................................................... 159

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13

B.
Projects

14

San Diego County District New Capital Investment
160

1.

Project Code I15-300002, Small Main Replacement
Program............................................................................................ 160

2.

Project Code I15-300015, Replace 500 Feet of 20-inch
Diameter Main in Palm Avenue (Project A-4) ................................ 161

3.

Project Code I15-300012, Advanced Metering
Infrastructure (AMI) ........................................................................ 162

4.

Project Code I15-300014, Coronado Reliability Supply
Project .............................................................................................. 163

5.

Project Code I15-300016, Coronado/Imperial Beach
Recycle Water Project ..................................................................... 163

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C.

23

Ventura County District Proposed Investment Projects .................. 164
1.

Project Code I15-510038, Advanced Metering
Infrastructure (AMI) ........................................................................ 164

2.

Project Code I15-510039, Booster Station Upgrades
Program............................................................................................ 165

3.

Project Code I15-510034, Tier 4 Compliance/Standby
Power ............................................................................................... 165

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D.

Monterey County Water District Proposed New
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Investment Projects.................................................................................................. 166
1.

Project Code I15-400093 Well Rehabilitation and
Replacement Program (2018-2020)................................................. 166

2.

Project Code I15-400090 Booster Station Rehabilitation
Program (2018-2020)....................................................................... 168

3.

Project Code I15-400089 Main Replacement Program
(2018-2020) ..................................................................................... 169

4.

Project Code I15-40092 Valve and PRV Replacement
Program (2018-2020)....................................................................... 170

5.

Project Code I15-400095 Fire Flow Improvement
Program............................................................................................ 171

10

6.

Project Code I15-400096 SCADA Upgrade Program.................... 172

11

7.

Project Code I15-400104, Advanced Metering
Infrastructure (AMI) ........................................................................ 173

8.

Project Code I15-400106, New Well Development
Program............................................................................................ 173

9.

Project Code I15-400108, Standby Power Generators .................... 173

10.

Project Code I15-400109, Los Padres Facility
Improvements .................................................................................. 174

11.

Project Code I15-400110, Begonia Iron Removal Plant
Improvements .................................................................................. 175

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12.

Project Code I15-400113, Replace Carola Tank # 1 ....................... 176

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13.

Project Code I15-400114, Replace Chualar Tank # 1 ..................... 176

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21

E.

Toro District Proposed Investment Projects .................................... 177

22

1.

Project Code I15-480010 Booster Station Replacement ................. 177

23

2.

Project Code I15-480012 SCADA Enhancements .......................... 178

24

F.

Garrapata Water System Projects .................................................... 178

25

G.

Monterey County Wastewater District Projects .............................. 179

H.

Sacramento County District Proposed Projects ............................... 180

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27

1.

28

Project Code I15-600083, Backyard Main Replacement
Program............................................................................................ 180
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2.

Project Code I15-600071, Sacramento District Annual
Well Rehabilitation Program ........................................................... 181

3.

Project Code I15-600068, Sacramento District Annual
SCADA Maintenance Program ....................................................... 183

4.

Project Code I15-600082, Sacramento District Standby
Generators Improvement ................................................................. 184

5.

Project Code I15-600072, Sacramento District Main
Replacement Program...................................................................... 185

6.

Project Code I15-600085, Water Level Monitoring
Program............................................................................................ 186

7.

Project Code I15-600088, Water Quality Monitoring
Program............................................................................................ 187

8.

Project Code I15-600089, Dunnigan Water System
Improvements .................................................................................. 188

9.

Project Code I15-600091, Sacramento Recycle Water
Project .............................................................................................. 188

10.

Project Code I15-600094, Nut Plains Well PFOA
Treatment ......................................................................................... 189

11.

Project Code I15-600093, New Lincoln Oaks Well ........................ 190

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I.

17

1.

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19
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Sonoma County District (Larkfield) Proposed Projects .................. 191

J.
XIV.

Project Code I15-610013, Miscellaneous Distribution
System Improvements...................................................................... 191
Dunnigan Wastewater District......................................................... 192

COMPREHENSIVE PLANNING STUDY AND SYSTEM MAPS...................... 192

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A.

Maintenance..................................................................................... 192

B.

Budgets ............................................................................................ 194

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XV.

TANK MAINTENANCE ........................................................................................ 195

XVI.

DEPRECIATION .................................................................................................... 200

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XVII.

HEXAVALENT CHROMIUM TREATMENT...................................................... 206

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XVIII.

PERFLUOROOCTANOIC ACID (PFOA) AND
PERFLUOROOCTANESULFONIC ACID (PFOS) TREATMENT ..................... 208

XIX.

M. SAN CLEMENTE DAM AND REROUTE AND REMOVAL

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 PROJECT UPDATE................................................................................................ 209

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XX.

WATER MAIN RENEWAL USING TRENCHLESS
REHABILITATION TECHNIQUES...................................................................... 216

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XXI. POLYBUTYLENE SERVICE REPLACEMENTS…………………………….217

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18168912.v1

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BEFORE THE PUBLIC UTLITIES COMMISSION

2

OF THE STATE OF CALIFORNIA

3
4
5
6

Application of California-American Water
Company (U210W) for Authorization to
Increase its Revenues for Water Service by
$34,559,200 or 16.29% in the year 2018, by
$8,478,500 or 3.43% in the year 2019, and
by $7,742,600 or 3.03% in the year 2020.

Application 16-07(Filed July 1, 2016)

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8
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DIRECT TESTIMONY OF F. MARK SCHUBERT, P.E.

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(FINAL APPLICATION)

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I.
Q1.
A1.

INTRODUCTION
Please state your name and business address.
My name is F. Mark Schubert. My business address is 1033 B Avenue, Suite 200,
Coronado, California 92118.

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Q2.
A2.

By whom are you employed and in what capacity?
I am employed by California-American Water Company (“California American Water”)

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as Manager of Capital Assets and Planning, as well as its Manager, Project Delivery, for

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its Southern Division.

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Q3.
A3.

What are your responsibilities?
As Manager of Capital Assets and Planning, my responsibilities include the following: 1)

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supervise and manage capital planning activities on a statewide basis; 2) manage asset

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planning on a statewide basis; 3) supervise engineering colleagues in two separate

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offices; and 4) provide rate case support and testimony as an expert witness on capital

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project planning in California. As Southern Division Manager, Project Delivery, I
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manage the delivery and implementation of capital projects in California American

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Water’s Southern Division, comprised of the Los Angeles County District, the San Diego

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County District and the Ventura County District.

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Q4.
A4.

Please summarize your educational background.
I graduated in 1978 with a Bachelor of Science degree in Civil and Environmental

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Engineering from Clarkson University, Potsdam, New York. In 1984, I earned a Master

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of Science degree in Civil Engineering from Northeastern University, Boston,

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Massachusetts.

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Q5.
A5.

Please summarize your employment experience.
In 1978, I joined R.W. Beck and Associates in Wellesley, Massachusetts, as an Assistant

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Engineer. I was then promoted to Engineer and later to Senior Engineer in the Power

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Supply and Special Studies Department. I worked on assignments in the civil,

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environmental, and electrical engineering areas, which included water, wastewater, solid

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waste, and hydroelectric projects. In 1984, I transferred to the Utilities Services Design

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office of R.W. Beck and Associates in Seattle, Washington, where I worked on

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engineering design for various water, wastewater, and solid waste projects.

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In 1985, I joined Economic and Engineering Services, Inc., in Olympia, Washington, as a

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Senior Engineer. From 1985 to 1987, I worked preparing water supply plans for several

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different water utilities and conducting associated engineering design and analysis.

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In 1987, I joined the System Engineering Department of American Water Works Service

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Company, Inc. (“Service Company”) as a Senior Planning Engineer in Voorhees, New

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Jersey. I worked on developing comprehensive planning studies for several subsidiary

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water companies of American Water Works Company, Inc. In 1989, I became Assistant

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Director - Rate Studies, which involved preparing reports and studies on cost of service,
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depreciation, and rate design for these same water companies. In 1994, I was promoted

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to Director - Regulatory Studies for New Jersey-American Water Company (“NJAWC”)

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in Haddon Heights, New Jersey. In 1995, I became Director - Business Development for

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NJAWC. In 2000, I returned to the Service Company as a Senior Planning Engineer,

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where I oversaw the capital planning and engineering activities of the Western Region on

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an interim basis. Those activities included development and maintenance of the annual

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and five-year capital investment plans. In November 2001, I became Director of

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Engineering for the Western Region and assumed these responsibilities on a permanent

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basis.

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In 2004, I joined RBF Consulting as a Senior Project Manager, where I prepared strategic

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master plans and helped implement capital improvement projects for clients. In addition,

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I assisted private utility clients on rate case applications because of my extensive

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experience with public utilities commissions in California, Hawaii, and New Mexico. I

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rejoined the Service Company in January 2006 as a Regulatory Engineering Manager in

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the rates and regulatory planning department. I became Director of Engineering for the

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Western Region in 2007, and in 2008, I became Director of Engineering for California

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American Water. In 2010, I assumed my current role as Manager of Capital Assets and

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Planning for California American Water. In 2012, I also assumed responsibility as

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Manager, Project Delivery, for the Southern Division of California American Water.

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Q6.
A6.

Have you testified before any regulatory agencies?
Yes. I testified as an expert witness on capital project planning on numerous occasions

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before state public utility commissions in California and New Mexico. I have also

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submitted expert testimony on capital project planning in Hawaii. In addition, I testified

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as an expert witness on depreciation issues in Indiana, Missouri, New Jersey and

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Pennsylvania. I have also submitted expert testimony on depreciation issues in Arizona

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and California. Finally, I have testified as an expert witness on water system issues

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before the California State Water Resources Control Board (“SWRCB”).
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Q7.
A7.

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Are you a registered professional engineer?
Yes. I am a registered professional engineer (Civil) in Massachusetts, California, Hawaii,
Idaho, New Jersey, New Mexico, Oregon, and Washington.

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Q8.
A8.

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Are you a member of any professional associations?
Yes. I am a member of the American Water Works Association and the American
Society of Civil Engineers.

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II.
Q9.
A9.

PURPOSE AND ORGANIZATION OF TESTIMONY
What is the purpose of your testimony?
My testimony provides: 1) a brief engineering overview; 2) a brief summary of our

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infrastructure and planning process within California; 3) support for the proposed capital

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investment projects for the Southern Division, comprised of the Los Angeles County

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District, the San Diego County District, and the Ventura County District; 4) support for

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the proposed capital investment projects for the Central Division, comprised of the

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Monterey County Water District, the Toro Water District, the Garrapata Water District,

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and the Monterey County Wastewater District; and 5) support for the proposed capital

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investment projects for the Northern Division, comprised of the Sacramento County

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District, the Sonoma County (Larkfield) District and the Dunnigan Wastewater District.

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Q10.
A10.

Please briefly describe how your testimony is organized.
The first part of my testimony provides an engineering overview and policy discussion,

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information on the Capital Investment Management Process and a summary of our

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infrastructure and planning process within California. Later in my testimony I address

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the three main areas of capital expenditures for the three divisions of California American

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Water (Southern, Coastal, and Northern). These areas will include: Developer and

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Contributed Projects, Recurring Projects (“RPs”), and Capital Investment Projects

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(“IPs”).
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III.
Q11.
A11.

CALIFORNIA AMERICAN WATER ENGINEERING GROUP
Please provide an overview of the California American Water Engineering Group.
The Engineering Group for California American Water has three main functions: Project

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Delivery and Planning; Capital Administration; and Supply Chain. A more detailed

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description of the Engineering Group is provided in Attachment 1 to my testimony.

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Q12.
A12.

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Please briefly describe the first function in your Engineering Group.
The first function is Project Delivery and Planning, which includes ensuring capital
projects are delivered on time and within budget. The Comprehensive Planning Study

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(“CPS”) provides the primary foundational support for capital projects delivered for

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California American Water.

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Q13.
A13.

What is the second function within your Engineering group?
It is Capital Administration, which has the primary responsibility of coordinating and

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managing the Capital Investment Management process in California and communicating

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all capital planning issues with California American Water’s President, the Vice

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President – Operations, and the General Manager for each of the three California

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American Water divisions.

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Q14.
A14.

What is the third function within your Engineering group?
The third function is Supply Chain, which uses knowledge of marketplace conditions,

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economic conditions, and local and regional nuances together with industry recognized

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best practices to: 1) Source; 2) Bid; 3) Negotiate; and 4) Award contracts addressing our

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needs for goods and services from vendors or contractors presenting the best value.

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Q15.
A15.

Please describe the current vacancies in the Engineering Group.
There are currently four vacancies within the Engineering Group, which we are actively
recruiting for and plan to replace this year. The four positions include: two (2) Senior
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Project Managers, one (1) Project Manager and one (1) Engineering Manager.

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IV.
Q16.
A16.

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CAPITAL INVESTMENT MANAGEMENT PROCESS
What is the next item you will cover in your testimony?
I will briefly discuss the Capital Investment Management (“CIM”) Process within
California American Water.

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Q17.
A17.

Why is California American Water providing this overview?
The primary reason for discussing the CIM Process is to show the internal review

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typically performed to monitor capital project costs, and to use that information to take

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actions and make any recommended improvements as necessary to manage to the total

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project budget.

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Q18.
A18.

Please describe the CIM Process.
California American Water annually prepares and maintains a five-year capital

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investment plan that serves as an integral component of its overall strategic business plan.

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The five-year capital investment plan is reviewed annually to identify and prioritize

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necessary capital improvement projects to ensure high-quality water service, resolve

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operational challenges, comply with regulatory requirements, and formalize and approve

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the annual budget. An assessment of the completed prior year’s capital expenditures is

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performed and adjustments, if applicable, are made in accordance with the remaining

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years of the current five-year capital investment plan. A more detailed description of the

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CIM Process is provided in Attachment 2 to my testimony.

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V.
Q19.
A19.

INFRASTRUCTURE STATUS AND PLANNING
What is the next item you will cover in your testimony?
I will discuss Infrastructure Status and Planning.

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Q20.

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Please provide a general overview of California American Water’s investment in capital
for water system improvements.

A20.

California American Water works to make capital investment decisions that efficiently

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use financial resources and minimize cost of service to the customer, while also assuring

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regulatory compliance, keeping pace with growth and infrastructure renewal, and

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providing safe, reliable, efficient, high-quality service to customers. Meeting these goals

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requires: 1) an ongoing, comprehensive engineering planning program, with the CPS as

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the primary tool for the evaluation and determination of capital investment needs; 2)

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preparation of capital budgets properly aligned with business plan objectives; and 3)

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effective technical, functional, and financial oversight of the delivery of the capital

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project delivery program of California American Water.

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Q21.
A21.

How important is planning in California American Water’s capital investment program?
California American Water adopts American Water Works Company’s (American

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Water) Comprehensive Planning Program and other comparable technical analyses as the

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primary driver for identifying specific capital project needs. These project

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recommendations are aligned with American Water’s Asset Investment Strategy, and

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include input from all appropriate functional areas. Emerging project needs arise

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between planning study cycles (typically 3 to 5 years), particularly as a result of

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acquisitions. In addition, certain types of projects cannot be identified via a typical

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engineering analysis, yet they still must be evaluated and prioritized. At this time, all of

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California American Water’s systems have been evaluated and have a current CPS. Two

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systems have not yet had a CPS performed, namely the Garrapata system in Monterey

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County (which was acquired in 2013) and the Dunnigan Wastewater system (which was

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acquired in 2015). These two systems are planned for inclusion in the next round of

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CPSs planned to be performed in 2016-2017. The majority of the capital improvements

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identified in this statewide GRC are grounded in the CPS. A more detailed description of

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American Water’s Comprehensive Planning Program is provided in Attachment 3 to my
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testimony.

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Q22.
A22.

Do you wish to provide additional information relative to the CPS?
Yes. American Water continues to incorporate principles of Integrated Water Resource

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Management (“IWRM”) into its planning process. In relevant part, IWRM involves

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integration of various interests and components that may not have always been central in

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a project or planning study, such as inclusion of outside stakeholders, early Public

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Utilities Commission involvement, innovative technologies (i.e., aquifer

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storage/recovery, wastewater re-use), environmental issues, regionalization of resources,

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demand management or other non-conventional solutions, including demand

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management as a supply alternative. While some components of IWRM may have been

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exercised on a project-specific basis in the past, the goal of American Water at this time

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is providing guidelines ensuring the consistent consideration of IWRM principles in the

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general course of planning. As a result, California American Water is incorporating these

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components, as applicable, in its continuing and future comprehensive planning process.

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Q23.
A23.

Can you provide an example of IWRM in California?
Yes. Recycled water has the potential to offset potable supply by replacing non-potable

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uses such as irrigation water. California American Water is currently in the preliminary

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planning stages of a recycled water project in our Southern Division’s Los Angeles

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District. The project has the potential to meet approximately 10 percent of the Baldwin

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Hill’s service area current demand. Irrigation is the most reasonable and accepted

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application for recycled water in this context. At this time, in the Baldwin Hills service

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area, it appears this type of project is most feasible, as one of California American

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Water’s largest customers, Plains Exploration, is under mandate to landscape their

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extensive property. California American Water is currently evaluating potential demands

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from Plains Exploration to determine the feasibility of this option. The effort would be a

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joint undertaking between the Kenneth Hahn Park State Recreation Area, Los Angeles
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County Department of Public Works, and potentially the City of Los Angeles.

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Q24.
A24.

Can you provide another example of the potential use of recycled water?
Yes. California American Water is also currently in the preliminary planning stages of a

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recycled water project in our Southern Division’s San Diego County District. The project

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has the potential to meet a portion of the San Diego County District’s service area current

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demand within the cities of Imperial Beach and Coronado. As currently envisioned, a

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recycled water treatment plant (or wastewater reclamation facility) would be constructed

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and a recycled water main would be installed to deliver recycled water to existing

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customers within the Coronado and/or Imperial Beach service areas. This project is

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discussed further later in my testimony.

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Q25.
A25.

Can you provide another example of the potential use of recycled water?
Yes. California American Water is also currently in the preliminary planning stages of a

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recycled water project in our Northern Division’s Sacramento County District. The

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project has the potential to meet approximately 15 percent of the Sacramento County

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District’s West Placer service area current demand in the long-term as this area is

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developed. The near-term plan is to use available recycled water for irrigation of a golf

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course in the service area.

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Q26.

Please provide some general perspective relating to California American Water’s goals

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with respect to water infrastructure improvements to its various operations across the

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State?

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A26.

One of California American Water’s charters is to provide safe, adequate and reliable

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water service to its customers. California American Water’s capital improvement plans

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are based on delivering capital investment projects that will maintain and improve the

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overall reliability of its water systems. Examples of maintaining and improving our

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water systems include: the replacement of older steel distribution mains in Seaside and
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Los Angeles, well rehabilitation programs in Monterey, Los Angeles and Sacramento,

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and booster station rehabilitation programs and tank rehabilitation programs in all service

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areas. We have bundled these types of projects by district to allow some flexibility in

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implementation based on permit constraints. It should be recognized that California

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American Water will examine the potential use of alternative technologies (i.e. no-dig or

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trenchless) as part of its design and evaluation process of its on-going main replacement

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program. As mentioned previously in my testimony, the comprehensive planning process

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is discussed in detail in Attachment 3. The resulting proposed investment projects are

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then presented by their respective District.

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Q27.
A27.

Can you provide a brief example of the importance of maintaining water infrastructure?
Yes. Briefly, I can highlight an example of a recent water transmission main failure in a

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non-California American Water-owned system elsewhere in California. A 24-foot

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section of an 8-foot diameter concrete pipeline suffered a “catastrophic failure” in August

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2015, resulting in a loss of 15 million gallons of water over one hour’s time. This water

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transmission main is 31 miles long and delivers up to 40 percent of the drinking water

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supply for 1.8 million Santa Clara County residents. In fact, it moves all of the water that

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the Santa Clara Valley Water District purchases from the federal Central Valley Project,

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pumping it from the San Luis Reservoir in Merced County through the Diablo Mountain

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range to the Coyote Pumping Plant near Anderson Reservoir in Morgan Hill. The water

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transmission main was installed by the Bureau of Reclamation in 1985, and was shut

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down for a month while repairs were made to the affected 24-foot section. The

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conclusion was the transmission main failed because mortar on the outside cracked,

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allowing water to seep in and rust high-tension wires that wrap around the steel and

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concrete core. Water then rushed through the top of the structurally compromised pipe.

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It should be recognized that for the one month the water transmission main was under

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repair, the water supply for the Santa Clara Valley Water District was perilously limited.

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If there had been a problem at the South Bay Aqueduct, the other key route for water
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from the Sacramento-San Joaquin River Delta to come into Santa Clara County,

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emergency water shortages could have resulted for homes and businesses. The

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transmission main break also disrupted water service to San Benito County, which is

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served by a spur line off this same transmission main.

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Q28.
A28.

What conclusion can be drawn from this water transmission main failure?
Sadly, this type of main break is symbolic of aging dams, pipes, canals and other water

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infrastructure that are in distress in many communities across the United States. The

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American Society of Civil Engineers reports that there are about 240,000 water main

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breaks a year in this country, equating to more than 600 water main breaks every day. It

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is imperative that capital improvement plans be approved and in place that will help

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maintain and improve the overall reliability of the country’s water systems.

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Q29.
A29.

Can you provide some other examples?
Yes. Another example of improving reliability would be purchasing groundwater rights

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so California American Water can pump more native groundwater in Los Angeles, thus

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avoiding the need to purchase water from the Metropolitan Water District of Southern

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California (“MWD”), which faces supply challenges because of issues in the Bay-Delta

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region. Finally, California American Water continues to examine solar and hydroturbine

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projects to improve our understanding of the energy-water nexus and to better position us

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for future decisions in that area.

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Q30.

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Please provide insight concerning California’s water issues, specifically as they relate to
Southern California.

A30.

Most people are aware that MWD is the regional wholesale water supplier in Southern

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California, serving six counties and approximately 19 million people. MWD accounts for

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more than 50 percent of the region’s water supply, or about four million acre-feet per

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year.
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Q31.
A31.

Can you briefly describe the composition of MWD’s water supply?
Yes. Water from the Colorado River accounts for approximately 25 percent, the amount

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of water flowing from the State Water Project (through the Bay-Delta in Northern

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California) accounts for approximately 30 percent, and the remaining approximately 45

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percent is comprised of local supplies, including from: 1) the Los Angeles Aqueduct; 2)

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conservation; 3) recycling; 4) groundwater; and 5) desalination.

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Q32.

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You mentioned the State Water Project, specifically the Bay-Delta. Can you expand
upon this area?

A32.

Yes. The Bay-Delta is the “hub” of the state of California’s water supply system. Any

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water moving from Northern California to Southern California presently moves through

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the Bay-Delta. This area is generally located halfway between San Francisco and

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Sacramento.

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Q33.

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Please provide some characteristics of where the water entering the Bay-Delta is
distributed.

A33.

In general, approximately 33 percent is distributed to the greater metropolitan Bay Area.

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Another approximately 30 percent is distributed to southern California, while the

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remaining amount is distributed to the Central Valley, mainly for irrigation purposes. It

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should be noted that some regions rely almost 100 percent on the Bay Delta for their

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water supply.

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Q34.
A34.

Please continue.
Of the water flowing through the Bay-Delta, approximately 48 percent flows out to the

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Pacific Ocean. Another approximately 31 percent is tied to upstream consumptive use,

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approximately 4 percent is tied to in-Delta consumptive use, and the remaining

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approximately 17 percent is tied to water being exported out of the Bay-Delta. Of the 17

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percent exportation amount, approximately 4 percent is what gets distributed to MWD.
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Q35.
A35.

According to MWD, what are the key Bay-Delta risks at this time?
MWD indicates there are presently four significant areas of risk in the Bay-Delta. The

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risks include: 1) fishery declines; 2) subsidence of islands in the delta; 3) seismic risk

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from earthquake fault lines; and 4) sea level rise.

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Q36.
A36.

Can you provide some more detail on the fishery risk?
Yes. It is my understanding that there are biological opinions in place that restrict the

8

amount of water that can be pumped to flow to southern California. This issue is mainly

9

tied to the Delta Smelt population. As a result, there is corresponding regulations that

10

govern the amount of water that can be reliably delivered through the Bay-Delta during

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drought conditions. Recently, it has been reported that up to 25 to 30 percent cutbacks

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are instituted every 7 to 10 years as a result of drought conditions. These regulations will

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continue to impose supply restrictions during normal and dry years.

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Q37.
A37.

What about the subsidence risk?
The subsidence risk is related to the island subsidence that is occurring within the Bay-

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Delta pathways for the water as it moves north to south. The soil in the Bay-Delta is

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considered to be very fertile, due to the significant amount of peat and other organic

19

material. The very action of exposing the soil to the air and the continuing farming

20

operations has caused these organics to decompose, thereby resulting in the associated

21

subsidence. The island subsidence is between 10 and 30 feet deep, meaning that future

22

reinforcement of existing levees (i.e., increasing their height and enhancing their

23

stability) could very well be necessary and very expensive in order to ensure the water is

24

still able to flow freely.

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Q38.
A38.

What about the seismic risk?
MWD indicates that the seismic risk is a huge vulnerability in keeping the water flowing
through the Bay-Delta region. There are at least ten major identified earthquake fault
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lines within the Bay-Delta region, and it has been projected that there is a 63 percent

2

probability of a greater than 6.5 magnitude earthquake occurring by 2032. The current

3

estimates from such a damaging seismic event are 50 levee breaks (due to liquefaction)

4

and 20 flooded islands. It is my understanding that the structural integrity of the levees is

5

questionable, since the majority of the levees were constructed in the 1920s and 1930s

6

with little in terms of engineering specifications. In addition, the majority of the levees

7

are 30 to 35 feet in height, which potentially makes them very susceptible to failure from

8

a seismic event. The most significant result from a single event would be a three-year

9

outage in the ability to move water through the Bay-Delta for exportation purposes to

10

customers in central and southern California. This information (as well as the preceding

11

discussion) was included in a presentation made by Randall Neudeck of MWD at the

12

“Engineering Managers Member Agency Forum,” hosted by MWD on November 15,

13

2012 in La Verne, California. For reference, I have included a copy of this presentation

14

as Attachment 4 to my testimony.

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Q39.
A39.

What about the risk based on sea level rise?
The sea level rise risk could be an important issue to address in the future. My

18

understanding is that the existing levee system does not have sufficient freeboard to

19

contend with any potential rise in the sea level. For reference, freeboard is defined as the

20

distance measured between the normal water level and the top of the levee structure.

21

However, at this time, I am not aware of any substantial analysis that indicates any

22

potential timeframe of when this issue would become a liability.

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Q40.

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26

What is MWD planning to do in order to meet future demands, recognizing the risks I
discussed above that are associated with water moving through the Bay-Delta region?

A40.

MWD is planning to meet future demand increases through local resources, including

27

groundwater, recycling, desalination, and conservation programs. MWD has also

28

significantly diversified its water supply mix, with emphasis on storage and transfers,
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conservations and local supplies, supplemented with water from the Colorado River and

2

the State Water Project. This approach ensures a higher level of water supply reliability

3

should some failure occur in the Bay-Delta region.

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Q41.
A41.

Has MWD identified the risks of doing nothing?
In general, it has identified that if nothing is done, the ecosystem in the Bay-Delta region

7

will continue to decline, while pumping restrictions could reduce supply by 30 percent,

8

which will further hamper the amount of water to be transferred. In addition, a seismic

9

event will likely cause a three-year disruption in water deliveries from the Bay-Delta,

10

potentially causing (according to MWD) an estimated $40 billion impact to California’s

11

economy. As discussed earlier in my testimony, Attachment 4 is the reference for all of

12

the MWD material contained within my testimony.

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Q42.

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What does this discussion about MWD and the Bay-Delta have to do with California
American Water?

A42.

It is very important to understand the impact on the future long-term reliability of water

17

supplies. As discussed above, if a failure were to occur in the Bay-Delta region due to a

18

seismic event, water supplies could be disrupted for three years. The potential of this

19

type of event occurring makes California American Water’s program of on-going well

20

rehabilitations and redrills within the Southern Division extremely valuable in terms of

21

providing reliable water supply to customers after a catastrophic event. These projects

22

and others are further described later in my testimony.

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It is also very important to recognize that California American Water relies entirely upon

25

purchased water in two of its districts. California American Water’s San Diego County

26

District is supplied 100 percent by purchased water from the City of San Diego, which in

27

turn purchases water from the San Diego County Water Authority (“SDCWA”), which in

28

turn purchases water from MWD. It should be noted that the City of San Diego also has
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a small amount of local water supply, which supplements its overall supply mix. The

2

Ventura County District of California American Water is supplied 100 percent by

3

purchased water from the Calleguas Municipal Water District (“CMWD”), which in turn

4

purchases water from MWD. In summary, water supply in southern California is an

5

intricately balanced system. MWD imports water from two major sources: the Colorado

6

River from the east and the State Water Project from northern California (of which the

7

Bay-Delta is a part). MWD owns facilities to treat the water and wholesales imported

8

water, both treated and untreated, to its 27 member agencies, including CMWD and

9

SDCWA. In conclusion, California American Water relies entirely upon purchased water

10

for the source of supply in two of its districts in southern California.

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Q43.

13
14

Please provide a general assessment of California American Water’s compliance with
the Commission’s General Order 103-A?

A43.

General Order 103-A was effective September 9, 2009. My subsequent testimony

15

provides a general discussion of the status compliance items as they relate to Operations

16

and Engineering, specifically as they pertain to Section II, Standards of Service.

17
18
19

Q44.
A44.

Please proceed.
The first item under Section II, Standards of Service, relates to the Quantity of Water,

20

Potable Water System Capacity portion. There are three service areas where a supply

21

deficit exists: 1) Sonoma County (Larkfield District); 2) the Duarte Service Area of the

22

Los Angeles County District; and 3) the Monterey County Water District.

23
24

Beginning with the Larkfield District, this water system has a supply deficit when

25

evaluated with General Order 103-A. This issue was raised in the 2009 GRC proceeding

26

for the Larkfield District, with much discussion centered around General Order 103-A’s

27

reference of State of California Title 22 Requirements. This issue was also repeated in

28

the 2010 GRC proceeding, and both the 2009 GRC and 2010 GRC Settlement
17
18168912.v1

 1

Agreements assert that the proposed Faught Road Well project will help to eliminate the

2

current supply deficit in the Larkfield District. California American Water also worked

3

with the Sonoma County District office of the California Department of Public Health

4

(“CDPH”) in receiving a waiver on the maximum day demand issue, based upon

5

representations that a short-term supplemental purchased water supply from the Sonoma

6

County Water Agency (“SCWA”) would be in place coincident with approval from the

7

Commission. As a result, this recognition resolved the supply deficit issue in the

8

Larkfield District. However, this supplemental purchased water supply was only a

9

temporary agreement, and work continues to make this additional water supply

10

permanent.

11
12

The Duarte service area in the Los Angeles County District was identified as having a

13

supply deficit in the 2008 CPS. Capital improvement projects have been identified to

14

remedy this situation, and the details of these projects are discussed later in my

15

testimony. The CPS conducted for all the districts of California American Water perform

16

a source of supply adequacy evaluation, which in turn can result in capital projects to

17

ensure adequate source of supply is available to provide reliable water service to

18

customers.

19
20

Finally, the Monterey County Water District may experience a deficit in the quantity of

21

water available to serve existing customers during the rate case period. This district’s

22

water supply challenges are well documented in prior Commission proceedings and

23

decisions. The portion of the Monterey County Water District identified as the Monterey

24

Main system is currently subject to a moratorium on new and expanded service

25

connections as authorized by the Commission in D.11-03-048. The moratorium is

26

expected to remain in effect until California American Water’s Monterey Peninsula

27

Water Supply Project (currently pending before the Commission in proceeding A.12-04-

28

019) is producing sufficient water to meet the difference between customer demand and
18
18168912.v1

 1

California American Water’s rights to appropriate water from the Carmel River and the

2

Seaside Groundwater Basin, as well as production from the Sand City Desalination Plant.

3

The Seaside Groundwater Basin is an adjudicated basin. After water is allocated for the

4

senior rights of overlying water users, California American Water is allocated

5

approximately 90 percent of the operating yield and the natural safe yield for the Coastal

6

Subarea of this Basin, as well as 100 percent of the operating yield and the natural safe

7

yield of the Laguna Seca Subarea of this Basin. For the Water Years 2014/2015 through

8

2017/2018, California American Water’s expected allocation of water from this Basin is

9

2,372 acre-feet per annum for the Coastal Subarea and 77 acre feet for the Laguna Seca

10

Subarea.

11
12

Therefore, California American Water is in compliance with this portion of Section II of

13

General Order 103-A for both the Larkfield District and the Duarte service area of the

14

Los Angeles District, based upon the discussion above and the related capital projects

15

approved in the 2010 GRC and the 2013 GRC. As mentioned above, a new water supply

16

project for the Monterey County Water District is part of a separate proceeding presently

17

before the Commission.

18
19

The second item under Section II relates to the Distribution Reservoirs portion. There are

20

capital improvement projects currently underway to remedy this issue within our Security

21

Park and Walnut Grove service areas in the Sacramento County District, approved as part

22

of the 2010 GRC and 2013 GRC. Certain capital improvement projects have been

23

completed, or are nearly completed to address this issue in the Monterey County Water

24

District. Details of these projects are discussed in the second part of my testimony.

25

Therefore, California American Water is in compliance with this portion of Section II.

26
27

The third item under Section II relates to the Reliability of Water Facilities portion.

28

There are capital improvement projects currently underway to remedy this issue within
19
18168912.v1

 1

our Security Park, Isleton, and Walnut Grove service areas in the Sacramento County

2

District, approved as part of the 2010 GRC and 2013 GRC. Two carry-over capital

3

improvement projects will address this issue in the Isleton service area of the Sacramento

4

County District (I15-600067 and I15-600077). Details of these projects are discussed

5

later in my testimony. Therefore, California American Water is in compliance with this

6

portion of Section II.

7
8

The fourth item under Section II relates to the Variations in Pressure portion. There are

9

areas within certain distribution systems where low pressures can occur during various

10

periods of demand. For example, there are 28 Low Pressure Areas (“LPAs”) in the

11

Monterey distribution system where, under normal operation, water pressure is less than

12

40 pounds per square inch (“psi”) or, under peak-hour demand conditions, water pressure

13

tends to be less than 30 psi. A preliminary technical memorandum was prepared that

14

reviewed these LPAs (as identified on tariff maps filed with the Commission) to ascertain

15

what potential improvements may be required in order to address a specific LPA pressure

16

issue. The preliminary technical memorandum recommended improvements ranging

17

from extending a distribution main from a higher pressure gradient and installing

18

associated isolation valves and pressure reducing valves as appropriate to serve the LPA,

19

or installing a small hydropneumatic tank and accompanying booster station to increase

20

the pressure level within the LPA. Unfortunately, the preliminary cost of distribution

21

system improvements for all LPAs in Monterey is estimated to be approximately

22

$13,000,000. California American Water plans to address the improvements needed in

23

these LPAs through a systematic approach of regular distribution main projects that occur

24

within or adjacent to these LPAs. The ongoing main replacement program (and proposed

25

in this GRC) will include capital improvement projects for those LPAs that are in the

26

vicinity of an adjacent distribution main improvement project, where appropriate.

27

California American Water (through its operations and engineering teams) will continue

28

to monitor these specific pressure areas, so any planned infrastructure improvements can
20
18168912.v1

 1

be expanded to potentially reduce or eliminate these issues. The Monterey County Water

2

District’s main replacement program is discussed in further details later in my testimony.

3

Therefore, California American Water is in compliance with this portion of Section II.

4
5

The fifth and final item under Section II relates to the Change in Existing Distribution

6

Systems. A carryover capital improvement project will address this issue in the Isleton

7

service area of the Sacramento County District (I15-600077). Details of this project are

8

discussed later in my testimony. Therefore, California American Water is in compliance

9

with this portion of Section II.

10
11
12

Q45.
A45.

What is your next item?
The next item would be Section III, Standards of Design and Construction. California

13

American Water is in compliance with this section. California American Water uses a

14

qualified and licensed professional engineer to stamp the plans and specifications for all

15

new work. California American Water continues to evaluate and update its standards and

16

specifications as appropriate to reflect the current standards in General Order 103-A, in

17

the State’s Title 22 requirements, and of the American Water Works Association

18

(“AWWA”) standards, as appropriate.

19
20
21

Q46.
A46.

22

What is your next item?
The next item is Section VI, Fire Protection Standards. California American Water is in
compliance with this section.

23
24
25

Q47.
A47.

What is your last item?
The last item is Section VII, Operation and Maintenance. General Order 103-A requires

26

the utility to “conduct regular reviews of their asset management system, employing

27

either internal or external resources, as appropriate.” California American Water is in

28

compliance with this section.
21
18168912.v1

 1

In addition, General Order 103-A requires that the utility have on file maps or other

2

records that contain, “Location of all pumping stations, diversion works, water or sewer

3

treatment plants, sources of supply, storage facilities, size, type of material and location

4

of all mains and ditches, including valves and sluice gates, gauges, interconnections with

5

other systems and fire hydrants.” California American Water continues to diligently

6

work hard to comply with this requirement through the ongoing implementation of a

7

comprehensive electronic geographic information system (“GIS”) program across the

8

state. In the Sacramento County District, California American Water did complete a

9

previously approved investment project (Mapping Improvement Project, IP-0560-176),

10

which has helped the process of improving the system maps which are referenced in this

11

portion of General Order 103-A. Therefore, California American Water is in compliance

12

with Section VII.

13
14

Finally, General Order 103-A requires that the utility maintain the following records:

15



Location, size and material of each service line;

16



A schematic drawing or map of all pumping stations, water or wastewater

17

treatment plants to show the size and location of all major equipment, pipelines,

18

connections, valves and other equipment; and


19

The date of construction of all plant.

20

California American Water continues to show the location, size, and material of the

21

service lines on as-built maps, as the maps are available. California American Water also

22

continues to work with Division of Drinking Water (DDW), since they require complete

23

schematic drawings on various pumping, treatment, and storage sites, while also showing

24

the date of construction of these plant facilities on the as-built drawings.

25
26

Q48.

27
28

What is your conclusion with regard to California American Water’s compliance with
engineering issues as they relate to General Order 103-A?

A48.

California American Water is fully and completely in compliance with the operations and
22

18168912.v1

 1

engineering issues as described above and as they relate to General Order 103-A. In

2

addition, I would emphasize that our CPS and Condition Based Assessment (CBA)

3

documents provide support for planned capital improvements for those items.

4
5
6
7

VI.
Q49.
A49.

DEVELOPER AND CONTRIBUTED PROJECTS – ALL DISTRICTS
Please describe the nature and composition of the developer and contributed projects.
The various tasks included in these types of projects are funded entirely by non-company

8

funds. The tasks are mostly unscheduled, and while California American Water typically

9

has a good understanding of those growth areas in our various districts, the timing of

10

when these projects will occur is highly speculative until a developer comes into our

11

offices with a set of plans and has in hand all necessary development approvals. A listing

12

of the typical tasks for this RP is provided in Attachment 5 to my testimony.

13
14
15

Q50.
A50.

Please describe the proposed new developer and contributed projects.
California American Water typically develops the estimated costs for these projects based

16

on documented and anticipated growth, developers’ inquiries, economic conditions, and

17

historical information. All districts except one are continuing to experience slower

18

growth than in previous years, and California American Water expects this slow growth

19

to remain fairly consistent into the foreseeable future. However, the Sacramento County

20

District, specifically its West Placer service area, has been experiencing resurgence in

21

developer activity. California American Water expects to add a significant number of

22

new customers over the next several years. In summary, California American Water

23

develops an estimate of the anticipated annual contributions for the next GRC period

24

(2018-2020) based on average growth and known forecasted development.

25
26
27
28

VII.
Q51.
A51.

RECURRING PROJECTS
Please describe the nature and composition of the RP capital expenditure category.
The RP capital expenditures are routine capital expenditures that are necessary to ensure
23

18168912.v1

 1

operation of a reliable water system. These types of capital expenditures are usually

2

comprised of short sections of distribution mains, valves, hydrants, service lines, meters,

3

small pumps and motors, and other items considered general equipment. The annual

4

level of expenditures for each of the individual recurring capital expenditure items

5

discussed in my testimony may vary from year-to-year based on need or unanticipated

6

emergencies.

7
8
9

Q52.
A52.

How does California American Water typically budget the RPs?
Since the RPs are primarily for smaller unforeseen operational capital investment tasks

10

and routine every year-type of projects, they are budgeted by taking into consideration

11

the inflation adjusted five-year historical average of the specific RP. In addition, the

12

results from the 2013 GRC were also reviewed to determine consistency. The RPs are

13

divided into seventeen areas, and are briefly summarized in my testimony below.

14
15

Q53.

16
17

Is California American Water requesting any changes to the way it administers the RP
category budgets?

A53.

No. Instead, California American Water acknowledges that it is in compliance with the

18

Settlement Agreement adopted in California American Water’s 2010 State-Wide GRC

19

(D.12-06-016), whereby the Commission recognized the value of flexibility to allocate

20

the total RP budget within each District among specific different RPs as needed. For

21

example, on page 148 of the Settlement Agreement, it states “DRA also agrees to allow

22

California American Water discretion to manage the overall adopted bottom-line

23

recurring project budget, with flexibility to allocate different spending levels to specific

24

recurring project line items during this GRC period (2012-2014).” California American

25

Water is continuing this approach for this current GRC time period (2018-2020).

26
27
28

Q54.
A54.

Please provide a brief scope of work for each of the 17 RP areas.
The following paragraphs provide brief summaries for each RP. It should be recognized
24

18168912.v1

 1

that the following codes are utilized by District: R15-50 – Los Angeles County; R15-30 –

2

San Diego County; R15-51 – Ventura County; R15-40 – Monterey County Water; R15-

3

54 - Garrapata Water; R15-48 - Toro Water; R15-49 – Monterey County Wastewater;

4

R15-60 – Sacramento County; R15-61 – Sonoma County; and R15-62 – Dunnigan

5

Wastewater. For purposes of the following RP summaries below in my testimony, I have

6

used the generic district designation of “R15-xx.” For reference, a detailed description of

7

each RP category is provided in Attachment 6 to my testimony.

8
9

A.

Project Code R15-xxA1 – Mains – New.

10

California American Water uses this RP for both scheduled and unscheduled tasks

11

involving installation of short lengths of main between dead-end mains in side streets and

12

installation of new short segments of main for certain road relocation projects. The tasks

13

include new water mains, including valves and other appurtenances necessary to install

14

the mains (e.g. casing pipes and joint restraints) funded by California American Water.

15
16

B.

17

California American Water uses this RP for scheduled tasks that it funds itself. These

18

tasks involve replacement, renewal, or improvement of existing water mains, including

19

valves and other appurtenances necessary to perform the work (e.g. reconnection of

20

existing service lines and hydrant assemblies, joint restraint, etc.).

Project Code R15-xxB1 – Mains – Replacement/Renewal.

21
22

C.

23

California American Water uses this RP for unscheduled emergency main replacement

24

tasks funded by California American Water. These tasks involve installation of one foot

25

or more of main where main breaks have occurred or been reported and installation of

26

new short segments of main will be required to fix the break. These tasks include

27

installation of new water mains, including valves and other appurtenances necessary to

28

install the mains (e.g. casing pipes and joint restraints) funded by California American

Project Code R15-xxC1 – Mains – Unscheduled.

25
18168912.v1

 1

Water.

2
3

D.

4

California American Water uses this RP for unscheduled emergency or scheduled main

5

relocation tasks that it funds itself. Typical tasks will involve relocation of main in

6

existing streets where city or external consultants request main relocation usually

7

resulting from new construction, or upsizing of other street utilities.

Project Code R15-xxD1 – Mains – Relocated.

8
9

E.

Project Code R15-xxE1 – Hydrants – New.

10

California American Water uses this RP for scheduled and unscheduled new hydrant

11

installation tasks funded by California American Water. Typical tasks include any new

12

hydrant installations that California American Water funds.

13
14

F.

15

California American Water uses this RP for scheduled and unscheduled hydrant

16

replacement tasks funded by California American Water. Typical tasks involve

17

replacement of leaking, failed, or obsolete hydrant assemblies (including the hydrant

18

lateral and valve) that California American Water funds.

Project Code R15-xxF1 – Hydrants – Replacement.

19
20

G.

21

California American Water uses this RP for scheduled and unscheduled new service line

22

installation tasks funded by California American Water. Typical matters include costs

23

associated with new service installations including corporation stops and shutoff valves

24

for water if California American Water owns the facilities, including fire lines.

Project Code R15-xxG1 – Services – New.

25
26

H.

27

California American Water uses this RP for scheduled and unscheduled replacement

28

service line installation tasks funded by California American Water. Typical tasks

Project Code R15-xxH1 – Services – Replacement.

26
18168912.v1

 1

involve water service replacement or improvement, including replacement of corporation

2

stops or shut-off valves for water if California American Water owns the facilities.

3
4

I.

5

California American Water uses this RP for scheduled and unscheduled new meter

6

installation tasks funded by California American Water. Typical tasks involve

7

purchasing and installing all new customer meter installations including yokes, meters,

8

and meter readout devices, including meters on fire services.

Project Code R15-xxI1 – Meters – New.

9
10

J.

11

California American Water uses this RP for scheduled and unscheduled meter

12

replacement tasks funded by California American Water. Typical tasks include

13

replacement or improvement of existing customer metering.

Project Code R15-xxJ1 – Meters – Replacement.

14
15

K.

16

California American Water uses this RP for costs related to the purchase of personal

17

computers (PCs), printers, plotters, scanners, peripherals, networks, software, servers,

18

and associated equipment.

Project Code R15-xxK1 – ITS Equipment and Systems

19
20

L.

21

California American Water uses this RP for scheduled and unscheduled tasks associated

22

with the replacement and upgrade of the SCADA system. The SCADA system monitors

23

and controls the production, treatment, distribution and storage facilities within the

24

various operating districts of California American Water.

Project Code R15-xxL1 – SCADA.

25
26

M.

27

California American Water uses this RP for scheduled and unscheduled tasks associated

28

with the replacement and upgrade of the security systems. Installation of these

Project Code R15-xxM1 –Security.

27
18168912.v1

 1

improvements is a result of ongoing evaluation of potential threats to the water facilities

2

located within the various operating districts of California American Water.

3
4

N.

5

California American Water uses this RP for scheduled and unscheduled tasks involving

6

the replacement or improvement of building systems, equipment, or purchase of

7

furnishings, copy machines, fax machines and other related equipment for the offices and

8

operations centers.

Project Code R15-xxN1 –Offices and Operations Center.

9
10

O.

11

California American Water uses this RP for scheduled and unscheduled purchases of new

12

or replacement tools and equipment. These tools and equipment are needed for the

13

operations conducted at the construction sites, fabrication shops, laboratories, storerooms

14

(material delivery, shipping, and storage) and meter reading benches.

Project Code R15-xxP1 –Tools and Equipment.

15
16

P.

17

California American Water uses this RP for scheduled and unscheduled tasks related to

18

the plant replacements or additions funded by California American Water. Typical plant

19

facilities covered under this RP are: a) water supply; b) water treatment; c) water

20

pumping; d) water storage; and, e) water pressure regulation facilities including the

21

associated building components and equipment.

Project Code R15-xxQ1 –Plant – Replacements/Additions.

22
23

Q.

24

California American Water uses this RP for scheduled and unscheduled tasks related to

25

tank rehabilitation work funded by California American Water. Tasks performed under

26

this RP include tank rehabilitation and routine restoration of the tank components. For

27

example, this RP consists of planned tank rehabilitation activities to maintain the

28

condition and extend the useful life of the 104 water storage tanks in the Monterey

Project Code R15-xxR1 –Tank Rehabilitation.

28
18168912.v1

 1

County Water District. These tanks require periodic repairs and reapplication of

2

protective coatings to prevent irreversible deterioration of the tanks. California American

3

Water engages American Water’s tank maintenance consultant, Tank Industry

4

Consultants (“TIC”), to assist and support California American Water in maintaining an

5

effective maintenance program to protect and extend the life of the tank investments

6

across the State. Based on the materials of construction and the coatings currently in

7

place, TIC estimate that the tank rehabilitation cycle frequency should be 15 years. It is

8

noted that California American Water is currently utilizing advanced coatings that may

9

extend the rehabilitation frequency to 25 years in the future. Finally, it should be

10

recognized that the two funding sources (deferred expense and capital) must be

11

synchronized by tank project; basically, one cannot be done without the other.

12
13

Q55.

14
15

What are the proposed expenditure levels for these RPs for implementation during the
upcoming GRC time period of 2018-2020?

A55.

The Proposed New RPs are those projects being submitted for review and consideration

16

by the Commission for adoption in the GRC period of 2018-2020. The budgets proposed

17

for each of the proposed New RPs are shown for all districts in the various tables

18

included as Attachment 7 to my testimony. It is important to recognize the budgets

19

reflected in Attachment 7 are direct costs for the individual RPs, and will not match the

20

total cost generated by the Results of Operations model. The reason for this difference is

21

the Results of Operations model calculates separately the appropriate factors for

22

engineering overhead and contingency, as appropriate.

23
24

Please also refer to the capital project Work Papers for additional information supporting

25

the requested expenditure amounts for each district of California American Water.

26
27
28

Q56.
A56.

Is there another RP line item that should be discussed at this time?
Yes. It should also be noted that the scope and budget for all of California American
29

18168912.v1

 1

Water’s ITS Equipment and Systems (Project Code R15-xxK1) are included in R15-

2

10K1, which is a RP line item for the Corporate Office.

3
4

Q57.

5
6

Please describe the increased investment in information technology (“IT”) from the
amounts projected in the Company’s last rate case.

A57.

In the 2013 rate case, the Company’s authorized revenue requirement was based, in part,

7

on projected annual 2014 to 2016 IT investment of $414,000, $634,800, and $1,081,920.

8

The Company’s actual IT investment in 2014 and 2015 was $1,869,468 and $2,243,964

9

respectively. The Company’s updated projected IT investment for 2016 is $1,977,120.

10
11
12

Q58.
A58.

Please describe the reasons for the increased IT investment in 2014 and 2015.
The Company’s increased 2014 and 2015 IT investment is largely a result of the post-go-

13

live stabilization costs for new IT systems implemented through the Business

14

Transformation (“BT”) program. The costs related to design and optimizing

15

implemented software and new business processes. This included costs for System

16

Integrator support, internal labor, project management, training, data management and

17

change management. Given the BT project’s impact on the business, the Company

18

expected that additional unanticipated costs might be incurred to insure the success of the

19

project following its implementation. These are new costs to address needs that became

20

apparent only after the Commission reviewed the requests in the previous California rate

21

case, in A.13-07-002. The Company began implementing enhancements and upgrades to

22

its IT systems that allow the Company to optimize use of the IT systems or result in

23

additional functionality. The Company automated many processes by upgrading and

24

configuring the SAP application to enable new functionality, including solutions to more

25

effectively manage customer records and billing requirements and GIS solutions. In

26

addition, the Company implemented SAP GRC Access & Process Control upgrades to

27

the latest versions and implemented SAP Enhancement Pack 7 Upgrade. In 2015, the

28

Company further improved its meter reading processes by implementing Fathom Meter
30
18168912.v1

 1

Data Management (MDM) 2.0. This implementation provided additional Smart Earth

2

Technology (SET) features including monitoring, analysis, alarms and reporting for

3

backflow and continuous flow conditions, meter tampering, and additional meter and

4

transmitter information.

5
6
7

Q59.
A59.

Please describe some of the additional IT investment forecast for 2016.
In 2016, the Company continues the implementation of SAP Enhancement Pack 7

8

Upgrade. Phase 2 of the Enhancement Pack 7 Upgrade includes the purchase of Onapsis

9

Security Software, which integrates with network security and security information and

10

event management SIEM solutions and workflows. The Onapsis Security Platform

11

delivers a near real-time preventative, detective and corrective approach for securing SAP

12

systems and applications. The Company is also increasing its IT functionality through

13

the procurement of Environmental Health & Safety Management software to automate

14

workflow associated with environmental compliance.

15
16

The Company is also implementing Microsoft Office 365 as its new desktop software to

17

replace its existing enterprise communication and collaboration applications. In addition,

18

the Company is implementing a new timekeeping system (described internally as

19

myTime Solutions) to replace its existing timekeeping system. The Company originally

20

planned to implement a timekeeping system as part of the BT program, but considering

21

the major transitions and operational issues with the new system implementations, the

22

Company decided to delay the deployment of a timekeeping solution until after BT

23

systems implementation and post-go-live stabilization.

24

implementation of myTime Solutions will be completed in two phases in 2016 and 2017.

25
26
27
28
31
18168912.v1

It is anticipated the

 1
2

VIII. CAPITAL INVESTMENT PROJECTS (IPS)
Q60.

3
4

What will your testimony cover regarding California American Water’s Capital
Investment Projects?

A60.

The Capital Investment Projects (IPs) are capital improvement projects included in the

5

five-year investment plan for California American Water’s various operating districts.

6

These improvements are related to the service areas’ respective source of supply

7

facilities, booster stations, distribution storage tanks, and transmission/distribution main

8

piping network. These capital improvements are required to comply with the state and

9

federal regulations and to ensure that continuous, safe, adequate and reliable water utility

10

service is maintained for California American Water’s customers.

11
12
13

Q61.
A61.

14

Please explain the various IP categories.
The IP in my testimony are separated into five categories, and are shown in several
tables, which are included in my testimony. These categories are:

15



Carry-Over and In-Progress Capital IP Adopted in 2013 GRC;

16



Capital IP performed or planned but not adopted;

17



Advice Letter Capital Investment Projects;

18



Carry-Over and in-Progress Capital IP Adopted in 2013 GRC (continuing into

19

2018 and beyond); and


20

Proposed New Capital IP.

21
22

IX.

23
24

ADOPTED IN 2013 GRC – ALL DISTRICTS
Q62.

25
26

CARRY-OVER AND IN-PROGRESS CAPITAL INVESTMENT PROJECTS

What is the nature of the carryover and in-progress capital IP adopted in the 2013 GRC
decision?

A62.

These are IPs that the Commission adopted in the 2013 GRC, and which California

27

American Water has either not completed in 2014, 2015 and 2016, but will be completed

28

by the end of 2017. These IPs had some level of capital spending in the 2015-2017
32
18168912.v1

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timeframe, and will have additional capital spending occurring within this GRC

2

timeframe (most likely 2018, possibly 2019). California American Water respectfully

3

requests the Commission adopt the carryover and in-progress projects and their related

4

capital expenditures into rate base as of their respective estimated completion/in-service

5

dates. I discuss each of these related investment projects in my testimony that follows.

6
7
8
9

Q63.
A63.

Please explain each project and the associated variance, if any.
I have provided this information in the following part of my testimony. It is important to
recognize that the information provided for these capital projects is current as of March 1,

10

2016. It is possible the status of these capital projects could change after this date for

11

various reasons, including but not limited to permitting delays and other unforeseen

12

actions or events. Accordingly, as part of this GRC application, California American

13

Water will be updating MDR II.D.0 with information on all projects as of May 31, 2016.

14
15

A.

16

San Diego County District
1.

17

I15-300007 - Hollister Street 20-inch Main Replacement Project Phase
2 (COMPLETED)

18

Phase 2 of the Hollister Street Main Replacement Project involved the replacement of

19

approximately 2,200 feet of corroded 20-inch diameter steel main within the City of San

20

Diego. This previously-approved capital project was designed, competitively bid and

21

awarded to the low bidder in December 2011. The City of San Diego has an extensive

22

and lengthy permitting process, which California American Water experienced during

23

Phase 1 of this project. Further, because of the length of pipe being replaced for Phases 2

24

and 3, both an analysis through the California Environmental Quality Act (“CEQA”) and

25

an encroachment permit were required from the City of San Diego. The CEQA

26

document was approved in July 2013, and eventually the encroachment permit was

27

issued in July 2014. The capital project was completed in July 2015 for a total budget of

28

$1,472,447. Costs for the project were slightly higher than the approved rate case budget
33
18168912.v1

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of $1,364,485 because the project was located adjacent to schools, which necessitated

2

night work to accommodate the school’s respective schedules. In addition, this portion of

3

Hollister Street was congested with other utilities. The additional expenditures of

4

$107,962 over the revised budget are reasonable and appropriate, based on the delays

5

experienced by this capital project. Therefore, it is recommended that the Commission

6

recognize this additional amount of $107,962 ($1,472,447 less $1,364,485) in rate base

7

for this investment project. Additional documentation and support for the increased cost

8

for this capital investment project are provided in the Capital Investment Project Work

9

Papers.

10
11

2.

12

I15-300004 - Hollister Street 20-inch Main Replacement Project Phase
3 (COMPLETED)

13

Phase 3 of the Hollister Street Main Replacement Project involved the replacement of

14

approximately 4,430 feet of corroded 20-inch diameter steel main within the City of San

15

Diego. This previously-approved capital project was designed, competitively bid and

16

awarded to the low bidder in December 2011. As discussed above in Phase 2, the City of

17

San Diego has an extensive and lengthy permitting process. Further, because of the

18

length of pipe being replaced for Phases 2 and 3, both an analysis through CEQA and an

19

encroachment permit were required from the City of San Diego. The CEQA document

20

was approved in July 2013, and eventually the encroachment permit was issued in July

21

2014. The capital project was completed in July 2015 for a total budget of $1,424,219.

22

Costs for the project were less than the approved 2013 GRC budget of $2,759,750 mainly

23

because the project was located at the southern end of Hollister Street, where there was

24

less interference with other utilities. Therefore, it is recommended that the Commission

25

recognize the recorded amount of $1,424,219 in rate base for this investment project.

26

Additional documentation and support for the cost for this capital investment project are

27

provided in the Capital Investment Project Work Papers.

28
34
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It should be recognized that the benefits from both Hollister Street projects (Phase 2 I15-

2

300007 and Phase 3 I15-300004) include the following: 1) the ability to operate at higher

3

service pressures, increasing the fire flow capacity to surrounding customers and meeting

4

the requirements of the City of San Diego’s fire department; 2) decrease the number of

5

water quality complaints from customers related to discolored water, and also reducing

6

laundry staining; 3) increased reliability of the water main along Hollister Street,

7

including fewer emergency repairs and service interruptions which promote better

8

customer service; 4) reducing general risk of operating the water system; 5) installation

9

of a new 20-inch diameter Ductile Iron pipe in the system with an estimated useful life of

10

approximately 100 years; and 6) replacement of aged and poor performing infrastructure.

11
12

B.

13

Los Angeles County District
1.

I15-500010 – Olympiad Booster Station Replacement (COMPLETED)

14

The Olympiad Booster Replacement project has been constructed and was placed into

15

service in October 2015. The project is currently in the permit close out phase. This

16

capital investment project has had a long and challenging history from the design and

17

permitting phase up through construction. The Conditional Use Permit (CUP) was

18

originally filed with Los Angeles County in May 2011. The expectation (from County

19

staff) was that a CUP would be forthcoming in the spring of 2012. However, upon notice

20

of the initial hearing in March 2012, the CUP was protested by the View Park

21

Preservation Society, and over the next eight months a series of public hearings were held

22

by Los Angeles County to discuss concerns and review issues raised by the View Park

23

Preservation Society regarding this project. Ultimately, on November 6, 2012, the CUP

24

was approved by Los Angeles County. Shortly afterward, the View Park Preservation

25

Society filed a lawsuit against Los Angeles County protesting the approval of the CUP.

26

However, this action was eventually dismissed by their legal counsel. Upon receipt of

27

the CUP, the construction permits were applied for, including Grading, Building, and

28

Electrical. The Grading permit was received in May 2014, while Building and Electrical
35
18168912.v1

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were received in August and September of 2014, respectively. The project was bid for

2

construction on during October 2013 to eight General Contractors. Actual construction

3

commenced in September 2014 and was finally complete in January 2016. This capital

4

investment project had a significant increase in cost. For example, additional internal and

5

external labor, including outside legal support, was needed during the CUP process.

6

Project bids were higher than anticipated due to the confined nature of the site and its

7

location. In addition, due to its location at the top of a valley, the pump station is

8

partially constructed into the side of the hill. Maintaining service of the existing station

9

during construction limited the working space available, which also slowed down piping

10

installation. Tie overs into aging infrastructure also caused coordination delays and

11

additional cost to replace existing valves that were beyond their useful services lives.

12

This capital investment project was originally proposed for an investment amount of

13

$2,365,000. The approved rate case amount was $2,365,000, while the revised project

14

budget after the conclusion of the 2013 GRC increased to $3,460,000. To date, the total

15

recorded capital expenditures (as of May 2016) were $3,535,696. The additional cost

16

was higher than the original cost estimate for all phases of the project. For example, the

17

Preliminary Phase costs were 45% higher ($125,000), the Support During Construction

18

cost was 52% higher ($170,000) and the Construction cost was 26% higher ($513,000).

19

The additional expenditures of $1,170,696 over the revised budget are reasonable and

20

appropriate, based on the delays experienced by this capital project. Therefore, it is

21

recommended that the Commission recognize this additional amount of $1,170,696 in

22

rate base for this investment project. Additional documentation and support for the

23

increased cost for this capital investment project are provided in the Capital Investment

24

Project Work Papers.

25
26
27
28
36
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2.

2

I15-500032 - Redrill Winston Well at Danford Reservoir (CARRYOVER PROJECT, COMPLETION IN 2019)

3

The Winston Well will be replaced at the Danford Reservoir Site, which is located in the

4

Raymond Basin in the City of San Marino. To date, preliminary design is complete and

5

permitting has begun. The City of San Marino does not require a Use Permit, and

6

permitting by the Raymond Basin Watermaster is negligible. Therefore, it is anticipated

7

California Division of Drinking Water (DDW) will process CEQA for this project. This

8

project was delayed due to San Gabriel County Water District contesting us to drill the

9

well at this location as they have concerns it would influence well production at a well

10

they have near this site. The project is currently on hold awaiting an update from San

11

Gabriel County Water District or possibly looking into an alternate site for re-drilling the

12

well. California American Water expects drilling of the new well to begin in the fall of

13

2018, pending receipt of Los Angeles County permits for temporary discharge to the

14

storm sewer. Upon well completion and testing, site design will be completed and site

15

construction is planned to be completed by late summer 2019. The current spend level is

16

$97,146, while the total project budget is $2,140,000. It should be recognized that the

17

approved budget for this project from the 2010 GRC included a total budget of

18

$3,566,000, which included provision for any necessary treatment.

19
20

3.

21

I15-500006 - Redrill Lamanda Well (CARRYOVER PROJECT,
COMPLETION IN 2016 OR 2017)

22

The Lamanda Well is located within the Raymond Basin, and is also within the City of

23

Pasadena corporate limits. To date, permitting of well installation is complete and the

24

well installation has been contracted. The driller is in the process of obtaining two

25

distinct and separate permits: a) sound wall permit; and b) drilling permit. A Conditional

26

Use Permit (CUP) was applied for in March 2013, and was ultimately approved on

27

October 1, 2014 (note the timeframe – nearly 18 months). It should be noted that the

28

CUP has a condition to add ADA sidewalk ramps at the northwest corner of California
37
18168912.v1

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American Water’s property. The well drilling was bid to three drillers in February 2015,

2

and a contract was signed with Southwest Well Drilling in June 2015. However, it is

3

critically important to recognize that due to the state-wide drought in California (in

4

particular in the Central Valley), a drill rig for the Lamanda site only became available in

5

May 2016,- upon completion of the drilling of the Lemon Well in Duarte. A new

6

development that could hamper and extend the time to actually drill the Lamanda Well

7

are some new permit conditions being placed upon the project by the City of Pasadena.

8

California American Water became aware of these new conditions in June 2016, and is

9

presently working with the City to resolve these permit conditions. If these new permit

10

conditions remain in place, it is very likely there will be an extension of the project

11

schedule and a corresponding increase in the project’s total cost. It is unknown as of the

12

time this testimony was prepared what these impacts will be, but as they become known

13

this project’s status will be updated as appropriate. Upon well completion and testing,

14

the site design will be completed, construction permits (Building and Electrical) will be

15

obtained, and site construction is targeted for completion by the Winter of 2017. The

16

current spend level as of May 2016 is $253,825, and the previously approved GRC total

17

project amount is $1,600,000. As part of this GRC, California American Water is

18

requesting an additional $740,000 for a new revised total project budget of $2,340,000.

19

As a comparison, the recently completed Richardson Well, a very similar project

20

described previously in my testimony, cost approximately $1,800,000 to complete. The

21

drilling contract for the Lamanda Well is about $1,100,000 whereas the Richardson Well

22

was approximately $800,000. The difference in costs is that the Lamanda Well also has

23

CUP ramp requirements, a new site entrance for the drill rig, and the well will also

24

require a new chemical feed system. It should be noted the additional drilling cost for

25

Lamanda Well is also due to the location of the site, which requires a more expensive

26

sound wall, and more restricted work hours. This capital investment project had an

27

original requested amount of $1,700,000, and ultimately the approved rate case amount

28

was $1,600,000. The revised increased budget amount to complete this project by the
38
18168912.v1

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end of 2017 is $2,340,000. The additional expenditure of $740,000 is entirely justified

2

and reasonable, based on the explanation provided above. Therefore, it is recommended

3

that the Commission recognize this additional amount of $740,000 in rate base for this

4

capital investment project. Additional documentation and support for the increased cost

5

for this capital investment project are provided in the Capital Investment Project Work

6

Papers.

7
8
9

4.

I15-500022 - Lemon and Crownhaven Wells (Duarte Water Supply

10

Improvement Project, IP-0550-170) (CARRYOVER PROJECT,

11

COMPLETION IN 2016 OR 2017

12

The Lemon Well is located in the Duarte District within the City of Bradbury,

13

specifically the Main San Gabriel Basin. As background and in order to save on well

14

design costs, the Lemon, Lamanda, Santa Fe, Crownhaven and Oswego well projects

15

were all bid for design services in January 2012. Contracts were awarded to the low

16

bidder in June 2012. Relative to the Lemon Well project, a CUP application was

17

submitted to the City of Bradbury in September 2013. Several meetings were attended

18

wherein the City placed a Condition of Frontage Improvements as part of the CUP.

19

These Frontage Improvements include new curb and gutter, tubular fencing with masonry

20

pilasters, concrete driveway approaches, and landscaping along the property frontage. A

21

CUP was finally received in August 2014 (note the time frame again – nearly 12 months).

22

Four well drillers were invited to bid, and Southwest Well drilling was awarded the

23

contract in June 2015. A permit for drilling from Los Angeles County and a temporary

24

sound wall permit from the City of Bradbury were obtained prior to drilling. However,

25

as related above regarding the planned start of drilling for the new Lamanda Well, the

26

availability of a drill rig was unknown because of the state-wide drought in California (in

27

particular in the Central Valley). Finally, the contractor was able to begin drilling on

28

February 4, 2016. As of the date of this testimony, drilling of the Lemon Well is
39
18168912.v1

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continuing and California American Water is hopeful of a successful “hole.” The Lemon

2

Well drilling contract was awarded in the amount of $1,358,200 whereas the previously

3

approved GRC budget estimate for this particular well component was $1,028,000. In

4

addition, the contract for the Frontage Improvements at Lemon Well was an additional

5

unforeseen expenditure of $198,325.

6
7

The Crownhaven Well is over 40 years old and has declined in production due to the

8

plugging of the well screens and the deterioration of pump efficiency. In 2008,

9

California American Water installed a new gravel pack, added a liner, and sonically

10

cleaned the screens, which is recognized as a temporary solution. California American

11

Water must replace the well to regain its historic capacity. The recent rehabilitation of

12

the well is only a temporary solution that will allow the well to remain operational until

13

California American Water can design and install permanent well upgrades. The current

14

site location and size will allow California American Water to perform a well

15

replacement adjacent to the existing well. With the addition of this new source of well

16

water from the proposed replacement of Crownhaven Well, the Duarte system will meet

17

the additional demand from transferring irrigation customer services to the potable

18

system and improve existing wellhead facilities that have already exceeded their expected

19

life. Preliminary design and permitting on the Crownhaven Well began in 2012.

20

Easement acquisition for storm drain installation has begun in 2015, and the project is

21

planned for completion in 2017. The current well design performed by AECOM is at

22

ninety percent and the pump to waste line design will be going through the City of

23

Duarte’s review in the spring of 2016. This capital investment project has a previously

24

approved amount of $3,719,250 from the 2010 GRC. The total overall budget for this

25

capital investment project is now $4,247,775, in order to complete this overall project by

26

the end of 2017. The additional expenditure of $528,525 is entirely justified and

27

reasonable, based on the explanation provided above. Therefore, it is recommended that

28

the Commission recognize this additional amount of $528,525 in rate base for this capital
40
18168912.v1

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investment project. Additional documentation and support for the increased cost for this

2

capital investment project are provided in the Capital Investment Project Work Papers.

3
4

5.

Project Code: IP-0550-35, Duarte - Lemon Domestic Reservoir

5

Improvements (CARRY-OVER PROJECT, COMPLETION IN 2016

6

OR 2017).

7

This previously approved project will eliminate low water pressure conditions

8

experienced in one of the gradients in the Duarte service territory and increase the

9

effective storage of the Lemon Reservoir. California American Water based the scope of

10

this proposed project on the recommendations in the Los Angeles District CPS, which

11

evaluated the Lemon Reservoir’s effective storage improvement alternatives. The CPS

12

concluded that if California American Water transferred the high elevation areas served

13

by the Lemon Reservoir to the Scott Gradient, the entire volume of the Lemon Reservoir

14

would be effective storage and the change would eliminate the aforementioned low

15

pressure condition. In order to transfer the high elevation areas to the Scott Gradient,

16

California American Water proposed to install 1,500 feet of 12-inch main in Central

17

Avenue to connect the 12-inch PVC pipe east of Mountain Avenue to the 8-inch PVC

18

pipe west of Buena Vista Street. It should be recognized that this project was originally

19

temporarily deferred until the scope of a separate capital project to combine the domestic

20

and irrigation systems in Duarte was completed. As a result of this new GRC

21

application, it was decided to incorporate this project as part of Project I15-500039,

22

which is the on-going Main Replacement Program in the Los Angeles District. This

23

project in Duarte, (previously identified as Project A-3 in the Los Angeles District CPS),

24

will: 1) eliminate the low pressure complaints; 2) effectively utilize the entire 1.5 million

25

gallon distribution storage volume of the Lemon Domestic Reservoir; and 3) would

26

improve available fire flow in the area to more than 1,500 gpm. An important fact to

27

understand is because of further analyses and study from working in conjunction with the

28

Los Angeles District operations team, some additional issues arose relative to
41
18168912.v1

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constructability, redundancy, and customer pressure issues. As a result of these

2

discussions and further analysis of this capital project, the overall scope of work was

3

increased to include: 1) the installation of 3,000 feet of 8-inch main; 2) the installation of

4

a new pressure reducing station; and 3) the installation of approximately 90 services with

5

pressure reducing valves (PRVs). This capital project is presently under design and

6

should be completed by the end of June 2016. Construction is planned to commence in

7

the fall of 2016 and be completed in early 2017. Additional information, documentation

8

and justification on this particular investment project (I15-500039, Main Replacement

9

Program) can be found in the Capital Investment Project Work Papers.

10
11

6.

12

Project Code: IP-0550-112, San Marino – Richardson Well Redrill
(COMPLETED)

13

The new Richardson Well is located within the Main San Gabriel Basin (MSGB), and is

14

also within the City of Rosemead. This previously approved project involved the

15

replacement of the Richardson Well at the Rosemead Operations Center. California

16

American Water equipped the replacement well with a pump and motor with a pumping

17

capacity of 1,500 gpm. The capital investment project also included approximately 1,000

18

linear feet of pipe to convey the water from the new Richardson well site back to the

19

Rosemead reservoir where California American Water pumps it into the distribution

20

system. Customers will benefit from the reduced reliance on purchased surface water

21

from Metropolitan Water District of Southern California (MWD). As of the date of this

22

testimony, this well is in operation and is in the process of permit closeout. For

23

reference, an application to drill a replacement well was submitted to the MSGB

24

Watermaster in April 2011. Initially, the USEPA had concerns about the application, but

25

they were eventually resolved. The MSGB Watermaster gave its approval of the well

26

construction in March 2013 (again, note the timeframe of nearly two years). An NPDES

27

permit for temporary discharge to the local storm sewer was also obtained from the

28

Regional Water Quality Control Board in June 2011. A CEQA exemption was also
42
18168912.v1

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granted by the California Department of Public Health (now known as the Division of

2

Drinking Water under the State Water Resources Control Board) in December 2013. The

3

well drilling was bid to three drillers, and the contract was signed with Southwest Well

4

Drilling in June 2013. A drilling permit from LA County and a temporary sound wall

5

permit from the City of Rosemead were received prior to drilling and subsequent to

6

CEQA approval. The well was drilled and pump tested by February 2014. Thereafter

7

and based on the pump test results, the final design was completed and the surface facility

8

construction was bid. This scope of work for the surface facility improvements included

9

the motor control center and switchgear, pump and motor, yard piping, and a pump to

10

waste line to the local storm sewer. A construction contract was issued to another low

11

bidder. A Los Angeles County Flood District connection permit, City of Rosemead

12

Encroachment permit, and City of Rosemead Building permits were received prior to

13

construction. Upon completion of construction, the project was inspected by the State

14

DDW, who granted an Operating Permit amendment in January 2016. The well was

15

placed into service the same month the amendment was received. This capital investment

16

project was originally proposed for an investment amount of $2,128,000. Ultimately, the

17

approved rate case amount in the 2013 GRC was also the same ($2,128,000). The project

18

to date has spent $1,803,106, which is still below the previously approved GRC budget.

19

Additional documentation and support for this capital investment project are provided in

20

the Capital Investment Project Work Papers.

21
22

7.

23

Project Code: IP-0550-113, San Marino – Oak Knoll Circle Well
Rehabilitation (POSTPONED INDEFINITELY).

24

The project involves the rehabilitation of the Oak Knoll Circle well in the San Marino

25

System. The Oak Knoll Circle Well, drilled in 1982, is located in San Marino’s upper

26

service area and withdraws water from the Raymond Basin. The well supplies water to

27

the Lamanda Booster Gradient. In 2001, California American Water took the well out of

28

service due to detectable contamination concentrations of carbon tetrachloride (CTC).
43
18168912.v1

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Initially, this project was deferred in order to accommodate the Duarte Railroad Main

2

relocation project that was begun in 2012 and was completed in June 2013. However, at

3

this time, California American Water has decided to postpone this project indefinitely,

4

mainly because of: 1) concerns over the “tight” well site and limitations for future

5

replacement of the existing well; 2) the low pumping capacity of the existing well; and 3)

6

perhaps most importantly the recognized ability of the Patton Booster Station to meet

7

customer demands in this area of the distribution system.

8
9

8.

10

Investment Project I15-500021 LA-Rosemead Reservoir
Reconstruction. (CARRY-OVER)

11

This capital investment project includes the replacement of the existing Rosemead

12

Reservoir and booster station, which serves California American Water’s San Marino

13

service area in the Los Angeles District. The Rosemead Reservoir and booster station are

14

vital facilities and will need to stay in service during construction of a replacement

15

reservoir and booster station. California American Water would complete the previously

16

approved recommended replacement of the reservoir and booster station in stages in

17

order to continue serving water from these vital facilities during construction. The

18

proposed new reservoir is a welded steel above-grade reservoir with a ring wall

19

foundation. The proposed new booster station will have three vertical turbine pumps

20

(two duty pumps and one back-up redundant pump) each with a pumping capacity of

21

1,500 gpm. The Rosemead operations site contains adequate space to build the new

22

reservoir and booster station in separate locations, align new piping appurtenances, and

23

transfer water from the existing reservoir to the proposed reservoir. Upon completion of

24

the new reservoir, California American Water will likely retire the existing reservoir by

25

backfilling the reservoir and grading the area flat to apply paving for future employee

26

parking and material storage. Upon completion of the new booster station, California

27

American Water will likely retire the existing booster station by removing all above

28

ground piping and electrical equipment within the existing booster building and
44
18168912.v1

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potentially re-use the building for storage or demolish the building to make additional

2

room for the new proposed Rosemead Office Building. California American Water

3

commenced preliminary design and permitting work in 2015. Construction is anticipated

4

to begin in late 2016/early 2017, with an anticipated completion date for the first quarter

5

of 2018. This capital investment project had an original requested amount of $3,155,000,

6

and the approved 2013 GRC amount was $3,045,820. The total projected capital

7

expenditures are estimated to remain at $3,045,820. Additional documentation and

8

support for the increased cost for this capital investment project are provided in the

9

Capital Investment Project Work Papers.

10
11

9.

12

Investment Project IP-0550-118 LA - Santa Fe Well Replacement
(CARRY-OVER PROJECT, COMPLETION IN 2018).

13

The Santa Fe Well is one of the most significant producers in the Duarte system,

14

producing between ten and twenty percent of the total demand over the last three years.

15

However, well production has significantly decreased over the last several years (from

16

1,542 gpm to 1,025 gpm). The CPS recommended that California American Water

17

replace the current well as it is at the end of its useful life and the casing could fail. The

18

well was drilled in 1930 and is far beyond the average well lifespan of 40 years. The

19

project was scheduled to start the preliminary phase in 2012 with construction,

20

implementation, and completion taking place in 2013. However, the project has been

21

delayed due to the proposed Indirect Reuse Replenishment Project (IRRP) that the Upper

22

San Gabriel Valley Municipal Water District (USGVMWD) is currently in the planning

23

and permitting phase on. The IRRP is expected to produce up to 10,000 acre-feet of

24

water each year as an alternative to purchases of imported water to meet replenishment

25

needs in the Main San Gabriel Basin. Basically, the USGVMWD proposes to treat

26

wastewater from the San Jose Creek Water Reclamation Plant, pump it north through

27

approximately 9 miles of transmission pipeline, and then spread the recycled water over

28

the Santa Fe Spreading Grounds. This project will impact drilling Santa Fe Well at its
45
18168912.v1

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current location as recycled water could influence the existing potable water supply.

2

California American Water has been working with the USGVMWD to investigate new

3

sites in the Duarte and Irwindale areas as potential sites to re-drill Santa Fe Well. The

4

site acquisition costs due to the relocation of the Santa Fe Well would be borne by the

5

USGVMWD. As of the date of this testimony, a preferred site with a cost of $499,000

6

has been located on Crestfield Drive in the City of Duarte. If the land acquisition

7

successfully occurs in 2016, then the preliminary phase of permitting and design for the

8

well will begin in the fall of 2016. The new Santa Fe Well is planned to be in service by

9

the winter of 2018.

10
11

10.

Investment Project IP-0550-158 LA-Spinks Reservoir Booster Station

12

Improvements. (CARRY-OVER PROJECT, COMPLETION IN

13

2016 OR 2017)

14

Growth and water usage distribution across the Spinks Service area is not uniform.

15

Considerable water demand and some customer growth are occurring in the western

16

sections of the Spinks gradient, near the Bliss Canyon tank. However, due to locations,

17

distances, and transmission capacity, the Spinks reservoir has a better hydraulic

18

connection to the Scott and Vineyard booster stations than the Bliss Canyon tank. As a

19

result, the Spinks reservoir fills at a higher rate and responds slower to customer demands

20

than Bliss Canyon tank. Therefore, Bliss Canyon tank provides much of the equalization

21

storage for the Spinks zone, in particular for the western section of the zone. California

22

American Water operators throttle a valve at the Spinks reservoir site in Woodlyn Lane to

23

reduce Scott booster discharge to Spinks reservoir and direct flows to Bliss Canyon tank.

24

The improvements to the booster stations will alleviate the need to throttle the valve and

25

create a better equalization between the zones. The project has been delayed as

26

investigations have been made into the discharge line restrictions from the Scott Booster

27

station. At this time, the Spinks reservoir booster station upgrades project is scheduled to

28

begin the preliminary development phase in 2016, with construction starting in 2017 and
46
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being completed in 2017.

2
3

11.

Investment Project IP-0550-38 LA-Oswego Well Replacement and

4

Treatment (SM). (CARRY-OVER PROJECT, COMPLETION IN

5

2018)

6

In order to continue providing a reliable supply capacity and minimize the dependence on

7

purchase water purveyors, California American Water proposes to replace this well. The

8

historic capacity of the Oswego Well yield has declined from about 900 gpm to roughly

9

450 gpm over the last decade, and the casing is beginning to fail. Due to the presence of

10

high nitrate contamination (up to 63 mg/l as NO3), California American Water must

11

blend this well water with MWD water at the Lamanda Park Reservoir to provide

12

acceptable water quality below the California Department of Public Health target

13

contaminant level of 36 mg/l. Rehabilitation of the well is not a viable option because

14

the Oswego Well casing is poor and close to failure. Therefore, replacing the well offers

15

the most practical option and can occur at the existing site because adequate land exists.

16

The project has begun the preliminary development phase in late 2013 with additional

17

design and permitting occurring in 2015. The project currently has design plans

18

completed at 90 percent and once complete they will go through the conditional use

19

permitting process with the City of Pasadena. The implementation phase involving

20

construction and start-up for this project is now scheduled to commence in 2019 and be

21

completed in 2021.

22
23

12.

24

Project Code I15-500045, San Gabriel Boulevard Light Rail Line
Main Relocation – ACE (COMPLETED)

25

This capital project involved a planned grade separation of San Gabriel Boulevard to

26

eliminate the existing freight rail crossing with vehicular traffic and construct a railroad

27

bridge over the existing San Gabriel Boulevard crossing by the ACE Authority. The

28

project is located in the Lower San Marino System within the City of San Gabriel’s
47
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jurisdiction. This investment project included 2,100 feet of 20-inch diameter ductile iron

2

water main being installed in Agostino Road, San Gabriel Boulevard, and Angeleno

3

Avenue to connect to the existing 20-inch ductile water main. The existing 20-inch line

4

serves as a transmission line for water from Rosemead booster and Rosemead reservoir to

5

the Upper San Marino System. Construction and relocation of the existing 20 inch water

6

line began with design in 2015, followed immediately thereafter by construction which

7

was completed in November 2015. The existing section of 20-inch ductile iron pipe main

8

along California Avenue was removed shortly after to allow for grading of the Union

9

Pacific freight rail line alignment. The project will need one paving section completed by

10

April 2016 to complete the project. The capital project has incurred expenditures of

11

$1,057,974, which is slightly higher than the original project approved request of

12

$1,000,000. Additional information, justification, and documentation can be found in the

13

Capital Investment Project Work Papers for this specific project.

14
15

13.

16

Project Code I15-500046, Crenshaw Boulevard Light Rail Line Main
Relocation – Metro Blue Line (COMPLETED)

17

As explained in my testimony for the 2013 GRC and repeated here for reference and

18

convenience, this relocation project is related to the Metro Blue line extension from

19

downtown Los Angeles to LAX, which is planned down the current street alignment of

20

Crenshaw Boulevard. With the installation of the rail line portions of the commuter rail

21

line will be at grade, elevated, and portions subterranean therefore requiring many

22

existing utilities to be relocated. Currently, California American Water’s 10” main in

23

Crenshaw Boulevard is within the rail alignment and must be relocated to a lower depth

24

as a part of the Metro’s railroad design standards.

25
26

Currently no funds are requested for this water main relocation work as the project is

27

funded fully by the Federal Recovery and Reinvestment Act. California American Water

28

will be acting as a reviewer of plans, inspect construction, recommend contractors to
48
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perform the work, and perform oversight on the project. This project was originally

2

scheduled to begin with design dollars in 2017, followed by construction beginning in

3

2018 or 2019. However, the project was accelerated in late 2013 by the light rail

4

authority, and all work was completed in July 2014. Additional information, justification

5

and documentation can be found in the Capital Investment Project Work Papers for this

6

specific project.

7
8

C.

9

Ventura County District
1.

10

Project Code 05510101 - Los Robles Tank #1 Replacement
(COMPLETED)

11

The Los Robles Tank #1 replacement project was completed in November 2014. This

12

capital investment project was approved in the 2010 GRC and was originally scheduled

13

for completion in December 2013. However, the project was not approved by the

14

Commission as part of the 2010 GRC proceeding until six months later (June 2012),

15

thereby adding six months to the project’s overall schedule. In addition, the construction

16

start date was also postponed because of unfortunate permitting delays involving the

17

surrounding land owner. Once these issues were resolved, the resulting five (5) month

18

delay pushed project completion into November 2014. This capital investment project

19

was originally proposed for an investment amount of $1,350,000. The approved rate case

20

amount of $1,282,500, and the total recorded capital expenditures were $1,288,734. The

21

additional expenditures of $6,234 is entirely reasonable based on the delays experienced

22

by this capital project, and therefore it is recommended that the Commission recognize

23

this additional amount of $6,234 in rate base. Additional documentation and support for

24

the increased cost for this capital investment project are provided in the Capital

25

Investment Project Work Papers.

26
27
28
49
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2.

2

Project Code 05510084 - White Stallion Transmission Booster Station
Replacement (COMPLETED)

3

The White Stallion Transmission booster station replacement project began construction

4

in the winter of 2013, and was completed in July 2014. Construction of the White

5

Stallion Transmission booster station replacement project was completed by Pacific

6

Hydrotech Corporation. While this capital investment project was able to be kept on

7

schedule, the approved budget from the 2010 GRC was exceeded because of the

8

additional scope of work required to implement and receive the necessary benefits from

9

the project. The following reasons were cited for the project cost increase:

10

1. The additional electrical requirements to upsize the pumps were not considered

11

during the planning phase. Variable Frequency Drives (VFD) were added to give

12

operational flexibility when the White Stallion Tank is off line. Since this is a closed

13

hydraulic pressure zone with only a single source of distribution storage, the use of

14

the VFDs allow the operations staff to operate the pumps off pressure. The original

15

budget had assumed only $75,000 would be required for electrical upgrades while the

16

actual cost of the electrical upgrades was approximately $184,900.

17

2. The original scope and budget assumed that the existing piping could be utilized and

18

new larger pumps would be added one at a time. With the increase in pump size as a

19

result of additional hydraulic analyses, the velocities through the existing discharge

20

manifold of the booster station would have been as great as 20 feet per second, if the

21

piping inside the booster station remained unchanged. This is well beyond the

22

acceptable pipe velocity range. As a result, new piping was needed to be added to the

23

overall project scope. An additional complication (and additional cost) arose with the

24

installation of this new piping. Basically, the existing booster station would need to

25

be offline during the work, and in order to maintain service to customers, temporary

26

pumping was also added to the project scope. The estimated cost for the new piping

27

and temporary pumping was approximately $119,000.

28
50
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3. During the design phase, the consulting engineer performed a surge analysis of the

2

system. Their analysis found the distribution system could be subject to potentially

3

damaging surges as a result of power failure, rapid valve opening/closing, etc. It was

4

recommended a bladder surge tank be installed in order to mitigate pressure

5

transients. The estimated cost of the bladder surge tank was approximately $66,000.

6
7

The sum of these additional scope items increased the total estimated cost for this capital

8

investment project by approximately $285,000, which is significantly over the approved

9

amount from the 2010 GRC. It is important to recognize that since completion of this

10

capital investment project, the upgraded White Stallion Transmission Booster Station has

11

alleviated the pumping deficits identified in the Comprehensive Planning Study and

12

significantly increased operational reliability. This capital investment project had an

13

original requested amount of $590,096, and in rebuttal testimony included in the 2013

14

GRC the requested amount was revised to $934,153. However, the approved rate case

15

amount was $590,096, and the total recorded capital expenditures were $875,443. It

16

should be noted that the total recorded capital expenditures for this project included a

17

removal cost of $62,660. After subtracting the removal cost of $62,660 from the total

18

recorded amount, the net capital expenditures for this project were $812,783. The

19

additional expenditure of $285,347 ($875,443 less $590,096) is entirely justified and

20

reasonable, based on the explanation provided above. Therefore, it is recommended that

21

the Commission recognize this additional amount of $285,347 in rate base. Additional

22

documentation and support for the increased cost for this capital investment project are

23

provided in the Capital Investment Project Work Papers.

24
25

3.

26

Investment Project IP-0551-92 (I15-510018) Calle Yucca Turnout 14”
Main Improvements (COMPLETED)

27

The Calle Yucca Turnout 14” Main Improvement project was completed by Innocenti

28

Construction in February 2015. Construction of this replacement pipeline project was
51
18168912.v1

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successful, despite some minor setbacks during actual construction work. Upon calling

2

Underground Services Alert prior to excavation work, a telecommunications utility not

3

previously identified on the design plans encroached upon the proposed pipeline

4

alignment. The design engineer revised the alignment based on this new information,

5

which resulted in a requirement for additional traffic control measures and also made for

6

a more difficult installation. Because of the delay to revise the pipeline alignment, the

7

construction window shifted several months, from the Fall of 2014 into the Winter

8

2014/2015. It is critical to emphasize that as a result of shifting the construction window

9

and the location of these improvements, the City of Thousand Oaks required the

10

Contractor to install the pipeline at night in order to mitigate traffic impacts. This capital

11

investment project had an approved rate case amount of $475,000, and the total recorded

12

capital expenditures were $490,393. The additional expenditure of $15,393 is entirely

13

justified and reasonable, based on the explanation provided above. In addition, the

14

completion of this capital investment project has: 1) eliminated future main breaks along

15

this pipeline route, thereby avoiding major liability risk; 2) improved operations staff

16

safety; and 3) most importantly, increased the system reliability from the Calle Yucca

17

Turnout. Therefore, it is recommended that the Commission recognize this additional

18

amount of $15,393 in rate base. Additional documentation and support for the increased

19

cost for this capital investment project are provided in the Capital Investment Project

20

Work Papers.

21
22

4.

23

Project Code 05510086 - Pace Reservoir Rehabilitation
(COMPLETED)

24

The Pace Reservoir rehabilitation project was completed by RSH Construction in May

25

2015. The design of the Pace Reservoir rehabilitation project occurred concurrently with

26

the Moorpark Reservoir and Potrero #1 Reservoir by the same design engineer

27

(AECOM). Due to water quality concerns, the Potrero #1 and Pace reservoirs could not

28

be rehabilitated simultaneously. Therefore, Pace Reservoir was selected to move forward
52
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in 2014, which pushed the rehabilitation of the Potrero Reservoir into 2015. Actual work

2

commenced in May 2014, and proceeded in acceptable fashion. However, during startup,

3

volatile organic carbon testing of the water, prior to release of the water into the

4

distribution system, revealed the presence of Carbon Tetrachloride (CTC) above the

5

California Maximum Contaminant Level (MCL). In order to treat the CTC, air was

6

bubbled through the water stored in the reservoir until the concentration was reduced to

7

an acceptable level. This treatment process, approved by the State Division of Drinking

8

Water, continued for nearly three months until the CTC level fell below the MCL. The

9

capital investment project spend was higher for several reasons, including a poor bidding

10

environment (lack of interest by contractors), higher material prices, and some required

11

scope not considered during the planning phase, namely the installation of a new

12

overflow pipe and connection. This capital investment project had an original requested

13

amount of $2,497,500, and this amount was updated in rebuttal testimony as part of the

14

2013 GRC to $2,873,122. However, the approved rate case amount remained

15

$2,497,500, and the total recorded capital expenditures were $2,507,513. The additional

16

expenditure of $10,013 is entirely justified and reasonable, based on the explanation

17

provided above. Therefore, it is recommended that the Commission recognize this

18

additional amount of $10,013 in rate base. Additional documentation and support for the

19

increased cost for this capital investment project are provided in the Capital Investment

20

Project Work Papers.

21
22

5.

23

Investment Project IP-0551-93 (I15-510019) Wildwood Tank
Rehabilitation (COMPLETED)

24

The Wildwood Tank rehabilitation project was completed by Cor-Ray Painting Company

25

in March 2014. Rehabilitation work began in November 2013, after California American

26

Water established the necessary temporary pumping required to serve the Wildwood zone

27

while the tank was offline. California American Water explored options to continue

28

serving the zone without a tank, including locating a temporary storage water reservoir at
53
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the tank site and temporary pumping. Ultimately, locating a temporary water storage

2

reservoir was deemed not feasible due to lack of site space for a sufficiently sized

3

temporary tank. It should be recognized that the project costs were higher than

4

anticipated, primarily due to the added cost for temporary pumping. The control strategy

5

that was deemed to have the greatest level of safety and redundancy was to operate the

6

temporary pump uninterrupted for the duration of construction and change the control

7

strategy on the existing pumps to run off system pressure rather than the tank level. In

8

the event the diesel pumps failed or the demand exceed the capacity of the temporary

9

pumps, the existing permanent pumps would turn on to continue serving the pressure

10

zone. While the existing pumps were sized to handle maximum day demand, they were

11

insufficiently sized to service peak hour demand. Overall, this strategy was successful

12

and resulted in uninterrupted water service during the entire timeframe of this project.

13

This capital investment project had an original requested amount of $184,371, and this

14

amount was further adjusted in rebuttal testimony to a revised amount of $195,000.

15

However, the approved rate case amount was adjusted to $184,371, and the total recorded

16

capital expenditures were $193,033. The additional expenditure of $8,662 is entirely

17

justified and reasonable, based on the explanation provided above. Therefore, it is

18

recommended that the Commission recognize this additional amount of $8,662 in rate

19

base. Additional documentation and support for the increased cost for this capital

20

investment project are provided in the Capital Investment Project Work Papers.

21
22

6.

23

IP 05510509 Improvements to Shopping Center Reservoir 1
(COMPLETED)

24

Shopping Center Reservoir No. 1 is a 144 foot by 212 foot concrete reservoir that was

25

built in 1961, has a capacity of 2.03 million gallons, and is 12.6 feet tall. The scope of

26

work for this investment project originally included repairing existing hatches, replacing

27

the reservoir roof, replacing the fence and replacing an asphaltic concrete access road.

28

However, during the preliminary phase of the project, California American Water
54
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discovered that a rehabilitation of the reservoir was no longer feasible and that the entire

2

reservoir itself must be replaced. As a result, California American Water conducted

3

several studies to define and evaluate various options. Based on the results of the studies,

4

California American Water believes that the District can temporarily comply with the

5

daily storage requirements in the Shopping Center Gradient without the storage capacity

6

of the Shopping Center Reservoir No. 1. The studies showed that the service area in the

7

vicinity of the Shopping Center Reservoir No. 1 served by California American Water

8

would continue to meet the storage criteria set forth in a franchise agreement between

9

California American Water and the City of Thousand Oaks until approximately 2020

10

without counting on the storage capacity provided by the Shopping Center Reservoir

11

No.1. As a result and for safety purposes, California American Water determined the

12

best course of action was to demolish the Shopping Center Reservoir No. 1 roof and

13

ultimately retire this facility from service. The main reason for not retiring this reservoir

14

in the first place was there was rehabilitation work being performed at Shopping Center

15

Reservoir No. 2 that needed to be completed. Once that work was completed, then the

16

existing Shopping Center Reservoir No. 1 was taken out of service. Shortly after, with

17

the recent activity of the neighboring development commencing the grading for houses, it

18

was determined the retirement of the reservoir would be a benefit to all parties from

19

filling in the reservoir and abandoning the on-site piping. The retirement was completed

20

by Innocenti Construction in 2014 for a total removal cost of $148,592.

21
22

7.

23

Project Code 05510018 - Moorpark Reservoir Rehabilitation
(Construction is Underway)

24

The Moorpark Reservoir rehabilitation project began in July 2015 and is currently

25

scheduled to continue through the end of June 2016. The design of the Moorpark

26

Reservoir rehabilitation project occurred concurrently with the Potrero #1 Reservoir and

27

the Pace Reservoir by the same design engineer (AECOM). Before rehabilitation of the

28

Moorpark Reservoir could commence, replacement/upgrading of the Moorpark Booster
55
18168912.v1

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Pump Station was necessary to sustain water service to the Moorpark zone, while the

2

zone’s only source of storage was offline. Because replacement/upgrading the Moorpark

3

Booster Pump Station was not identified in the 2010 GRC, the Moorpark Reservoir

4

rehabilitation project was significantly delayed. As described earlier my testimony, the

5

Moorpark Booster Station was replaced and placed into service in January 2015. Shortly

6

thereafter, the project was bid in March 2015 and Cushman Contracting Corporation was

7

awarded the construction contract, along with the Potrero #1 Reservoir. The construction

8

scope included replacement of the existing truss roof with an aluminum geodesic dome

9

roof, replacement of the liner with a geomembrane liner, increasing the height of the

10

parapet wall to comply with seismic requirements, improvement to water mixing, and

11

performing minor site improvements. As of January 2016, the Contractor had completed

12

the parapet wall height addition, added the mixing system, added a new overflow pipe

13

and connection, and completed some site improvements. Upon receipt of the roof

14

material in mid-January after a three-month delay because of a material shortage, the

15

Contractor began making preparations to install the new roof. However, a setback in late

16

January during roof construction at the Potrero #1 Reservoir required the Contractor to

17

reevaluate the roof construction methodology for Moorpark Reservoir. After further

18

analyses and investigation was completed, a safer roof construction methodology was

19

implemented and work commenced in mid-February. The roof assembly was completed

20

in mid-March, and the installation of the geomembrane liner was completed in May. At

21

this time, this capital investment project is anticipated to be completed in late June 2016.

22

At this time, the remaining scope items include the aforementioned roof construction and

23

the liner installation. This capital investment project had an original requested amount of

24

$2,287,579, and a revised amount was requested in the 2013 GRC of $2,372,676.

25

Ultimately, the approved rate case amount was $2,287,579, and the total projected capital

26

expenditures are estimated to be $2,006,700, which is slightly below budget. Recorded

27

expenditures through May 2016 are $1,496,340. The 2013 GRC settlement agreement

28

allows for the variance in actual cost to be reviewed in the next GRC application.
56
18168912.v1

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Additional documentation and support for the increased cost for this capital investment

2

project are provided in the Capital Investment Project Work Papers.

3
4

8.

5

Project Code 05510094 – Potrero #1 Reservoir Rehabilitation
(Construction is Underway)

6

The Potrero Reservoir rehabilitation project began construction in June 2015 and is

7

currently scheduled for completion in June 2016. Cushman Contracting Corporation was

8

awarded the construction contract after the bidding process in March 2015. The

9

construction scope includes replacement of the existing truss roof with an aluminum

10

geodesic dome roof, replacement of the liner with a geomembrane liner, erecting seismic

11

restraint shear walls, installing a new overflow connection to the City of Thousand Oaks

12

storm drain system, improvement to water mixing, and minor site improvements. As of

13

January 2016, the Contractor completed the installation of the shear walls, installed the

14

overflow pipe and connection, added mixing system, and completed the site

15

improvements. In December 2015, the Contractor’s roof subcontractor (Ultraflote) began

16

erecting the new reservoir roof. By the end of January 2016, Ultraflote had completed

17

installing approximately 50 percent of the roof, when a large storm caused a catastrophic

18

failure on January 31, 2016. Basically, the roof buckled and collapsed into the reservoir

19

due what is believed to be wind velocities in excess of the design assumption. Following

20

the incident, the subcontractor submitted a dismantling plan to safely remove the failed

21

roof. The subcontractor has also acknowledged full responsibility for the incident.

22

Shortly thereafter, the dismantling plan was reviewed and approved by California

23

American Water on February 9, 2016, and Ultraflote began the process of deconstructing

24

the roof on February 10, 2016. Following the removal of the damaged roof, the

25

subcontractor will begin construction of the new roof. New construction methodologies

26

will be implemented to mitigate wind load and other failure mechanisms during

27

construction, while also maintaining a safe working environment. Work commenced on

28

re-installing the roof in April, and was completed in May. Upon completion of the roof
57
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installation, the geomembrane liner was installed and the reservoir is anticipated to be

2

returned to service in late June. As a result of this unfortunate incident, the completion of

3

this capital investment project has been delayed by almost four months, with an

4

anticipated completion date now set for June 2016. This capital investment project had

5

an original requested amount of $2,497,500, and a revised amount was requested in the

6

2013 GRC rebuttal testimony of $2,820,500. Ultimately, the approved rate case amount

7

was $2,497,500, and the total projected capital expenditures are estimated to be

8

$2,282,722, which is below budget. Recorded expenditures through May 2016 are

9

$1,846,010. The 2013 GRC settlement agreement allows for the variance in actual cost

10

to be reviewed in the next GRC application. Additional documentation and support for

11

the increased cost for this capital investment project are provided in the Capital

12

Investment Project Work Papers.

13
14

9.

15

IP-0551-100 (I15-510002) Improve Low Pressure in Gainsborough
Zone (CARRY-OVER PROJECT, COMPLETION IN 2016 OR 2017)

16

This previously approved investment project will improve the low pressure and low fire

17

flow capacity as well as a low water supply reliability condition that exists at the southern

18

part of the Gainsborough hydraulic gradient. The water supply reliability is low because

19

the Gainsborough Gradient receives water primarily from a single turnout with CMWD

20

located at the junction of Gainsborough Road and Moorpark Avenue. In the event of a

21

failure at this turnout, the entire zone could lose its pressure. Moreover, the zone does

22

not have a dedicated storage tank or any other back up supply. The lack of a storage tank

23

also requires improvements to the fire flow capacity of the Gainsborough Gradient. The

24

southern part of the Gainsborough Gradient, which has a higher elevation than the rest of

25

the zone, experiences frequent low water pressure. Construction of a booster station

26

equipped with pumps and variable speed drives with sufficient capacity to meet the

27

residential fire flow requirements will address any low pressure concerns. The booster

28

station will be located at Shopping Center Reservoir #2 site, which is owned by
58
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California American Water. The improvements include: 1) the installation of

2

approximately 250-feet of 16-inch main from the booster station suction to the Shopping

3

Center Reservoir #2 outlet pipe; 2) the installation of 1350-feet of 12-inch main (within

4

an existing easement) from the new booster station to the existing main at Warwick

5

Avenue; 3) the installation of a 10-inch pressure reducing valve (“PRV”) on the existing

6

10-inch main in Warwick Avenue where it intersects with Hendrix Avenue; and 4) the

7

installation of a 10-inch PRV on the existing 10-inch main in the southern end of

8

Warwick Avenue where it intersects with Wilbur Avenue. The proposed budget for this

9

project was originally $3,610,000, as approved in the 2010 GRC. However, the proposed

10

project scope has changed recently as the planned improvements at Tract 5325 have

11

received approval from the City of Thousand Oaks Council. As part of that approval, the

12

developer (The New Home Company) is required to construct a booster station as a part

13

of developing 20 residential homes. Originally, the developer planned to complete the

14

booster station and 2,000 feet of 8-inch diameter water main in 2014. Once the developer

15

completes this portion of the project, California American Water plans to pursue

16

easements for the construction of water main to connect the Oak View Estates with the

17

new booster station. Once this is complete, the existing Oak View Estates booster station

18

will be retired and customers within this zone will observe higher system pressures

19

therefore reducing customer complaints. The adjusted project cost is now $2,850,000.

20

The project design was finally awarded in the summer of 2015, but the booster station

21

design by the Tract 5325 developer (The New Home Company) moved along much

22

slower than planned. Construction on the proposed booster station did not start until the

23

fall of 2015. The remaining work (design and installation of the mains) is scheduled to

24

begin in 2016 and be completed by the end of 2016. Additional documentation and

25

support for this capital investment project are provided in the Capital Investment Project

26

Work Papers.

27
28
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10.

Investment Project IP-0551-79 (I15-510014) Ventura Improvements

2

to CMWD Interconnections (CARRY-OVER PROJECT,

3

COMPLETION IN 2016 OR 2017)

4

This previously approved investment project includes the installation of two

5

interconnections with the City of Thousand Oaks as a means to provide system reliability

6

and redundancy to California American Water’s Ventura County District. The project,

7

located in Thousand Oaks, is based on installing a conceptual-level design typical of a

8

water system interconnection. The improvement project is needed for interconnections at

9

the intersection of Gainsborough Road and Moorpark Road, and between Rolling Oaks

10

Drive and Rimrock Road, in the City of Thousand Oaks. This previously approved

11

investment project has a total estimated cost of $567,150. It is anticipated that this

12

project will improve emergency supply. The measurable benefits of the project

13

implementation include the following: Increased reliability of the water system and the

14

ability to access additional storage in adjacent service locations in the event of an

15

emergency or main break. This is especially vital because it would insure a reliable

16

source of supply to an existing medical center. Preparation of an interconnection

17

agreement with the City of Thousand Oaks began in 2015, and should be completed in

18

the near future. The project design was awarded in 2015, and is expected to be

19

completed in June 2016. Actual construction is planned to commence in the summer of

20

2016 and be completed in the fall of 2016. Additional documentation and support for this

21

capital investment project are provided in the Capital Investment Project Work Papers.

22
23

11.

Investment Project IP-0551-88 (I15-510017) Connect 12" Main

24

between Hillcrest and Lawrence Dr (CARRY-OVER PROJECT,

25

COMPLETION IN 2016 OR 2017)

26

This previously approved investment project includes the installation of approximately

27

300 feet of new 12-inch main between Hillcrest and Lawrence Drive. The main

28

extension is needed to connect the western section of the Ventura County system to the
60
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southeastern part of the newly acquired Academy Mutual Water System in order to

2

improve water quality, pressure and fire flow. The water main in Hillcrest Road

3

currently terminates approximately 250 feet west of the junction of Lawrence Drive and

4

Hillcrest Drive. This main is one of the key arteries supplying water to the industrial and

5

commercial customers along the West Hillcrest Drive corridor. Likewise, the

6

southeastern part of the former Academy Mutual Water Company has been subject to

7

several new commercial developments, including a recently constructed shopping center

8

at the southeastern part of the U.S. Highway 101 and Borchard Road interchange. The

9

planned project will improve water circulation, fire flow capacities and overall water

10

quality in the western part of the Ventura County District. This previously approved

11

project has a total estimated cost $169,000, and is scheduled for design and construction

12

in 2016. Additional documentation and support for this capital investment project are

13

provided in the Capital Investment Project Work Papers.

14
15

12.

Investment Project IP-0551-96 (I15-510021) 1200’ of main in Rolling

16

Oaks & Los Padres Drive (CARRY-OVER PROJECT,

17

COMPLETION IN 2016 OR 2017)

18

This previously approved project is needed to provide an increased water supply

19

reliability to a critical customer. The Thousand Oaks Surgical Hospital is serviced

20

through an existing 10-inch AC main along Rolling Oaks Drive within California

21

American Water’s Ventura County District service area. The hospital, which is

22

considered a critical customer, is located on the eastern boundary of the Ventura service

23

territory. The 10-inch main, which terminates in front of the hospital, supplies water to

24

the hospital from a single turnout with the CMWD. In the event of a shut-down or a

25

failure at the turn-out, the hospital source of supply will be interrupted. To increase the

26

reliability of service to the hospital, California American Water proposes to install 1,200

27

feet of new 8-inch main to extend the terminal point of the existing 10-inch main in

28

Rolling Oaks Drive to Robert S. Holland Drive at a point where an emergency
61
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connection can be made with the City of Thousand Oaks main located in Robert S.

2

Holland Drive.

3
4

Project benefits are increased reliability of water supply to Rolling Oaks Drive, which

5

serves several medical offices and the hospital. Also, an emergency connection with the

6

City of Thousand Oaks will increase the fire flow capacity to surrounding customers and

7

meet local fire department requirements. Eliminating the dead-end section of the existing

8

10-inch main in Rolling Oaks Drive will decrease the number of water quality complaints

9

from customers. This project will also reduce the risk of water loss to the nearby hospital

10

during a seismic event. This previously approved project was approved in the 2010 GRC

11

for $70,000 in 2013, and the remaining amount of $407,000 was approved for completion

12

as part of the 2013 GRC. This previously approved project has a total estimated cost

13

$477,000, and is scheduled to begin design in 2016. Construction should commence by

14

the summer of 2016 and be completed by the end of 2016. Additional documentation and

15

support for this capital investment project are provided in the Capital Investment Project

16

Work Papers.

17
18

D.

19

There are no capital projects to be discussed in this category for the Monterey County

20

Water District.

Monterey County Water District

21
22

E.

23

There are no capital projects to be discussed in this category for the Monterey County

24

Wastewater District.

Monterey County Wastewater District

25
26
27
28
62
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F.

2

Sacramento County District
1.

3

Project Code I15-600007 Elverta Road Bridge Water Main (CARRYOVER PROJECT, COMPLETION IN 2019)

4

This project was previously approved by the Commission in order to allow California

5

American Water to coordinate a water main replacement project with a Sacramento

6

County bridge replacement project. As described in my capital project testimony in the

7

2013 GRC and repeated here for reference, Sacramento County is still scheduled to

8

widen an existing bridge on Elverta Road sometime in the future (now tentatively

9

planned for 2019). The bridge project crosses Dry Creek, which is between Watt Avenue

10

and Rivergreen Drive, and the project also includes replacing an existing culvert on

11

Elverta Road east of 28th Street. California American Water’s existing main is located

12

on the north side of the bridge, which will need to be relocated to the south side of the

13

bridge because the existing main will be demolished with the existing bridge.

14

addition, the existing 12-inch main continues along Elverta Road and crosses the culvert.

15

Sections of water main near the culvert will need to be replaced to accommodate the new

16

County culvert installation.

17

submitted with this testimony, also provide supporting information for this project.

18

Unfortunately, this project has not been finished as a result of project delays from

19

Sacramento County. This project cannot be completed until Sacramento County finally

20

moves forward on their bridge widening project. In the meantime, California American

21

Water representatives have attended several meetings with Sacramento County to discuss

22

the utility coordination requirements. It is my understanding that the bridge is planned to

23

be constructed in stages. The County construction documents propose that the south

24

portion of the bridge be placed first. After which, vehicular traffic will be detoured to the

25

southern half of the new bridge, while the original bridge is demolished and rebuilt.

26

Once the bridge construction is complete, California American Water and Pacific Gas

27

and Electric (PG&E) have agreed to relocate their respective facilities to a cantilever

28

utility support which is situated on the south side the new bridge. Sacramento County

The associated capital investment project work papers,

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In

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has prepared a preliminary cooperation agreement for California American Water and

2

PG&E which itemizes the cost for design, construction and inspection of the cantilever

3

utility support.

4

utilities will each pay half of the cost for design, construction and inspection of the

5

cantilever utility support.

The preliminary agreement also includes a clause stating that both

6
7

In summary, California American Water must relocate this pipe per the franchise

8

agreement with Sacramento County.

9

California American Water to comply with the terms of its franchise agreement with

10

Sacramento County. The costs spent to date on this investment project are $53,728. The

11

total costs estimated for the remainder of the investment project will be within with the

12

total previously approved budget of $348,000. Additional information, justification and

13

documentation can be found in the Capital Investment Project Work Papers for this

14

specific project.

The primary project benefit will be enabling

15
16

2.

17

Project Code I15-600051 Arden Intertie (CARRY-OVER PROJECT,
COMPLETION IN 2019)

18

This recommended investment project is comprised of an interconnection with the City of

19

Sacramento, inclusive of a booster station, which is needed to provide the requisite water

20

to maintain desired delivery of service to customers. The Arden service area covers an

21

area over one square mile, which is located just east of the Cal Expo grounds and the City

22

of Sacramento (City) limits. The area served by the Arden system is built out, and has

23

limited potential opportunity to acquire property for new production or storage facilities.

24

The system serves approximately 1,195 customers, with a significant number of

25

commercial and multi-family customers. As previously explained in my direct testimony

26

from the 2013 GRC, the Arden system has an Average Day Demand (ADD) of 1.61

27

million gallons per day (MGD) and an estimated maximum day demand (MDD) of

28

approximately 3.15 MGD. The system is primarily supplied by 5 groundwater wells that
64
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have a total firm capacity of 2,590 gallons per minute (gpm) or 3.73 MGD. The Arden

2

system is currently capable of maintaining supply during ADD periods. However, the

3

current MDD and Fire Flow, as well as Peak Hour Demands (PHD), exceed available

4

supplies that are necessary to maintain the minimum requisite system pressure of 40 psi

5

(pounds per square inch). As discussed in the previous testimony, this recommended

6

investment project will connect to the City of Sacramento water system and will also

7

include the construction of a booster station with three - 350 gpm capacity pumps to

8

increase the pressure from the City of Sacramento into California American Water's

9

existing system infrastructure in order to provide potable water to meet the demand of the

10

system users and comply with the requirements of the Division of Drinking Water. As of

11

the date this testimony was prepared, California American Water was engaged in a search

12

of available property for the installation of the booster station. This effort has taken

13

much longer than anticipated because of a strong reluctance by adjoining property owners

14

to sell a portion of their property or even provide an easement. California American

15

Water is committed to completing this property acquisition by late 2017, with design to

16

follow shortly thereafter. It is anticipated that construction could commence in mid-2018

17

and be completed no later than the end of the first quarter of 2019. The costs spent to

18

date on this investment project are $103,705. The total costs estimated for the remainder

19

of the investment project is expected to be within with the total approved budget of

20

$2,398,034. Additional information, justification and documentation can be found in the

21

Capital Investment Project Work Papers for this specific project.

22
23

X.

24
25

ADOPTED – ALL DISTRICTS
Q64.

26
27
28

CAPITAL INVESTMENT PROJECTS PERFORMED OR PLANNED BUT NOT

Please explain capital investment projects that were performed, or are planned to be
performed in the period of 2014-2016, which have not been adopted in a prior GRC.

A64.

There are several capital IPs that have not been adopted in a prior GRC but which
California American Water has performed, or plans to perform. These specific IPs are
65

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discussed in my testimony below. California American Water believed it was important

2

to continue categorizing two of these IPs in this fashion since there were cost increases

3

for these completed projects (Baldwin Avenue Light Rail Line Main Relocation and

4

Leasehold Improvements for New San Diego County Operations Building).

5

Accordingly, California American Water believes these projects should receive additional

6

review by the Commission. These two projects are discussed below in my testimony. A

7

third IP (San Diego PRV Modernization Program) remains in this category at this time

8

since this project has been hampered by permitting delays and issues with the original

9

equipment manufacturer, so California American Water kept this project in this category

10

because it remains an on-going project and has not yet been completed.

11
12
13

Q65.

14
15
16

What is the main reason for these IPs being performed without prior adoption by the
Commission?

A65.

The performed but not adopted projects by each California American Water district is
further explained below:

17
18

A.

19

Los Angeles County District
1.

20

Project Code I15-500044, Baldwin Avenue Light Rail Line Main
Relocation – Alameda Corridor East (ACE) (COMPLETED)

21

The total budget for this investment project is $536,132 with a preliminary phase totaling

22

$73,350. The Alameda Corridor East Authority presented the planned grade separation

23

of Baldwin Avenue to eliminate the existing freight rail crossing with vehicular traffic

24

and divert vehicle traffic under the existing rail elevation by lowering Baldwin Avenue

25

twenty feet. The project is located within the Lower San Marino System within the City

26

of El Monte’s jurisdiction. As part of the project 1,400 feet of 8” ductile water main will

27

be installed along the newly proposed vertical alignment of Baldwin Avenue. Installation

28

of new fire hydrants and services will be constructed as a part of the project. The existing
66
18168912.v1

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8-inch asbestos cement main will be retired and disposed of during excavation on the

2

proposed Baldwin Avenue vertical alignment. Construction and relocation of the existing

3

8-inch water line was planned to begin in 2014. The capital project was completed in

4

March 2015 for a total cost of $573,544 and was completed ahead of schedule. The

5

capital project (as originally proposed) was approved for $519,970 for the years 2015-

6

2016. The total length of pipe installed was 1,964 feet of 8-inch main, which included 80

7

feet of 8-inch CML&C pipe through a casing contained within the Union Pacific Railroad

8

bridge crossing. This capital investment project had an original requested amount of

9

$519,970 and the total recorded capital expenditures were $573,544. The additional

10

expenditure of $53,574 is entirely justified and reasonable, based on the explanation

11

provided above. Therefore, it is recommended that the Commission recognize this

12

additional amount of $53,574 in rate base. Additional documentation and support for the

13

increased cost for this capital investment project are provided in the Capital Investment

14

Project Work Papers.

15
16

B.

17

San Diego County District
1.

I15-300006 San Diego PRV Modernization Program

18

This investment project is for the installation of a micro-hydroelectric turbine generator

19

(“HTG”) unit at the Highland Tank PRV Station located in California American Water’s

20

San Diego County District. As presented in my previous capital testimony in the 2013

21

GRC, the purpose of this investment project is to use the excess head in the tank’s

22

existing water supply pipelines to produce electrical energy that would otherwise be lost.

23

The amount of power generated by this turbine generator is estimated to be between 64

24

and 150 kW. California American Water owns and operates the existing Highland Tank

25

Pressure Reducing Valve Station (Highland Tank PRV Station) that is used to distribute

26

water for residential and/or commercial purposes. The Highland Tank PRV Station is

27

located immediately adjacent to an existing 3 million gallon above ground steel tank that

28

was built in 1963. Under Resolution W-4854 adopted on December 2, 2010, the
67
18168912.v1

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Commission authorized, among other things, California American Water’s Beyer

2

Boulevard PRV Station for the installation of a HTG within the San Diego County

3

District. In addition, the Commission recognized that this investment project would be a

4

California Corporate project, for purposes of accounting the investment dollars.

5

Subsequent to Resolution W-4854, California American Water determined the Highland

6

Tank PRV Station exceeds Beyer Boulevard PRV Station generation potential by more

7

than four times. As such, California American Water submitted Advice Letter (AL) 922

8

to the Commission requesting authorization to specify Highland Tank PRV Station as the

9

new location for the Pressure Reducing Valve Modernization and Energy Recovery

10

Memorandum Account. AL 922 was approved by the Commission on April 19, 2012

11

under Resolution W-4913. Therefore, California American Water proposes

12

implementation of the Highland Tank Pressure Reducing Valve Modernization Project

13

through a program sponsored by the California Water Association and the Commission

14

under Commission Resolution No. W-4854. At this time, it is anticipated the power

15

generated by this investment project would be used locally (i.e., within the immediate

16

community or in the city of San Diego) via SDG&E’s local electrical distribution system.

17

California American Water is currently going through the Federal Energy Regulatory

18

Commission (“FERC”) permitting process and will be preparing a CUP for review by the

19

City of San Diego. The CUP process is expected to take 6 to 9 months, and be completed

20

in 2016. Construction is expected to follow shortly thereafter and at this time the project

21

is targeted for completion by the end of 2016. This investment project currently has a

22

total estimated cost of $1,250,000. It is important to recognize that this project was

23

originally using Zeropex for the equipment, but due to recent failures at similar sites

24

California American Water has opted to pursue a new generator equipment package

25

through Rentricity that will use a Cornell pump in two different sizes. The project is still

26

anticipated to be completed by December 2016. Because of the issues with the Zeropex

27

equipment, the other water companies involved in this initiative (e.g., Golden State Water

28

Company, Cal Water Service Company, and San Jose Water Company) have decided to
68
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no longer proceed with the research design and development project. Additional

2

information, justification, and documentation can be found in the Capital Investment

3

Project Work Papers for this specific project.

4
5

2.

6

Leasehold Improvements for New San Diego County Operations
Building – R15-30N1 (COMPLETED)

7

This capital investment project reflected leasehold improvements for an existing building

8

that is now being leased by California American Water to house its relocated operations

9

center within its San Diego County service area. The original requested capital budget

10

for this project was $420,000. As explained in my testimony for the 2013 GRC and

11

repeated here for reference and convenience, this building and its appurtenant facilities is

12

centrally located within the San Diego County service area, directly on Palm Avenue in

13

the City of Imperial Beach, California. The previous operations center had been housed

14

in a converted residential home in a residential portion of Imperial Beach for over thirty

15

years, immediately adjacent to an elementary school. This previous building on Cherry

16

Avenue has never been an ideal location, because it has customer accessibility issues and

17

the building itself was far too small to adequately meet business needs. In recent years,

18

local and state ordinances, such as compliance with the Americans with Disabilities Act

19

(“ADA”), hazardous materials monitoring and storage issues, as well as fire protection

20

needs, made the existing location completely obsolete and inefficient for a water utility

21

operation. In general, this previous location on Cherry Avenue had a number of issues

22

that supported a change in the operating location that would improve the overall

23

operations and enhance customer service. Some of the more important issues supporting

24

this change include the following: 1) ADA compliance issues; 2) parking issues; 3) fire

25

protection needs; and 4) inside building space and storage. These items were explained

26

at length in my 2013 GRC testimony.

27
28

The new operations center on Palm Avenue consists of a 7,346 square foot building with
69
18168912.v1

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a parking lot located on an approximate 27,878 square foot parcel of land with a common

2

address of 1025 Palm Avenue; plus an adjoining 4,000 square foot building on an

3

approximate 5,737 square foot parcel immediately to the west with a common address of

4

1003 Palm Avenue. The lease contemplates a total “under the roof” improved building

5

square footage of 11,345 square feet, and accompanying total land to be leased of 33,615

6

square feet. This location on Palm Avenue has proven to be ideally suited for an office

7

containing general office space, walk-in customer service area, dispatch facilities and

8

vehicle storage in a sizable parking area. The benefits of a new operations center for San

9

Diego County include the following: 1) adherence to required ADA and appropriate

10

California building codes; 2) an enclosed customer walk-in area with plexiglass

11

protection, which will allow reasonable space for customers to form a line for payments

12

and a workstation with a telephone connecting directly to American Water’s Customer

13

Service Center; 3) providing reasonably-sized workstations (offices for management) for

14

full-time staff and, if possible, smaller workstations for field team members; 4)

15

men/women’s restrooms; 5) showers/lockers; 6) a kitchen/lunch room w/stove,

16

refrigerator, dishwasher, microwave, sink, and related appurtenances; 7) provide a large

17

conference/training room to accommodate employee meetings/trainings; 8) installing the

18

latest security technology - including video camera (inside/outside - where appropriate),

19

emergency button for cashier, card key access for all doors, etc., thereby insuring

20

adherence to recommended American Water Corporate security requirements; 9)

21

providing secured parking for all company vehicles with appropriate fencing; and 10)

22

having adequate customer parking and handicapped parking. Construction of the

23

leasehold improvements commenced in the third quarter of 2013 upon receipt of all

24

necessary permits from the City of Imperial Beach, and was completed in the summer of

25

2014. California American Water recommends that the Commission recognize and

26

approve the total capital dollars associated with the leasehold capital improvements in

27

rate base in the total amount of $785,715. Additional information and documentation is

28

provided in the Capital Investment Project Work Papers for this specific project.
70
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2

C.

3

VENTURA County District
1.

4

Project Code 05510200 - Moorpark Booster Station Replacement
(COMPLETED)

5

The Moorpark Booster Station project was completed by Pacific Hydrotech Corporation

6

in May 2015. The project included the full replacement of the existing booster pump

7

station with a new below-grade prefabricated booster pump station, adjacent to the

8

existing booster station within the public right-of-way. It should be noted that the limited

9

space at this location required significant pedestrian and traffic control for the duration of

10

the project. The prefabricated booster pump station was manufactured by Engineered

11

Fluid Inc. (EFI) and was purchased directly by California American Water to reduce

12

project costs. Proposals were solicited from two prefabricated pump station

13

manufacturers, EFI and USEMCO. It should be recognized that the project costs were

14

higher than anticipated, primarily due to the added cost for a new electrical service.

15

During the design phase, it was discovered that the electrical service to the existing

16

Moorpark Booster Station was insufficient for the new booster station. Initially, the

17

electrical utility had informed California American Water that there was sufficient

18

service in this area, but this information turned out to be incorrect. As a result, the

19

Contractor had to directionally drill new conduit under and across a 60 foot wide road

20

and tie into a power pole located in a customer’s backyard. The discovery of the

21

requirement for a new electrical service also caused a delay to the project, as the new

22

service required significant coordination with the electrical utility. The transformer

23

serving the pump station also needed to be upgraded as part of the project. While this

24

task was completed by the electrical utility, this effort required significant coordination

25

with the surrounding community, as the outage affected a wide area, including a high

26

school. This capital investment project had an original requested amount of $1,381,590,

27

and this amount was further supported in rebuttal testimony as part of the 2013 GRC.

28

However, the approved rate case amount was adjusted to $1,248,110, and the total
71
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recorded capital expenditures were $1,277,575. The additional expenditure of $29,465 is

2

entirely justified and reasonable, based on the explanation provided above. Therefore, it

3

is recommended that the Commission recognize this additional amount of $29,465 in rate

4

base. Additional documentation and support for the increased cost for this capital

5

investment project are provided in the Capital Investment Project Work Papers.

6
7

D.

8

MONTEREY COUNTY WATER District
1.

9

Project Code I15-400111, Retire Carmel Valley Filter Plant (20152017)

10

This project consists of demolishing and retiring the former Carmel Valley Filter Plant.

11

Work is scheduled to begin in 2016 and be completed in 2017. Tasks include the

12

removal of the Carmel Valley Filter Plant and all related treatment buildings and

13

structures, including three welded steel backwash tanks and the former dam keeper

14

residence.

15
16

Work for this project also includes the relocation of existing chlorine feed and analyzer

17

equipment into a new utility structure and the connection of ancillary power to the

18

structure. Work also includes the installation of ancillary power, monitoring and control

19

equipment to the structure. Work also includes the removal and relocation of SCADA

20

monitoring and control equipment currently housed within the building to a new location.

21

The estimated costs for this project are $1,130,000 for the demolition of the plant and

22

structures, $100,000 for the chlorine feed and SCADA relocation improvements and

23

$110,000 (10%) project contingencies, $60,000 in overhead costs and $100,000 in labor

24

and labor overhead costs for a total estimated cost of $1,500,000. California American

25

Water is also utilizing Granite Construction for the Carmel Valley Filter Plant

26

demolition, since they will be completing other work on-site related to the San Clemente

27

Dam removal project. Taking this approach will allow both projects to save on

28

mobilization and demobilization costs. In addition, this project is being completed at this
72
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time in order to take advantage of the contractor’s available resources that will be

2

completing activities simultaneously on the San Clemente Dam removal project.

3

Additional information, justification, and documentation can be found in the Capital

4

Investment Project Work Papers for this retirement project.

5
6

E.

7

1.

8
9

Sonoma County (Larkfield) District
Project Code 05510200 – Replacement of the Backwash Tank at the
Larkfield Water Treatment Plant (In Progress)

This proposed investment project involves the replacement of the existing bolted steel

10

backwash tank located at the Larkfield Water Treatment Plant, with expected completion

11

in late 2016/early 2017. This project (not previously approved or adopted) is necessary at

12

this time because the backwash tank recently experienced a significant leak. Tank

13

Industry Consultants (TIC) was called upon to investigate the probable cause of the leak,

14

and made a site visit on August 24, 2015. California American Water has highlighted

15

some of TIC’s findings regarding this backwash tank:

16
17



The hole was most likely caused by a pinhole in the coatings near the base of the tank

18

on north side of the tank that over time eventually corroded through the thin shell of

19

the bolted tank, and breached the total thickness causing the leak. Early this year

20

several holes on the upper portion of the tank required four (4) of the steel plates be

21

replaced due to similar type holes.

22
23



The interior and exteriors of the steel to floor juncture were inspected to determine if

24

any other items of concern were apparent. No additional holes or concerns were

25

discovered. However, sludge residuals around the bolts near the bottom of the tank

26

could hide other small holes that may be at the point of starting new leak(s).

27
28
73
18168912.v1

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

There were about 12-15 small pits visible from inside the tank on the bottom shell.

2

The visible rust at the pit corrosion was scrapped away and with a pocket knife used

3

to access the depths of the pitting and none of them were found to be deep enough to

4

require immediate attention such as welding.

5
6



7

The concrete floor was visible and clean and found to be in good shape and no cracks
were visible.

8
9



10

The flexible seal at the base of the tank where the steel plate meets the concrete floor
was also in good shape.

11
12



The bottom 2-3 feet of the tank where the individual bolted plates intersect and are

13

bolted together shows signs of corrosion at all of the plate intersections. The metal

14

brackets and bolt heads have significant amounts of metal loss. The corrosion

15

byproduct color matches the ferric chloride type sludge residuals that remain making

16

it difficult to differentiate corrosion from the sludge. This lower couple of feet is

17

where the concentrated sludge is stored in the tank until it is periodically removed.

18

The sludge may be providing an environment that is more corrosive more than the

19

decant water on the upper portion within the tank.

20
21

TIC recommended that a steel threaded plug that matches the threaded hole that was

22

drilled into the tank be used to fill the hole, and nylon tape will be used at the threads to

23

ensure the threads are sealed. The inside of the tank should be hand tool cleaned to

24

remove remaining residuals and light rust around the void then painted with 100% solids

25

epoxy such as Aquata Poxy made by Raven Industries. This product is NSF 61 approved

26

and dries very quickly, thus allowing the tank be back in service the same day. This is a

27

temporary fix and will not permanently solve the problem. TIC also advised California

28

American Water that the thickness of the bolted steel tanks do not have much if any
74
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tolerance for corrosion. The steel plug is only a temporary repair and will be monitored

2

regularly to ensure the leak does not reappear, or other new leaks appear. Finally, TIC

3

stated that the tank is in need of replacement. TIC recommended the tank be replaced

4

within the year. There is sufficient space on the plant site to construct a new tank based

5

on our view of the site. California American Water recommends that the Commission

6

approve this IP for the requested dollar amount of $864,564 and the present construction

7

timeframe (late 2016/early 2017). Additional information, justification and

8

documentation can be found in the Capital Investment Project Work Papers for this

9

specific project.

10
11
12

XI.
Q66.

13
14

ADVICE LETTER CAPITAL INVESTMENT PROJECTS
Please explain the capital projects that have been designated Advice Letter projects by
the Commission.

A66.

California American Water has a number of Advice Letter investment projects in its

15

Monterey County Water District and its Sacramento County District. I would like to

16

present a summary description of the scope and status of these Advice Letter projects.

17

Please note that the Commission authorized Advice Letter treatment for all of these

18

projects in Decision (“D.”) 15-04-007.

19
20

A.

21

MONTEREY COUNTY WATER DISTRICT
1.

22

Project Code I15-400034 (IP-0540-194), Replace Carmel Woods Tank
(COMPLETED)

23

This investment project involved the replacement of an aged and structurally deficient

24

water distribution storage tank located immediately adjacent to residences in the City of

25

Carmel. This project has been completed and placed into service at a total cost of

26

$710,597. The actual completion cost was $685,000, while the interest cost for this

27

Advice Letter project was an additional $25,597. For reference, the 2010 GRC approved

28

an Advice Letter amount of $685,000 plus interest for this capital project. The cost of the
75
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project exceeded the approved advice letter amount due to increased construction costs

2

which included (1) a change in the foundation type as recommended by the soils

3

engineer, including a related construction delay cost (2) replacement of failed existing

4

piping and additional piping tie in costs (3) special inspection for welding required by

5

Monterey County (4) a tank mixing system required by Monterey County. The

6

Commission approved this Advice Letter capital project by an offset to rate base by

7

Advice Letter Number 1062 in January 2014. A copy of the Advice Letter Commission

8

Resolution is included as Attachment 8 to my testimony.

9
10

2.

11

Project Code I15-400004 (05400509), (2) 200,000 Gallon Tanks in
Ambler Park (COMPLETED)

12

This distribution storage project is necessary to meet daily demands of the Ambler Park

13

satellite system and to help meet current fire protection standards. The project was

14

completed and placed into service in May 2016, and an Advice Letter will be filed with

15

the Commission in June 2016. The project had a previously approved advice letter

16

budget of $1,952,971, which was recognized and re-approved in the 2013 GRC

17

settlement agreement. The completed cost of the project is $1,994,379, which is an

18

increase in cost of $41,408 over the original approved amount. The increased cost

19

reflected increased construction costs which included: (1) additional tie in work due to a

20

failed section of existing pipe (2) removal of iron deposits that accumulated in the

21

existing tanks (3) change in piping location due to minimal space on site (4) additional

22

excavation costs due to rock encountered beneath tank foundation (5) heating costs

23

during interior tank coating due to construction during winter weather. The final location

24

of the project site is at an existing California American Water tank site. The previously

25

identified project site was located behind San Benancio Middle School and was not

26

considered because California American Water determined after investigation there

27

would be an additional cost of construction and a number of trees would have to be

28

removed in order to construct the necessary access road just to reach this tank site.
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Additional information, justification and documentation can be found in the Capital

2

Investment Project Work Papers for this specific capital project.

3
4

3.

5

I15-400083 (IP-0540-90), Upper Rimrock Storage Tanks
(COMPLETED)

6

The proposed Upper Rimrock Storage Tank will replace two existing 25,000 gallon

7

bolted steel water storage tanks with one 120,000 gallon welded steel storage tanks as

8

part of the Ambler Park Water System. The additional storage will serve the Upper

9

Rimrock gradient and will ensure that reliable water service and improved fire protection

10

is provided to customers. This project was also originally scheduled to be completed in

11

2011, but was delayed by a lawsuit filed by the property owner on title and CEQA basis.

12

The project was completed and placed into service in December 2014, and the associated

13

Advice Letter project submittal was also made to the Commission in December 2014.

14

For reference, this distribution storage tank project was approved in the 2010 GRC as an

15

Advice Letter project, and re-approved as part of the 2013 GRC settlement agreement,

16

with a cost of $932,000 plus interest. The Commission approved this Advice Letter

17

capital project by an offset to rate base by Advice Letter Number 1061. A copy of the

18

Advice Letter Commission Resolution is included as Attachment 8 to my testimony.

19
20

4.

21

I15-400015 (IP-0540-155), Chualar 150K Gal Tank (Currently InProgress)

22

This IP will allow California American Water to upgrade the only water storage facility

23

serving the City of Chualar, thereby allowing the water system to meet current fire

24

protection standards. Critical facilities to be served include an elementary school,

25

residences, and a commercial area. This project was also originally scheduled to be

26

completed in 2013, but unfortunately, this project has been delayed due to negotiations

27

with the landowner for an additional easement. Because of the high fire demand

28

requirements from the neighboring elementary school (which does not have fire
77
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sprinklers) the project required a larger storage tank of 188,000 gallons and a fire flow

2

pumping capacity of 2,750 gpm. As a result of the increased fire demand requirement, a

3

larger fire pump was necessary. Also, because the tank is larger in volume, additional

4

property was acquired from the property owner. The tank and site work contracts have

5

been awarded and the project is scheduled to start construction in April. For reference,

6

the 2010 GRC settlement agreement recognized this distribution storage tank as an

7

Advice Letter project, and initially set the project cost at $832,000, plus interest. The

8

project was re-approved in the 2013 GRC settlement as an Advice Letter project for

9

$925,000, plus interest. The 2013 GRC settlement agreement recognized this increased

10

cost as well. At the time this testimony was prepared, this capital project is expected to

11

be completed in October 2016 and within the estimated project cost of $925,000, plus

12

interest. Additional information, justification, and documentation can be found in the

13

Capital Investment Project Work Papers for this specific project.

14
15

5.

16

I15-400006 (IP-0540-101), Ryan Ranch – Bishop Intertie (Currently
In-Progress)

17

The Ryan Ranch service area does not have sufficient capacity to meet demands during

18

peak events and, as a result, has been forced to utilize an emergency interconnection with

19

the main Monterey service area. The Monterey County Environmental Health

20

Department (“MCEHD”) issued a Compliance Order in April 2006, indicating that

21

California American Water did not meet its permit conditions for providing a reliable and

22

adequate supply of water. The recommended solution is to provide an interconnection

23

between the Ryan Ranch system and the Bishop service area to meet those demands and

24

the interconnection will supplement the supply only when it is absolutely necessary.

25

MCEHD is aware of California American Water’s efforts in addressing the Compliance

26

Order. As per the 2010 GRC Settlement Agreement, it was recommended this

27

investment be approved in the amount of $277,000, plus interest, and that California

28

American should be authorized to seek a rate base offset by filing a Tier 2 Advice Letter
78
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when the project has been completed and is used and useful, at costs not to exceed those

2

indicated. This project was re-approved as an Advice Letter Project in the 2013 GRC

3

settlement agreement for the same dollar amount. The design for the intertie has been

4

completed. California American Water also received the necessary distribution system

5

permit from the Monterey Peninsula Water Management District (MPWMD) for this

6

capital project in June 2015. The costs spent to date on this investment project are

7

$34,007. At this time, it is fully expected the project will be completed by the end of

8

2016 and within the $277,000 budget – plus interest. Additional information,

9

justification, and documentation can be found in the Capital Investment Project Work

10

Papers for this specific project.

11
12

6.

13

I15-400049 – Los Padres Dam Fish Passage Advice Letter Project
(COMPLETED)

14

California American Water owns and operates Los Padres Dam at approximately River

15

Mile 24.8 on the Carmel River. The Carmel River is home to a population of sea-run

16

steelhead trout, a species currently listed as “Threatened” per the federal Endangered

17

Species Act. The current steelhead population in the Carmel River is lower in numbers

18

than historic levels due to many factors, one of which is believed to be the delay and/or

19

barrier to fish passage at Los Padres Dam. This previously approved project was

20

originally approved as an Advice Letter project in the 2010 GRC, and included detailed

21

designs, permitting, and construction of a floating weir surface collector and bypass

22

conduit design that allows downstream passage of smolts and kelts. Project components

23

include a behavioral guidance system (“BGS”), floating weir surface collector, fish

24

bypass conduit, bypass access portals, and bypass outfall. Additional details on the BGS,

25

the floating weir collector structure, the bypass conduit and the bypass outfall can be

26

found in the Capital Investment Project Work Papers. The previously estimated total

27

project costs for the Floating Surface Collector was $2,342,000. It is important to note

28

that this value was adopted as the upper limit allowed for the installation of the fish
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passage system in the 2010 GRC. However, during the final design stage, consultation

2

with the California Division of Safety of Dams (“DSOD”) was required for review of the

3

design from a dam safety and permitting perspective. DSOD approval is required for any

4

modification to the dam structure. Discussions with DSOD staff resulted in several

5

changes to the overall design being required and incorporated, including: 1) Realignment

6

of bypass pipe; 2) Increased penetration length through ogee; 3) Increased pipe protection

7

in spillway; and 4) Change from HDPE to steel pipe in portion of line. In addition, the

8

following changes were required due to permitting requirements: 1) Biological

9

monitoring and mitigation during construction; 2) Addition of access manway and

10

handrails to floating collector; 3) Floating collector geometry revisions; 4) Revised length

11

and alignment of outfall; 5) Addition of debris deflection piles; and 6) Increased length of

12

debris boom. As a result of these design changes, the project was rebid in 2015. Bids

13

were solicited earlier in the year to provide for a longer pre-construction period that

14

allows the contractors to optimize the construction process. The construction cost

15

estimate, based on those received bids, was reduced by approximately 10% to

16

$2,500,000. In addition, a value-engineering exercise was also performed by California

17

American Water and HDR Engineers to review the design for unnecessary features and

18

less costly alternatives. Several items were identified to reduce the overall cost, which

19

are primarily the result of improving access to the construction area by lowering the

20

reservoir level, allowing the contractors to work “in the dry.” The project was re-

21

approved in the 2013 GRC as a capital Advice Letter project for $4,200,000, however

22

due to the permitting and construction requirements mentioned above and specialized

23

inspection costs the project’s total recorded capital expenditure amount is $5,375,190.

24

The facility was commissioned in March 2016, and is complete and in service.

25

Therefore, based on the information presented above, it is recommended that the

26

Commission approve this capital advice letter project, as amended by California

27

American Water for the additional costs, for a total recorded capital expenditure amount

28
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of $5,375,190. The Advice Letter application is planned to be filed with the Commission

2

in June 2016.

3
4

California American Water and various stakeholders have submitted an amended

5

application to the State Water Resources Control Board (SWRCB) for an order

6

modifying certain of the ordering provisions of Order WRO 2009-0060. In brief, in

7

Orders WRO 2009-0060 (also known as the CDO) as amended by WR 2010-0001, the

8

SWRCB required California American Water to comply with Condition 2 of SWRCB

9

Order WR 95-10. A copy of this amended application to the SWRCB is included in the

10

testimony of Richard Svindland. A copy of the Advice Letter submittal, as well as all

11

additional information, justification and documentation for this specific investment

12

project, are included in the Capital Investment Project Work Papers.

13
14
15
16

B.

17

SACRAMENTO COUNTY DISTRICT
1.

IP-0560-100 – Walnut Grove System Improvements (COMPLETED)

18

California American Water’s Walnut Grove drinking water system is situated along the

19

west side of the Sacramento River, approximately 40 miles south of Sacramento,

20

California. The system is supplied with groundwater from two active wells (Walnut

21

Grove No. 3 and Walnut Grove No. 1). Both wells exceed the revised maximum

22

contaminate level for arsenic (10 ppb). In order to bring the system into compliance with

23

the new arsenic rule, the Commission previously approved the design and construction of

24

a new treatment plant (the Islandview water treatment plant). The new plant currently

25

allows finished water in the Walnut Grove system to comply with the Federal and State

26

revised arsenic standard. However, the treatment plant can only treat groundwater

27

produced from Well No. 3. This previously approved Advice Letter project was needed

28

to convey raw groundwater from Well No. 1 to the Islandview plant for treatment. The
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new raw water pipeline also provides the treatment plant with a back-up supply in

2

conformance with California waterworks standards. The ability for future maintenance

3

and rehabilitation activities associated with Well No. 3 will also be realized upon

4

completion of the project. The overall project includes; design/permitting/land

5

acquisition of a tank, construction of a raw water main from the Walnut Grove Well No.

6

1 to the Arsenic treatment plant site at Well No. 3, and rehabilitation of Well No. 1. The

7

major project components consist of:

8
9



1,700 feet of 6-inch water main

10



Switchgear was added at Well No. 1.

11



Concrete driveway and foundation improvements

12



Chemical feed system updates at Well No. 3

13
14

Originally, the Commission in Decision 08-05-018 designated this project as an Advice

15

Letter project in the amount of $710,000. In the July update to the 2009 GRC, California

16

American Water postponed full implementation of this project and requested funds for

17

preliminary activities be included in rate base. As part of the settlement agreement to the

18

2009 GRC, the Commission approved preliminary funds in the amount of $100,000 for

19

2011. A budget of $414,774 was established as part of the settlement agreement in

20

Application A.13-07-002 (D.12-06-016). The cost allowed by the Commission in the

21

2013 GRC was $414,774. The final cost of this project totaled $793,065, which is

22

$378,291 above the previously approved Advice Letter amount. The project was over

23

budget due to the following critical reasons: 1) due to the poor soils in Walnut Grove,

24

there was a specific need to insure the new tank would not settle over time, therefore

25

additional soils testing was performed and a more adequate foundation was designed; 2)

26

based on public comments received, the tank was relocated and hence additional design

27

was required; 3) several changes in the field during construction on the other portions of

28

this project including the pipeline between Well 1 and Well 3 and improvements at Well
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1 were required to address site condition changes that arose, including – pipe separation

2

conflicts, fencing farmers’ irrigation valves, and additional paving requirements; and 4)

3

construction inspection was used on this project to insure compliance with design and

4

County specifications. The total additional costs were as follows: $179,723 for design

5

changes; $152,768 for construction costs due to design changes plus field changes that

6

occurred during construction; and $45,800 for construction inspection for the project

7

components that were constructed. The tank construction was submitted as a separate

8

project (IP-0560-38) for total capital expenditure of $2.75M. California American Water

9

completed the project in the fall of 2014, and filed an Advice Letter application with the

10

Commission in November 2014. A copy of the Advice Letter submittal and the

11

associated Commission Resolution are included in the Capital Investment Project Work

12

Papers, as well as all additional information, justification and documentation for this

13

specific investment project.

14
15

2.

16

IP-0560-38 – Walnut Grove 120,000 Gal Tank (INPROGRESS/NEARLY COMPLETE)

17

This previously approved Advice Letter Project consists of the design, permitting, land

18

acquisition, and construction of a storage tank and booster station for the Walnut Grove

19

System. Work completed for this portion of the project included property acquisition,

20

tank sizing study, design drawings and specifications, and project administration. It is

21

important to recognize that this investment project is the predecessor to a carry-over

22

investment project that was approved by the Commission in the 2013 GRC, and is

23

described later in my testimony. This carry-over investment project, identified as I15-

24

600063, Walnut Grove System Tank Construction, was approved for construction in

25

2015-2017 timeframe Reference should be made to the new investment project for

26

additional information, justification and documentation of this specific project.

27

California American Water completed the initial portion of this project as described

28

previously in the fall of 2014, and filed an Advice Letter with the Commission in
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November 2014. A copy of the Advice Letter submittal and the associated Commission

2

Resolution are included in the Capital Investment Project Work Papers, as well as all

3

additional information, justification and documentation for this specific investment

4

project.

5
6

3.

7

IP-0540-74 – Lincoln Oaks 1.5 MG Tank, BPS, and Well
(COMPLETED)

8

This Advice Letter project was approved in the 2013 GRC and consists of the design,

9

permitting, and construction of a 1.5 MG tank, 3,000-gpm booster station, and 1,100-gpm

10

production well to serve the southern portion of California American Water’s Lincoln

11

Oaks system. Work completed to date includes property acquisition and project

12

administration, Phase 1 Environmental Investigation, property appraisals, preliminary

13

and detailed design and most construction activities. By way of background, the Lincoln

14

Oaks Water System firm capacity marginally meets existing MDD; California American

15

Water projects a deficit of 1.72 MGD by 2020. During peak hour demands, there is

16

currently a 10.55 MGD deficit, which will likely increase to 13.88 MGD by 2020. This

17

deficit translates to a current 1.59 MG storage deficit, and increasing to a 2.28 MG

18

storage deficit in 2020. As one can see, the Lincoln Oaks system currently has

19

inadequate source capacity and pumped storage to meet diurnal demands (peak hour

20

demands) associated with maximum day water usage. This results in low pressures to

21

existing customers during peak demand periods. Wholesale purchase from Sacramento

22

Suburban Water District (“SSWD”), is currently offsetting the low-pressure problem

23

somewhat, however, this wholesale supply is not for summer purchase, is not firm

24

capacity, and is not guaranteed. As previously described in my testimony provided in the

25

2013 GRC and repeated here for convenience, California American Water requires a new

26

1.5 MG storage and booster pumping facility to provide system storage for equalization

27

and fire protection during maximum demand usage. California American Water placed

28

the project into service on June 27, 2016. At this time, California American Water plans
84
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to file an Advice Letter application with the Commission in June 2016. The cost allowed

2

in the 2013 GRC is $8,354,508. The final cost of this project is estimated to be

3

$6,966,041, which is within the previously approved cost. A copy of the Advice Letter

4

application is included as part of the Capital Investment Project Work Papers. Additional

5

information, justification and documentation for this specific investment project will also

6

be included.

7
8

4.

9

I15-600032 Walerga Road Bridge Pipeline (TEMPORARILY
DEFERRED)

10

This previously proposed Advice Letter project is to abandon an existing 16-inch water

11

main crossing Dry Creek at Walerga Road, and will involve the construction of

12

approximately 600 feet of buried 16-inch pipe at the proposed bridge abutment and 550

13

feet of 16-inch pipe on the proposed Walerga Road bridge deck. The Project is located in

14

Placer County in California American Water’s West Placer water system, Sacramento

15

District. As previously described in my capital project testimony from the 2013 GRC,

16

California American Water owns a 16-inch water main that crosses beneath Dry Creek

17

and dead ends on the south side of the creek. The pipeline is located in a multi-use

18

easement owned by Placer County adjacent to the County’s Walerga Road bridge

19

crossing. Placer County is planning to widen the Walerga Road Dry Creek bridge

20

crossing from two lanes to four lanes with room to eventually expand to six lanes. The

21

footprint of the proposed bridge will extend over California American Water’s 16-inch

22

water main and the County has requested that California American Water relocate the

23

pipe, at our expense, in accordance with our franchise agreement with the County. Placer

24

County requested California American Water complete the pipeline improvement design

25

in 2010 so that the project will be ready for construction as soon as the Federal funding

26

becomes available. However, completion of this project is dependent on Placer County

27

moving forward with their project. As of the date of this testimony, the County’s

28

schedule remains unknown. My previous testimony from the 2013 GRC explained in
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detail the various options available to California American Water for relocating the pipe.

2

It is important to recognize that abandoning the pipe is not an alternative because it is a

3

vital piece of water supply infrastructure for that area. In summary, California American

4

Water must relocate this pipe per the franchise agreement with Placer County. The

5

primary project benefit will be enabling California American Water to comply with the

6

terms of its franchise agreement with Placer County. The costs spent to date on this

7

investment project are $0. The total costs estimated for this investment project (identified

8

as an Advice Letter project) is $805,000. Additional information, justification and

9

documentation can be found in the Capital Investment Project Work Papers for this

10

specific project.

11
12

5.

IP-0560-88 – Crowder Lane Controls (COMPLETED)

13

This previously approved Advice Letter project includes the installation of a flow control

14

valve and instrumentation improvements at the Crowder Lane metering station. Upon

15

completion of the Walerga tank, booster station, and pipeline in July 2015, the

16

installation of this control station will serve to control the flow rate of water through the

17

Crowder Lane metering station. Controlling the flow rate will allow a balanced flow

18

from the higher HGL of the PFE station, will allow effective working use of the storage

19

reservoir, turnover stored water, and allow peaking to occur from the new storage

20

reservoir and booster pump station. California American Water purchases water from

21

Placer County Water Agency (“PCWA”). PCWA delivers water through the Crowder

22

Lane metering station, and the PFE metering station to serve customers in the West

23

Placer service area. Presently, within limits, the hydraulic controls for the Crowder Lane

24

station are pressure sustaining based. The Crowder Lane station delivers water at a lower

25

hydraulic grade line (“HGL”) than the PFE station. For reference, the 2010 GRC

26

settlement agreement recognized this distribution storage tank as an Advice Letter

27

project, and initially set the project cost at $54,549, plus interest. California American

28

Water completed the project in December 2015 at a cost of approximately $59,927, and
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filed an Advice Letter with the Commission in early 2016. A copy of the Advice Letter

2

submittal and the associated Commission Resolution are included in the Capital

3

Investment Project Work Papers, as well as all additional information, justification and

4

documentation for this specific investment project.

5
6

C.

7

Sonoma County District (Larkfield)
1.

Project Code I15-610002 Faught Road Well

8

This recommended and previously approved investment project includes the construction

9

of a 150 gallon per minute (gpm) production well, and 1,500-feet of 6-inch raw water

10

main from the well to the Larkfield water treatment plant. As my previous direct

11

testimony in the 2013 GRC explained, additional supply capacity is needed in the

12

Larkfield system to support California American Water’s goal of increasing the supply

13

capacity needed to meet existing demands. A monitoring well was drilled at the well site

14

to determine the adequacy of the water quality and supply. A Basis of Design Report for

15

the Faught Well, Pumping Plant, and Raw Water Transmission Pipeline, was prepared by

16

GEI Consultants, Inc., Bookman-Edmonston Division. The property owner worked with

17

his consultant to develop a permit application for project approval from Sonoma County.

18

However, as of the date of this testimony, it is my understanding that the easement issues

19

with the property owner continue to remain unresolved. California American Water

20

continues to work on alternative approaches for insuring site access. This investment

21

project continues to be on-going. And, the primary reason it continues to be delayed is

22

simple. Since 2013, the water supply for the Larkfield system has been successfully

23

supplemented with surplus capacity (albeit on a temporary contract basis) from the

24

Sonoma County Water Agency’s (SCWA) source of supply. However, as of the date of

25

this testimony, California American Water can report that SCWA has provided a letter

26

(dated April 1, 2016) wherein SCWA has determined that there is adequate capacity in

27

the transmission system to extend the term of the supplemental agreement for an

28

additional six years (from 2019 to 2025). While this is a positive development, amending
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the agreement will still be required between the parties. A date of when the supplemental

2

contractual agreement will be amended and approved by SCWA and California American

3

Water remains undetermined at this time. Therefore, California American Water believes

4

it is still prudent and reasonable to continue reflecting this investment project as an

5

Advice Letter project until the approval and execution of a supplemental water purchase

6

agreement is achieved and in place for a long period of time. The costs spent to date on

7

this investment project are $288,126. The total costs estimated for the remainder of the

8

investment project will be within with the total approved budget of $2,504,133.

9

Additional information, justification and documentation can be found in the Capital

10

Investment Project Work Papers for this specific project.

11
12
13
14

XII.

15
16

CARRY-OVER CAPITAL INVESTMENT PROJECTS ADOPTED IN 2013 GRC
(CONTINUING INTO 2018 AND BEYOND)

Q67.

Please describe the nature and composition of each carry-over capital IP adopted in the

17

2013 GRC, inclusive of the current status and/or progress based on California American

18

Water’s best estimate within the confines of the current GRC.

19

A67.

Yes. The respective carry-over capital IPs, their current status, their anticipated schedule,

20

and their respective budgets, are provided below for each district of California American

21

Water. It is important to recognize the respective budgets for some of the carry-over

22

capital IPs shown in each district’s table are direct costs for the individual IPs, and will

23

not match the total cost generated by the Results of Operations model. The reason for

24

this difference is the Results of Operations model calculates separately the appropriate

25

factors for engineering overhead and contingency, as appropriate on a project-by-project

26

basis.

27
28

Q68.

Please discuss the carry-over capital IPs for California American Water.
88

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2

A68.

Yes. I provide a summary description of the carry-over capital IPs for the Los Angeles
County District below:

3
4

A.

5

Los Angeles County District Previously Approved Carry-Over IPs
1.

6

Project Code I15-500036, Rehabilitate/Redrill Longden Well
(CARRY-OVER)

7

The total estimated cost for this previously approved carry-over capital investment

8

project is now $4,745,780. This amount has $167,929 planned for 2016, $190,837

9

planned for 2017, $18,348 planned for 2018, and $4,368,666 planned for 2019. As

10

explained in my testimony for the 2013 GRC and repeated here for reference and

11

convenience, this capital IP will address a deficit in the source of supply for the Los

12

Angeles District’s San Marino Service Area. In order to minimize CAW’s reliance on

13

costly purchased water from MWD, it is recommended that CAW should maximize

14

production from the well through rehabilitation or a complete redrill. The Longden Well

15

is located adjacent to the Longden Reservoir on a small lot in a residential area in the

16

southern part of the Upper Service Area of California American Water’s San Marino

17

service area in the Los Angeles District. The well was drilled in 1924 and is presently

18

equipped with a 960 gpm, 150 HP submersible pump, which in turn pumps into the

19

Danford/Oak Knoll Zone distribution system. The condition of the well is not known at

20

this time. However, the Longden Well is over 80 years old and is nearing the end of its

21

useful life. Elevated nitrate concentrations as high as 70 mg/L (higher than the 45 mg/L

22

MCL) have been recorded in the well. The original capacity of the Longden Well prior

23

to the presence of elevated nitrate concentrations was over 1,800 gpm. However, since

24

the water must be blended with Lower System water in order to maintain compliance

25

with nitrate limits, a smaller 960 gpm pump was installed in 1998 to address this issue.

26

In addition, booster pumps and an in-line static mixer were also installed in 1998 to

27

facilitate the blending. Finally, it should be noted that elevated nitrate concentrations,

28

perchlorate and PCE concentrations have also been increasing in the well. The maximum
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concentration of perchlorate measured in the well was 4.0 μg/L which is below but

2

approaching the MCL of 6 μg/L. The maximum concentration of PCE measured in the

3

well was 9 μg/L, well above the 5 μg/L MCL. Treatment options to address the nitrate

4

and PCE levels are currently being investigated as part of this capital project. This

5

project is presently underway with initial design and some pilot testing, with construction

6

to follow in late 2018 and targeted to be complete by the end of 2019. CAW

7

recommends that the Commission re-approve this IP for the requested dollar amount and

8

the adjusted timeframe. Additional information, justification and documentation can be

9

found in the Capital Investment Project Work Papers for this specific project.

10
11
12
13

2.

14

Project Code I15-500037, Combine Domestic/Irrigation System in
Duarte (Carryover)

15

The total estimated cost for this previously approved carry-over capital investment

16

project is $3,890,000. As explained in my testimony for the 2013 GRC and repeated here

17

for reference and convenience, this capital IP will address a long-term issue within the

18

Los Angeles District’s Duarte service area. The Duarte service area in the Los Angeles

19

District supplies untreated water for irrigation purposes to approximately 40 customers in

20

the Spinks/Bliss Canyon Gradient. The irrigation system supplies an average of 0.33

21

mgd with maximum day usage of approximately 1.09 mgd. It is important to recognize

22

that the retirement of the irrigation system in Duarte (Bradbury) was identified in the

23

2010 GRC as “Special Request #23 – Retire the Bradbury Irrigation System.” In the

24

settlement agreement with DRA and other parties, and in the final decision from the 2010

25

GRC (D.12-06-016), the Commission recognized that “The parties agree that California

26

American Water shall retire the Bradbury irrigation system and transfer the customers to

27

the potable system during the years 2015 to 2017.” Accordingly, the Commission

28

acknowledged and expected that a subsequent project would be included in the next GRC
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(i.e., 2013). This proposed investment project meets this expectation and will allow for

2

the transfer of these irrigation customers to the domestic system. As background, a

3

number of the components in the irrigation supply system are at the end of their useful

4

life and require replacement or rehabilitation. Problematic sections of the pipe and

5

conduit which comprise the gravity transmission component of the irrigation system were

6

recently inspected and the video revealed that there were numerous joint leaks, tree root

7

intrusions, and several partially collapsed sections. In addition, various sections of the

8

transmission system were installed on private property, which makes the mains difficult

9

to access. In the past, system ruptures on private property have caused California

10

American Water to assume property damage liabilities. A comprehensive survey of the

11

irrigation system was conducted in January 2012 and summarized in a technical

12

memorandum included within the Comprehensive Planning Study for the Los Angeles

13

District. It is recommended that the irrigation system pipelines and facilities in the

14

Spinks/Bliss Canyon area be retired, and coincidentally the irrigation customers should

15

be transferred over to the domestic system. Basically, this investment project includes

16

retirement of all irrigation system piping, the portion of the gravity conduit that conveys

17

water to the Fair Oaks Reservoir, two of the booster stations, and all three reservoirs. In

18

most areas, modifications would require only the relocation of service and/or hydrant

19

connections from the irrigation main to the domestic main. However, there are sections

20

of the irrigation system where the irrigation pressure piping does not parallel domestic

21

distribution mains. In those areas, irrigation service connections and irrigation hydrants

22

exist where there are no domestic mains in close proximity. Since the existing irrigation

23

mains in these areas are steel pipes that are at or near the end of their useful life, new

24

domestic mains would need to be installed to replace them. These new domestic mains

25

would connect to the existing domestic system at the nearest location. It is estimated that

26

approximately 6,000 feet of 8-inch and 1,400 feet of 12-inch diameter main (and

27

associated hydrant and service connections) would be required to extend domestic water

28
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to potentially stranded irrigation services and replace service and fire hydrant

2

connections.

3
4

At this time, the overall project to combine the irrigation/domestic system is in the

5

planning phase. A hydraulic modeling analysis was completed in the Fall of 2015. The

6

analysis provided several solutions to meet the increased demands on the domestic

7

system with the transfer of the irrigation costumers; the proposed solutions were

8

reviewed and prioritized with California American Water operations. The highest

9

ranking solution was to install a new transmission line down Lemon Avenue that would

10

connect to the existing Winston Avenue main, which would provide additional supply to

11

the west side of the Spinks Gradient. This solution is important, since this portion of the

12

Spinks Gradient experiences 75 percent of the demand but only has a fraction of the

13

distribution storage capacity. The new main installation would be accompanied by the

14

new Lemon Well and possibly the new Lemon Booster station. The new well would

15

permit operations to pump directly into the Spinks Reduced Gradient, thus resolving the

16

supply and to some extent the hydraulics issues caused by the increased domestic demand

17

resulting from the western end of the Spinks Gradient. In addition, California American

18

Water continues to investigate the option of installing 4,000 feet of 12-inch diameter

19

transmission main down Woodlyn Lane along with installing or upgrading PRVs and

20

upsizing the Scott Booster station as part of this investment project. It should be

21

recognized that should the Lemon Well project prove to be unsuccessful because of the

22

amount of water that can be produced, then the installation of a Lemon Booster Station

23

might be necessary. The Lemon Booster Station would provide the same function as the

24

new Lemon Well, but instead it would pump water from the Lemon Domestic Reservoir.

25

The Booster Station would also help with the hydraulics issue, however, the source of

26

supply would still be a concern since the irrigation system retirement would add to the

27

system deficiency. California American Water is presently awaiting the results of the

28

Lemon Well project, which are expected in the second quarter of 2016. As of April 15,
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2016, the Lemon well is currently at a depth of 700 feet, with a targeted total depth of

2

870 feet. Based on this progress, it is estimated pump testing could commence in

3

approximately two weeks (early May). If the Lemon Well project is successful, then

4

California American Water would move forward with implementing this investment

5

project. If the Lemon Well project is determined to be insufficient, then the alternate

6

approach discussed previously would be implemented. The bottom line is California

7

American Water should not transition the irrigation customers to the domestic system

8

until another source of supply is secured for this service area. A parallel effort to transfer

9

the fire hydrants is nearly complete. Only one fire hydrant remains to be transferred from

10

the irrigation system, and that specific hydrant would be switched over when the overall

11

transfer to the domestic system is completed. This project continues with design work in

12

2016, with construction planned to follow later in 2016 and targeted to be complete by

13

the end of 2017. Additional information, justification and documentation can be found in

14

the Capital Investment Project Work Papers for this specific project.

15
16

3.

17

Project Code I15-500038, Booster Station Upgrades (Project A-4,
Baldwin Hills; Project A-5, Baldwin Hills; Project A-5, Duarte

18

The total estimated cost for this previously approved carry-over capital investment

19

project is $2,385,765. As explained in my testimony for the 2013 GRC and repeated here

20

for reference and convenience, this capital IP is the result of a CBA study that was

21

performed on various booster station locations within the Los Angeles District. This

22

study is included within the Capital Investment Project Work Papers as part the Los

23

Angeles District CPS as an appendix. This IP includes three booster station upgrades

24

recommended by the CBA study, namely the Scott Booster Station located in the Duarte

25

service area (identified as Project A-5 in the Los Angeles District CPS), the Garth

26

Booster Station located in the Baldwin Hills service area (identified as Project A-4 in the

27

Los Angeles District CPS), and the Mount Vernon Booster Station also located in the

28

Baldwin Hills service area (identified as Project A-5 in the Los Angeles District CPS).
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The Scott Booster Station is the primary supply for the Spinks gradient in the Duarte

2

service area and is rehabilitation work will begin shortly as part of the “Spinks Gradient

3

Booster Station Improvements.” The CBA noted that water could be heard cascading

4

into the pump suction cans when the pumps are operating at full capacity. A review of

5

the suction pipe velocities indicated that the cascading water may be due to undersized

6

suction piping. The condition would be aggravated by proposed increases in pump

7

capacities. The CBA also identified leaks in one of the pump cans that need to be

8

repaired to prevent water loss. The Garth Booster Station in the Baldwin Hills service

9

area has infrastructure and a hydropneumatic storage tank that are over eighty years old,

10

inefficient, and in need of replacement. This project is not due to hydraulics, but

11

designed to address mechanical and electrical issues. Finally, the Mount Vernon Booster

12

Station, which is also in the Baldwin Hills service area, has infrastructure and a

13

hydropneumatic storage tank that are over eighty years old, inefficient, and in need of

14

replacement. This project is not due to hydraulics, but designed to address mechanical

15

and electrical issues.

16
17

This overall project is scheduled to begin with design in early 2016, with construction to

18

follow in 2017, and targeted to be complete by the end of 2017. One of the booster

19

stations will be upgraded in 2018. Additional information, justification, and

20

documentation can be found in the Capital Investment Project Workpapers for all three

21

capital projects that comprise this combined investment project.

22
23

4.

24

Project Code I15-500039 – Main Replacement Program (Project A-6,
Baldwin Hills; Project A-3, Duarte; and Project A-4, Duarte)

25

The total estimated cost for this previously approved carry-over capital investment

26

project is $1,665,475. As explained in my testimony for the 2013 GRC and repeated here

27

for reference and convenience, this capital IP is includes three main replacement projects,

28

two in the Duarte service area and one in the Baldwin Hills service area, as recommended
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and identified in the Los Angeles District CPS. The first project in Duarte is the Lemon

2

Gradient Reduction, identified as Project A-3. This project recommends that 1,500 feet

3

of 12-inch main be installed in Central Avenue, from the 12-inch PVC pipe east of

4

Mountain Avenue to the 8-inch PVC pipe west of Buena Vista Street. This 12-inch main

5

would connect the high elevation customers in the Huntington/Central/Mountain/Buena

6

Vista area to the Scott Gradient. Isolation valves would also be installed at key locations

7

to complete isolation of the Lemon and Scott Gradients. This project will eliminate low

8

pressure complaints, the entire 1.5 million gallon volume in Lemon Reservoir would be

9

effective storage, and the available fire flow in the area would improve to more than

10

1,500 gpm.

11
12
13
14

The second project in Duarte is the installation of 1,500 feet of 8-inch diameter main in

15

Las Lomas Road and Markwood Street, identified as Project A-4. An area in the eastern

16

section of the Spinks/Bliss Canyon Gradient exhibits excessive pressures. Customers in

17

the area can receive pressures of up to 150 psi, depending on elevation. These pressures

18

are higher than recommended guidelines, and contribute to customer complaints and

19

main breaks. The recommended project involves moving the pressure zone boundary

20

such that lower elevation customers (elevations less than 750 feet) in the high pressure

21

area would be transferred from the Spinks/Bliss Canyon Gradient to the Vineyard

22

Reservoir zone. The installation of 1,500 feet of 8-inch main in Las Lomas Road and

23

Markwood Street to convey Vineyard Booster flows to the Spinks/Bliss Canyon zone will

24

address these high pressure issues.

25
26

The third project in Baldwin Hills is the installation of 1,100 feet of 16-inch diameter

27

main in Heatherglen Drive, identified as Project A-6. Flow capacity from the Olympiad

28

Gradient to the Garth Gradient is limited such that storage can become unbalanced in the
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Olympiad and Garth reservoirs. During maximum customer demand days, inflows from

2

the WB-22 connection are frequently needed to augment the Garth Gradient water

3

supply. The intermittent use of WB-22 water is inefficient and is a higher cost relative to

4

California American Water groundwater production costs. In addition, Angeles Mesa

5

Reservoir, located between the Olympiad and Garth gradients, has inadequate storage

6

turnover, which can produce water quality issues. The CPS recommended 1,100 feet of

7

16-inch diameter main be installed in Heatherdale Drive, from the 12-inch pipeline in

8

Slauson Avenue to Angeles Mesa Reservoir in order to address this challenge.

9
10

An update on the status of this investment project is appropriate at this time. Project A-3

11

has started the design phase. Design is expected to be completed by the end of June 2016

12

and Construction is projected to commence in the Fall of 2016. As previously explained

13

in my testimony, this project initially called for the installation of 1,500 feet of 12-inch

14

main on Central Avenue, but due to constructability, redundancy, and customer pipe

15

pressure issues the project scope increased to include: 1) the installation of 3,000 feet of

16

8-inch main; 2) the installation of a new pressure reducing station; and 3) the installation

17

of approximately 90 services with pressure reducing valves (PRVs). The scope revision

18

is to add additional pipe caused by the need to replace approximately 1,900’ of existing

19

4” steel main (some up to 72 years old) on several residential streets because the

20

antiquated piping would experience approximately double the current pressure when it is

21

moved from the Lemon Gradient to the Scott Gradient. In addition to the increased

22

piping quantity, a new pressure reducing station (PRS) will be installed to replace

23

existing 6-inch main that goes underneath the 210 freeway, which in turn will be capped

24

as part of the zone shift. The PRS is necessary because if it is not installed, the portion of

25

the Lemon Gradient that is south of the 210 Highway will only have one source of

26

supply, thereby creating a serious reliability and redundancy issue. As a result, the

27

increased cost of this specific main replacement project constrains the feasibility of the

28

Heatherglen project, which is discussed further below. Also at this time, Project A-4 is
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currently starting the design phase. Design is expected to be completed by the end of

2

June 2016 and Construction is also planned to commence in the Fall of 2016. This

3

project should proceed with no change in the scope. Finally, Project A-6 is currently

4

being reevaluated due to changes in the water distribution system operating behavior.

5

Originally, this investment project was intended to facilitate the transport of water from

6

the east side to the west side of the Baldwin Hills system through the installation of a new

7

16-inch 1,100 foot main and two automated valves in Heatherglen Drive. This

8

investment project would facilitate the conveyance of water to the Angeles Mesa

9

reservoir and provide operational diversity. At the present time, the distribution system is

10

having trouble maintaining water pressure/supply on the east side of the gradient because

11

most of the water is currently conveyed to Garth Reservoir in the west. Therefore, a

12

modeling analysis has commenced to determine if the current distribution system

13

behavior is the new operating standard. The modeling analysis should help determine

14

whether the distribution system’s current operation is a byproduct of inadvertent system

15

modifications (such as the closure of certain valves), or some other abnormality. One

16

potential scope of work change would be the installation of an altitude valve at Garth

17

reservoir. If modeling detects system abnormalities that can be operationally corrected

18

and the distribution system behavior reverts to original conditions, then implementation

19

of the original scope will be reevaluated due to budget limitations caused by the scope

20

increase in Project A-3 as described earlier in my testimony. This combined IP began

21

design in 2015, and construction is now scheduled to begin in 2016, and targeted to be

22

complete by the end of 2017. Additional information, justification, and documentation

23

can be found in the Capital Investment Project Work Papers for all three specific capital

24

projects that comprise this combined IP.

25
26

5.

Project Code I15-500041, Upgrade SCADA System

27

The total estimated cost for this previously approved carry-over capital investment

28

project is $1,951,570. As explained in my testimony for the 2013 GRC and repeated here
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for reference and convenience, this capital IP is for proposed SCADA upgrades are part

2

of a long-term strategy to continually upgrade California American Water’s SCADA

3

systems, particularly in its Los Angeles County District. To improve system reliability

4

and quality of service, California American Water intends to have a fully functional and

5

reliable SCADA system covering its three service areas within the Los Angeles County

6

District. To that end, California American Water has included the following components

7

in the proposed project:

8
9

1. Replace thirty existing Bristol brand PLCs with Allen Bradley brand PLCs at the

10

sites that currently have SCADA systems. Emerson (owner of the Bristol) is

11

eliminating this product, and it will no longer be available, nor will there be any

12

support. California American Water anticipates that the existing electrical

13

equipment will remain at these sites. The recommended project includes

14

replacing four PLCs in 2012 and five in 2013.

15
16

2. Programming of the central SCADA computers at California American Water’s

17

Rosemead office to accept the new signals, process the data, and provide an

18

interface for system operation. California American Water would phase in the

19

required programming modifications with the SCADA system improvements

20

described above.

21
22

The expanded and upgraded SCADA system in the Los Angeles County District will

23

improve system reliability and quality of service, reduce the risk of service disruptions,

24

replace obsolete systems that have reached the end of their useful lives, and improve

25

operational efficiency. Emerson’s decision to eliminate this line of products leaves

26

California American Water in the negative predicament of having to search for a

27

replacement, since Emerson no longer produces this product, and will only continue

28

supporting it for a very short period of time.
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At this time, this project is scheduled to begin with design in 2019, followed by

2

construction beginning in late 2019, and construction being completed by the end of

3

2020. Additional information, justification, and documentation can be found in the

4

Capital Investment Project Work Papers for this specific project.

5
6

6.

Project Code I15-500042, Purchase Groundwater Rights (Annually)

7

The total estimated cost for this previously approved carry-over capital investment

8

project is $2,156,000. As explained in my testimony for the 2013 GRC and repeated here

9

for reference and convenience, the ownership of groundwater rights is an important asset

10

for water utilities operating in the greater Los Angeles metropolitan area. In particular,

11

the groundwater basins where California American Water owns and/or leases

12

groundwater rights in the Los Angeles District (namely the Central Groundwater Basin,

13

the Raymond Basin and the Main San Gabriel Basin) are critical, since they allow us to

14

pump groundwater rather inexpensively in order to provide customers with a reliable

15

supply of water. This is an extremely important advantage, especially during times of

16

drought like the experience from several years ago. In addition, the ownership of these

17

groundwater rights has proven its value in avoiding any rationing and significant fines

18

that would have been imposed by the MWD or the West Basin Municipal Water District

19

(“WBMWD”). It is important to understand that one of MWD’s goals is to reduce the

20

reliance that purchase water customers have on their supply, particularly because the

21

MWD supply may be limited in periods of drought. I also previously discussed the

22

general water issues in California (specifically the Bay-Delta), the composition of

23

MWD’s water supply mix and the challenges currently faced by MWD in southern

24

California earlier in my testimony. While MWD continued to supply water to the San

25

Marino service area during the recent drought of 2007- 2009, MWD did urge local water

26

systems in 2008 to enforce water use restrictions during the time of the drought to help

27

preserve the water supply. In addition, MWD stipulates in their Contract with the City of

28

San Marino that each member agency “shall have sufficient resources such as local
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reservoir storage, groundwater production capacity, system interconnections, or alternate

2

supply source to sustain a seven-day interruption based on average day demands.”

3
4

It is no secret that the cost of imported water will continue to rise. Significant rate

5

increases have been implemented by MWD over the past five to seven years, and are

6

expected to continue well into the future. An example of the increased cost is a Delta

7

Surcharge placed into effect by MWD, which basically reflects the result of pumping

8

restrictions, lost value in supplies available from the State Water Project, and the cost of

9

personnel and consultants working on Delta improvements. This surcharge is presently

10

$51 per acre-foot, and will be in effect until a long-term solution for the Delta is

11

achieved. For reference, I discussed the Bay-Delta and its impact on water supply for

12

Southern California earlier in my testimony. Complicating this issue even further is that

13

the value of groundwater rights will be increasing in these respective basins. As the cost

14

of imported water from MWD rises, more water utilities will be turning to groundwater

15

to augment their source of supply mix. While the cost of pumping groundwater has not

16

increased at the same pace of imported water, it is obvious that the cost savings from

17

pumping groundwater versus purchasing imported water has increased. Even when the

18

potential treatment of groundwater is factored in, the overall cost is still much more

19

economical than purchasing imported water from MWD going into the future.

20
21

Therefore, it is expected that the demand for local groundwater will continue to increase.

22

Future population growth in Southern California will result in a corresponding need for

23

additional supply. Accordingly, California American Water and the other water utilities

24

in Southern California need to be cognizant of reduced imported water supplies, due to

25

state-wide hydrologic conditions, environmental regulations that govern supply, water

26

quality contamination and natural disasters (such as a seismic event). These factors are

27

expected to drive up the cost of purchasing groundwater rights within the Central

28

Groundwater Basin, the Raymond Basin, and the Main San Gabriel Basin. It is
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imperative that California American Water be as proactive as possible in securing and

2

purchasing additional groundwater rights in order to insure reliable sources of supply for

3

customers.

4
5

The purchase cost of groundwater rights has been increasing in the various basins. In

6

general, water rights that are sold in the Main San Gabriel Basin are owned by

7

individuals with a small amount of water rights (such as from past irrigation use), or by

8

industrial users who have modified their water use or gone out of business and no longer

9

need some or all of their rights. It is my understanding that presently there are only a few

10

of these types of water rights holders remaining in the Main San Gabriel Basin, which

11

results in sales of these rights being infrequent. As an example, in April 2013, California

12

American Water became aware of 450 acre-feet of water rights being offered for sale. It

13

is suspected the seller is an industrial user who no longer needs some or all of its water

14

rights. It is not unusual for years to pass without seeing this quantity of water rights

15

offered for sale. Even small quantities of rights are not often sold, and many times the

16

sale is done without a broad bid solicitation. For reference, it was reported through the

17

broker that the seller was seeking an approximate sale price of $14,000 per acre-foot for

18

its water rights.

19
20

Ultimately, this capital investment project was approved by the Commission as part of

21

the 2013 GRC proceeding. Shortly after approval, an opportunity to use the capital funds

22

approved for this investment project occurred with the recent acquisition of the Adams

23

Ranch Mutual Water Company by California American Water. This small water system

24

is located immediately adjacent to California American Water’s San Marino service area.

25

The owners decided to sell the assets (including 100 acre feet of water rights), and this

26

sale was approved by the Commission on February 25, 2016. California American Water

27

closed the acquisition on March 8, 2016. The portion of the sale related to the water

28

rights was $1,600,000, or approximately $16,000 per acre-foot. This price per acre-foot
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is remarkably consistent with the earlier discussion on the increasing cost of water rights

2

in the greater Los Angeles metropolitan area. As a result of this acquisition of 100 acre-

3

feet of water rights, there is approximately $556,000 remaining that could be used to

4

purchase other water rights should the opportunity arise later in 2016 and into 2017. It is

5

important to understand that the timing of these opportunities to purchase water rights is

6

unique and generally unknown. The actual acquisition/purchase process can occur in a

7

matter of weeks or could take almost a year to complete if they are included as part of the

8

purchase of a water system’s assets (e.g., Adams Ranch Mutual). As a reminder, it is

9

important to recognize that California American Water will only purchase groundwater

10

rights when they become available. Additional information, justification, and

11

documentation can be found in the Capital Investment Project Work Papers for this

12

specific project.

13
14

7.

15

Project Code I15-500048, Arlington Well TCE Treatment (Project A3, Baldwin Hills)

16

The total estimated cost for this previously approved carry-over capital investment

17

project is $1,922,894. As explained in my testimony for the 2013 GRC and repeated here

18

for reference and convenience, this capital IP is for addressing elevated and increasing

19

levels of Trichloroethylene (“TCE”) that have been detected in the Arlington Well, which

20

has required blending and curtailed production. Due to the sharp and unpredictable spike

21

in TCE in the Arlington Well, there is the potential that this will continue to rise to a

22

point where production is either significantly curtailed, or eliminated. The Arlington

23

Well is located in a large fenced lot in a residential area on Arlington Avenue. Starting in

24

2004, historical TCE concentrations in the Arlington Well began increasing and have

25

surpassed the TCE MCL. Trending data has shown that TCE concentrations have been

26

continuously increasing, and this well is currently blended with supply from the 48th

27

Street Well to deliver finished water below the primary TCE MCL limit. It is

28

recommended to install treatment on this well for removal of TCE. Typically Volatile
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Organic Compounds (“VOCs”) are removed from water through either air stripping or

2

granular activated carbon (“GAC”) adsorption. Air stripping generally requires the

3

installation of tall towers and involves noisy air handling equipment that can produce

4

resistance from local residents. Therefore, GAC adsorption would be the preferred

5

treatment process for the Arlington well. California American Water is not aware at this

6

time of any responsible parties being identified as the potential source of this

7

contamination. California American Water submitted an application in April 2016 to the

8

Water Replenishment District's (WRD) Safe Drinking Water Program to be considered

9

for $1,644,000 in wellhead treatment grant funding for VOC removal at the Arlington

10

Well. Under this program, WRD would design, construct, and install equipment at the

11

drinking water well site containing VOCs in excess of the maximum contaminant level

12

and California American Water, as the well owner, would be responsible for the

13

operation and maintenance of the treatment system. In early May 2016, California

14

American Water was advised by WRD that this project had been approved for

15

$1,644,000 in grant funding.

16
17

This project is scheduled to begin with design in 2016, followed by construction

18

beginning in mid-2017, and construction being completed by the end of 2018. California

19

American Water recommends that the Commission re-approve this IP for the requested

20

dollar amount and the present timeframe. Additional information, justification, and

21

documentation can be found in the Capital Investment Project Workpapers for this

22

specific project.

23
24

8.

25

Project Code I15-500050, Patton Tank Reconstruction/Rehabilitation
(Project B-x, San Marino)

26

The total estimated cost for this previously approved carry-over capital investment

27

project is $1,200,000. As explained in my testimony for the 2013 GRC and repeated here

28

for reference and convenience, this capital IP is regarding the reconstruction or
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rehabilitation of the Patton Tank. This particular tank is a 540,000 gallon partially buried

2

concrete ground storage tank located in the Los Angeles District, specifically the San

3

Marino Service area. California American Water engaged Tank Industry Consultants

4

Inc. (“TIC”) to perform inspection of the Patton Tank and prepare a report of the field

5

evaluation conducted. This report, dated February 14, 2013, basically recommended that

6

when the anticipated seismic and engineering concerns; the known safety, structural and

7

sanitary issues; and the age of the structure are all considered, tank replacement becomes

8

the best long-term option for meeting California American Water’s service requirements.

9

The report goes on to say that the tank is considered a lifeline structure and should be

10

replaced within the next seven to twelve years. In the long-term period (or more than 4 to

11

5 years), the TIC report does recommend certain improvements be made to the interior

12

surfaces, in particular the installation of a liner and applying a protective coating to the

13

interior metal coatings. In the short-term period, the TIC report recommends

14

improvements to the exterior roof and asphalt embankment, as well as various minor

15

interior enhancements. This project is scheduled to begin only with design dollars in

16

early 2017, followed by construction beginning in 2018, and being completed in early

17

2020. California American Water recommends that the Commission re-approve this IP

18

for the requested dollar amount and the present timeframe. Additional information,

19

justification, and documentation, including the TIC report, can be found in the Capital

20

Investment Project Work Papers for this specific project.

21
22

9.

23

Project Code I15-500051, Oak Knoll Reservoir Rehabilitation (Project
B-x, San Marino)

24

The total estimated cost for this previously approved carry-over capital investment

25

project is $1,203,382. As explained in my testimony for the 2013 GRC and repeated here

26

for reference and convenience, this capital IP is related to the rehabilitation of the Oak

27

Knoll Reservoir. This reservoir is a 2,500,000 gallon partially buried concrete ground

28

storage tank located in the Los Angeles District, specifically the San Marino Service area.
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California American Water engaged TIC to perform inspection of the Oak Knoll

2

Reservoir and prepare a report of the field evaluation conducted. This report, dated

3

March 14, 2012, basically recommended the exterior concrete surfaces be repaired within

4

the next 2 to 4 years due to the extent of deterioration noted. The report also said the

5

interior piping and roof structure should be cleaned and repainted within the next 2 to 3

6

years due to the extent of corrosion noted on these items as well. The TIC report did not

7

address any anticipated seismic and engineering concerns, or any modifications that may

8

be required for compliance with present structural codes. Therefore, the only

9

improvements included in this project are related to cleaning and coating various

10

components of the interior of the reservoir (steel and concrete), and the exterior of the

11

reservoir (concrete).

12
13

This project is scheduled to begin only with design dollars in early 2017, followed by

14

construction beginning in 2018, and being completed by the end of 2018. California

15

American Water recommends that the Commission re-approve this IP for the requested

16

dollar amount and the present timeframe. Additional information, justification, and

17

documentation can be found in the Capital Investment Project Work Papers for this

18

specific project.

19
20

10.

21

Project Code I15-500052, Retire Fairfax Tank (Project B-2, Baldwin
Hills)

22

The total estimated cost for this previously approved carry-over capital investment

23

project is $116,492, and this entire amount is planned for 2016. As explained in my

24

testimony for the 2013 GRC and repeated here for reference and convenience, this capital

25

IP is related to the retirement of the Fairfax Water Storage Tank. This tank provides

26

negligible operational benefit and has extremely low turnover, which results in water

27

quality management challenges. The costs to maintain the tank and the related lease cost

28

for the associated land are no longer justified. The Fairfax Water Storage Tank was
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constructed in 1948 and provides 160,000 gallons of finished water storage. It operates

2

within the Garth Reservoir Gradient and is situated about a half mile from the nearest

3

service connection. Because of its remote location and low demand, it experiences

4

extremely low rates of turnover. Maintaining adequate chlorine residual is an ongoing

5

challenge. This relatively small tank accounts for 2.4% of the water stored in the

6

Baldwin Hills System, and 3.8% of the water stored in the Garth Gradient. The Los

7

Angeles District CPS determined that eliminating this specific tank would not reduce the

8

effective storage volume of the system. Therefore, it is recommended the Fairfax Storage

9

Tank be retired and removed in order to recognize significant cost savings without

10

detriment to effective storage, system pressures, or water quality. The Fairfax Tank is

11

currently in the preliminary phase, which includes developing specifications for the

12

proper retirement and dismantling of the steel tank. Development of these specifications

13

began in March 2016. The project is expected to go out to bid in summer of 2016, and

14

the implementation phase is expected to be completed by the end of 2016. For reference,

15

the existing roof is composed of tar paper roofing materials, which will need to be

16

disposed of properly and the existing steel will be recycled by the firm awarded the bid

17

for dismantling the tank. Additional information, justification and documentation can be

18

found in the Capital Investment Project Work Papers for this specific project.

19
20

B.

21

San Diego County District Carry-over IPs
1.

Project Code I15-300002, Small Main Replacement Program

22

The total estimated cost for this previously approved carry-over capital investment

23

project is $750,000, for the three year period (2015-2017). As explained in my testimony

24

for the 2013 GRC and repeated here for reference and convenience, this capital IP is

25

regarding the replacement of several sections of small water mains within the San Diego

26

County District. This is a three-year project that will start in January of each year and

27

end in December of the same year. California American Water prepared a 2012 CBA for

28

Buried Infrastructure, which evaluated the condition and performance of pipe in the San
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Diego system and prioritized the portions of the distribution system that should be

2

replaced. This is a proactive program to replace water mains that reduces the overall risk

3

and consequences associated with main breaks in the system, including: avoiding

4

potential insurance claims due to damages associated with main breaks, maintaining 24-7

5

service to critical customers, avoiding the potential for contamination while repairing

6

pipe, and maintaining a good reputation with the public. The majority of these small

7

main projects include undersized 4-inch main. The local operations staff is responsible

8

for prioritizing and selecting the replacement projects they will complete for each year

9

from 2015 to 2017. This will provide flexibility in selecting the projects to be

10

constructed for each year so that it coincides with city street paving. The project will

11

reduce the number of main failures and improve water quality. In addition, the project

12

will improve fire protection to more than 750 gpm in locations which are currently below

13

the City of San Diego Fire Department guidelines. This project is scheduled to begin

14

with design, permitting, and construction dollars in 2015, followed by similar activities in

15

2016 and 2017. To date, California American Water has completed approximately 1,500

16

feet of 8-inch main in Basswood, Cypress, and 13th Street within the City of Imperial

17

Beach. In addition, approximately 35 feet of 8-inch main was installed in Flower Avenue

18

in the City of San Diego. At the time this testimony was prepared, approximately 2,000

19

feet of 8-inch main was being installed on Isabella and Dana Place within the City of

20

Coronado. Additional information, justification, and documentation can be found in the

21

Capital Investment Project Work Papers for this specific project.

22
23

2.

24

Project Code I15-300008, Replace 2,450 Feet of 18-inch diameter
main in Elm Avenue (Project A-2)

25

The total estimated cost for this previously approved carry-over capital investment

26

project is $2,093,921. As explained in my testimony for the 2013 GRC and repeated here

27

for reference and convenience, this capital IP is regarding the replacement of an 18-inch

28

diameter welded steel, cement lined water main was installed in 1965, has a history of
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main breaks, and based upon investigations during main break repairs, there is evidence

2

of advanced structural deterioration, representing a risk to system operation. Since 1990,

3

there have been seven (7) main breaks which cost in excess of $50,000 to repair. The

4

section in question is approximately 2,640 linear feet along Elm Avenue between

5

Hollister Street and 27th Street. The “Main Leak Investigation Reports” indicate severe

6

deterioration of the pipe as indicated within the San Diego District CPS. The pipe has

7

“blown out” and “deteriorated” which has resulted in “holes” in the pipe. This pipe

8

requires either a full “structural” rehabilitation or full pipe replacement. It is

9

recommended that open-cut replacement of the existing 18-inch diameter steel main be

10

completed with new ductile iron pipe. In addition, at the existing railroad crossing, the

11

existing pipe should be removed and a new 18-inch ductile iron main installed within the

12

existing casing. This project started design in 2016 with geotechnical work and

13

surveying. Design plans are expected to be 30 percent complete in March 2016, and the

14

permitting process would begin shortly with the City of San Diego. This capital project

15

is expected to start construction in the fall of 2016, and possibly be completed by the end

16

of 2016 (perhaps first quarter of 2017). California American Water recommends that the

17

Commission re-approve this IP for the requested dollar amount and the present

18

timeframe. Additional information, justification and documentation can be found in the

19

Capital Investment Project Work Papers for this specific project.

20
21

3.

Project Code I15-300010, Replace 16-inch diameter Transmission

22

Main along the Silver Strand (Project A-3)

23

The total estimated cost for this carry-over capital investment project is now

24

approximately $23,300,000. For reference, this capital investment project originally had

25

$232,000 planned for 2017 for initial design dollars only. California American Water is

26

now proposing additional design and permitting expenditures for the entire project in this

27

GRC. In addition, construction dollars for installing the first phase of this project

28

(identified as Phase A) have also been proposed in this GRC. The total estimated cost for
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the entire design of the project and installing Phase A is approximately $14,632,000. The

2

estimated capital expenditures by year are as follows:

3
4



$232,000 in 2017



$2,400,000 in 2018



$5,500,000 in 2019



$6,500,000 in 2020

5
6
7
8
9
10
11
12

The remaining phase (Phase B) would be implemented as part of the next GRC

13

timeframe, specifically 2021 to 2023. As explained in my testimony for the 2013 GRC

14

and repeated here for reference and convenience, this original capital investment project

15

is related to the replacement of approximately 52,000 linear feet of 16-inch diameter

16

unlined, pit cast iron main, which was installed in 1912 from Coronado (originating at

17

near the end of Orange Avenue), along The Strand, and then along Palm Avenue in

18

Imperial Beach, and terminating on Palm Avenue in the City of San Diego (at Saturn

19

Boulevard). This particular water main has a history of eleven main breaks since the

20

1980s, and based upon investigations during main break repairs, there is evidence of an

21

increased risk to overall system operation. In addition, a recent main break on November

22

10, 2015 resulted in a closure of State Highway 75 and the adjoining bike path for nearly

23

two hours, resulting in a major inconvenience for commuters and severely disrupting

24

water service to our customers in the nearby Coronado Cays area. This recent failure

25

reinforced the importance of beginning to implement a new replacement transmission

26

main project along the Silver Strand, as previously discussed above. The key drivers I

27

would highlight for this investment project are: 1) to address older infrastructure (100

28

year old mains) in the distribution system that have reached the end of their useful service
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life with a systematic, reasonable replacement program; 2) to insure continued reliability

2

of water service to customers; 3) to reduce and/or eliminate the possibility of road

3

closures on a major state highway that is one of only two exits to leave the City of

4

Coronado in the event of an emergency; and 4) to create an opportunity to potentially

5

utilize the existing transmission main as a conveyance system for a future recycled water

6

project to serve ultimately both the cities of Coronado and Imperial Beach.

7
8
9
10

The preliminary engineering, detailed design and permitting work for this investment

11

project is expected to be a major, detailed and complicated challenge. Also, it must be

12

recognized that this overall investment project will most likely take two GRC timeframes

13

to completely install this new main. For reference, this current GRC’s timeframe is

14

2018-2020, while the next GRC timeframe is 2021 to 2023. Accordingly, California

15

American Water believes it is prudent to separate this investment project in phases. The

16

first phase (Phase A) would not only include design and permitting for the entire length

17

of the investment project, but would also include the first 5.7 miles (30,096) feet of

18

transmission main to be replaced. Generally speaking, the first phase (Phase A) of

19

transmission main replacement is proposed to originate at Adella and Orange Avenue

20

(State Highway 75), and would continue south along the eastern edge of the right-of-way

21

for to a point where the transmission main crosses State Highway 75 and enters the

22

Navy’s Coastal Campus along its northern border at Hooper Boulevard. It is important to

23

recognize that this first phase includes the area of the recent main break experienced in

24

November 2015. The second phase (Phase B) would then encompass the remaining two

25

segments of the transmission main, namely: 1) the portion of the transmission main in

26

Orange Avenue between Adella and First Avenue within the City of Coronado

27

(approximately 1.5 miles or 7,920 feet); and 2) the portion of the transmission main

28

where it exits the Navy Coastal Campus within the City of Imperial Beach and then turns
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east on Palm Avenue to its termination point at Saturn Boulevard within the City of San

2

Diego (approximately 2.5 miles or 13,200 feet).

3
4

It is important to recognize that this capital investment project will present significant

5

challenges during construction. Since State Highway 75 is a major thoroughfare between

6

Imperial Beach and Coronado, and the adjacent bike path is heavily utilized by the public

7

for recreational purposes, the timing and sequencing of actual construction will depend

8

on a coordinated effort among the cities of Coronado and Imperial Beach, the United

9

States Navy, CALTRANS and the California Coastal Commission. At this time,

10

construction is planned to begin in the second half of 2019, but the actual start date could

11

change to 2020 or later, depending upon discussions with these important stakeholders on

12

the appropriate planning that will be needed to carefully stage the pipeline installation

13

work.

14
15

As further background information, the United States Navy recently began construction

16

of its new $1 billion Coastal Campus on the site of the existing Silver Strand Training

17

Complex located in Coronado. This facility is the result of the country’s enhanced focus

18

on national security. As a result, this has signaled the need for an increase in demand for

19

Special Operations Force capabilities, including Naval Special Warfare. A total of 24

20

projects will comprise the Coastal Campus, totaling 1.5 million square feet. The overall

21

project is expected to take ten years to complete, and eventually about 3,300 personnel

22

will be moved to the site from the current Naval Amphibious Base. The $1 billion total

23

cost represents approximately $700 million to construct the buildings; $200 million for

24

design and equipment; and $100 million for infrastructure such as utilities, new gates and

25

roads. It is important to note that the United States Navy is an existing customer of

26

California American Water, and they will also be installing a new water transmission

27

main along the western portion of the Coastal Campus, funded entirely as part of their

28

infrastructure improvements. This new water transmission main will replace the existing
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water transmission main that currently crosses directly through the new Coastal Campus,

2

and is in conflict with the planned new construction. The replacement of the existing

3

water transmission main represents the United States Navy’s commitment to helping

4

insure there is adequate infrastructure in place to not only meet their water supply needs,

5

but also to complement the overall water transmission main replacement project proposed

6

for along the Silver Strand.

7
8

The opportunity also exists for a parallel capital investment project to deliver recycled

9

water for use in landscaping for existing customers such as parks, schools, city

10

landscaping, and golf courses within different portions of California American Water’s

11

service area. It is estimated that the project would require a significant amount of

12

recycled water pipe to be installed between the City of Imperial Beach and the City of

13

Coronado. As currently envisioned the proposed project will also include a Wastewater

14

Reclamation Facility, the location of which has not yet been determined. This project is

15

in the very preliminary planning stages, and initial discussions with interested parties

16

have expressed interest in the project.

17
18

Therefore, it is recommended that the first phase of open-cut replacement of the total

19

required 52,000 lineal feet of the existing 16-inch diameter cast iron main be performed

20

through the installation of new ductile iron pipe over the course of two GRC cycles or

21

timeframes. This first phase of the project (Phase A) includes approximately 30,000 feet

22

and is scheduled to begin with design dollars in 2017, followed by construction beginning

23

in late 2018 and continuing through 2020. California American Water recommends that

24

the Commission re-approve this IP for the requested dollar amount and the present

25

timeframe. Additional information, justification and documentation can be found in the

26

Capital Investment Project Work Papers for this specific project.

27
28
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4.

Project Code I15-300011, Upgrade SCADA System

2

The total estimated cost for this previously approved carry-over capital investment

3

project is $1,199,884. As explained in my testimony for the 2013 GRC and repeated here

4

for reference and convenience, this capital IP is regarding the proposed SCADA upgrades

5

for the San Diego County District, which are part of a long-term strategy to continually

6

upgrade California American Water’s SCADA systems. In order to improve system

7

reliability and quality of service, California American Water intends to have a fully

8

functional and reliable SCADA system covering its San Diego County District service

9

area. To that end, California American Water has included the following components in

10

the proposed project:

11
12

1. Replace fourteen existing Bristol brand PLCs with Allen Bradley brand PLCs at

13

the sites that currently have SCADA systems. Emerson (owner of the Bristol) is

14

eliminating this product, and it will no longer be available, nor will there be any

15

support. California American Water anticipates that the existing electrical

16

equipment will remain at these sites.

17
18

2. Programming of the central SCADA computers at California American Water’s

19

Imperial Beach office to accept the new signals, process the data, and provide an

20

interface for system operation. California American Water would phase in the

21

required programming modifications with the SCADA system improvements

22

described above.

23
24

The expanded and upgraded SCADA system in the San Diego County District will

25

improve system reliability and quality of service, reduce the risk of service

26

disruptions, replace obsolete systems that have reached the end of their useful lives,

27

and improve operational efficiency. Emerson’s decision to eliminate this line of

28

products leaves California American Water in the negative predicament of having to
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search for a replacement, since Emerson no longer produces this product, and will

2

only continue supporting it for a very short period of time. This project is scheduled

3

to begin with design dollars in 2016, followed by construction beginning later in

4

2016, and being completed by the end of 2017. California American Water

5

recommends that the Commission re-approve this IP for the requested dollar amount

6

and the present timeframe. Additional information, justification and documentation

7

can be found in the Capital Investment Project Work Papers for this specific project.

8
9

C.

10

Ventura County District (Currently in Progress Capital Investment Projects)
1.

11

Project Code I15-510026, Replace Los Robles Booster Station
(Currently in Progress)

12

The Los Robles Booster Station is located near the intersection of Oak Creek Drive and

13

South Moorpark Road. The station pumps from the Main Zone to the Los Robles Tanks.

14

The pumps are controlled by water levels in the Los Robles Tanks #1 and #2. The station

15

consists of two buried concrete vaults with above grade electrical enclosures. One vault

16

houses two booster pumps, while the other vault contains a sump pit. The Los Robles

17

Booster Station is 46 years old and is the second oldest pump station in the Ventura

18

County District. It was originally constructed in 1966, and has had two major equipment

19

replacements. The number and severity of deficiencies with the structure, electrical

20

equipment and pumping equipment coupled with the age of the pump station make this

21

station a candidate for replacement. A CBA was performed as a supplementary analysis

22

to the CPS that identified these deficiencies. As a result, the Commission approved this

23

capital investment project in the 2013 GRC. The Los Robles Booster Station design

24

started in February 2016. Design proposals were received by three (3) engineering firms.

25

Brown and Caldwell was the selected firm due to their experience with booster station

26

design for the Ventura County District. Anticipated project scope includes full

27

replacement of the existing booster pump station with a new below-grade prefabricated

28

booster pump station and new electrical equipment with two 800 gpm pumps to match
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the capacity of the existing pump station. The prefabricated booster pump station is

2

anticipated to be purchased by California American Water from either USEMCO or EFI

3

to save on project costs. Design is expected to continue through 2016 with construction

4

beginning in late 2016 and being completed by the end of June 2017. This capital

5

investment project has a Commission approved rate case amount of $1,150,000, and the

6

current projected spend of capital expenditures is estimated to be $1,146,614, as of the

7

time this testimony was prepared. Additional information, justification and

8

documentation can be found in the Capital Investment Project Work Papers for this

9

specific project.

10
11

2.

12

Project Code I15-510027, Upgrade Mayfield Booster Station
(Currently in Progress)

13

The Mayfield Booster Station is located near 4030 Mayfield Street. The station pumps

14

from the Main Zone to the closed Mayfield Zone. The station consists of a partially

15

buried concrete vault with above grade electrical enclosures. The Mayfield Booster

16

Station is 42 years old and is the fourth oldest pump station in the Ventura County

17

District. It was originally constructed in 1970, and has had major pumping equipment

18

replacements in 1991 and 1995. A Condition Based Assessment was prepared in

19

conjunction with the Ventura County District CPS, which identified several deficiencies.

20

These deficiencies include, and are not limited to: 1) pumps are nearing replacement age;

21

2) the piping connecting the system to the booster station has leaks at taps and needs to

22

be replaced; 3) there is no permanent standby power system; and 4) the pump station

23

structure is physically undersized. The significant number and severity of deficiencies

24

coupled with the age of the booster pump station makes this station a candidate for

25

upgrade. As part of this investment project, it is recommended that the existing vault

26

should be made larger to provide for adequate equipment and electrical space. This

27

expansion could include a new buried vault that could be connected to the existing vault

28

to expand the overall size of the station. The addition of variable speed pumps, added
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pumping capacity and a small hydropneumatic tank could resolve the capacity issues,

2

reduce operational power costs, and improve the quality of the service being provided.

3

The booster station would be equipped with two 50 gpm pumps and one 1,000 gpm fire

4

pump. Finally, a permanent standby generator would be installed. Design proposals

5

were received by three (3) engineering firms on February 5, 2016. The design award to a

6

successful firm is expected later in February, and design would begin in March 2016. It

7

is anticipated that construction will follow beginning in November 2016, and be

8

completed in March 2017. This capital investment project has a Commission approved

9

rate case amount of $788,000, and the current projected spend of capital expenditures is

10

estimated to be $788,000, as of the time this testimony was prepared. Additional

11

information, justification and documentation can be found in the Capital Investment

12

Project Work Papers for this specific project.

13
14

3.

15

Project Code I15-510028, Replace 1,400 Feet of 10-inch Main to Los
Posas Tanks (Project B-1)

16

The total estimated cost for this previously approved carry-over capital investment

17

project is now $1,079,542, and is all planned for 2016. As explained in my testimony for

18

the 2013 GRC and repeated here for reference and convenience, this capital IP is

19

regarding the replacement of approximately 1,400 linear feet of 10-inch diameter

20

asbestos-cement pipe spans a canyon between the Las Posas tanks and Old Coach Drive

21

within the Las Posas satellite system in the Ventura County District service area.

22

Recently, there was a severe water main break on an adjacent section of this 10-inch

23

diameter pipe which resulted in significant damage to an adjoining hillside. California

24

American Water incurred over $1 million dollars in restoration costs. Although

25

California American Water believes the main break was caused by work performed by a

26

third party, it shows the potential risk associated with a 50 year old, 10-inch diameter

27

asbestos-cement pipe that traverses across a canyon that is only accessible by foot. It is

28

recommended that the existing asbestos-cement pipe be replaced through the installation
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of a new HPDE pipe via Horizontal directional drill (HDD) near the existing pipe route.

2

This project would establish a structurally sound, jointless pipe that should require little

3

to no maintenance over its life, with the main benefit of reducing a significant risk in the

4

system related to the consequences of failure associated with this pipeline in a difficult to

5

repair area. This project is scheduled to begin only with design dollars in early 2016,

6

followed by construction beginning and being completed by the end of 2016. California

7

American Water recommends that the Commission re-approve this IP for the requested

8

dollar amount and the present timeframe. Additional information, justification and

9

documentation can be found in the Capital Investment Project Work Papers for this

10

specific project.

11
12

4.

13

Project Code I15-510029, Replace 1,200 Feet of 8-inch Main in Rolling
Oaks Drive (Project B-2)

14

The total estimated cost for this previously approved carry-over capital investment

15

project is $400,000, and is all planned for 2016. As explained in my testimony for the

16

2013 GRC and repeated here for reference and convenience, this capital IP concerns

17

continued reliable service to the Thousand Oaks Surgical Hospital. This facility is

18

serviced through an existing 10-inch diameter asbestos-cement main along Rolling Oaks

19

Drive within the Ventura County District service area. The hospital, which is considered

20

a critical customer, is located on the eastern boundary of the Ventura County District

21

service area. The 10-inch diameter main terminates in front of the hospital, and this main

22

supplies water to the hospital from a single turnout with Callegeus Municipal Water

23

District (CMWD). In the event of a shut-down or a failure at this turn-out, the hospital

24

source of supply will be interrupted. In order to eliminate this potential service

25

interruption, the CPS recommended the installation of 1,200 feet of new 8-inch diameter

26

main from the present terminal point of the existing 10-inch diameter main in Rolling

27

Oaks Drive to a point near the intersection of Robert S. Holland Drive where an

28

emergency interconnection can be made with the City of Thousand Oaks distribution
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main that is located in Robert S. Holland Drive. This investment project will provide

2

increased water supply reliability to a critical customer, as well as several medical offices

3

in the immediate vicinity. In addition, an emergency connection with the City of

4

Thousand Oaks will increase the fire flow capacity to surrounding customers and meet

5

local fire department requirements. This project is scheduled to begin only with design

6

dollars in 2016, followed by construction beginning and being completed by the end of

7

2016. California American Water recommends that the Commission re-approve this IP

8

for the requested dollar amount and the present timeframe. Additional information,

9

justification and documentation can be found in the Capital Investment Project Work

10

Papers for this specific project.

11
12

5.

13

Project Code I15-510030, Upgrade Springwood Booster Station
(Project B-3)

14

The total estimated cost for this previously approved carry-over capital investment

15

project is $1,042,597. As explained in my testimony for the 2013 GRC and repeated here

16

for reference and convenience, this capital IP is regarding the upgrade of the Springwood

17

Booster Station. This facility is located near 789 Springwood Avenue, and the station

18

pumps from the Main Zone to the Springwood Zone. The Springwood Booster Station is

19

24 years-old, making it the eighth oldest pump station in the Ventura County District.

20

The station was originally constructed in 1988, and has had major electrical equipment

21

rehabilitation and numerous motor replacements. A CBA was prepared in conjunction

22

with the Ventura County District CPS, which identified several deficiencies. These

23

deficiencies include pumps that are nearing the end of their useful life, the existing

24

pumps operate at constant speed, the existing pump controls are aging, and the motors

25

fail frequently. This investment project recommends the replacement of the pumps with

26

variable speed controllers and inverter duty rated motors. This project is scheduled to

27

begin only with design dollars in early 2017, followed by construction beginning in 2018,

28

and being completed by early 2019. California American Water recommends that the
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Commission re-approve this IP for the requested dollar amount and the present

2

timeframe. Additional information, justification, and documentation can be found in the

3

Capital Investment Project Work Papers for this specific project.

4
5

6.

6

Project Code I15-510031,

Upgrade Wildwood Hydro Booster

Station (Project B-4)

7

The total estimated cost for this previously approved carry-over capital investment

8

project is $1,172,932. As explained in my testimony for the 2013 GRC and repeated here

9

for reference and convenience, this capital IP is regarding the upgrade of the Wildwood

10

Hydro Booster Station. This facility is located near 1138 Wildwood Avenue, and the

11

station pumps from the Wildwood Tank to the closed Wildwood Hydro Zone. This

12

booster station is 32 years old, which makes it the sixth oldest pump station in the

13

Ventura County District. The station was originally constructed in 1980 and has had

14

numerous pump replacements since that time. A CBA was prepared in conjunction with

15

the Ventura County District CPS, which identified several deficiencies such as on-going

16

operational issues and site vandalism. In addition, because of the age, physical condition,

17

and safety hazards of the existing electrical service and motor control center (“MCC”),

18

these components would also be replaced. The completion of this investment project in

19

the 2018-2020 GRC would be improved system reliability for the Wildwood Hydro

20

gradient. This project is scheduled to begin only with design dollars in early 2017,

21

followed by construction beginning in 2018 and being completed by early 2019.

22

California American Water recommends that the Commission re-approve this IP for the

23

requested dollar amount and the present timeframe. Additional information, justification,

24

and documentation can be found in the Capital Investment Project Work Papers for this

25

specific project.

26
27
28
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7.

2

Project Code I15-510032, Replace White Stallion Domestic Booster
Station (Project B-5)

3

The total estimated cost for this previously approved carry-over capital investment

4

project is $1,073,323. As explained in my testimony for the 2013 GRC and repeated here

5

for reference and convenience, this capital IP is regarding the replacement of the White

6

Stallion Domestic Booster Station. This facility is located near 2300 White Stallion

7

Road, and the station pumps from the White Stallion Tank to the White Stallion Zone.

8

The White Stallion Domestic Booster Station is 21 years-old, and is the eleventh oldest

9

pump station in the Ventura County District. The station was originally constructed in

10

1991, and has had only one renewal (motor on one pump). A CBA was prepared in

11

conjunction with the Ventura County District CPS, which identified several deficiencies.

12

These deficiencies include pumps are nearing replacement age, available pumping

13

capacity is marginal to meet peak hour demand, and there is no fire pumping capacity.

14

This investment project recommends the replacement of the White Stallion Domestic

15

pump station, as well as the installation of two adequately sized pumps (approximately

16

150 gpm each) to meet peak hour demand. In addition, a 1,000 gpm fire pump is

17

required to provide 1,000 gpm of fire protection. The main benefit would be improved

18

system reliability for the White Stallion Domestic gradient. This project is scheduled to

19

begin only with design dollars in early 2017, followed by construction beginning in late

20

2018 and being completed by the end of 2019. California American Water recommends

21

that the Commission re-approve this IP for the requested dollar amount and the present

22

timeframe. Additional information, justification, and documentation can be found in the

23

Capital Investment Project Work Papers for this specific project.

24
25

8.

26

Project Code I15-510033, Upgrade Wildwood Booster Station (Project
B-6)

27

The total estimated cost for this previously approved carry-over capital investment

28

project is $937,426. As explained in my testimony for the 2013 GRC and repeated here
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for reference and convenience, this capital IP is regarding the upgrade of the Wildwood

2

Booster Station. This facility is located on Wildwood Avenue, north of Big Sky Drive,

3

and the station pumps from the Main Zone to the Wildwood Tank. The Wildwood

4

Booster Station is 32 years-old, which makes it the fifth oldest pump station in the

5

Ventura County District. The station was originally constructed in 1980 and the only

6

major replacement or renewal work was motor replacements performed 17 years ago. A

7

CBA was prepared in conjunction with the Ventura County District CPS, which

8

identified several deficiencies. These deficiencies include: 1) the exposure condition of

9

these pumps to the weather; 2) the current inefficiency of the pumps; 3) the short

10

remaining life of the pumps; and 4) the rusted and aging condition of the electrical

11

service and the MCC. This investment project recommends the replacement of both

12

pumps, with a reliable pumping capacity of 250 gpm each in order to meet current and

13

future MDD. The main benefit would be improved system reliability for the Wildwood

14

gradient. This project is scheduled to begin only with design dollars in early 2017,

15

followed by construction beginning later in 2018, and being completed by the end of

16

2019. California American Water recommends that the Commission re-approve this IP

17

for the requested dollar amount and the present timeframe. Additional information,

18

justification, and documentation can be found in the Capital Investment Project Work

19

Papers for this specific project.

20
21

9.

Project Code I15-510034, Upgrade SCADA System

22

The total estimated cost for this previously approved carry-over capital investment

23

project is $683,000. As explained in my testimony for the 2013 GRC and repeated here

24

for reference and convenience, this capital IP is regarding the upgrade of the SCADA

25

system in the Ventura County District. The proposed SCADA upgrades are part of a

26

long-term strategy to continually upgrade California American Water’s SCADA systems.

27

To improve system reliability and quality of service, California American Water intends

28

to have a fully functional and reliable SCADA system covering its Ventura County
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District service area. To that end, California American Water has included the following

2

components in the proposed project:

3
4

1. Replace forty existing Bristol brand PLCs with Allen Bradley brand PLCs at the

5

sites that currently have SCADA systems. Emerson (owner of the Bristol) is

6

eliminating this product, and it will no longer be available, nor will there be any

7

support. California American Water anticipates that the existing electrical

8

equipment will remain at these sites.

9
10

2. Programming of the central SCADA computers at California American Water’s

11

Ventura County District office to accept the new signals, process the data, and

12

provide an interface for system operation. California American Water would

13

phase in the required programming modifications with the SCADA system

14

improvements described above.

15
16

The expanded and upgraded SCADA system in the Ventura County District will improve

17

system reliability and quality of service, reduce the risk of service disruptions, replace

18

obsolete systems that have reached the end of their useful lives, and improve operational

19

efficiency. Emerson’s decision to eliminate this line of products leaves California

20

American Water in the negative predicament of having to search for a replacement, since

21

Emerson no longer produces this product, and will only continue supporting it for a very

22

short period of time. This project is scheduled to begin only with design dollars in 2017,

23

completing design in mid-2018, followed by construction beginning in 2019 and

24

ultimately being completed by the end of 2020. California American Water recommends

25

that the Commission re-approve this IP for the requested dollar amount and the present

26

timeframe. Additional information, justification, and documentation can be found in the

27

Capital Investment Project Work Papers for this specific project.

28
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D.

2

Monterey County Water District Carry-Over Capital IPs
1.

Project Code I15-400093 Well Rehabilitation (2015-2017).

3

The total estimated cost for this previously approved carry-over capital investment

4

project is $2,298,400. As explained in my testimony for the 2013 GRC and repeated here

5

for reference and convenience, this capital IP is regarding planned well rehabilitation

6

activities to maintain the performance and reliability of the Monterey System source of

7

supply wells. The Monterey System currently operates 35 active wells as its source of

8

supply. The bulk of the wells (15) are located in the Carmel River valley, with the rest

9

distributed in Seaside (5) and throughout the satellite systems (12 wells in Bishop,

10

Amber, Toro, Ralph Lane, Ryan Ranch, Hidden Hills, and Chualar). As of the date this

11

testimony was prepared, Berwick Well # 9 has been rehabilitated. The next wells in the

12

“queue” are Ambler Well # 6 and Robles Well # 3, which are presently in the preliminary

13

design phase. In addition, the Pearce Well, the Begonia Well, and the Cypress 2 Well

14

were all rehabilitated in 2015 on an emergency response basis. The current wells planned

15

for possible rehabilitation during 2016 and 2017 are the Luzern Well, the Playa Well # 3,

16

Chualar Well # 3, the Rancho Canada Well, and the Schulte Well. The total capital

17

dollars recorded in 2015 were $752,700, which is on track with the total estimated three

18

year program cost of $2,298,400. Additional information, justification, and

19

documentation can be found in the Capital Investment Project Work Papers for this

20

specific project.

21
22

2.

23

Project Code I15-400090 Booster Station Rehabilitation Program
(2015-2017).

24

The total estimated cost for this previously approved carry-over capital investment

25

project is $1,187,916. As explained in my testimony for the 2013 GRC and repeated here

26

for reference and convenience, this capital IP is regarding the continuation of the booster

27

station rehabilitation program adopted by the Commission in the 2010 GRC. This project

28

will allow California American Water to continue to maintain its fleet of booster
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pumping stations within the Monterey County Water District. The District has 145

2

booster pumps that compose the 68 booster pump stations. Ongoing rehabilitation is

3

required to ensure that the booster stations remain reliable and avoid costly failures. .

4

This previously approved capital investment project allows for the rehabilitation and

5

replacement of the following booster stations in the 2015-2017 timeframe: 1) Munras; 2)

6

Corona; 3) Upper Rancho Fiesta; 4) Pebble Beach; and 5) Carmel Knolls. The Munras

7

booster station design, permitting, and construction are complete. The Corona booster

8

station design is complete with agency approval in process. Since California Coastal

9

Commission and CalTrans approvals for the Corona booster station took longer than

10

expected, it was decided to proceed in parallel with additional projects in case this project

11

is not able to be complete during the current rate case. The additional projects being

12

designed in 2016 with potential construction in 2016 and 2017 are the Upper Rancho

13

Fiesta booster station, the Pebble Beach # 6 booster station, and the Carmel Knolls

14

booster station. The total spend through 2015 was $41,264 and California American

15

Water is on track to meet the total approved program budget of $1,187,916. Additional

16

information, justification and documentation can be found in the Capital Investment

17

Project Work Papers for this specific project.

18
19

3.

20

Project Code I15-40097 Interconnect the Ryan Ranch, Hidden Hills,
and Bishop Satellite Systems to the Main Monterey System).

21

The total estimated cost for this previously approved carry-over capital advice letter

22

investment project is $3,754,663. This amount now has $300,000 planned for 2017,

23

$2,212,855 planned for 2018, and $1,241,808 planned for 2019. As explained in my

24

testimony for the 2013 GRC and repeated here for reference and convenience, this capital

25

IP is regarding the installation of interconnections between the Main (Monterey) System

26

and the Laguna Seca satellite systems. The benefit is a primary source of supply for the

27

Hidden Hills, Bishop, and Ryan Ranch Systems when the Seaside Groundwater Basin

28

Aquifer allocation for all three systems is reduced to zero in 2018. The service areas that
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comprise the Laguna Seca Systems (Ryan Ranch, Hidden Hills, Bishop) share an overall

2

allocation from the Laguna Seca Sub-Basin of the Seaside Basin Aquifer. The Ryan

3

Ranch System is supplied by three wells that are treated with filtration and chemical

4

injection at a small treatment facility within Ryan Ranch. The Bishop System is supplied

5

by two (2) wells which are treated solely with chemical injection at a small treatment

6

facility within the Bishop system. The Hidden Hills service area is supplied by one (1)

7

active well which is treated by chemical injection at the Hidden Hills treatment facility.

8

Per the Seaside Groundwater Basin Adjudication, “Exports of natural replenishment

9

water (are) prohibited from the Laguna Seca Subarea. Exports from the Laguna Seca

10

Subarea of natural replenishment water and carryover credits not caused by artificial

11

replenishment are prohibited. Portability authorized within subareas: Portability (is)

12

prohibited between subareas. Any producer may change the location of its production

13

facilities within its respective subarea or join other production facilities within its

14

subarea, so long as such relocation does not cause a material injury or threat of material

15

injury to the basin or interfere with the production by any pre-existing production

16

facilities operated by another producer(s). No Party may produce groundwater from the

17

coastal subareas pursuant to any right recognized by this Decision in the Laguna Seca

18

Subarea, and vice versa.” (emphasis added). In short, the last sentence above from the

19

Adjudication means that when the allocation in the Laguna Seca Subarea has been

20

reduced to zero, these systems cannot continue to pump groundwater and debit those

21

withdrawals against the remaining allocation in the Coastal Subarea. The result is that a

22

new source of water will need to be delivered to the satellite systems, and that source will

23

be from the Monterey Peninsula Water Supply Project (“MPWSP”), which may consist

24

of a mix of desalinated water, ASR and GWR. California American Water believes that

25

in order to address these deficiencies, the systems will require certain interconnections

26

with the Main (Monterey) System.

27
28

California American Water completed an evaluation of the available hydrologic and
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hydrogeologic information for the Seaside Basin, along with anticipated changes in water

2

levels due to the Aquifer Storage and Recovery Program and anticipated changes due to

3

the Monterey Peninsula Water Supply Project. Preliminary modeling results suggest that

4

California American Water will need to cease pumping in the Laguna Seca subarea once

5

the interconnection is complete and water is available through the main system. Even if

6

California American Water stops pumping today, the levels in Laguna Seca will continue

7

to decrease through 2040. The WaterMaster is evaluating steps that might be taken

8

including further reductions in Laguna Seca to slow the drop in water levels. This project

9

now has design and permitting activities beginning in early 2017, followed by

10

construction beginning in 2018 and construction being completed by the end of 2019.

11

Because of the complexities surrounding this project as described in my testimony above,

12

the Commission approved this previously approved capital IP as an Advice Letter

13

project. Additional information, justification, and documentation on these various

14

proposed interconnections with the Main (Monterey) System can be found in the Capital

15

Investment Project Work Papers for this specific project.

16
17

4.

Project Code I15-400089 Main Replacement Program (2015-2017)

18

The total estimated cost for this previously approved carry-over capital investment

19

project is $5,565,149. As explained in my testimony for the 2013 GRC and repeated here

20

for reference and convenience, this capital IP is a continuation of an investment project

21

previously approved by the Commission in the 2008 GRC and 2010 GRC for

22

replacement of distribution mains within the existing Monterey service area distribution

23

network, primarily in the Seaside area. The previously approved funding for this capital

24

project 2015-2017 will allow for the completion of work in Seaside and portions of the

25

highest priority areas identified in the 2013 CBA. The following main replacements

26

projects were completed in 2015:

27


28

El Potrero in Carmel Valley – 2,050 feet
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

Chaparral & El Caminito in Carmel Valley – 3,300 feet



Via Esperanza & Via Descanso in Monterey – 947 feet



Garzas Road in Carmel Valley – 1040 feet

2
3
4
5
6
7

During the remainder of 2016 and through the end of 2017 the following projects are

8

scheduled to be completed:

9
10



Kenneth St in Seaside – 1320 feet



Ord Grove in Seaside – 2,125 feet



Panetta in Carmel Valley – 2,575 feet



Paso Honda in Carmel Valley - 3,500 feet



Punta Del Monte in Carmel Valley – 1,750 feet

11
12
13
14
15
16
17
18
19
20

The total recorded capital expenditures in 2015 were $1,351,290. California American

21

Water is on track to meet our total program budget of $5,565,149 for the three year

22

timeframe. Additional information, justification, and documentation, including the NRW

23

Report, can be found in the Capital Investment Project Work Papers for this specific

24

project.

25
26

5.

Project Code I15-400094, Redrill Ralph Lane Well

27

The total estimated cost for this previously approved carry-over capital investment

28

project is $750,000, and was originally planned for completion in 2016. As explained in
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my testimony for the 2013 GRC and repeated here for reference and convenience, this

2

capital IP is regarding the drilling and equipping a new well in California American

3

Water’s Ralph Lane satellite system, at the site of the existing well. The system is

4

currently served by a single well that cannot be relied upon for long term performance

5

due to advanced deterioration of the well casing. The Ralph Lane subsystem consists of

6

one supply well, one 20,000 gallon storage tank, a pneumatic pressurization system, and

7

approximately 2,500 feet of distribution piping serving approximately 25 customers.

8

This system is completely remote from any other Monterey area systems. Recently,

9

California American Water explored the option of having a liner inserted into the existing

10

well with a smaller pump that would still be sized to meet the required pumping capacity.

11

While the design is feasible in principle the well size constraints do not allow for any

12

tolerances during the construction phase of the liner insertion. California American

13

Water has included in the Work Papers a drawing entitled “Proposed Well Liner

14

Section”’ dated February 2016 from Intera. At this point, the redrill option is again being

15

reviewed to see if there is sufficient space to drill a new well. If it is determined that

16

there is not room for a new well, then California American Water will investigate an

17

intertie with either California Water Service Company or Assisi Mutual Water Company

18

as an alternate to the replacement of the existing well. Both water systems are adjacent to

19

the Ralph Lane system, and could conceivably supply water on a permanent basis. The

20

investigation of well options will be complete in 2016. The design and completion of the

21

preferred option will start in 2016 and be complete in 2017. Additional information,

22

justification and documentation can be found in the Capital Investment Project Work

23

Papers for this specific project.

24
25

6.

Project Code I15-40092 Valve and PRV Replacement Program

26

The total estimated cost for this previously approved carry-over capital investment

27

project is $802,500. As explained in my testimony for the 2013 GRC and repeated here

28

for reference and convenience, this capital IP is regarding a continuation of a mainline
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valve replacement project that was adopted by the Commission in its decision for the

2

2008 GRC. In 2015, a 4-inch valve at Franciscan in Carmel was replaced as part of this

3

capital project. Also later in 2015, several broken valves were discovered during a main

4

replacement project in Monterey. This discovery resulted in the replacement of four 16-

5

inch valves, one 6-inch valve, and one 4-inch valve at Hoffman Avenue in Monterey. So

6

far in 2016, two 8-inch valves have been replaced in Monterey, specifically at the corner

7

of Prescott and Cannery Row. This second project was chosen based on the City of

8

Monterey scheduling a repaving and accessibility curb project at a location where broken

9

valves had previously been discovered. Both valve replacement projects were at

10

locations where businesses were sensitive to having water shutoff, so line stops were

11

used. The PRVs that have been replaced in 2015 are Carmel Valley Ranch in Carmel

12

Valley, Elk Run in Monterey, Aguajito in Carmel, and Vista Verde in Carmel Valley.

13

All PRVs listed are six inch. The total valve and PRV replacement cost as of May 2016

14

for this program is $511,400. Based on this capital expenditure amount to date,

15

California American Water is on track to meet the total $802,500 budget by the end of

16

2017. Additional information, justification, and documentation can be found in the

17

Capital Investment Project Work Papers for this specific project.

18
19

7.

Project Code I15-400095 Fire Flow Improvement Program

20

The total estimated cost for this previously approved carry-over capital investment

21

project is $729,410. As explained in my testimony for the 2013 GRC and repeated here

22

for reference and convenience, this capital IP is for the construction of the highest

23

priority pipeline and booster pumping improvements to increase fire flow capabilities

24

within the Monterey District. During 2015, California American Water worked with the

25

Fire Flow Task Force to determine what fire flow improvements should be constructed.

26

The Fire Flow Task Force recommended a main at Viejo and Valenzuela in 2015, but the

27

proposed main would be approximately 1.1 Miles and would have exceeded the Fire

28

Flow Improvements Programs budget. Therefore, at the beginning of 2016, California
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American Water returned to the Fire Flow Task Force and recommended switching to

2

installing an 8-inch diameter main in Upper Airways (approximately 2,540 feet in

3

length). This alternate project was also another high priority on the Task Force list. This

4

alternate project proposed by California American Water is currently being reviewed by

5

the Fire Flow Task Force. If approved (as expected), the design and construction will

6

occur in 2016 and possibly extend to 2017. Additional information, justification, and

7

documentation can be found in the Capital Investment Project Work Papers for this

8

specific project.

9
10

8.

Project Code I15-400096 SCADA Upgrade Program

11

The total estimated cost for this previously approved carry-over capital investment

12

project is $646,534. As explained in my testimony for the 2013 GRC and repeated here

13

for reference and convenience, this capital IP is regarding the continuation of an

14

investment project previously approved by the Commission in the 2010 GRC for ongoing

15

maintenance and replacement of SCADA equipment within the Monterey County

16

District. The SCADA system monitors and controls the production, treatment,

17

distribution, and storage facilities with the Districts. A summary of the program status

18

follows:

19
20

1. The New data Allen-Bradley Micrologix concentrators were purchased and

21

installed in 2015. California American Water is currently going through the

22

acceptance phase, field testing all the inputs and outputs. The project is scheduled

23

for completion in mid-2016. There were a total of five data concentrators: 1. Ord

24

Grove, 2. Huckleberry, 3. Quail Meadows, 4. Carmel Valley Ranch, 5. Carmel

25

Valley Filter Plant (note – it will be relocated to Upper Robles tank in preparation

26

for the demolition of CVFP).

27
28

2. California American Water is also planning to start upgrading the Monterey
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District radio system to an IP based radio network in mid-2016. Upon

2

installation, testing and acceptance of the data concentrators will occur, with this

3

portion of the program scheduled to be complete by the end of 2016.

4
5

3. The field device replacement is scheduled to start towards the end of 2016, once

6

the communication system has stabilized.

7
8

Overall, California American Water is scheduled to complete the project by the end of

9

2017 with the funds previously approved. Additional information, justification, and

10

documentation can be found in the Capital Investment Project Work Papers for this

11

specific project.

12
13

9.

14

Project Code IP I15-40091 Service Line Replacement Program (20152017).

15

The total estimated cost for this previously approved carry-over capital investment

16

project is $450,000. By the end of 2015, 68 services had been replaced at a total cost of

17

$201,717. It is important to recognize that the average cost per service line replaced was

18

just below $3,000 (only $2,966). Therefore, California American Water remains on track

19

to meet our planned total budget over the timeframe of this GRC.

20
21

10.

22

Project Codes I15-400098, I15-400099, I15-400100. Carmel Valley
ESA, 2015, 2016 and 2017.

23

The total planned expenditures for this previously approved memorandum/non rate base

24

project are $1,500,000, with $500,000 in planned expenditures for 2015, $500,000 in

25

planned expenditures for 2016 and $500,000 in planned expenditures for 2017. Work

26

under this project is for California American Water to comply with Endangered Species

27

Act (ESA) requirements specifically related to California Red Legged Frog (CRLF) in

28
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the Carmel River Valley. For more information on this project, please reference the

2

testimony of Eric Sabolsice, Section V.

3
4

E.

5

Toro Water District Carry-Over IPs
1.

6

Project Code I15-480006 Access Road Improvements at Vista Dorado
Tank (COMPLETED)

7

The total estimated cost for this previously approved carry-over capital investment

8

project is $94,556, and was planned for completion in late 2015. As explained in my

9

testimony for the 2013 GRC and repeated here for reference and convenience, this capital

10

IP consists of the access road to the Vista Dorado Tank in the Toro System. The access

11

road to the Vista Dorado tank was deteriorated and failing in several places. The road

12

approaches 25% grade and was in danger of washout. Several areas of the pavement had

13

crumbled and the road base had slumped. Rebuilding the roadbed and repaving was

14

required to prevent further deterioration and failure of the road, which would have

15

prevented access to the tank site. This project commenced design and construction in

16

2015, and the project was completed in December 2015 for a total capital expenditure of

17

$89,534.

18
19

2.

20

Project Code I15-480007 Altitude Valve for Corte Cordillera Tank
(CARRY-OVER)

21

The total estimated cost for this previously approved carry-over capital investment

22

project is $174,554, and is scheduled for completion in 2016. As explained in my

23

testimony for the 2013 GRC and repeated here for reference and convenience, this capital

24

IP consists of piping modification and installation of an altitude valve chamber at the

25

Corte Cordillera Tank in the Toro System. The Toro water system has three tank sites in

26

the lower pressure gradient. The Corte Cordillera Tank site is in close proximity to the

27

water treatment plant and subsequently sees a higher hydraulic gradeline than the other

28

tanks sites. This higher gradeline causes the Cordillera Tank to fill before the other
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tanks, and can cause the tank to overflow. The previous system owners installed a 1.5-

2

inch diameter bypass valve to throttle back the flow and slow the rate of filling. The 1.5-

3

inch bypass valve is not an engineered solution and has many drawbacks, including

4

limiting the fire protection availability, negatively impacting tank water quality, and

5

requiring constant manual adjustment to balance tank levels. The proposed solution is to

6

remove the by-pass line and install an altitude valve and check valve chamber. This will

7

provide proper control, prevent the tanks from overflowing, and allow water to flow out

8

of the tanks at a higher rate to meet equalization and fire protection demands. Additional

9

information can be found in the Capital Investment Project Work Papers.

10
11

F.

12

Sacramento County District Carry-Over IPs
1.

Project Code I15-600063, Walnut Grove System Tank Construction

13

The total estimated cost for this previously approved carry-over capital investment

14

project is $2,750,000. This amount was originally all planned for 2015, however certain

15

permitting and public requested design changes caused delays that have resulted in a

16

modified schedule. These delays are mainly attributable to new FEMA requirements,

17

which in turn required design changes, resulted in further permitting review time, and

18

also increased costs. As explained in my testimony for the 2013 GRC and repeated here

19

for reference and convenience, this capital IP is for the construction of a pumped storage

20

tank for the Walnut Grove system and applied for project approvals from the

21

Commission in prior GRCs. The Commission approved $280,000 for site acquisition,

22

design, and permitting in the 2010 GRC. California American Water completed the

23

design of the tank and booster pumping facilities for the Walnut Grove system and

24

purchasing the required land necessary pursuant to the Commission’s prior approval in

25

the 2010 GRC. The Walnut Grove Water System hydraulic gradient is currently

26

provided by a hydropneumatic tank situated at the arsenic removal treatment plant

27

installed at the Walnut Grove 3 well site. No treated water storage exists in the system

28

and the system has no interties with other water utilities due to its isolated location. The
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Walnut Grove system currently has no firm supply capacity since the Walnut Grove 3

2

well is the only source of supply classified as “Active” by the CDPH. This project is

3

needed in order to provide demand equalization and fire flow storage in the Walnut

4

Grove system. Completion of the tank will also improve the operation of the existing

5

arsenic treatment plant providing a more consistent flow through the existing pressure

6

filters and reduce the backwash cycles. The tank will be constructed near to the existing

7

Walnut Grove 3 well site. This project is now scheduled to begin construction in 2016,

8

with construction being completed in 2017. California American Water recommends that

9

the Commission re-approve this IP for the requested dollar amount and the present

10

timeframe. Additional information, justification and documentation can be found in the

11

Capital Investment Project Work Papers for this specific project.

12
13

2.

14

Project Code I15-600076, Construct Isleton Chemical Building
Enclosure

15

The total estimated cost for this previously approved carry-over capital investment

16

project is $262,000, and this amount is planned for 2016. As explained in my testimony

17

for the 2013 GRC and repeated here for reference and convenience, this capital IP is

18

required to prevent equipment and material freezing and premature failure at the Isleton

19

Arsenic Treatment Plant. Failure of any of the chemical feed systems located at the

20

treatment plant could result in a violation of drinking water standards, which poses a risk

21

to public health, and results in a notice of violation. Delivery of untreated water to the

22

distribution system would require the entire distribution system to be flushed and

23

disinfected, resulting in lengthy system shutdowns and a great expense to California

24

American Water and its customers. The treatment plant would have to be shut down until

25

the chemical feed systems were repaired, effectively shutting down water service to the

26

Isleton System. Currently, the chemical feed systems are housed in an open-sided roofed

27

structure, which provides little protection from the weather. It is recommended the

28

existing overhead structure be retrofitted with permanent walls and doors. In addition,
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heating and ventilation equipment should be installed as required to comply with local

2

building construction codes, while providing adequate climate control for the chemical

3

feed and process control equipment. The protection of chemical feed equipment will

4

increase the reliability of the treatment processes at the treatment plant, while ensuring a

5

continuous, reliable water supply that is in compliance with drinking water quality

6

standards for the Isleton water system. This project is scheduled to begin with design

7

dollars in 2016, and will also be followed by construction in 2016 and completion by the

8

end of 2016. California American Water recommends that the Commission re-approve

9

this IP for the requested dollar amount and the present timeframe. Additional

10

information, justification, and documentation can be found in the Capital Investment

11

Project Work Papers for this specific project.

12
13

3.

Project Code I15-600067, Isleton Distribution System Improvement

14

The total estimated cost for this previously approved carry-over capital investment

15

project is $831,720. This amount had $60,000 planned for 2015, and $771,720 planned

16

for 2016. As explained in my testimony for the 2013 GRC and repeated here for

17

reference and convenience, this capital IP is for a certain distribution system

18

improvement in the Isleton service area. More specifically, there are customers being

19

served from a dead-end main along First Street (top of levee). This investment project is

20

needed to address a potential public safety issue, and enhance overall service quality.

21

Accordingly, California American Water had developed a plan to install a water main to

22

loop the system within this project area. As part of the permit acquisition and review

23

process, the United States Army Corps of Engineers determined that the proposed

24

installation would place the water main within the levee profile. In addition, it was

25

determined that the existing main along First Street would have to be removed since there

26

are no records of a permit being issued for its placement within the levee profile.

27

Removal of this portion of water main would result in the inability to serve several

28

existing customers. As a result of these developments and to minimize the risks and costs
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associated with removing the existing water main along First Street, this main will now

2

be abandoned in place. Existing customers previously served from the First Street main,

3

will be serviced from the existing main along Second Street through a series of long 2-

4

inch services. In order to provide service to the remaining customers that could not be

5

serviced from the Second Street main, a new main will be installed connecting to the

6

Second Street main and running perpendicular under Victory Highway. This

7

recommended project will satisfy the California Code of Regulations governing pipeline

8

installation within the levee profile, will ensure public safety by preventing potential

9

levee failure associated with a failed water main, and improve the water quality of

10

customers currently being served from a dead-end water main. This project has begun

11

with design dollars in 2015, and will be followed by construction beginning in 2016 and

12

being completed by the end of 2016. California American Water recommends that the

13

Commission re-approve this IP for the requested dollar amount and the present

14

timeframe. Additional information, justification and documentation can be found in the

15

Capital Investment Project Work Papers for this specific project.

16
17

4.

18

Project Code I15-600077, Isleton Pumped Storage Tank and Booster
Station

19

The total estimated cost for this previously approved carry-over capital investment

20

project is $1,700,000. As explained in my testimony for the 2013 GRC and repeated here

21

for reference and convenience, this capital IP is for a new tank and booster station in the

22

Isleton service area. Currently, this water System includes a single elevated tank which

23

provides distribution system storage for treated water. The tank has a storage volume of

24

0.100 million gallons and an overflow elevation set at approximately Elevation 100.

25

Ground elevations within the Isleton service area generally range from 0 to 5 feet above

26

sea level, which in conjunction with the normal tank operating range, result in system

27

pressures between 35 and 40 psi. General Order 103-A requires that the “distribution

28

system shall be operated in a manner to assure that the minimum operating pressures at
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each service connection throughout the distribution system is not less than 40 psi nor

2

more than 125 psi, except that during periods near peak hour demand PHD the pressure

3

may not be less than 30 psi,…”. Hydraulic modeling has also shown that the requisite

4

fire flow of 1500 gpm cannot be delivered to substantial portions of the system at a

5

residual pressure of 20 psi. This is in part due to undersized water mains within the

6

system, but is also a result of the relatively low gradient (system pressure) on which the

7

Isleton service area is currently operated. The recommended solution for increasing

8

system pressures and storage is to construct a pumped storage facility at the Isleton Water

9

Treatment Plant site. The new pumped storage facility would be sized to provide a total

10

system storage capacity of approximately 200,000 gallons (0.20 mg) based on Title 22

11

analysis and recognizing that the Isleton system can utilize the Isleton 2 well in an

12

emergency situation to augment flows pumped from storage. Booster pumping facilities

13

would be constructed at the pumped storage tank and be sized to satisfy normal system

14

demands and contribute to fire flows. This project has experienced a slight delay in

15

implementation, and is now scheduled to begin with design dollars in 2016, followed by

16

construction beginning in late 2016 and completion by the end of 2017. California

17

American Water recommends that the Commission re-approve this IP for the requested

18

dollar amount and the present timeframe. Additional information, justification and

19

documentation can be found in the Capital Investment Project Work Papers for this

20

specific project.

21
22

5.

23

Project Code I15-600070, Lincoln Oaks SCADA Improvements at
SSWS Interconnection

24

The total estimated cost for this previously approved carry-over capital investment

25

project is $280,000. This amount had $80,000 planned for 2015 and $200,000 planned

26

for 2016. As explained in my testimony for the 2013 GRC and repeated here for

27

reference and convenience, this capital IP will allow for monitoring and control of the

28

delivery of purchased surface water into the Lincoln Oaks system to meet California
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American Water’s conjunctive use goals set forth under the Sacramento Groundwater

2

Authority’s (“SGA”) water accounting framework. The Lincoln Oaks Water System

3

includes three interconnections with the Sacramento Suburban Water District (“SSWD”).

4

Currently, the interconnections are manually controlled, and are not tied into the

5

Sacramento County District’s SCADA system. Installation of an automatic flow control

6

valve, associated instrumentation, and connection of the controls to California American

7

Water’s central SCADA system will allow for more effective use of available surface

8

water resources, while maximizing conjunctive use throughout the system. This IP will

9

include the installation of a new below grade vault to accommodate automatic isolation

10

and flow control valves, instrumentation improvements, and interconnection with the

11

existing flow meters. This project is now scheduled to begin with design dollars in early

12

2016, followed by construction beginning in mid-2016 and completion by the end of

13

2016. California American Water recommends that the Commission re-approve this IP

14

for the requested dollar amount and the present timeframe. Additional information,

15

justification and documentation can be found in the Capital Investment Project Work

16

Papers for this specific project.

17
18

6.

Project Code I15-600064, Lincoln Oaks Wellhead Treatment

19

The total estimated cost for this previously approved carry-over capital investment

20

project is $1,500,000, and this amount was all planned for 2016. As explained in my

21

testimony for the 2013 GRC and repeated here for reference and convenience, this capital

22

IP is regarding the groundwater contamination that has been detected in a number of the

23

Lincoln Oaks water supply wells over the past 10 years. More specifically, it has forced

24

California American Water to deactivate the Oak Berry and Sandalwood wells. The

25

Hemlock and Villaview wells can be used but are currently placed in offline status due to

26

iron and manganese concentrations above the Secondary Maximum Contaminant Levels.

27

The Lincoln Oaks water system currently is supplied from 23 active groundwater wells.

28

The system also includes four interconnections with the SSWD and five interconnections
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with the Citrus Heights Water District (“CHWD”). However, the water available from

2

the SSWD is primarily to meet California American Water’s conjunctive use goals under

3

the SGA water accounting framework, while the interconnections with the CHWD are for

4

short term emergency use. Currently, a study is underway to assess the source and fate of

5

the groundwater contamination in the aquifer underlying the Lincoln Oaks service area

6

(approved in the 2010 GRC - IP 0560-170). It is anticipated that the study will provide

7

additional direction as to which wells will likely require treatment. In order to ensure that

8

adequate water supply for the Lincoln Oaks water system is not jeopardized by the

9

migration of the existing groundwater contamination to key system wells, it is

10

recommended that portable equipment, such as granular activated carbon systems, which

11

lend themselves to installation on the small well sites located in the Lincoln Oaks service

12

area. California American Water is now evaluating the most promising well site

13

locations for this type of treatment equipment, since it is possible both the Oakberry and

14

Sandalwood well sites may be inadequate “size-wise” in order to accommodate the

15

portable treatment equipment being considered. At this time, these units are the most

16

feasible solution to addressing the type of contaminants that are known to exist within the

17

area aquifer. This project is now scheduled to begin with design dollars in late 2016,

18

followed by construction beginning in early 2017 and completion by the end of 2017.

19

California American Water recommends that the Commission re-approve this IP for the

20

requested dollar amount and the present timeframe. Additional information, justification

21

and documentation can be found in the Capital Investment Project Work Papers for this

22

specific project.

23
24

7.

25

Project Code I15-600065, Security Park Pump Station Upgrade/
Rehabilitation (COMPLETED)

26

The total estimated cost for this previously approved carry-over capital investment

27

project is $490,000, and was originally planned for 2016. As explained in my testimony

28

for the 2013 GRC and repeated here for reference and convenience, this capital IP is for
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the rehabilitation of the Security Park Pump Station. This facility is nearing the end of its

2

useful life. The electrical switchgear and controls are in need of replacement,

3

specifically, from a safety standpoint, and also to minimize the likelihood of requiring

4

emergency repairs. The Security Park Booster Pump Station consists of two booster

5

pumps, two fire pumps, and one hydropneumatic tank. The booster station is a metal clad

6

building located at the southwest corner of the intersection of Security Park Drive and

7

Goldflake Court. The components of the booster station were installed originally in the

8

1950’s and have not been significantly upgraded since that time. It is recommended to

9

replace the existing pump station switchgear, pump control system, and related electrical

10

appurtenances at the Security Park Booster Pump Station in a manner consistent with

11

current electrical construction codes. This project was completed in March 2016 for a

12

total cost of $408,923, which is below the original requested amount. California

13

American Water recommends that the Commission recognize the lower amount in rate

14

base. Additional information, justification and documentation can be found in the Capital

15

Investment Project Work Papers for this specific project.

16
17

8.

18

Project Code I15-600066, Suburban-Rosemont Route 50 Crossing (16inch Diameter Main)

19

The total estimated cost for this previously approved carry-over capital investment

20

project is $1,425,000. This amount had $80,000 originally planned for 2015 and

21

$1,345,000 planned for 2016. As explained in my testimony for the 2013 GRC and

22

repeated here for reference and convenience, this capital IP is for a distribution system

23

reinforcement/reliability project within the Suburban-Rosemont service area. The

24

Suburban-Rosemont Water System is bisected in the north/south direction by State Route

25

50 (“RT 50”). The majority of the system’s water supply sources, including the recently

26

completed intertie with the City of Sacramento, as well as all of the system distribution

27

storage tanks are located south of RT 50. Transmission main crossings of RT 50 are

28

limited. Based upon the hydraulic analysis of the Suburban-Rosemont water system,
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additional transmission main reinforcement across RT 50 is required for peak hour

2

demand conditions. Currently, there are certain areas in Suburban-Rosemont which are

3

projected to experience pressures below 30 psi during a peak hour demand modeling

4

scenario, particularly the area around Fite Circle off Horn Road. These areas would

5

benefit greatly from the addition of another transmission main connection to increase

6

pressure. The recommended project is to install a 16-inch diameter main across RT 50 to

7

supply additional pressure and flow to the Fite Circle area. The benefits from installing

8

this main are maintaining adequate pressures as required by General Order 103A to

9

system customers during peak hour demands, providing additional fire protection

10

capability, and increasing overall system reliability. This project has begun with design

11

dollars in 2016, and construction will begin in mid-2017. This additional work has

12

caused a slight delay in the overall schedule, mainly due to the complexities of the

13

planned crossing location under a major freeway. It is anticipated that construction will

14

not be completed until the end of 2017. California American Water recommends that the

15

Commission re-approve this IP for the requested dollar amount and the present

16

timeframe. Additional information, justification and documentation can be found in the

17

Capital Investment Project Work Papers for this specific project.

18
19

9.

20

Project Code I15-600075, Antelope Backyard Main Replacement
Program

21

The total estimated cost for this previously approved carry-over capital investment

22

project is $375,000. This amount had $75,000 planned for 2015 and $300,000 planned

23

for 2016. As explained in my testimony for the 2013 GRC and repeated here for

24

reference and convenience, this capital IP is to address an on-going operations challenge

25

of backyard mains in the Antelope service area. This service area includes residential

26

areas where water mains were installed in backyards, making maintenance and repair

27

extremely difficult, costly, and invasive to homeowner privacy. The backyard easements

28

are often encroached upon by structures and improvements, further restricting access to
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the water mains. In many cases, the mains are undersized by current regulatory and

2

industry standards and are nearing the end of their useful life. Time has proven that the

3

water mains in the backyard easements are plagued with problems including ability to

4

access, locate and mobilize excavation and repair equipment to address main leaks.

5

There are a few limited areas remaining in the Antelope service area where backyard

6

mains still exist and should be replaced. This recommended project is to complete

7

several backyard main replacements with properly-sized distribution mains within the

8

public rights-of-way. The benefits of this project are improved customer service through

9

a reduction in encroachment into private properties to repair the existing mains.

10

Replacement of antiquated mains also reduces the likelihood of service interruptions due

11

to main breaks and a reduction in unaccounted for water. This project was designed in

12

2015 and construction was completed in 2016 for a portion of the project. One of the

13

three streets that this project covered was completed, although there was an increased

14

cost to build this project due the service line replacements. This portion of the project

15

was constructed for the requested $375,000. However, the remaining two streets are

16

recommended to be included as part of the proposed main replacement program or the

17

backyard mains replacement program, both requested as part of this current GRC.

18

Therefore, California American Water recommends that the Commission re-approve this

19

IP for the requested dollar amount and the present timeframe. Additional information,

20

justification and documentation can be found in the Capital Investment Project Work

21

Papers for this specific project.

22
23

10.

24

Project Code I15-600073, Antelope 1MG Tank, Booster Station and
Well (Elverta Road)

25

The total original estimated cost for this previously approved carry-over capital

26

investment project was $500,000, and was planned for 2015. As explained in my

27

testimony for the 2013 GRC and repeated here for reference and convenience, this capital

28

IP is for the initial capital dollars related to design, permitting and land acquisition of an
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additional distribution storage tank in the Antelope service area. However, the settlement

2

agreement in the 2013 GRC only allowed for the cost to purchase land (estimated at

3

$150,000). California American Water initially located a piece of property for this tank,

4

but further investigation has shown that the property site has recently been rezoned into a

5

flood plain. Accordingly, California American Water is in discussions with the adjoining

6

property owner to acquire additional land so the overall site is acceptable for design and

7

permitting requirements, prior to commencement of construction. The Antelope Water

8

System derives its water supply from both groundwater wells and from purchased surface

9

water. Prior to the 2010 completion of the Cook Riolo Tank and Booster Station, no

10

distribution storage existed in the Antelope system. Although the Cook Riolo Tank and

11

Booster Station substantially have improved peak flow delivery capacity, hydraulic

12

modeling of the system performed as part of the CPS and conformance with Title 22

13

guidelines for fire flow supply indicates that additional system storage is necessary to

14

meet projected peak hour demands and fire flow requirements. This recommended

15

project of a new 1.0 MG tank, 3,000 gpm booster station, and 1,500 gpm production well

16

will provide additional supply capability and additional demand equalization and fire

17

protection storage in the Antelope service area during maximum demands periods. It

18

should be recognized that this carryover project is now scheduled to begin with design

19

and permitting in 2020, followed by construction commencing within the next GRC

20

timeframe (i.e., 2021-2023). California American Water recommends that the

21

Commission re-approve this IP for the requested dollar amount and the present

22

timeframe. Additional information, justification, and documentation can be found in the

23

Capital Investment Project Work Papers for this specific project.

24
25

11.

26

Project Code I15-600071, Sacramento District Annual Well
Rehabilitation Program

27

The total estimated cost for this previously approved carry-over capital investment

28

project is $4,500,000. As explained in my testimony for the 2013 GRC and repeated here
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for reference and convenience, this capital IP continues a well rehabilitation program that

2

has been authorized by the Commission for in excess of ten years. The Sacramento

3

County District includes nine (9) separate service areas that provide potable water to

4

approximately 58,000 customers in the greater Sacramento area. The primary source of

5

water supply for the nine water systems includes over one hundred individual wells,

6

which operate in conjunction with treatment plants, storage tanks, bulk water metering

7

facilities, and related infrastructure to deliver high quality water to California American

8

Water customers. A draft well rehabilitation report prepared in 2009 summarized and

9

prioritized recommendations for well rehabilitations, while also instituting a sustainable

10

plan for above- and below-grade improvements at all of the Sacramento County District

11

wells on an ongoing annual basis. These aging wells require ongoing maintenance,

12

rehabilitation, and replacement of above- and below-ground facilities to continue to

13

provide safe and reliable water supply to customers. It is recommended the Sacramento

14

County District continue its ongoing maintenance program for above- and below-grade

15

well improvements, since these type of projects will: 1) increase system reliability; 2)

16

maintain system capacity; 3) avoid catastrophic failures; 4) minimize potential violations

17

issued by the CDPH; 5) extend the useful life of the well facilities; 6) improve

18

operability; 7) improve site aesthetics; 8) improve site safety; 9) increase customer

19

satisfaction; and 10) decrease future unanticipated costs. This annual project has design

20

and construction dollars reflected for each year of this GRC cycle (2015-2017).

21

California American Water recommends that the Commission re-approve this IP for the

22

requested dollar amount and the present timeframe. Additional information, justification

23

and documentation can be found in the Capital Investment Project Work Papers for this

24

specific project.

25
26

12.

27
28

Project Code I15-600068, Sacramento District Annual SCADA
Maintenance Program

The total estimated cost for this previously approved carry-over capital investment
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project is $360,000. As explained in my testimony for the 2013 GRC and repeated here

2

for reference and convenience, this capital IP is for on-going work to keep the SCADA

3

equipment upgraded in the Sacramento County District. A significant investment in

4

SCADA equipment has been made in the past several years to provide better monitoring

5

and control of California American Water facilities throughout the Sacramento County

6

District. In order to keep this system up and running, SCADA equipment must be

7

maintained and updated. By continuing this historical program of providing ongoing

8

maintenance and replacement of SCADA equipment, California American Water will be

9

able to maintain and enhance water system reliability. A comprehensive and well-

10

maintained SCADA system allows for more effective system control, monitoring, record

11

keeping, and system diagnosis. Of particular benefit is monitoring the production of the

12

100+ wells California American Water owns and maintains within the Sacramento

13

District. This recommended project will maintain and replace SCADA components as

14

needed to sustain their existing SCADA infrastructure, investing approximately $100,000

15

per year. This annual program is scheduled for design and construction dollars in each

16

year of this GRC cycle (2015-2017). California American Water recommends that the

17

Commission re-approve this IP for the requested dollar amount and the present

18

timeframe. Additional information, justification and documentation can be found in the

19

Capital Investment Project Work Papers for this specific project.

20
21

13.

22

Project Code I15-600072, Sacramento District Main Replacement
Program

23

The total estimated cost for this previously approved carry-over capital investment

24

project is $4,500,000. As explained in my testimony for the 2013 GRC and repeated here

25

for reference and convenience, this capital IP is for the continuation of a main

26

replacement program across the entire Sacramento County District. It is recognized that

27

miscellaneous, geographically distinct sections of water main within the nine Sacramento

28

District service areas require replacement, upsizing, and/or looping to improve water
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pressures, water quality, and system reliability and redundancy. To ensure these

2

improvements occur in the proper location, careful consideration is given on where to

3

replace pipe in the specific service area. Typically, the operational requirements of the

4

entire system, system changes from the addition of distribution storage tanks, booster

5

pump stations, and increased supply from wells or interconnections are examples that are

6

considered. Implementing a programmatic annual approach is recommended to allow for

7

a planned and prioritized method for replacing mains which have either been identified

8

by the California American Water Operations staff as exhibiting a higher than normal

9

rate of breaks or customer complaints, or through the CBA as reaching the end of their

10

projected useful life. The benefits of this project are improved customer service through

11

a reduction in service interruptions caused by water main breaks, and for those projects

12

involving replacement of tuberculated and/or unlooped distribution mains, improvements

13

to water quality and pressure. Addressing aging infrastructure in a programmatic,

14

planned fashion is more cost effective than conducting a series of emergency repairs.

15

This annual program is scheduled for design and construction dollars to occur within

16

each year of this GRC cycle (2015-2017). California American Water recommends that

17

the Commission re-approve this IP for the requested dollar amount and the present

18

timeframe. Additional information, justification and documentation can be found in the

19

Capital Investment Project Work Papers for this specific project.

20
21

14.

22

Project Code I15-600074, Sacramento District Beloit Office Solar
Project

23

The total estimated cost for this previously approved carry-over capital investment

24

project is $164,000, and this amount is planned for 2016. As explained in my testimony

25

for the 2013 GRC and repeated here for reference and convenience, this capital IP is to

26

install solar panels at the Sacramento County District office location. The Beloit Office,

27

which includes a warehouse, has a south-facing roof area and onsite energy usage,

28

making it a suitable site for a solar photovoltaic (“PV”) system. The proposed solar PV
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system would fully or partially offset annual electricity usage at the Beloit Office. The

2

roof area of approximately 2,600 square feet could accommodate an approximate 30

3

KWDC PV system. A system of this size in Sacramento is estimated to generate up to

4

41,700 kWh annually, and would be installed on the roof of the office and warehouse

5

building. Net Energy Metering (NEM) would be established with the energy provider.

6

In the event that more energy is produced than used at the location, retail-valued energy

7

credits are received for the excess electricity. At the end of a 12 month period, any

8

surplus kWh can be rolled into the next 12 month period or receive a monetary credit for

9

this surplus energy generation based on the established methodology used by the

10

provider. This project is scheduled to begin with design dollars in early 2016, and will be

11

followed thereafter by the installation of the solar panels, also in 2016. Additional

12

information, justification, and documentation can be found in the Capital Investment

13

Project Work Papers for this specific project.

14
15

G.

16

Sonoma County District (Larkfield) Carry-Over IPs
1.

I15-610009 Londonberry Drive Creek Crossing

17

The total estimated cost for this previously approved carry-over capital investment

18

project is $444,000. As explained in my testimony for the 2013 GRC and repeated here

19

for reference and convenience, this capital IP addresses a service reliability concern in the

20

Sonoma County District. An 8-inch diameter asbestos cement pipe between Londonberry

21

Drive and Carriage Lane near Well #1A is exposed in the creek. An exposed pipe is

22

more likely to deteriorate more quickly or be damaged reducing the useful life. This

23

project will replace approximately 100-feet of main with new 8-inch PVC main. At the

24

current time, the pipe replacement was estimated using an open cut installation with an 8-

25

inch diameter pipe. As stated above, this project was scheduled to begin with design

26

dollars in 2015, to be followed by construction beginning in 2016 and completion by the

27

end of 2016. However, an initial analysis of the significant construction challenge of

28

crossing this creek and associated wetlands raised questions on the reasonableness of the
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current cost estimate. In addition, permitting issues with several regulatory agencies

2

were determined to affect the timing on when the construction could actually begin. The

3

revised estimated cost to complete this project is now $850,000. The design of this

4

project would now commence in 2019, followed by construction starting in 2020 and

5

being completed by the end of 2020. Additional information, justification and

6

documentation can be found in the Capital Investment Project Work Papers for this

7

specific project.

8
9

2.

I15-610010 SCWA Interconnection Improvement

10

The total estimated cost for this previously approved carry-over capital investment

11

project is $50,000, and this amount was planned for 2016. As explained in my testimony

12

for the 2013 GRC and repeated here for reference and convenience, this capital IP is for

13

improving an interconnection between the Sonoma County Water Agency (“SCWA”)

14

and the Sonoma County District. The SCWA intertie located on Fulton Road just south

15

of River Road is a major supply component for the system. At this location, there is

16

some undersized piping which is part of the intertie that needs to be upgraded to reduce a

17

bottleneck that currently impacts the amount of flow delivered at a satisfactory pressure

18

to Larkfield. Upgrading the piping at this interconnection will improve overall system

19

reliability. The SCWA intertie supplies a significant share of the water to meet the

20

Larkfield system demands. This intertie is a critical component of supply for the system.

21

This project will replace small diameter piping with 8-inch diameter piping to decrease

22

headloss through the interconnection. This solution may consider or include a 12-inch

23

main extension to River Road to tie into an existing 12-inch main. This project is

24

scheduled to begin with design dollars in 2016, followed by construction beginning in

25

2016 and completion in early 2017. California American Water recommends that the

26

Commission re-approve this IP for the requested dollar amount and the present

27

timeframe. Additional information, justification and documentation can be found in the

28

Capital Investment Project Work Papers for this specific project.
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2

XIII. PROPOSED NEW CAPITAL INVESTMENT PROJECTS
Q69.

3
4

Please describe the nature and composition of each new capital IP proposed by
California American Water in this GRC.

A69.

The proposed new IPs and their respective budgets for each District of California

5

American Water are listed in their respective Table 4 shown in my testimony below. In

6

addition, a project-by project summary for each district is provided immediately after

7

each respective District’s Table 4 below. It is important to recognize the respective

8

budgets for the new IPs shown in each district’s table are direct costs for the individual

9

IPs, and will not match the total cost generated by the Results of Operations model. The

10

reason for this difference is the Results of Operations model calculates separately the

11

appropriate factors for engineering overhead and contingency, as appropriate on a

12

project-by-project basis.

13
14

Q70.

15
16

What will you discuss first related to the new capital IPs proposed by California
American Water in this GRC?

A70.

There is one new proposed capital investment project that is common to four of the

17

operating districts of California American Water. California American Water is

18

proposing to implement a two-way, Advanced Metering Infrastructure (AMI) system in

19

four of its California American Water service districts. These four districts are: San

20

Diego County, Monterey County, Ventura County, and Los Angeles County. California

21

American Water is proposing this AMI deployment as a way to achieve certain

22

improvements in its operations, and as a means to promote water conservation activities

23

of its customers by using real time data to make decisions or investigate potential leaks.

24

AMI is a mature technology that enables the automated collection, transmittal and

25

collating of California American Water’s meter reads from its customer water meters.

26

This technology involves gathering data from the water meter and transmitting this

27

information -- with high levels of reliability and frequency -- to a variety of end-use

28

applications. More detailed information and related exhibits for this capital investment
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project are provided in Section IX of the direct testimony of Richard Svindland. This

2

project is scheduled to begin with detailed system and deployment planning in 2017 and

3

continuing into 2018. It is expected the purchase of the necessary equipment, including

4

the meter communication modules (MTU’s) will also commence in the later part of 2018

5

and continue into 2019. Actual field installation work would commence in 2019 and be

6

completed by the end of 2020. California American Water recommends that the

7

Commission approve this IP for the requested dollar amount and the present timeframe.

8

All information, justification, and documentation can be found in appendices included

9

with the direct testimony of Richard Svindland.

10
11
12

A.

Los Angeles County District Proposed IPs

Table 4A. Proposed New Investment Projects for Los Angeles County District

13
14

FP #

FP Description

3-Yr Total

2018 Plant
Expend.

2019 Plant
Expend.

2020 Plant
Expend.

15

I15-500056

Advanced Metering Infrastructure

$4,688,762

$635,591

$2,931,733

$1,121,438

16

I15-500038

Booster Station Upgrades Program

$2,328,090

$828,090

$1,000,000

$500,000

I15-500057

Annual Main Replacement
Program

$2,200,000

$700,000

$750,000

$750,000

I15-500042

Purchase Groundwater Rights

$2,200,000

$200,000

$2,000,000

I15-500058

Tier 4 Compliance/Standby Power

$1,109,000

$346,000

$763,000

I15-500059

Baldwin Hills Recycle Water
Project

$1,500,000

$500,000

$500,000

$500,000

I15-500060

Reconstruct Rosemead Operations
Center

$3,500,000

$250,000

$2,000,000

$1,250,000

Total Investment Projects

$17,525,852

$3,459,681

$9,944,733

$4,121,438

17
18
19
20
21
22
23
24
25
26

1.

Project Code I15-500056, Advanced Metering Infrastructure (AMI)

27

The estimated cost for this proposed investment project is shown in Table 4A above. This

28

proposed capital investment project is discussed previously in my testimony at the
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beginning of the Proposed New Projects section, and should be referenced for additional

2

information since it is a common project to four districts: San Diego County, Monterey

3

County, Ventura County and Los Angeles County.

4
5

2.

Project Code I15-500038, Booster Station Upgrades Program

6

The estimated cost for this proposed investment project is shown in Table 4A above.

7

This investment project is a continuation of a previously approved project from the 2013

8

GRC. This program is the result of a CBA study that was performed on various booster

9

station locations within the Los Angeles District. This study is included within the

10

Capital Investment Project Work Papers as part the Los Angeles District CPS as an

11

appendix. This IP includes two specific booster station upgrades that are recommended

12

by the CBA study, namely the Lamanda and the Oak Knoll Booster Stations located in

13

the San Marino service area (identified as Projects B-2 and B-3, respectively, in the Los

14

Angeles District 2012 CPS). The Lamanda Booster Station is the primary supply for the

15

Lamanda Booster Gradient. The gradient does not have any storage and relies on the

16

pumping equipment to maintain system pressure. While the booster station has sufficient

17

capacity to satisfy current and projected peak demands, the CBA identified the following:

18

1) the pumping equipment is not sized to meet the pressure requirements with multiple

19

pumps in operation; 2) one of the pumps is located in a pump pit and is periodically

20

damaged by submergence; and 3) repair components for the control processor are no

21

longer manufactured. The Oak Knoll Booster Station is relied upon to provide water to

22

the Patton Gradient. While the booster station has sufficient capacity to satisfy current

23

and projected peak demands, the CBA identified the booster station as being

24

mechanically obsolete and electrically inefficient. In addition, the local control processor

25

is obsolete and poses a significant process failure potential. This ongoing project is

26

scheduled to begin with design in early 2018, with construction to follow in 2019, and

27

targeted to be complete by the end of 2020. It is possible one of the booster stations will

28

be upgraded in 2021. California American Water recommends that the Commission
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approve this IP for the requested dollar amount and the present timeframe. Additional

2

information, justification, and documentation can be found in the Capital Investment

3

Project Work Papers for both capital projects that comprise this combined investment

4

project.

5
6

3.

Project Code I15-500057 – Annual Main Replacement Program

7

The estimated cost for this proposed investment project is shown in Table 4A above. The

8

proposed project includes the replacement of several sections of small water mains within

9

the Los Angeles County District. It is important to recognize that the Commission

10

previously approved a similar project in the 2013 GRC (I15-500039), and this program is

11

proposed to continue as part of this GRC. This program is spread over a three-year

12

period, and will start in January of each year and end in December of the same year.

13

California American Water commissioned a CBA of Buried Infrastructure, which was

14

completed in March of 2012. The CBA evaluated the Risk, Performance, and Economic

15

Life of the buried piping infrastructure in the Los Angeles systems in order to provide a

16

comprehensive list that prioritizes piping replacement projects throughout the district.

17

The Main Replacement program is intended to be a proactive replacement program that

18

reduces the overall risk and consequences associated with main breaks in the system,

19

including: avoiding potential insurance claims due to damages associated with mean

20

breaks, maintaining 24-7 service to critical costumers, avoiding potential contamination

21

while repairing pipe, and maintaining a good reputation with the public. In addition to

22

aforementioned benefits the Main Replacement program could also help with pressure

23

and fire flow issues in areas where the existing main is undersized or too brittle to support

24

an increase ins system pressure, because many of the CBA listed projects include the

25

replacement of dated and undersized 4-inch main. The local operations staff is

26

responsible for prioritizing and selecting the replacement projects they will complete

27

each year. This will provide flexibility in selecting the projects to be constructed for each

28

year so that it coincides with city street paving and with any hydraulic changes in the
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system. The Main Replacement Program will reduce the number of main failures,

2

improve water quality, and improve customer pressure & fire flow. Additional

3

information, justification, and documentation can be found in the 2012 Los Angeles

4

CBA. This combined IP is scheduled to begin with design in early 2018, with

5

construction to follow later in 2019 and continuing through 2019 and 2020. California

6

American Water recommends that the Commission approve this combined IP for the total

7

requested dollar amount and the present timeframe. Additional information, justification,

8

and documentation can be found in the Capital Investment Project Work Papers for both

9

specific capital projects that comprise this combined IP.

10
11

4.

Project Code I15-500042, Purchase Groundwater Rights (Annually)

12

The estimated cost for this proposed investment project is shown in Table 4A above. It

13

should be recognized that the total estimated cost for an identical investment project

14

approved by the Commission in the 2013 GRC was $2,156,000. This project was

15

described earlier in my testimony as a Carry-Over Project originating from the 2013

16

GRC. For reference, I have only repeated a short portion here. This capital IP is a

17

continuation of a program to purchase water rights within the Los Angeles County

18

District among several groundwater basins. As I noted previously, the ownership of

19

groundwater rights is an important asset for water utilities operating in the greater Los

20

Angeles metropolitan area. In particular, the groundwater basins where California

21

American Water owns and/or leases groundwater rights in the Los Angeles District

22

(namely the Central Groundwater Basin, the Raymond Basin and the Main San Gabriel

23

Basin) are critical, since they allow us to pump groundwater rather inexpensively in order

24

to provide customers with a reliable supply of water. This is an extremely important

25

advantage, especially during times of drought like the on-going experience, where the

26

need for California American Water to explore potential opportunities to purchase

27

groundwater rights has been reinforced.

28
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2

Q71.
A71.

What is California American Water requesting as part of this current GRC proceeding?
California American Water is requesting $2,200,000 in funding for the 2018-2020

3

timeframe of this GRC to allow for the purchase of between 100 and 150 acre-feet of

4

prescriptive water rights. As stated previously, it is anticipated that the number of

5

potential water rights available for sale in the various basins will be very limited. Local

6

operations has reported only small quantities of water rights (about 100 acre-feet) come

7

on the market annually over the last couple of years. Second, California American Water

8

wants to secure sufficient additional groundwater rights for future supply purposes over a

9

long-term horizon, with the objective of reducing its reliance on imported water supplies

10

because of state-wide hydrologic conditions, environmental regulations that govern

11

supply, water quality contamination and natural disasters (such as a seismic event).

12

Accordingly, California American Water believes it is not only appropriate, but

13

extremely valuable to purchase available groundwater rights on annual basis beginning in

14

2018. California American Water requests that the Commission allow for $2,200,000 in

15

funds so groundwater rights can be purchased in the target year of 2019, or as they

16

become available through the years of this GRC (2018, 2019, and 2020). California

17

American Water recommends that the Commission approve this IP for the requested

18

dollar amount of $2,200,000, with $200,000 planned for 2018 and $2,000,000 planned

19

for 2019 when the potential purchase of the water rights is anticipated to occur. It is also

20

important to recognize that California American Water will only purchase groundwater

21

rights when they become available. Additional information, justification, and

22

documentation can be found in the Capital Investment Project Work Papers for this

23

specific project.

24
25

5.

26

Project Code I15-500058, Tier 4 Compliance/Standby Power (Project
A-4, All Three Service Areas)

27

The estimated cost for this proposed investment project is shown in Table 4A above. By

28

way of introduction, Section III.8.B. of General Order 103-A requires critical equipment
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to have adequate redundancy and reliability, including fixed or portable backup power.

2

Without a reliable source of back-up power, a prolonged electric outage would interrupt

3

service for customers in some areas of the system. California American Water has

4

historically, and will continue to rely upon, portable trailer mounted generators to provide

5

back-up power at those important stations. The Portable Diesel-Fueled Engine Air Toxic

6

Control Measure, specifically subdivision (B)(3) of Section 93116 of Title 17 of the

7

California Code of Regulations requires certified, portable diesel-fueled engines used

8

exclusively for emergency or low use purposes to either: (1) meet Tier 4 engine emission

9

standards; (2) to be equipped with a verified emission control technology; or (3) use a

10

combination of verified emission control strategies to reduce diesel particulate emissions

11

by 85 percent. For engines that do not meet a certified federal emission standard, such

12

engines must be taken out of service or replaced no later than January 1, 2017.

13

Separately, the Stationary Diesel Engine Air Toxic Control Measure, specifically,

14

subdivision (b)(3) of section 93115.6 of Title 17 of the California Code of Regulations

15

restricts the number of hours a diesel-fueled engine can be operated for maintenance and

16

testing purposes, depending on the particulate emissions of the engine, as determined by

17

the air quality management district issuing a permit to the stationary engine. Such hour

18

limitations may conflict with best operating practices for ensuring engine reliability.

19

In addition, both Section 93115.5 and 93116 prohibit the maintenance and testing of

20

diesel engines between 7:30 am and 3:30 pm (some air districts have adopted rules

21

further prohibiting maintenance and testing to 4:30pm) unless the engine meets the new

22

engine particulate emission standards. This limitation forces maintenance and testing of

23

these units to occur outside normal operating hours for the utility, which complicates

24

employee shifts and may require the payment of overtime to complete this work.

25
26

Based on the regulations, California American Water has five Tier 1 generators that must

27

meet Tier 4 requirements by January 1, 2020. In addition, California American Water

28
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has already retired 7 “Tier 0” or uncertified engines based on their age in anticipation of

2

the January 1, 2017 deadline for removing these engines from service.

3
4

This project is scheduled to begin in early 2018, with purchase of appropriate equipment

5

and installation work to follow and be completed in 2019, and continued annually for the

6

next several years until all the targeted facilities for standby power have been completed.

7

California American Water recommends that the Commission approve this IP for the

8

requested dollar amount and the present timeframe. Additional information, justification,

9

and documentation can be found in the Capital Investment Project Work Papers for this

10

specific project.

11
12

6.

Project Code I15-500059, Baldwin Hills Recycle Water Project

13

The estimated cost for this proposed investment project is shown in Table 4A above. The

14

Baldwin Hills West Basin Municipal Water District Recycled Water Line Extension will

15

provide non-potable recycled water to existing customers within the Baldwin Hills

16

service area and to potential customers adjacent to the Baldwin Hills service area.

17

Recycled water would be purchased from West Basin MWD, who produces recycled

18

water at the Edward C. Little Water Recycling facility in El Segundo. This system would

19

require a connection to the end of the existing recycled water pipe within the City of

20

Inglewood, a new pipeline that extends north into California American Water’s service

21

area, two pressure reducing valves, and two pump stations. Recycled water would be

22

supplied to landscaping including parks, schools, municipal landscaping, cemeteries and

23

golf courses. As part of the project, California American Water also is considering

24

serving potential demands that lie outside of its service area, including: Golden State

25

Water Company, including Culver City; and the City of Los Angeles that is served by

26

Los Angeles Department of Water and Power. The estimated recycled water demand is

27

projected to be 600 acre-feet per year to the proposed customers served from this project.

28

In general, California American Water would receive recycled water from West Basin
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MWD by connecting to an existing 16-inch pipeline at Florence Avenue and Prairie

2

Avenue in the City of Inglewood. Approximately 1.5 miles of the new 16-inch pipeline

3

would lie outside of the Baldwin Hills Service Area. A new, 60 HP booster pump station

4

would be located just inside the CAW service area in the approximate area of 62nd and

5

La Brea. The overall project will include 21,000 feet of 16-inch recycled water pipeline

6

and 40,400 feet of 6-inch recycled water pipe. A second booster pump station is planned

7

to be installed on Stocker Street between La Brea Avenue and South Fairfax Avenue with

8

a 120-horsepower rating. This pump station will help to serve recycled water to

9

additional customers within the Golden State Water Company and Los Angeles

10

Department of Water and Power service areas north of the Baldwin Hills service area.

11

Two pressure reducing valves will also be installed, the first on Slauson Avenue and the

12

second will be located in Kenneth Hahn Park. The benefit of recycled water within the

13

Baldwin Hills Service Area is it would supplement current water demands that are being

14

met with groundwater and imported water from the West Basin MWD. These supplies

15

are currently used for outdoor ornamental use including parks, school fields, cemeteries

16

and landscaping. Recycled water will provide a viable alternative to the current supply

17

options available. This project is scheduled to begin in early 2018, with initial

18

engineering, design and permitting, and is planned to continue through 2019 and into

19

2020. California American Water recommends that the Commission approve this IP as

20

an Advice Letter project for the requested dollar amount and the present timeframe.

21

Additional information, justification, and documentation can be found in the Capital

22

Investment Project Work Papers for this specific project.

23
24

7.

Project Code I15-500060, Reconstruct Rosemead Operations Center

25

The estimated cost for this proposed investment project is shown in Table 4A above. The

26

existing Rosemead Operations site consists of several individual small buildings and a

27

trailer that are occupied by operations staff, engineering, customer service, conservation,

28

and external affairs employees. The original Rosemead office building was constructed
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in 1962, is presently in a severely deteriorated condition, and has a number of

2

deficiencies, including but not limited to: 1) inadequate restroom facilities for the number

3

of employees on site; 2) non ADA compliant restrooms; 3) unreliable and inefficient

4

HVAC systems; 4) insufficient office space for the number of employees 5) no break

5

room or kitchen area for employees to prepare or store edible items; 6) has limited space

6

for employees in common areas such as the conference room; 7) does not have a fire

7

protection sprinkler system; and 8) experiences a number of structure-related roof leaks

8

as additions to the original building have occurred over the years. It should also be

9

recognized that a total of 15 office employees report to the Rosemead office, and 25 field

10

employees also report to the Rosemead office on a daily basis since this location is where

11

company vehicles are parked each night. The Rosemead office building, through its

12

attachment to the garage, contains an area for storage of materials including meters,

13

fittings, meter vaults, pipe, sand, aggregate base, generators, and occasional plant

14

equipment. Storage locations at the Rosemead office also include document and record

15

retention filing cabinets. Some of the files are currently located in an old pump house and

16

rented truck cargo container. Conservation supplies and external affairs presentation

17

equipment are also stored in the main building and the truck cargo containers. It should

18

also be noted that the trailer only has a temporary occupancy permit from the City of

19

Rosemead, and therefore is not considered for long-term use at this time. Finally, the

20

Rosemead site also has the following plant facilities on site including Grand Well,

21

Rosemead Well, Richardson Well # 3, Rosemead Reservoir, and Rosemead Boosters.

22

Richardson Well # 3 is currently in-service and the Reconstruction of the Rosemead

23

Reservoir is currently in the planning phase.

24
25
26
27
28

Based upon the above described deficiencies, California American Water recommends
moving forward with a new operations building to replace the existing 54 year old,
deteriorated structure. The proposed project will accommodate all employees in one
central building, allowing for efficiencies and improved working conditions while also
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enhancing the overall operation and continuing to deliver excellent customer service.

2

This project is scheduled to begin in 2018, with engineering design and permitting,

3

followed by construction beginning in mid-2019 and being completed by the end of 2020.

4

. If the remodel option is selected, this option would include costs associated with

5

leasing another office to house existing employees while the remodeling is completed.

6

The remodeling option also will include moving costs, IT costs, and security costs

7

associated with moving employees to a temporary leased facility during construction. If

8

the new building option is selected, it can be constructed while having existing

9

employees work where they are and it would save the costs associated with moving twice

10

and leasing another office space for employees. Costs for the remodeling and new

11

building options are included in the project Work Papers. It is important to note that

12

California American Water will also conduct a value engineering analysis of these two

13

options prior to a final selection. This project is scheduled to begin in 2018, with

14

engineering design and permitting, followed by construction beginning in mid-2019 and

15

being completed by the end of 2020. California American Water recommends that the

16

Commission approve this IP for the requested dollar amount and the present timeframe.

17

Additional information, justification, and documentation can be found in the Capital

18

Investment Project Work Papers for this specific project.

19
20

8.

Project Code I15-500062, Mission View Well 2 Treatment

21

The estimated cost for this proposed investment project is $3,980,000. The project will

22

add treatment to the existing Mission View Well 2 in the San Marino Service Area of the

23

Los Angeles County District. Elevated levels of nitrate have recently been detected in

24

this well, requiring the well to be taken out of service. In addition, both the Mission

25

View Well and the nearby Mariposa Well have hexavalent chromium at levels over 90%

26

of the Maximum Contaminant Level (which is 10 ppb). It is recommended that treatment

27

be installed for hexavalent chromium, and a blending line be constructed from the

28

Mariposa Well to the Mission View Well site for nitrate blending. Given that Ion
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Exchange resins are still being evaluated and improved for hexavalent chromium

2

treatment, a Feasibility Study and Pilot Study may be needed to confirm which

3

technologies are viable and the most cost effective. This pilot system may be operated

4

through the summer of 2017 to confirm results and collect data. This project is scheduled

5

to begin in 2016, with initial studies, followed by engineering design and permitting. It is

6

anticipated that construction will begin in late 2017, and be completed by the end of

7

2018. California American Water recommends that the Commission approve this IP for

8

the requested dollar amount and the present timeframe. Additional information,

9

justification, and documentation can be found in the Capital Investment Project Work

10

Papers for this specific project.

11
12

B.

San Diego County District New Capital Investment Projects

13
14

Table 4B. Proposed New Investment Projects for San Diego County District

15
2019 Plant
Expend.

2020 Plant
Expend.

FP #

FP Description

17

I15-300002

Small Main Replacement Program

$750,000

$250,000

$250,000

I15-300015

Replace 500 Ft of 20-inch Main in
Palm Avenue

$750,000

$165,000

$585,000

I15-300012

Advanced Metering Infrastructure

$3,697,637

$490,903

$2,320,468

$886,266

I15-300014

Coronado Reliability Supply
Project

$1,500,000

$500,000

$500,000

$500,000

I15-300016

Coronado/Imperial Beach Recycle
Water Project

18

3-Yr Total

2018 Plant
Expend.

16

$250,000

19
20
21
22
23
Total Investment Projects

24
25
26
1.

27
28

Project Code I15-300002, Small Main Replacement Program

The proposed budget for this project is included in Table 4B. The proposed project
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includes the replacement of several sections of small water mains within the San Diego

2

County District. This is a three-year project that will start in January of each year and

3

end in December of the same year.

4

California American Water prepared a 2012 CBA for Buried Infrastructure, which

5

evaluated the condition and performance of pipe in the San Diego system and prioritized

6

the portions of the distribution system that should be replaced. This is a proactive

7

program to replace water mains that reduces the overall risk and consequences associated

8

with main breaks in the system, including: avoiding potential insurance claims due to

9

damages associated with main breaks, maintaining 24-7 service to critical customers,

10

avoiding the potential for contamination while repairing pipe, and maintaining a good

11

reputation with the public. The majority of these small main projects include undersized

12

4-inch main. The local operations staff is responsible for prioritizing and selecting the

13

replacement projects they will complete for each year from 2018 to 2020. This will

14

provide flexibility in selecting the projects to be constructed for each year so that it

15

coincides with city street paving. The project will reduce the number of main failures

16

and improve water quality. In addition, the project will improve fire protection to more

17

than 750 gpm in locations which are currently below the City of San Diego Fire

18

Department guidelines. This project is scheduled to begin with design, permitting, and

19

construction dollars in 2018, followed by similar activities in 2019 and 2020. California

20

American Water recommends that the Commission approve this IP for the requested

21

dollar amount and the present timeframe. Additional information, justification, and

22

documentation can be found in the Capital Investment Project Work Papers for this

23

specific project.

24
25

2.

26

Project Code I15-300015, Replace 500 Feet of 20-inch Diameter Main
in Palm Avenue (Project A-4)

27

The estimated cost for this proposed investment project is shown in Table 4B above. The

28

need for this capital project was previously reviewed and “conditionally approved” in the
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2013 GRC, but it was unable to move forward because of planned City of Imperial Beach

2

improvements and a paving moratorium in this specific area. This 20-inch diameter

3

welded steel, cement lined water main was installed in 1959, has a history of main

4

breaks, and based upon investigations during main break repairs, there is evidence of

5

advanced structural deterioration, representing a risk to system operations. In December

6

2011 there was a break on this section of main that cost $250,000 to repair. The section

7

in question is approximately 500 linear feet along Palm Avenue between 3rd Street and

8

Corvina Street. The pipe has “blown out” and “deteriorated” which has resulted in

9

“holes” in the pipe. This pipe requires either a full “structural” rehabilitation or full pipe

10

replacement. It is recommended that open-cut replacement of 500 feet of the existing 20-

11

inch steel main with be performed with the installation of new ductile iron pipe. It is also

12

recommended that the replacement of this pipe be coordinated with the City of Imperial

13

Beach, since the City has a plan to replace an existing storm drain in this vicinity. The

14

project is still needed due to the issues with the existing main material. At this time, this

15

project is scheduled to begin with design dollars in late 2018, followed by construction

16

being completed by the end of 2019. California American Water recommends that the

17

Commission approve this IP for the requested dollar amount and the present timeframe.

18

Additional information, justification, and documentation can be found in the Capital

19

Investment Project Work Papers for this specific project.

20
21

3.

Project Code I15-300012, Advanced Metering Infrastructure (AMI)

22

The estimated cost for this proposed investment project is shown in Table 4B above.

23

This proposed capital investment project is discussed previously in my testimony at the

24

beginning of the Proposed New Projects section, and should be referenced for additional

25

information since it is a common project to four districts: San Diego County, Monterey

26

County, Ventura County and Los Angeles County.

27
28
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4.

Project Code I15-300014, Coronado Reliability Supply Project

2

The estimated cost for this proposed investment project is shown in Table 4B above. The

3

project includes a study and analysis of recommended improvements to reduce the

4

potential of catastrophic failure of a key facility within California American Water’s

5

systems. The existing 20” transmission line that crosses the San Diego Bay into

6

Coronado from the City of San Diego near the Marriott Hotel in Downtown San Diego is

7

considered a high ranking facility of concern. This project is scheduled to begin with

8

preliminary engineering work, design and permitting activities in 2018, and this effort

9

would continue through 2019 and into 2020. California American Water recommends

10

that the Commission approve this IP for the requested dollar amount and the present

11

timeframe. Additional information, justification, and documentation can be found in the

12

Capital Investment Project Workpapers for this specific project.

13
14

5.

15

Project Code I15-300016, Coronado/Imperial Beach Recycle Water
Project

16

This proposed capital investment project includes the delivery of recycled water for use

17

in landscaping for existing customers such as parks, schools, city landscaping, and golf

18

courses within different portion of California American Water’s service area. It is

19

estimated the project would require a significant amount of recycled water pipe to be

20

installed between the City of Imperial Beach and the City of Coronado. The potential

21

customers receiving service would have separate meters and rates for the proposed

22

recycled water supply. As currently envisioned, the proposed project will also include a

23

Wastewater Reclamation Facility, the location of which has not yet been determined. It

24

is expected this facility would have appropriate treatment processes to meet the

25

California Code of Regulations Title 22 criteria for disinfected tertiary recycled water for

26

irrigation. This project is still in the very preliminary planning stages, and initial

27

discussions with interested parties have expressed an interest in the project. This project

28

is scheduled to begin with preliminary engineering design and permitting activities
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beginning in 2018, and continuing into 2019 and 2020, in parallel with previous design

2

discussion provided for IP I15-5300010. It is planned that initial construction would

3

most likely not commence until the timeframe of the 2019 GRC (2021 to 2023).

4

California American Water recommends that the Commission approve this IP as an

5

Advice Letter project for the requested dollar amount and the present timeframe.

6

Additional information, justification, and documentation can be found in the Capital

7

Investment Project Work Papers for this specific project.

8
9
10

C.

Ventura County District Proposed Investment Projects

Table 4C. Proposed New Investment Projects for Ventura County District

11
3-Yr Total

2018 Plant
Expend.

12

FP #

FP Description

13

I15-510038

Advanced Metering Infrastructure

14

I15-510039

Booster Station Upgrades Program

$750,000

15

I15-510034

Tier 4 Compliance/Standby Power

$300,000

$300,000

$4,517,954

$773,055

$3,467,954

$473,055

2019 Plant
Expend.
$2,165,986

2020 Plant
Expend.
$828,913
$750,000

16
17

Total Investment Projects

$2,165,986

$1,578,913

18
19

1.

Project Code I15-510038, Advanced Metering Infrastructure (AMI)

20

The estimated cost for this proposed investment project is shown in Table 4C above.

21

This proposed capital investment project is discussed previously in my testimony at the

22

beginning of the Proposed New Projects section, and should be referenced for additional

23

information since it is a common project to four districts: San Diego County, Monterey

24

County, Ventura County and Los Angeles County.

25
26
27
28
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2.

Project Code I15-510039, Booster Station Upgrades Program

2

The estimated cost for this proposed investment project is shown in Table 4C above.

3

This IP is the result of a CBA study that was performed on various booster station

4

locations within the Ventura County District. This study is included within the Capital

5

Investment Project Work Papers as part the Ventura County District CPS as an appendix.

6

This IP is a continuation of a previously approved program of different booster station

7

upgrades or replacements, as recommended by the CBA study. This ongoing overall

8

project is scheduled to begin with design in early 2020, with construction to follow in

9

2020, and most likely continue with one or two additional booster stations in 2021, 2022

10

and into 2023. California American Water recommends that the Commission approve

11

this IP for the requested dollar amount and the present timeframe. Additional

12

information, justification, and documentation can be found in the Capital Investment

13

Project Work Papers for this investment project.

14
15

3.

Project Code I15-510034, Tier 4 Compliance/Standby Power

16

The estimated cost for this proposed investment project is shown in Table 4C above.

17

This proposed capital investment project is similar to Project Code I15-500058, discussed

18

previously in my testimony in the Proposed New Projects section of the Los Angeles

19

County District. That specific project should be referenced for additional information,

20

since it is similar to this project in Ventura County District and to the project in the

21

Monterey County District. In summary, all engines in the Ventura County District are

22

either Tier 1 or “Tier 0” uncertified engines. Thus, two engines must be removed from

23

service by January 1, 2017 and over 5 must be replaced with Tier 4 engines by January 1,

24

2020. This project is scheduled to begin in early 2018, with purchase of appropriate

25

equipment and installation work to follow and be completed in 2018, and continued

26

annually for the next several years until all the targeted facilities for standby power have

27

been completed. California American Water recommends that the Commission approve

28

this IP for the requested dollar amount and the present timeframe. Additional
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information, justification, and documentation can be found in the Capital Investment

2

Project Work Papers for this specific project.

3
4

D.

Monterey County Water District Proposed New Investment Projects

5
6

Table 4D. Proposed New Investment Projects for Monterey County Water District

7
8
9
10
11
12
13
14
15
16
17
18
19
20
21

FP #
I15400093
I15400090
I15400089
I15400092
I15400095
I15400096
I15400104
I15400106
I15400108
I15400109
I15400110
I15400113
I15400114

FP Description
Well Rehabilitation and
Replacement Program (2018-2020)
Booster Station Rehabilitation
Program (2018-2020)
Main Replacement Program (20182020)
Valve and PRV Replacement
Program (2018-2020)

3-Yr Total

2018 Plant
Expend.

2019 Plant
Expend.

2020 Plant
Expend.

$3,000,000

$1,000,000

$1,000,000

$1,000,000

$1,500,000

$500,000

$500,000

$500,000

$6,000,000

$1,000,000

$3,000,000

$2,000,000

$900,000

$300,000

$300,000

$300,000

Fire Flow Improvement Program

$900,000

$300,000

$300,000

$300,000

SCADA Upgrade Program

$900,000

$300,000

$300,000

$300,000

Advanced Metering Infrastructure

$7,862,971

$999,686

$4,970,608

$1,892,677

New Well Development Program

$170,000

$50,000

$70,000

$50,000

Standby Power Generators

$750,000

$250,000

$250,000

$250,000

Los Padres Facility Improvements
Begonia Iron Removal Plant
Improvements

$300,000

$300,000

$1,250,000

$250,000

$750,000

$250,000

$707,350

$707,350

$556,200
$24,796,521

$81,000
$6,038,036

$475,200
$11,915,808

$6,842,677

Replace Carola Tank # 1
Replace Chualar Tank # 1
Total Investment Projects

22
23

1.

24
25
26
27
28

Project Code I15-400093 Well Rehabilitation and Replacement
Program (2018-2020).

Table 4D shows the requested budget for this investment project. This proposed
investment project is a continuation of well rehabilitation program adopted by the
Commission in the 2010 GRC and the 2013 GRC, with the additional scope of replacing
wells if the initial well evaluation indicates that rehabilitation is not sufficient. Basically,
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this proposed investment project consists of planned well rehabilitation and replacement

2

activities to maintain the performance and reliability of the Monterey System source of

3

supply wells. The Monterey System currently operates 35 active wells as its source of

4

supply. The bulk of the wells (14) are located in the Carmel River valley, with the rest

5

distributed in Seaside (5) and throughout the satellite systems (15 wells in Bishop,

6

Ambler, Toro, Ralph Lane, Ryan Ranch, Hidden Hills, and Chualar). To establish the

7

predicted well maintenance frequency, these wells are broken down into two general

8

categories based on the type of installed pump: submersible or line-shaft turbine. There

9

are 16 line-shaft turbine pump wells and 19 submersible pump wells currently in active

10

operation. Additional information regarding the Monterey System and recommendations

11

regarding well rehabilitation and replacement are in the GEI Consultant Draft Revised

12

Well Rehabilitation Program Report dated December 11, 2013, along with the GEI

13

Consultant report from June 01, 2015 titled Carmel Valley Well Evaluation. Due to the

14

unpredictable nature of individual well conditions which cannot be determined until a

15

well is examined, a decision on rehabilitation versus needing to drill a new well will be

16

made only after the well has been surveyed. This project is scheduled to continue with

17

design, permitting and construction activities in 2018, followed by similar activities in

18

2019 and continuing through 2020. California American Water recommends that the

19

Commission approve this IP for the requested dollar amount and the present timeframe in

20

order to maintain and sustain the performance and reliability of the Monterey System

21

wells. It is also important to highlight another critical benefit of this on-going project.

22

By insuring the reliability of the various wells located within the Carmel Valley aquifer,

23

California American Water can fully utilize these wells during times of excess flows in

24

the Carmel River. In this fashion, California American Water can obtain the maximum

25

possible diversion of water (under our allowable water rights) to be treated, transferred

26

and injected into the Seaside Basin for aquifer storage and recovery purposes.

27

Additional information, justification, and documentation, along with both GEI reports,

28

can be found in the Capital Investment Project Work Papers for this specific project.
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2

2.

3

Project Code I15-400090 Booster Station Rehabilitation Program
(2018-2020).

4

Table 4D shows the requested budget for this investment project. This proposed

5

investment project is a continuation of the booster station rehabilitation program adopted

6

by the Commission in the 2010 GRC and the 2013 GRC. This project will allow

7

California American Water to continue to maintain its fleet of booster pumping stations

8

within the Monterey County Water District. The District has 145 booster pumps that

9

compose the 68 booster pump stations. Ongoing rehabilitation is required to ensure that

10

the booster stations remain reliable and avoid costly failures. Also, many of the pumps

11

and some of the stations have reached or are nearing the end of their useful life. The

12

stations range in age from 5 to 89 years old. The average age of the stations is roughly 49

13

years. In order to evaluate the needs of the project, California American Water prepared

14

a CBA specifically for the booster stations in the Monterey County Water District as part

15

of the CPS effort. The goal of the CPS (and corresponding CBAs on infrastructure and

16

booster stations) was to identify and prioritize capital improvement projects necessary to

17

ensure the District can safely, adequately, and reliably distribute water to meet current

18

and projected water demands. The booster station CBA included a detailed analysis of

19

14 pumping stations, and evaluated various components such as: Site Conditions;

20

Structural Conditions; Process Equipment; Piping and Valves; Heating and Ventilation

21

Systems; Instrumentation and Control Systems; Electrical Systems; Standby Power; and

22

Fire and Safety. The remaining stations were evaluated through a desktop assessment

23

that evaluated pump and pump station service-life, pump efficiency, hydraulic capacity,

24

and power outage reliability. The following booster stations are recommended capital

25

projects for the 2018-2020 timeframe: Lower Airways; High Meadows; Del Mesa

26

Carmel; Encina; Carmel Woods. These booster stations are subject to change based on

27

operating conditions. This list is based on input from operators and engineering

28

consultants. The potential implementation of work on the recommended booster stations
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will be determined during the course of the project. The sequence of implementation of

2

these sites will be evaluated and made based on schedule requirements and due to

3

easement considerations and/or relocations. This investment project is scheduled to

4

begin with design and permitting activities in 2018, followed by construction beginning

5

later in 2018, and continuing with design, permitting and construction activities through

6

2019 and through the end of 2020. California American Water recommends that the

7

Commission approve this IP for the requested dollar amount and the present timeframe.

8

Additional information, justification and documentation can be found in the Capital

9

Investment Project Work Papers for this specific project.

10
11

3.

Project Code I15-400089 Main Replacement Program (2018-2020)

12

Table 4D shows the requested budget for this investment project. This proposed

13

investment program is a continuation of an investment project previously approved by the

14

Commission in the 2008 GRC, the 2010 GRC and the 2013 GRC for replacement of

15

distribution mains within the existing Monterey distribution network. The proposed

16

funding for 2018-2020 will continue to address portions of the highest priority areas

17

identified in the 2013 CBA. This investment program will allow for the replacement of a

18

total of 21,000 lineal feet of distribution mains within the Monterey County Water

19

District during this upcoming three-year GRC cycle (2018-2020). As further support for

20

this continuing investment project, California American Water’s 2015 Main Repair

21

Report found high frequency of leaks related to small diameter galvanized pipelines, and

22

small diameter unlined cast iron pipelines. The Report also identified problem areas that

23

existed in Monterey, Pacific Grove and Carmel Valley. The 2013 CBA provides a more

24

detailed analysis of areas containing high concentrations of main breaks. The CBA

25

identified over 30,000 lineal feet of mains that have exceeded their useful life as evident

26

by excessive break records, and need to be replaced. The CBA has grouped these mains

27

into various project areas. Funds requested in this investment program will allow for the

28

replacement of approximately 15,000 lineal feet of the highest ranking projects identified
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through the CBA process. This project is scheduled to continue with design, permitting,

2

and construction activities in 2018, followed by similar activities in 2019 and continuing

3

until completion in 2020. California American Water recommends that the Commission

4

approve this IP for the requested dollar amount and the present timeframe. Additional

5

information, justification, and documentation, including the 2015 Main Repair Report,

6

can be found in the Capital Investment Project Work Papers for this specific project.

7
8

4.

9

Project Code I15-40092 Valve and PRV Replacement Program (20182020)

10

Table 4D shows the requested budget for this investment project. This proposed

11

investment project is a continuation of a mainline valve replacement project that was first

12

adopted by the Commission in its decision for the 2008 GRC, and continued to be

13

approved for the 2010 GRC and the 2013 GRC. The 2012 CBA identified that

14

approximately 40% of the 13,000 valves in the Monterey System were over 40 years-old.

15

Operations staff reported that often during shut downs to isolate main breaks they found

16

many of the valves broken or inoperable which resulted in the necessity to shut down

17

larger numbers of customers. As valves are exercised, information is collected on each

18

valve that is linked to a GIS database. Information includes the physical location and size

19

of the valve along with condition of the valve. In addition, California American Water

20

regularly discovering broken valves during shut-downs while addressing main breaks, it

21

will also start replacing valves based on age. The proposed funding level for this project

22

will allow for the replacement of approximately 60 the highest priority valves. This

23

project also addresses rehabilitation of the approximately 70 diaphragm valves (altitude

24

and pressure regulating valves) within the distribution system. Altitude valves are

25

typically located at tank sites to prevent overflowing, and pressure regulating valves are

26

typically located in where high pressures need to be reduced to prevent damage to

27

distribution infrastructure and customer lines. To ensure that diaphragm valves are

28

rehabilitated on at least a 20-year schedule, California American Water must rehabilitate
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approximately 4 valves per year. This project is scheduled to continue with design,

2

permitting, and construction activities in 2018, followed by similar activities in 2019 and

3

continuing until completion in 2020. California American Water recommends that the

4

Commission approve this IP for the requested dollar amount and the present timeframe.

5

Additional information, justification, and documentation can be found in the Capital

6

Investment Project Work Papers for this specific project.

7
8
9

5.

Project Code I15-400095 Fire Flow Improvement Program

Table 4D shows the requested budget for this investment project. This proposed

10

investment program was previously approved by the Commission in the 2013 GRC, and

11

will allow for the construction of the highest priority pipeline and booster pumping

12

improvements to increase fire flow capabilities within the Monterey District. Priority

13

projects will be determined in conjunction with the Fire Flow Task Force which consists

14

of California American Water personnel and local fire agency staff. The 2008 Monterey

15

GRC Decision created a task-force comprised of representatives from the local fire

16

department. The purpose of the task force was to work with Fire Chiefs to determine the

17

highest priority improvements needed within the systems to address fire flow

18

deficiencies. California American Water performed a comprehensive fire flow

19

improvement study to identify and prioritize deficiencies within the System. The study

20

was performed using a GIS based hydraulic model that simulated both the current and

21

improved fire flow capabilities, and presented a prioritized list of specific projects to

22

address deficiencies. Over 18 miles of pipeline improvement projects along with multiple

23

pumping and storage projects were identified. Working through the Fire Flow Task

24

Force, the identified projects will be used to facilitate discussions with the local Fire

25

Chief’s about their highest areas of concern. The requested budget will allow for

26

construction of approximately 3,000 lineal feet of pipeline improvements. California

27

American Water recommends that the Commission approve this IP for the requested

28

dollar amount and the present timeframe. Additional information, justification, and
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documentation can be found in the Capital Investment Project Work Papers for this

2

specific project.

3
4

6.

Project Code I15-400096 SCADA Upgrade Program

5

Table 4D shows the requested budget for this investment project. This proposed

6

investment program is a continuation of an investment project previously approved by the

7

Commission in the 2010 GRC and the 2013 GRC for ongoing replacement of SCADA

8

equipment within the Monterey County District. The SCADA system monitors and

9

controls the production, treatment, distribution, and storage facilities with the Districts.

10

Improvements scheduled for 2018-2020 include the following:


11

The Main Monterey system improvements would include new SCADA

12

equipment and/or new cellular modem equipment being installed at critical

13

facilities, as identified by operations staff.


14

The Ambler Park satellite system improvements would include new SCADA

15

equipment and/or new cellular modem equipment being installed at the

16

following facilities, as appropriate: 1) Well No. 4; 2) Well No. 5; 3) Well No. 6;

17

4) Lower Rimrock Booster Station; 5) Meyer Pneumatic Tank; 6) Upper

18

Rimrock Booster Station; 7) Lower Rimrock Tank; and 8) Upper Rimrock Tank.


19

The Chualar satellite system improvements would include new cellular modem

20

equipment being installed at all the facilities, as appropriate (two tanks, booster

21

pump, fire pump, Well No. 3 and Well No. 4).


22

The Ralph Lane satellite system improvements would include new SCADA

23

equipment and/or new cellular modem equipment being installed at all the

24

facilities, as appropriate (tank, well, booster pump and fire pump).

25

An upgraded SCADA system in the Monterey County District will improve system

26

reliability and quality of service, reduce the risk of service disruptions, replace obsolete

27

systems that have reached the end of their useful lives, and improve operational

28

efficiency. California American Water recommends that the Commission approve this IP
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for the requested dollar amount and the present timeframe. Additional information,

2

justification, and documentation can be found in the Capital Investment Project Work

3

Papers for this specific project.

4
5

7.

Project Code I15-400104, Advanced Metering Infrastructure (AMI)

6

The estimated cost for this proposed investment project is shown in Table 4D above.

7

This proposed capital investment project is discussed previously in my testimony at the

8

beginning of the Proposed New Projects section, and should be referenced for additional

9

information since it is a common project to four districts: San Diego County, Monterey

10

County, Ventura County and Los Angeles County.

11
12

8.

Project Code I15-400106, New Well Development Program

13

The estimated cost for this proposed investment project is shown in Table 4D above.

14

This project is scheduled to begin with design and evaluation work in 2018, followed by

15

similar activities in 2019 and continuing until completion in 2020. The key items that

16

would be evaluated in this timeframe include:

17



Depth of aquifer at lower Carmel Valley

18



Drilling of new wells (i.e., where they should be drilled)

19



Additional support for ASR during winter

20



Wells to shut down during summer

21

California American Water recommends that the Commission approve this IP for the

22

requested dollar amount and the present timeframe. Additional information, justification,

23

and documentation can be found in the Capital Investment Project Work Papers for this

24

specific investment project.

25
26

9.

Project Code I15-400108, Standby Power Generators

27

The estimated cost for this proposed investment project is shown in Table 4D above.

28

This proposed capital investment project is similar to Project Code I15-500058, discussed
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previously in my testimony in the Proposed New Projects section of the Los Angeles

2

County District. That specific project should be referenced for additional information,

3

since it is similar to this project in the Monterey County District and to the project in the

4

Ventura County District. Based on the previous discussion of the regulations, the

5

generators that are proposed for replacement are listed below.

6

Chualar

Install year not know, limited operations

7

Huckleberry

Tier 1, installed 1995

8

Upper Estrella De Oro

Install year not known, limited operations

9

This project is scheduled to begin in early 2018, with purchase of appropriate equipment

10

and installation work to follow and be completed in 2018, and continued annually for

11

2019 and 2020 until the targeted facilities for standby power have been completed.

12

California American Water recommends that the Commission approve this IP for the

13

requested dollar amount and the present timeframe. Additional information, justification,

14

and documentation can be found in the Capital Investment Project Work Papers for this

15

specific project.

16
17

10.

Project Code I15-400109, Los Padres Facility Improvements

18

The estimated cost for this proposed investment project is shown in Table 4D above.

19

California American Water owns and operates Los Padres Dam along the Carmel River.

20

The Los Padres Dam was built in 1949 and is designed with mechanical valves and gates

21

in order to safely operate the dam. California American Water recently hired AECOM to

22

perform a mechanical assessment of the Los Padres Dam Valves. The assessment, dated

23

December 16, 2015, is based on documents obtained from California American Water

24

and the California Division of Safety of Dams (DSOD), a site inspection held on

25

November 20, 2015, and interviews with CAW personnel. The report contains long term

26

recommendations which include the following: (1) inspect the inlet slide gate and stem;

27

(2) inspect the outlet conduit; (3) improve even walkway to the outlet concrete structure

28

for inspections and operations; (4) repair the concrete outlet structure; (5) remove the
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original 30‐inch diameter butterfly valve and bridge with flanged pipe spool; (6) remove

2

the outlet structure 30‐inch diameter butterfly valve flange weld bead and valve; (7)

3

refurbish valve and reinstall and repair flange leaks as required; (8) repack the middle

4

two outlets, 12‐inch diameter gate valves, bonnet gland packing and refurbish valves as

5

required; (9) perform condition assessment (wall thickness measurements) on the 12‐inch

6

diameter habitat flow steel pipeline; (10) replace spillway slide gate frame, stem, and

7

hardware and refurbish the slide as required; and (11) remove all hand wheels from the

8

outlet structure. In order to safely operate the dam and minimize risk to the dam’s

9

operation, these improvements need to be implemented starting with the highest priority

10

recommendations. This project is scheduled to begin with design, permitting, and

11

construction activities for the long-term improvements in 2018. California American

12

Water recommends that the Commission approve this IP for the requested dollar amount

13

shown below. Additional information, justification, and documentation can be found in

14

the Capital Investment Project Work Papers for all three capital projects that comprise

15

this combined investment project.

16
17

11.

Project Code I15-400110, Begonia Iron Removal Plant Improvements

18

The estimated cost for this proposed investment project is shown in Table 4D above. The

19

Begonia Iron Removal Plant has a total of 18 multimedia green sand and anthracite

20

filters. Of the 18 horizontal pressure filters, twelve are 10’ diameter filters and six are 8’

21

diameter filters. The filters were designed to backwash with air followed by water.

22

Currently, the air wash lines are inoperable due to leaking valves and leaks on the air

23

piping. Consequently filters are not being properly backwashed and if not addressed

24

would require complete replacement of media. Additional information regarding the

25

Begonia Iron Removal Plant’s current condition and recommended improvements can be

26

found in Tonka’s report named ‘Begonia, Ca – Water Treatment Plant, Field Report and

27

Plant Assessment’, prepared by Tonka Water. The connections to leaking air actuator

28

valves are currently isolate with blind flanges. Additional work in 2016 will likely
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involve an inspection report and topping off of media. This will allow the plant to operate

2

until the project begins with design, permitting, and construction activities in 2018,

3

followed by similar activities in 2019 and continuing until completion by the end of

4

2019. California American Water recommends that the Commission approve this IP for

5

the requested dollar amount and the present timeframe. Additional information,

6

justification, and documentation can be found in the Capital Investment Project Work

7

Papers for this combined investment project.

8
9

12.

Project Code I15-400113, Replace Carola Tank # 1

10

The estimated cost for this proposed investment project is shown in Table 4D above. The

11

Carola Tank # 1 is a 125,000 gallon bolted steel distribution storage tank located in the

12

Monterey District. In 2015, California American Water engaged Tank Industry

13

Consultants Inc. (“TIC”) to perform an inspection for the rehabilitation of the tank.

14

During the inspection process TIC recommended that the tank be replaced rather than

15

rehabilitated. This was due to the significant costs that would be incurred during

16

rehabilitation and the desire to replace older bolted steel tanks with a new welded steel

17

tank. TIC summarized their initial findings and recommendations in a report dated

18

March 28, 2016 This project is scheduled to begin only with design dollars in early 2018,

19

followed by construction that is planned to be complete by the end of 2018. California

20

American Water recommends that the Commission approve this IP for the requested

21

dollar amount and the present timeframe. Additional information, justification, and

22

documentation, including the TIC report, can be found in the Capital Investment Project

23

Work Papers for this specific project.

24
25

13.

Project Code I15-400114, Replace Chualar Tank # 1

26

The estimated cost for this proposed investment project is shown in Table 4D above. The

27

Chualar Tank # 1 is a 99,400 gallon bolted steel distribution storage tank located in the

28

Chualar satellite service area of the Monterey County Water District. In 2016, California
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American Water engaged Tank Industry Consultants Inc. (“TIC”) to perform an

2

inspection for the rehabilitation of the tank. During the inspection process TIC

3

recommended that the tank be replaced rather than rehabilitated. This was due to the

4

significant costs that would be incurred during rehabilitation and the desire to replace

5

older bolted steel tanks with a new welded steel tank. TIC summarized their initial

6

findings and recommendations in a report dated March 7, 2016. This project is scheduled

7

to begin with design in 2018, followed by construction being completed by the end of

8

2019. California American Water recommends that the Commission approve this IP for

9

the requested dollar amount and the present timeframe. Additional information,

10

justification, and documentation, including the TIC report, can be found in the Capital

11

Investment Project Work Papers for this specific project.

12
13
14

E.

Toro District Proposed Investment Projects

Table 4E. Proposed New Investment Projects for Toro Water District

15
16

FP #

FP Description

17

I15-480010

Booster Station Replacement

18

I15-480012

SCADA Enhancements

3-Yr Total

2018 Plant
Expend.

$135,000

$45,000

$25,000

$25,000

$160,000

$70,000

2019 Plant
Expend.

2020 Plant
Expend.

$45,000

$45,000

$45,000

$45,000

19
20

Total Investment Projects

21
22

1.

Project Code I15-480010 Booster Station Replacement

23

Table 4E shows the requested budget for this investment project. This proposed

24

investment project consists of replacement of the Lower Markham booster pumping

25

station. The pumps, piping, valves, and electrical will need to be replaced. In addition the

26

enclosure building also needs to be replaced. This project is similar to what was recently

27

completed for the Upper Markham Booster Station rehabilitation project, except it does

28

not include a pneumatic tank. This project is scheduled to continue with design,
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permitting, and construction activities in 2018, followed by similar activities in 2019 and

2

continuing until completion in 2020. California American Water recommends that the

3

Commission approve this project for the requested dollar amount and present timeframe.

4

Additional information can be found in the Capital Investment Project Work Papers.

5
6

2.

Project Code I15-480012 SCADA Enhancements

7

Table 4E shows the requested budget for this investment project. This proposed

8

investment project consists of new SCADA equipment and/or new cellular modem

9

equipment being installed at the following facilities in the Toro satellite system, as

10

appropriate: 1) Well No. 3; 2) Corte Cordillera Tank and Booster Station; 3) Lower

11

Markham Ranch Tank and Booster Station; 4) Upper Markham Ranch Tank and Booster

12

Station; and 5) Vista Dorado Tank. This project is scheduled for design and

13

implementation in 2018. California American Water recommends that the Commission

14

approve this project for the requested dollar amount and present timeframe. Additional

15

information can be found in the Capital Investment Project Work Papers.

16
17
18

F.

Garrapata Water System Projects

Table 4F. Proposed New Investment Projects for Garrapata Water System

19
20

FP #

FP Description

21
22

25

2018 Plant
Expend.

2019 Plant
Expend.

2020 Plant
Expend.

Process Plant Facilities and
R15-54Q1

23
24

3-Yr Total

Q72.
A72.

Equipment

$150,000

$50,000

$50,000

$50,000

Total Recurring Projects

$150,000

$50,000

$50,000

$50,000

What are the proposed projects for the Garrapata Water System?
First, there are no proposed new capital IPs for the Garrapata system. This system will be

26

relying upon its Recurring Project budgets, previously described in my testimony and in

27

the capital investment project Work Papers. It should be recognized that California

28

American Water only recently acquired the assets of this small water system. As shown
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in Table 4F above, there are budget dollars for R15-54Q1 in all three years of this GRC

2

(2018-2020). The work to be performed under R15-54Q1 will address improvements

3

such as the implementation of a SCADA system, which will allow operators to react

4

quickly to issues requiring resolution and that could affect continued adequate water

5

pressure being maintained and the treatment plant being fully operational. The new

6

SCADA equipment and/or new cellular modem equipment would be installed at the

7

following facilities, as appropriate: 1) Water Treatment Plant; 2) Well No. 1; 3) Well No.

8

2; 4) Twin Tanks and Booster Station; 5) Corral Tank and Booster Station; and 6) Upper

9

Tank. As always, California American Water plans to prioritize the SCADA work to

10

ensure the provision of safe, adequate and reliable water service to customers. California

11

American Water recommends that the Commission approve this RP project for the

12

requested dollar amounts over this GRC timeframe (2018-2020).

13
14
15
16

G.

Monterey County Wastewater District Projects

Table 4F. Proposed New Investment Projects for Monterey County Wastewater District
FP #

FP Description

3-Yr Total

2018 Plant
Expend.

2019 Plant
Expend.

2020 Plant
Expend.

17

R15-42B1

Mains-Replaced / Restored

$90,000

$30,000

$30,000

$30,000

18

R15-42L1

SCADA Equipment and Systems

$36,000

$12,000

$12,000

$12,000

19

R15-42P1

Tools and Equipment

$45,000

$15,000

$15,000

$15,000

Equipment

$600,000

$200,000

$200,000

$200,000

Total Recurring Projects

$771,000

$257,000

$257,000

$257,000

20
21

Process Plant Facilities and
R15-42Q1

22
23
24

Q73.
A73.

What are the proposed projects for the Monterey County Wastewater District?
There are no proposed new capital IPs for the Monterey County Wastewater District.

25

This system will be relying upon its Recurring Project budgets as shown in Table 4F, and

26

as previously described in my testimony and in the capital investment project Work

27

Papers.

28
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2

H.

Table 4G. Proposed New Investment Projects for Sacramento County District

3
4
5
6

FP
#
I15-600083
I15-600071

7

I15-600068

8

I15-600082
I15-600072

9
10
11
12
13
14

Sacramento County District Proposed Projects

I15-600085
I15-600088
I15-600089
I15-600091
I15-600094
I15-600093

FP Description
Backyard Main Replacement
Program
Annual Well Rehabilitation
Program
Annual SCADA Maintenance
Program
Standby Generators
Improvement
Main Replacement Program
Water Level Monitoring
Program
Water Quality Monitoring
Program
Dunnigan Water System
Improvements
Sacramento Recycle Water
Project
Nut Plains Well PFOA
Treatment
New Lincoln Oaks Well
Total Investment Projects

3-Yr Total

2018 Plant
Expend.

$2,000,000

2019 Plant
Expend.

2020 Plant
Expend.

$1,700,000

$300,000

$4,400,000

$700,000

$2,300,000

$1,400,000

$2,100,000

$700,000

$700,000

$700,000

$500,000
$4,500,000

$500,000
$700,000

$2,300,000

$1,500,000

$750,000

$250,000

$250,000

$250,000

$750,000

$100,000

$325,000

$325,000

$800,000

$800,000
$250,000

$500,000

$700,000
$1,200,000
$9,725,000

$4,975,000

$750,000
$750,000
$1,400,000
$18,700,000

$50,000
$200,000
$4,000,000

15
16
17
18
19
20
21
22
23
24
25
26
27
28

1.

Project Code I15-600083, Backyard Main Replacement Program

The estimated cost for this proposed investment project is shown in Table 4G above.
California American Water still owns and operates several miles of 4-inch to 8-inch
backyard water mains in the Parkway, Lincoln Oaks, Suburban/Rosemont, Arden and
Antelope water systems. The intent of this project is to continue the systematic backyard
main replacement program to properly sized distribution mains within the public rightsof-way. New water mains and appurtenances would be installed within roadways and
new services run to meter boxes at the curb line. The project also requires replumbing a
portion of the service lines from the meter box to approximately 10 feet away from the
houses to reconnect the new service lines entering the properties from the street side of
the properties and grounding the new service line in accordance with local requirements
since many of the residences involved were built in the 1950’s and are not in compliance
with current building codes. This capital project addresses multiple strategic objectives
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for California American Water. Not only does this program involve upgrading the piping

2

network by replacing older, small diameter pipes, but it eliminates problems associated

3

with backyard mains such as difficulty inspecting the mains, reading meters and repairing

4

main breaks due to property access issues. The benefits of this project are improved

5

customer service through a reduction in encroachment into private properties to repair the

6

existing mains. Replacement of antiquated mains also reduces the likelihood of service

7

interruptions due to main breaks and a reduction in unaccounted for water. This project

8

is scheduled to begin with design dollars in 2019, followed by construction beginning in

9

2019 and completion is planned to be completed by the end of 2020. California

10

American Water recommends that the Commission approve this IP for the requested

11

dollar amount and the present timeframe. Additional information, justification and

12

documentation can be found in the Capital Investment Project Work Papers for this

13

specific project.

14
15

2.

16

Project Code I15-600071, Sacramento District Annual Well
Rehabilitation Program

17

The estimated cost for this proposed investment project is shown in Table 4G above. It is

18

important to recognize that the Commission has approved this annual program on a

19

continuous basis dating back to the 2004 GRC. This program has been successful, and

20

the Commission has repeatedly approved the program and its estimated capital

21

expenditures in subsequent GRCs (2007, 2009, 2010 and 2013). The Sacramento County

22

District includes nine (9) separate service areas that provide potable water to

23

approximately 58,000 customers in the greater Sacramento area. The primary source of

24

water supply for the nine water systems includes over one hundred individual wells,

25

which operate in conjunction with treatment plants, storage tanks, bulk water metering

26

facilities, and related infrastructure to deliver high quality water to California American

27

Water customers. An updated Well Rehabilitation Master Plan was prepared in February

28

2016 to address the long-term sustainability of the well supply systems including routine
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maintenance, major equipment replacement and complete well replacement. The Well

2

Rehab Master Plan prioritizes and schedules well rehabilitation improvements based on

3

safety, need, well performance, importance, and availability. The well sites anticipated

4

for rehabilitation in the 2018 to 2020 timeframe include the following (shown by service

5

area for ease of reference):

6
7

Antelope – Fox Park, Elverta, Covered Wagon, Falcon View and Cook-Riolo.

8

Arden – Wyda, Howe and Fairlake # 1.

9

Isleton – Isleton 3A and Isleton 3B.

10

Lincoln Oaks – Andrea # 1, Rushmore, Twin Parks and Glass Slipper.

11

Parkway – Wilbur # 2, Countryside # 2, Lippi, Southgate, Auberry, Hemingway, and

12

Parksite # 2.

13

Suburban/Rosemont – Westporter, West La Loma, Woodman, Point Reyes, Folsom

14

Bradshaw, Oaken Bucket, Tally Ho # 2, Swansea, Nut Plains and Rogue River.

15

Walnut Grove – Grove # 1.

16
17

These aging wells require ongoing maintenance, rehabilitation, and replacement of

18

above- and below-ground facilities to continue to provide safe and reliable water supply

19

to customers. It is recommended the Sacramento County District continue its ongoing

20

well rehabilitation program for above- and below-grade well improvements, since these

21

type of projects will: 1) increase system reliability; 2) maintain system capacity; 3) avoid

22

catastrophic failures; 4) minimize potential violations issued by the CDPH; 5) extend the

23

useful life of the well facilities; 6) improve operability; 7) improve site aesthetics; 8)

24

improve site safety; 9) increase customer satisfaction; and 10) decrease future

25

unanticipated costs. This annual project has design and construction dollars reflected for

26

each year of this GRC cycle (2018-2020). California American Water recommends that

27

the Commission approve this IP for the requested dollar amount and the present

28

timeframe. Additional information, justification and documentation can be found in the
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Capital Investment Project Work Papers for this specific project.

2
3

3.

4

Project Code I15-600068, Sacramento District Annual SCADA
Maintenance Program

5

The estimated cost for this proposed investment project is shown in Table 4G above. For

6

reference, this proposed investment program was previously approved by the

7

Commission in the 2013 GRC. A significant investment in SCADA equipment has been

8

made in the past several years to provide better monitoring and control of California

9

American Water facilities throughout the Sacramento County District. It is important to

10

recognize that the Sacramento District has systematically installed SCADA equipment at

11

most of its ninety nine (99) operational well sites and five (5) treatment plants, one

12

booster station site, three (3) tank and booster station sites and numerous inter-agency

13

water connections, thereby giving it the ability to monitor and control the facilities and

14

maintain adequate potable water for the area customers. In order to keep this system up

15

and running, SCADA equipment must be maintained and updated. By continuing this

16

historical program of providing ongoing maintenance and replacement of SCADA

17

equipment, California American Water will be able to maintain and enhance water

18

system reliability. A comprehensive and well-maintained SCADA system allows for

19

more effective system control, monitoring, record keeping, and system diagnosis. Of

20

particular benefit is monitoring the production of these 100+ wells that California

21

American Water owns and maintains within the Sacramento District. The SCADA

22

upgrades have been part of a long-term strategy to upgrade, improve and keep current

23

CAW's SCADA systems in its Sacramento District to assure the following benefits: a)

24

continued reliability and quality of service; b) reduce risk of service disruptions; c)

25

maintain serviceability of CAW's assets; d) replace obsolete systems that have reached

26

the end of their useful life; and e) maintain and improve overall operational efficiency.

27

This recommended project will maintain and replace SCADA components as needed to

28

sustain their existing SCADA infrastructure.
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This annual program is scheduled for

 1

design and construction dollars in each year of this GRC cycle (2018-2020). California

2

American Water recommends that the Commission approve this IP for the requested

3

dollar amount and the present timeframe.

4

documentation can be found in the Capital Investment Project Work Papers for this

5

specific project.

Additional information, justification and

6
7

4.

8

Project Code I15-600082, Sacramento District Standby Generators
Improvement

9

The estimated cost for this proposed investment project is shown in Table 4G above. The

10

project includes implementing a prioritized plan for replacement as outlined in the

11

Generator Planning Report completed for the Sacramento District, which is part of the

12

Capital Investment Project Work Papers.

13

maintaining, replacing, and in some cases, relocating generators within selected

14

Sacramento District water systems in order to provide the water supply reliability

15

benchmark established by CAW policy while conforming with the balance of the

16

evaluation criteria established in the Generator Planning Report for the Sacramento

17

District systems. In summary, the Generator Planning Report evaluated the capability to

18

meet current and projected average day demands for the seven District systems which

19

will continue to rely on groundwater as their primary water source. System well capacity

20

relative to future system demands, the distribution of standby power equipped wells and

21

pumped storage facilities, relative to system hydraulics, to power substation grids, and

22

also with respect to school proximity which restricts the ability to exercise diesel fueled

23

generators due to emissions regulations were evaluated for all generators. The age of the

24

existing generators relative to anticipated useful life and/or need to retrofit the units to

25

comply with current and impending tightening of air quality regulations was also a key

26

planning criteria. Additionally, the electrical connections are evaluated for compliance

27

with current codes and adaptability with the new equipment. Based on the regulations,

28

the generators that are proposed for replacement are listed below.
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This plan was specifically developed for

 1

Mather Tank

Located near school

2

Countryside Treatment Plant

Tier 1, installed 1992-limited operation

3

Vintage Treatment Plant

Tier 0

4

Van Maren Well Site

Tier 2, installed 1996 – limited operation

5

This program is scheduled for design and equipment purchase to occur in 2018.

6

California American Water recommends that the Commission approve this IP for the

7

requested dollar amount and the present timeframe. Additional information, justification

8

and documentation can be found in the Capital Investment Project Work Papers for this

9

specific project.

10
11

5.

12

Project Code I15-600072, Sacramento District Main Replacement
Program

13

The estimated cost for this proposed investment project is shown in Table 4G above. For

14

reference, this proposed investment program was previously approved by the

15

Commission in the 2013 GRC. The project allows for a planned and prioritized method

16

for replacing mains which have been identified as system bottlenecks and require

17

upsizing, provide a complete loop, or upsizing of mains to develop a transmission main.

18

These projects will allow conveyance of water through the various Sacramento systems

19

in the most efficient and cost effective manner, while potentially reducing energy costs.

20

Miscellaneous, geographically distinct sections of water main within the nine Sacramento

21

District service areas require replacement, upsizing, and/or looping to improve water

22

pressures, water quality, and system reliability and redundancy. To ensure these

23

improvements occur in the proper location, careful consideration is given on where to

24

replace pipe in the specific service area. Typically, the operational requirements of the

25

entire system, system changes from the addition of distribution storage tanks, booster

26

pump stations, and increased supply from wells or interconnections are examples that are

27

considered. Implementing a programmatic annual approach is recommended to allow for

28

a planned and prioritized method for replacing mains which have either been identified
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by the California American Water Operations staff as exhibiting a higher than normal

2

rate of breaks or customer complaints, or through the CBA as reaching the end of their

3

projected useful life. The benefits of this project are improved customer service, system

4

reliability, water quality and pressure. Addressing necessary infrastructure improvements

5

in a programmatic, planned fashion is more cost effective. This annual program is

6

scheduled for design and construction dollars to occur within each year of this GRC cycle

7

(2018-2020). California American Water recommends that the Commission approve this

8

IP for the requested dollar amount and the present timeframe. Additional information,

9

justification and documentation can be found in the Capital Investment Project Work

10

Papers for this specific project.

11
12

6.

Project Code I15-600085, Water Level Monitoring Program

13

The estimated cost for this proposed investment project is shown in Table 4G above.

14

This capital investment project involves the procurement and installation of water level

15

monitoring equipment at selected well sites throughout the Sacramento District. As part

16

of this project, a study will be conducted to identify all wells that can be equipped with

17

level monitors within the Sacramento District. Initially, the scope of this project is to

18

install well level monitoring at 15 of the most critical well sites. Wells within the

19

Sacramento District either have old and unreliable water level monitoring equipment, or

20

do not have any equipment at all. Aquifer levels are recorded on a monthly basis and

21

operators currently have to manually check water levels at well sites. An understanding

22

of where aquifer levels are in relation to pumping levels at any given time will improve

23

operational efficiency across the Sacramento District and assist in wire-to-water

24

efficiency objectives. Installation of water level monitoring equipment will also allow

25

operators to determine which wells can be run most efficiently, thereby potentially

26

leading to a reduction in power costs. A key benefit of this equipment will be if the

27

drawdown level at a well becomes too great, an alarm will trigger the well pump/motor to

28

automatically shut down and another well can then be activated. Considering the current
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drought and preponderance of lower aquifer levels, it has become evident how necessary

2

reliable water level monitoring equipment will be in increasing operational efficiency.

3

This program is scheduled for preliminary work and design to begin in 2018, followed by

4

initial equipment installation also beginning in 2018 and continuing into 2020. California

5

American Water recommends that the Commission approve this IP for the requested

6

dollar amount and the present timeframe.

7

documentation can be found in the Capital Investment Project Work Papers for this

8

specific project.

Additional information, justification, and

9
10

7.

Project Code I15-600088, Water Quality Monitoring Program

11

The estimated cost for this proposed investment project is shown in Table 4G above. A

12

majority of the wells in the Sacramento District have not been upgraded to have chlorine

13

and fluoride analyzers installed at these respective sites. Operators visit the well sites

14

daily and check the fluoride and chlorine pumps to make sure the equipment is working

15

properly. However, with no continuous monitoring equipment installed at these sites, it is

16

difficult to determine when and if a chlorine or fluoride pump were to stop working. If

17

this situation were to occur, there are presently no “checks” in place to shut the well off

18

or alert an operator that there is a problem at the well site. In the first scenario, the

19

potential exists that water may be delivered into the distribution system that is not

20

chlorinated or fluoridated. In the second scenario, the potential exists of an accidental

21

overdose of chlorine or fluoride that would not be known until it was manually checked

22

by an operator during normal rounds. The bottom line is these monitors are necessary to

23

ensure customer safety and adequate water quality. In summary, this capital investment

24

project includes the procurement and installation of chlorine and fluoride analyzers at

25

well sites that currently do not have this type of equipment already installed. This project

26

is scheduled to begin with design/evaluation dollars in 2018, followed by actual

27

installation of the various analyzers beginning in late 2018 and continuing into 2020.

28

California American Water recommends that the Commission approve this IP for the
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requested dollar amount and the present timeframe. Additional information, justification

2

and documentation can be found in the Capital Investment Project Work Papers for this

3

specific project.

4
5
6
7
8
9
10
11
12
13
14
15
16
17
18

8.

Project Code I15-600089, Dunnigan Water System Improvements

The estimated cost for this proposed investment project is shown in Table 4G above.
California American Water acquired the Dunnigan water system in 2015. In summary,
there are a number of operational and regulatory deficiencies in the Dunnigan water
system. The following list identifies the system improvements that are recommended to
be completed first as part of this capital investment project: 1) implementation of
SCADA improvements ($150,000); 2) installation of meters (approximately $500,000);
and 3) seismic improvements two tanks and the treatment building ($137,000). This
capital investment project is scheduled to begin with design dollars in early 2018,
followed by construction of the necessary improvements beginning in mid-2018, with the
goal of completion by the end of 2018. California American Water recommends that the
Commission approve this IP for the requested dollar amount and the present timeframe.
Additional information, justification, and documentation can be found in the Capital
Investment Project Work Papers for this specific project.

19
20
9.

21
22
23
24
25
26
27
28

Project Code I15-600091, Sacramento Recycle Water Project

The estimated cost for this proposed investment project is shown in Table 4G above.
This project includes two parts: 1) purchasing an existing recycle water transmission
main that currently serves a golf course. Additionally, this part will involve a purchase
water agreement that is in progress; and 2) extending the existing recycle conveyance
system to serve this area as development occurs. The existing recycle water transmission
main will be extended as new irrigation opportunities are developed and is scheduled to
begin with preliminary engineering work in 2018, followed by design and permitting
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activities beginning in 2019 and continuing into 2020. California American Water will

2

file an Advice Letter once all costs are known and negotiations are completed. However,

3

we would like to the Commission to recognize this future Advice Letter for acquisition of

4

the recycle water conveyance system as part of this GRC filing.

5

justification, and documentation can be found in the Capital Investment Project Work

6

Papers for this specific project.

Additional information,

7
8
9

10.

Project Code I15-600094, Nut Plains Well PFOA Treatment

The estimated cost for this proposed investment project is shown in Table 4G above.

10

This investment project is needed to reduce the levels of Perfluorooctanoic acid (PFOA)

11

and Perfluorooctanesulfonic acid (PFOS) in drinking water served to customers in

12

California American Water’s Suburban-Rosemont service area such that the levels are

13

less than the 70 parts per trillion suggested by the U.S. Environmental Protection Agency

14

(EPA) in a health advisory issued on May 25, 2016. Periodically, EPA requires water

15

purveyors to collect water samples to be tested for unregulated contaminants to determine

16

if there is a need for additional regulation. The latest round of such monitoring was

17

conducted in 2014 and 2015, testing for approximately 30 unregulated substances,

18

including PFOA and PFOS. California American Water collected samples in the

19

Suburban-Rosemont service area and tested the water for the presence of the constituents

20

of concern. In both 2014 and 2015 samples, the combined level of PFOA and PFOS

21

exceeded 180 parts per trillion – almost 2.5 times the EPA health advisory maximum. As

22

a result, California American Water believes it is prudent and reasonable to move

23

forward with a project that includes the installation of treatment equipment, such as a

24

granular activated carbon system (GAC), at the Nut Plains Well site. These units are the

25

most feasible solution to addressing the type of contaminants that are known to exist

26

within the area aquifer, especially PFOA and PFOS. It should be recognized that

27

California American Water will pursue all responsible parties for release of this

28

contaminant for full reimbursement of all capital costs for this project, once they have
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been identified. In light of the recent national attention surrounding PFOA and PFOS,

2

California American Water plans to start this capital project as soon as possible, and will

3

work in a timely fashion to move this project along as quickly as possible. As such, we

4

will coordinate the timing and cost of this project with other capital projects in this

5

district. California American Water recommends that the Commission approve this IP

6

for the requested dollar amount. Additional information, justification, and documentation

7

can be found in the Capital Investment Project Work Papers for this specific project.

8
9

11.

Project Code I15-600093, New Lincoln Oaks Well

10

The estimated cost for this proposed investment project is shown in Table 4G above.

11

The project involves the construction of a new well in the Lincoln Oaks system in the

12

Sacramento District. The Lincoln Oaks system currently has inadequate source capacity

13

and pumped storage to meet diurnal demands (peak hour demands) associated with

14

maximum day water usage. This results in low pressures to existing customers during

15

peak demand periods. To meet the storage capacity, a new tank and booster pump station

16

was recently constructed and placed into service in June 2016. The proposed new well

17

project will be located on property owned by California American Water in the vicinity

18

of the new tank, thereby not only helping to meet peak demand but will also be used to

19

fill the new tank during off-peak demand. This capital investment project is scheduled to

20

begin with design dollars in 2017 (approximately $50,000), followed by construction

21

beginning in late 2018, with the goal of completion by the end of 2019. California

22

American Water recommends that the Commission approve this IP for the requested

23

dollar amount and the present timeframe. Additional information, justification, and

24

documentation can be found in the Capital Investment Project Work Papers for this

25

specific project.

26
27
28
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2

I.

Sonoma County District (Larkfield) Proposed Projects

Table 4H. Proposed New Investment Projects for Sonoma County District (Larkfield)

3
4
5

FP #
I15-610013

FP Description
Miscellaneous Distribution
System Improvements
Total Investment Projects

6

3-Yr Total

2018 Plant
Expend.

2019 Plant
Expend.

2020 Plant
Expend.

$70,000

$70,000

$70,000

$70,000

7
1.

8

Project Code I15-610013, Miscellaneous Distribution System
Improvements

9
10

The estimated cost for this proposed investment project is shown in Table 4H above.

11

This investment project is needed to install approximately 2,300 feet of 8-inch water

12

mains on Deerwood Drive and Sussex Drive in the Larkfield District. In addition,

13

approximately 25 new customer connections will be connected to these new mains. The

14

two proposed 8-inch mains will tie into the existing water mains on Old Redwood

15

Highway and Londonberry Drive. California American Water provides reliable drinking

16

water to approximately 2,300 customers in the Larkfield District. Approximately 25

17

residences on Deerwood Drive and Sussex Drive still receive their potable water supply

18

from private groundwater wells. The surrounding residences along Old Redwood

19

Highway, Londonberry Drive, and Larkfield Drive are already California American

20

Water customers. The installation of the two 8-inch diameter water mains and new

21

customer services is needed in order for California American Water to supply reliable

22

drinking water to these additional residences that still have private water supply systems.

23

This project will also increase the overall operational reliability of the water distribution

24

system with additional looping of the mains. Construction will include installation of the

25

water mains, service laterals, water meters, and related appurtenances.

26
27

The preliminary design plans are already complete. Once encroachment permits are

28

pulled, we can proceed with construction. This project is scheduled to begin with
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construction in the second half of 2020, with plans for completion by the end of 2021 (in

2

the first year of the next GRC cycle). California American Water recommends that the

3

Commission approve this IP for the requested dollar amount and the present timeframe.

4

Additional information, justification and documentation can be found in the Capital

5

Investment Project Work Papers for this specific project.

6
7
8
9

J.

Dunnigan Wastewater District

Table 4I. Proposed New Investment Projects for Dunnigan Wastewater District
FP #

FP Description

3-Yr Total

2018 Plant
Expend.

2019 Plant
Expend.

2020 Plant
Expend.

10

R15-62B1

Mains-Replaced / Restored

$30,000

$10,000

$10,000

$10,000

11

R15-62F1

Hydrants, Valves and Manholes

$15,000

$5,000

$5,000

$5,000

12

R15-62H1

Services and Laterals - Replaced

$15,000

$5,000

$5,000

$5,000

13

R15-62L1

SCADA Equipment and Systems

$15,000

$5,000

$5,000

$5,000

R15-62P1

Tools and Equipment

$30,000

$10,000

$10,000

$10,000

Equipment

$210,000

$70,000

$70,000

$70,000

Total Recurring Projects

$315,000

$105,000

$105,000

$105,000

14
15
16

Process Plant Facilities and
R15-62Q1

17
18
19

Q74.

20
21

Please describe the proposed new capital investment projects for the Dunnigan
Wastewater District.

A74.

There are no proposed new capital IPs for the Dunnigan Wastewater District. This

22

system will be relying upon its Recurring Project budgets as shown in Table 4I, and as

23

previously described in my testimony and in the Capital Investment Project Work Papers.

24
25

XIV. COMPREHENSIVE PLANNING STUDY AND SYSTEM MAPS

26
27
28

A.
Q75.
A75.

Maintenance

In general, please discuss the proposed budgets for the comprehensive planning studies.
The proposed budgets account for tasks related to comprehensive planning studies and
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the preparation of the associated planning reports for each district of California American

2

Water. These tasks are necessary for evaluation of present facility status, projection of

3

future needs, and identification of the capital projects and/or programs needed so that the

4

assets of each district are able to provide safe, adequate and reliable water service to the

5

our customers. These tasks are also necessary for developing a list of the proposed

6

capital improvements. The tasks will also evaluate and recommend improvements that

7

could reduce operating and maintenance costs. The typical tasks conducted under this

8

budget usually include: Comprehensive Planning Studies (“CPSs”); Emerging-Need

9

Project (“ENP”) Evaluations; Condition Based Assessments (“CBAs”); Urban Water

10

Management Plans (“UWMPs”); and Strategic Capital Expenditure Plans (“SCEPs”).

11

Additional detail is provided in Attachment 9 of my testimony and is also included in

12

the capital project Work Papers.

13
14

Q76.

15
16

In general, please discuss the basis for the budget and the scope of the system map
maintenance tasks.

A76.

The requested budget accounts for acquiring services and consumable material as needed

17

to support California American Water’s asset records management staff to maintain

18

system plans, maps, drawings, and other records as required by the Commission’s G.O.

19

103-A, Chapter VII, Operations and Maintenance, Sections 4A and 4B. Similar

20

requirements are also imposed on water utilities by the Waterworks Standards issued by

21

the DPH, in Section 64604, Preparation and Maintenance of Records. Both the

22

Commission’s G.O. 103-A and the DPH Waterworks Standards require that California

23

American Water have on file updated plans, maps, drawings, or other records of all

24

system facilities. A further summary of this work is provided in Attachment 9 to my

25

testimony. California American Water estimated that about 20 percent of the work on

26

each system map task will be performed by California American Water staff, 30 percent

27

by the American Water Service Company staff, and the remaining 50 percent by external

28

consultants. The estimate of the internal staff hourly rate is about $40 per hour, plus 55
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percent labor overhead, for a total of $62 per hour. California American Water estimated

2

$70 per hour, including labor overhead, for the average cost of support by the American

3

Water Service Company and about $120 per hour for the average hourly rate by external

4

consulting firms.

5
6
7

B.
Q77.

8
9

Budgets

Please discuss the scope and budget for all the districts of California American Water as
they relate to comprehensive planning study and system map work.

A77.

The following tables, by District, provide the requested budgets for the comprehensive

10

planning study and the maintenance of system maps. It should be recognized that the

11

expenditures will be amortized over a three-year period and the annual amounts that will

12

be charged to the expense accounts. Additional detail is provided in Attachment 9 of my

13

testimony.

14
15

Table 5A: Sacramento District Comprehensive Planning Study and System Maps
Sacramento Task
2018
2019
2020

16

Planning Studies

17

Maintenance of System
Maps

18

$198,977

$204,947

$211,095

$147,103

$151,516

156,061

19
20
21
22

Table 5B: Larkfield District Comprehensive Planning Study and System Maps
Larkfield Task
2018
2019
2020
Planning Studies

$12,154

$12,519

$12,894

$17,587

$18,115

$18,658

Maintenance of System

23

Maps

24
25
26
27

Table 5C: Monterey County District Comprehensive Planning Study and System Maps
Monterey Task
2018
2019
2020
Planning Studies

$112,691

$116,072

$119,554

$195,779

$201,653

$207,702

Maintenance of System

28

Maps

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2
3

.
Table 5D: Monterey Wastewater District Comprehensive Planning Study and System
Maps
Monterey Wastewater Task
2018
2019
2020
$0

$0

$0

$48,721

$50,183

$51,688

Planning Studies & SSMP

4

Maintenance of System Maps
5
6
7

Table 5E: Los Angeles County District Comprehensive Planning Study and System Maps
Los Angeles Task
2018
2019
2020
Planning Studies

8

$137,917

$142,055

$146,316

$87,447

$90,070

$92,773

Maintenance of System

9

Maps
10
11
12

Table 5F: San Diego County District Comprehensive Planning Study and System Maps
San Diego Task
2018
2019
2020
Planning Studies

13

$91,876

$94,632

$97,471

$80,085

$82,487

$84,962

Maintenance of System

14

Maps

15
16
17
18

Table 5G: Ventura County District Comprehensive Planning Study and System Maps
Ventura Task
2018
2019
2020

19

Planning Studies

20

$81,576

$84,023

$86,544

$77,438

$79,762

$82,154

Maintenance of System

21

Maps

22
23
24
25
26
27
28

XV.
Q78.
A78.

TANK MAINTENANCE
Please provide a description of the tank maintenance program.
California American Water’s Tank Maintenance Program involves both capital and
deferred (tank painting) expenditures. This portion of my testimony will focus on the
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deferred expense portion of the tank maintenance program. The capital expenditures are

2

discussed previously in my testimony as part of the Recurring Project discussion, in

3

particular Tank Rehabilitation (RP15-xxR1). In summary, the tank maintenance program

4

maximizes the life span of the numerous tanks and reservoirs throughout the state

5

through continual assessment and regular maintenance. The tank maintenance program is

6

also designed to implement tank and reservoir improvements to meet existing and future

7

laws, codes, and regulations.

8
9

California American Water continues to contract with TIC, a leader in the field of steel

10

tank design, construction, and maintenance, for assistance in implementing the tank

11

maintenance program. TIC’s responsibilities include assessing the condition of the

12

tanks/reservoirs, providing recommendations on needed maintenance and improvements,

13

developing cost estimates and schedules for construction, developing technical

14

documents, providing construction inspections, and providing anniversary inspections.

15
16

As I said previously, the tank maintenance program involves assessment of both capital

17

and deferred improvements. Examples of capital improvements are sanitary, structural,

18

or safety improvements. California American Water makes capital expenditures via a

19

recurring project budget (Item R) or a separate investment project budget. Again, this

20

portion of my testimony discusses the deferred expenditures, which include the tank

21

painting (also referred to as tank coating) improvements. I have provided summary

22

tables below that propose the dollars associated with each California American Water

23

District’s respective tank painting projects.

24
25

Q79.

26
27
28

Please explain what deferred tank improvements California American Water plans to
make during this GRC period.

A79.

Again, I am providing summary tables below for the deferred tank improvement projects
that California American Water proposes for this rate case cycle by specific District.
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Table 6A: San Diego County District Tank Improvements

2

Tank Improvement

3

Montgomery Tank

4
5

$683,820

$683,820

Total

$688,460

$688,460

Table 6B: Los Angeles County District Tank Improvements

8

Olympiad Reservoir

9

Oak Knoll Reservoir

13
14
15
16
17
18
19
20

Total

Highland Tank

Tank Improvement

12

2020

$4,640

7

11

2019

$4,640

6

10

2018

2018

2019

2020

$4,320

Total
$4,320

$4,320

$4,320

$4,480

$8,800

Mt Vernon Reservoir

$4,320

$4,320

Garth Reservoir

$4,480

$4,480

Danford Reservoir

$4,320

Patton Reservoir

$2,458

$2,458

Lamanda Reservoir

$4,320

$4,320

Rosemead Reservoir

$4,320

$4,320

$108,000

$108,000

Longden Reservoir
Spinks Reservoir
Bliss Canyon Reservoir
Scott Reservoir
Starpine Reservoir

$27,000

$2,800

$4,320

$3,920

$14,580

$2,800

$29,800
$189,080

$197,320
$17,380

$4,320

$4,320

21
Homeland Reservoir

$4,480

$4,480

Angeles Mesa Reservoir

$4,320

$4,320

22
23
Vineyard Reservoir

$4,480

$4,480

$193,560

$407,438

24
Total

$177,958

$35,920

25
26
27
28
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Table 6C: Ventura County District Tank Improvements

2

Tank Improvement

3

Potrero Reservoir #1

$4,320

$4,320

4

Las Posas Tank #2

$4,320

$4,320

5

Dos Vientos IIA

$4,160

$4,320

$8,480

6

Dos Vientos IIB

$4,493

$5,011

$9,504

7

Dos Vientos III

$4,852

$5,813

$10,665

8

Pace Reservoir

$4,320

$4,320

9

Moorpark Reservoir

$4,320

$4,320

10

Los Robles Tank #1

$4,320

$4,320

Orbis Tank

$4,480

$4,480

Shopping Center Reserv #2

$4,480

$4,480

11
12
13
14
15
16
17
18

2018

2019

2020

Total

Wildwood Tank

$4,640

$4,640

Industrial Park Reservoir #1

$4,640

$4,640

Industrial Park Reservoir #2

$4,640

$4,640

Janss Tank

$4,640

$4,640

Potrero Reservoir #2

$4,320

$4,320

$38,024

$82,089

Total

$22,145

$21,920

19
20
21

Table 6D: Monterey County District Tank Improvements
Tank Improvement

2018

2019

2020

Total

22
Hilby Tank # 1

$2,278

$492,744

$495,022

Hilby Tank # 2

$9,490

$473,735

$483,225

23
24
La Rancheria Tank # 2

$240,816

$240,816

$4,606

$4,606

$132,000

$132,000

25
Paseo Pravada Upper
26
Tank
27
28

Pebble Beach Tank # 2

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18168912.v1

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Tank Improvement

2

Tierra Grande Middle

3

Tank

$4,000

$4,000

4

Rio Vista Tank # 1

$9,212

$9,212

5

Ryan Ranch Tank

$4,700

$4,700

6

Upper Airways

$2,369

7

Lower Toyon #1

$2,369

8

Tierra Grande Lower

$4,790

$4,790

9

Tierra Grande Upper

$9,212

$9,212

Presidio #1

$2,369

$382,000

$409,471 $1,090,240

$599,635

10
11

2018

Total

2019

2020

Total

$105,021

$107,390
$217,635

$220,004

$384,369
$2,099,346

12
Table 6E: Sacramento District Tank Improvements

13
14

Tank Improvement

15

Rose Parade Finished Tank

$4,300

16

Rose Parade Backwash Tank

$4,300

$4,300

17

Cook-Riolo Tank

$4,300

$4,300

18

Parksite Backwash Tank # 2

$9,000

19

Vintage Treatment Plant Tank

$4,700

20

Isleton Elevated Tank

$4,700

$4,700

21

Isleton TP Recovery Tank

$4,700

$4,700

22

Isleton TP Backwash Tank

$4,700

$4,700

23

Roseville Road Tank

$4,700

$4,700

24

WG Islandview TP Tank

$4,700

$4,700

25

Total

26

2018

$17,600

2019

$28,200

2020

Total

$111,000

$120,000

$4,700

$9,400

$115,700

$161,500

Table 6F: Larkfield District Tank Improvements

27

Tank Improvement

28

Upper Wikiup # 2

2018

2019

$4,300

Total
$4,300

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 1

Tank Improvement

2

Lower Wikiup # 2

$4,700

$4,700

3

North Wikiup # 2

$4,700

$4,700

4

North Wikiup # 1

5

Total

2018

$4,300

2019

$9,400

2020

Total

$5,100

$5,100

$5,100

$18,800

6
7
8
9

XVI. DEPRECIATION
Q80.

Water.

10
11

Please summarize the latest depreciation study performed for California American

A80.

A depreciation study was performed for California American Water and is attached to my

12

testimony as Attachment 10. The study was prepared by the Alliance Consulting Group

13

in 2015 and analyzed the life and net salvage percentage for the property groups

14

associated with California distribution and general plant assets as of December 31, 2014.

15

The depreciation study includes eight separate districts, namely: Coronado Water,

16

Corporate, Larkfield Water, Los Angeles Water, Monterey Water, Sacramento Water,

17

Village Water, and Monterey Waste Water.

18
19
20
21

Q81.
A81.

Please briefly describe the assets for California American Water.
Generally speaking, six districts contain water plant such as mains, services and hydrants.

22

One district contains wastewater plant such as sewers. Finally, the Corporate plant is

23

used to support water and waste water operations across California American Water’s

24

service area.

25
26

Q82.

depreciation study?

27
28

What is the general definition of depreciation for the purpose of conducting a

A82.

The term “depreciation,” as used herein, is considered in the accounting sense; that is, it
200

18168912.v1

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is a system of accounting that distributes the cost of assets, less net salvage (if any), over

2

the estimated useful life of the assets in a systematic and rational manner. Depreciation is

3

a process of allocation, not valuation. Depreciation expense is systematically allocated to

4

accounting periods over the life of the properties. The amount allocated to any one

5

accounting period does not necessarily represent the loss or decrease in value that will

6

occur during that particular period. Thus, depreciation is considered an expense or cost,

7

rather than a loss or decrease in value. The Company accrues depreciation based on the

8

original cost of all property included in each depreciable plant account. On retirement,

9

the full cost of depreciable property, less the net salvage amount, if any, is charged to the

10

depreciation reserve.

11
12
13

Q83.
A83.

What depreciation methodology was used in the depreciation study?
The straight-line, Average Life Group remaining-life depreciation system was employed

14

to calculate annual and accrued depreciation in this study. This use of the Average Life

15

Group methodology is the same methodology used to develop the Company’s current

16

depreciation rates, which were approved by the Commission in 2012 in Proceeding

17

A10071007 (D.12-06-016).

18
19
20

Q84.
A84.

How were depreciation rates determined using the average life group procedure?
The annual depreciation expense for each group was computed by dividing the original

21

cost of the asset, less allocated depreciation reserve, less estimated net salvage, by its

22

respective average life group remaining life. The resulting annual accrual amounts of all

23

depreciable property within an account were accumulated and divided by the original cost

24

of all depreciable property within the account to determine the depreciation rate. The

25

calculated remaining lives and annual depreciation accrual rates were based on attained

26

ages of plant in service and the estimated service life and salvage characteristics of each

27

depreciable group.

28
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18168912.v1

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2

Q85.
A85.

What time period was used to develop the proposed depreciation rates?
As stated previously, the account level depreciation rates were developed based on the

3

depreciable property recorded on California American Water’s books as of December 31,

4

2014.

5
6

Q86.

7
8

In developing the proposed depreciation rates, did Alliance Consulting Group consider
the company’s current asset accounting practices?

A86.

9

Yes. In developing the proposed depreciation rates, the depreciation study analysis
focused not only on historical data but also on the field experience noted by the

10

Company’s operations personnel. The results of this analysis contained within the

11

depreciation study confirmed that the historical accounting and operational data were

12

generally representative of ongoing California American Water practices.

13
14
15

Q87.
A87.

What factors influence the depreciation rates for an account?
The primary factors that influence the depreciation rate for an account are (1) the

16

remaining investment to be recovered in the account, (2) the depreciable life of the assets

17

in the account, and (3) the net salvage of the assets in the account.

18
19
20

Q88.
A88.

What is the significance of an asset’s useful life in the depreciation study?
An asset’s useful life was used to determine the remaining life over which the remaining

21

cost (original cost, plus or minus net salvage, minus accumulated depreciation) can be

22

allocated to normalize the asset’s cost and spread it ratably over future periods.

23
24
25

Q89.
A89.

How did the depreciation study determine the average service lives for each account?
All accounts were analyzed using the well-accepted actuarial analysis method (retirement

26

rate method) to estimate the life of property. In much the same manner as human

27

mortality is analyzed by actuaries, depreciation analysts use models of property mortality

28

characteristics that have been validated in research and empirical applications. Further
202
18168912.v1

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detail is found in the life analysis section of the depreciation study.

2
3

Q90.

4
5

In addition to statistical modeling, did the depreciation study consider company-specific
expectations in developing your service life recommendations?

A90.

Yes. Both statistical modeling of historical data and company-specific expectations are

6

critical to any depreciation analysis. In order to achieve a reasonable balance between

7

these critical components of the life analysis, the consultant evaluated the statistical

8

historical data and then applied informed judgment to make the most appropriate service

9

life selections. The objective in any depreciation study is to project the remaining cost

10

(installation, material and removal cost) to be recovered and the remaining periods in

11

which to recover the costs. This goal necessarily requires that the service life selections

12

reflect both the California American Water’s historical experience and its current

13

expectations of asset lives. In order to understand the California American Water’s

14

expectations regarding asset lives, interviews were held with California American Water

15

engineers working in both operations and maintenance to confirm the historical activity

16

and indications, current and future plans, expectations and the applicability to the future

17

surviving assets. The interview process provides important information regarding

18

changes in materials, operation and maintenance, as well as California American Water’s

19

current expectation regarding the service life of the assets currently in use. This

20

information is then considered along with the historical statistical data to develop the

21

most reasonable and representative expected service lives for California American

22

Water’s assets. The result of all of this analysis is reflected in the service life

23

recommendations set forth in the depreciation study and accompanying workpapers, all

24

included in Attachment 10.

25
26
27
28

Q91.
A91.

Is there a summary prepared in the depreciation study of the life changes by account?
Yes. The remaining life for each account is calculated in the workpapers of the
depreciation study, and along with graphs and tables supporting the actuarial analysis and
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18168912.v1

 1

the chosen Iowa Curves used to determine the average service lives for analyzed accounts

2

are also found in the Life Analysis section of the depreciation study.

3
4

Q92.

5
6

What are the key factors driving the need to revise the average service lives for the
various accounts?

A92.

The key factor changing the lives of average service lives included incorporation of

7

updated information about the Company’s assets since the last depreciation study,

8

including an additional six years of Company-specific information and input from

9

operations personnel. In addition, California American Water conducted an analysis of

10

its utility plant assets in 2014. This analysis was performed in accordance with an

11

American Water corporate initiative to review plant assets in its records, which normally

12

occurs on a five year basis

13
14
15

Q93.
A93.

What is net salvage?
Net salvage is the difference between the gross salvage (what the asset was sold for upon

16

removal) and the removal cost (cost to remove and dispose of the asset). Salvage and

17

removal cost percentages are calculated by dividing the current cost of salvage or

18

removal by the original installed cost of the asset. When salvage exceeds removal

19

(positive net salvage), the net salvage reduces the amount to be depreciated over time.

20

When removal exceeds salvage (negative net salvage), the negative net salvage increases

21

the amount to be depreciated. Plant assets can experience significant negative removal

22

cost percentages due to the amount of removal cost and the timing of the addition versus

23

the retirement.

24
25

Q94.

26
27
28

How did the depreciation study determine the net salvage percentages for each asset
group?

A94.

The consultant (Alliance Consulting Group) evaluated the actual net salvage percentages
for each year for each district. The analysis looks at various bands (or combinations) of
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these years, such as a two-year, three-year, up to a ten-year band. Evaluating these

2

moving averages allows the smoothing of the timing differences between when

3

retirements, removal cost and salvage are booked. By looking at successive average

4

bands (“rolling bands”), an analyst can also see trends in the data that would indicate the

5

future net salvage in the account, like if net salvage has recently been increasing or

6

decreasing. Based on this examination and the feedback from California American

7

Water representatives regarding any changes in operations or maintenance that would

8

affect the future net salvage of the asset, a determination was made of the best estimate of

9

future net salvage for each account. The net salvage percentage for each account is

10

shown in the depreciation study, specifically in Appendices D-1, D-2 through D-8.

11
12
13

Q95.
A95.

Is this a reasonable method for determining net salvage rates?
Yes. Based on my experience and this consultant, the method used to establish

14

appropriate net salvage percentages for each account is the methodology commonly

15

employed throughout the industry. I would note that the Commission has also adopted

16

this methodology in other Proceedings, namely: A10071007, A13-11-003, and A14-07-

17

006.

18
19
20

Q96.
A96.

21

When were California American Water’s current net salvage rates established?
Net salvage rates for the Company were last established by the Commission in
Proceeding A10071007, adopted in D.12-06-016 in June 2012.\

22
23

Q97.

24
25

In general, what are the main factors impacting the net salvage that California American
Water is experiencing?

A97.

The costs related to retirement activities (generally including cutting, capping, and

26

purging of water for the abandonment of pipe) have increased over time. Removal from

27

service of these underground assets involves increased labor costs due to inflation and the

28

need to use specialized skill and equipment in the removal process, more restrictive
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municipal ordinances for performing these projects, and environmental disposal costs.

2
3
4

Q98.
A98.

Please summarize the conclusions reached in the depreciation study.
The depreciation study and analysis performed by Alliance Consulting Group fully

5

support setting depreciation rates that should be adequate to recover the Company’s total

6

investment in property over the estimated remaining life of the assets. The depreciation

7

study recommends an increase of $2,300,000 in annual depreciation expense when

8

compared to the depreciation rates currently in effect through D.12-06-xxx. Again, these

9

new depreciation rates are reflected in the depreciation study, attached to my testimony as

10

Attachment 10.

11
12
13

XVII. HEXAVALENT CHROMIUM TREATMENT
Q99.

14
15

Please explain what the current situation is regarding hexavalent chromium in the state
of California.

A99.

Hexavalent Chromium is a regulated contaminant with a California Maximum

16

Containment Level (MCL) of 10 parts per billion (ppb). This MCL became effective in

17

California on July 1, 2014. In reviewing the routine quarterly sampling data, 13 wells

18

were identified to be over the new MCL- all these wells are located in the Northern area.

19

California American water developed an implementation plan to meet the new

20

regulations. As part of the short term plan, all wells that were identified through

21

sampling to exceed the MCL were turned off while design is being completed. The long

22

term plan is to design/implement treatment for 6 of the 13 wells that are considered

23

critical wells for the respective system. At the time of this plan development, the wells in

24

the Southern area were not over the MCL. Since that time, 1 well in the Southern area

25

has since sampled over the MCL.

26
27

In Los Angeles, the San Marino District has two wells that are approaching the MCL.

28

The Grand Well and the new Richardson # 3 Well, while below the MCL based on
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allowed averaging of 10.4 ppb or lower, have been very close to the limit. Richardson

2

Well # 3 is at 8.8 ppb based on startup sampling, while Grand Well has had an average of

3

10.11 ppb. These two wells are located on the same site. They represent a significant

4

portion of the Lower System well capacity, with a combined flow of 2,500 gpm.

5

Initially, it has been determined that ion exchange is the most cost effective treatment

6

technology. Therefore, pilot testing of an ion exchange treatment has been underway to

7

evaluate different resins. To date, $67,300 has been spent. The total project budget is

8

estimated at $3,257,428 for the Los Angeles District. In the Sacramento District, 6 of 13

9

wells identified to be over the MCL are currently planned for treatment. A study was

10

performed to identify the most cost effective treatment and a pilot study was conducted to

11

determine the most efficient resin. The design is complete and construction bids have

12

been received. Implementation of the treatment for these wells is planned for completion

13

in late summer 2016.

14
15

It should be recognized that in 2015, California American Water began the application

16

process for the Drinking Water State Revolving Fund (SRF) program. California

17

American Water has submitted four separate applications to install treatment for

18

Hexavalent Chromium at various sites in Sacramento and in Dunnigan. The SRF is a

19

loan and grant program. The grants are funded through Proposition 1. In the grant

20

application review process, the state of California will determine if the project is eligible

21

for a loan or grant based on the ability of the ratepayers to absorb the costs associated

22

with the capital improvement project. At this time, California American Water expects to

23

complete the full applications in mid-2016.

24
25

It should be understood that these hexavalent chromium treatment costs are being tracked

26

through a memorandum account previously approved by the Commission. A Tier 3

27

advice letter will be filed by the end of 2016 to recover the costs for the Sacramento

28

County District, based on the process approved by the Commission and the treatment
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facilities being completed later in 2016. The costs have been reflected in the beginning

2

plant balances. For the Los Angeles County District, California American Water requests

3

recovery of the costs in this GRC based on the expected completion of the planned

4

treatment in 2017. The approved memorandum account provides for recovery either by

5

Tier 3 advice letter or through this general rate case based on the timing.

6
7
8
9
10

XVIII. PERFLUOROOCTANOIC ACID (PFOA) AND
PERFLUOROOCTANESULFONIC ACID (PFOS) TREATMENT
Q100. Please explain what the current situation is regarding Perfluorooctanoic acid (PFOA)
and Perfluorooctanesulfonic acid (PFOS) in the state of California.

11

A100. On May 25, 2016, the EPA established drinking water Health Advisories (HA) for PFOA

12

and PFOS, which are the key ingredients in non-stick and stain-resistant products.

13

(Federal Register / Vol. 81, No. 101 page 33250 & 33251). The EPA’s HA levels, which

14

identify the concentration of PFOA and PFOS in drinking water at or below which

15

adverse health effects are not anticipated to occur over a lifetime of exposure, are: 0.07

16

parts per billion (70 parts per trillion) for PFOA and PFOS. Because these two chemicals

17

cause similar types of adverse health effects, EPA recommends that when both PFOA

18

and PFOS are found in drinking water the combined concentrations of PFOA and PFOS

19

be compared with the 0.07 parts per billion HA level. It should be understood that HA’s

20

are not regulations, but certain communities have taken steps to address this issue. For

21

example, the West Morgan-East Lawrence Water and Sewer Authority in northern

22

Alabama issued a recommendation to 100,000 people in its service area to not drink

23

water from their taps due to elevated levels of PFOA and PFOS. Another example is the

24

state of New Jersey, which first conducted state-wide studies of these types of

25

contaminants, beginning in 2006. As a result of this work, New Jersey currently has a

26

guidance level of 40 part per trillion and a reporting level of 20 parts per trillion for

27

PFOA for its water systems. Finally, the EPA recently reached out directly to the City of

28

Rancho Cordova and advised them of the new HA. California American Water currently
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has one important well in its Sacramento County District affected with PFOA levels

2

above this HA limit, which is in the vicinity of the City of Rancho Cordova. California

3

American Water has reached out directly to the Division of Drinking Water (DDW) of

4

the SWRCB to seek guidance on this matter. DDW advised that the well in question

5

should be turned off or treatment should be added. Accordingly, a new investment

6

project (I15-600093) has been proposed in this GRC (and described earlier in my

7

testimony) to install granular activated carbon treatment at the Nut Plains Well for

8

removal of PFOA, in order to insure the well’s continued operation in supplying water to

9

customers.

10
11
12
13
14
15
16

XIX. M. SAN CLEMENTE DAM AND REROUTE AND REMOVAL PROJECT
UPDATE
Q101. What is the major capital investment project you will now discuss?
A101. I will provide a general update on the status of the San Clemente Dam and Reroute and
Removal Project, currently nearing completion in Monterey.

17
18
19

Q102. Please generally describe the San Clemente Dam.
A102. The San Clemente Dam was a 106 foot tall concrete arch dam that was originally

20

constructed in 1921. The dam previously impounded a reservoir that was historically

21

used in conjunction with the Los Padres Reservoir (located about six miles upstream) as a

22

source of water for the Main Monterey system. A fish ladder was located along the west

23

abutment of the dam that provided access for fish over the dam.

24
25
26

Q103. Please summarize the Reroute and Removal Project.
A103. The Reroute and Removal Project addressed longstanding seismic safety issues

27

associated with the San Clemente Dam, it now provides significant environmental

28

benefits, and due to an innovative public/private partnership, has not cost California
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American Water’s customers any more than the least-cost option. Implementation of the

2

Reroute and Removal Project has addressed the seismic safety risks associated with the

3

continued operation of the San Clemente Dam. In addition, removal of the dam is a

4

method to resolve continuing issues relating to fish passage, the preservation of habitat

5

for wildlife on the river, and compliance with the federal Endangered Species Act. In

6

summary, the Reroute and Removal Project included permanently bypassing a portion of

7

the Carmel River by cutting a 450-foot long channel between the Carmel River and San

8

Clemente Creek, approximately 2,500 feet upstream of the dam. The bypassed portion of

9

the Carmel River was used as a sediment disposal site for the accumulated sediment. The

10

rock spoils from the channel construction were used to construct a diversion dike at the

11

upstream end of the bypassed Carmel River channel. The new Carmel River channel was

12

improved with a series of fish passage elements which included step pools, resting pools

13

and surrounding riparian habitat.

14
15
16

Q104. Please provide the current status of the Reroute and Removal Project.
A104. Yes. Work completed as of the date of my testimony includes: 1) the reroute of the

17

Carmel River (December 2014); 2) the complete removal of San Clemente Dam (August

18

2015); and 3) the channel restoration along the rerouted Carmel River (December 2015).

19

For more detailed information on the current status of the Project, please see Attachment

20

11, which is the latest Quarterly Status Report prepared and submitted to the Commission

21

on this Project (dated March 21, 2016). For purposes of my testimony, I discuss the

22

following construction activities that were conducted during the last quarter of 2015:

23
24

1. As stated previously, the project’s major definable features of work were completed

25

this quarter with the exception of removing Old Carmel River Dam and the Sleepy

26

Hollow Ford low water crossing; and construction of the permanent bridge at the Sleepy

27

Hollow Ford location. It is important to recognize that California American Water did

28

receive a letter dated February 5, 2016 from the California Department of Water
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Resources, Division of Safety of Dams (DSOD). In this letter, DSOD “found all

2

construction items related to the removal of the dam were completed in accordance with

3

the approved plans and specifications.” This letter was prepared as a result of a final

4

construction inspection performed by DSOD at San Clemente Dam on December 9,

5

2015.

6
7

2. Fill placement and construction of erosion protection elements at the Stabilized

8

Sediment Slope were also completed. The completion of the habitat restoration at the

9

Stabilized Sediment Slope is anticipated by the end of June 2016.

10
11

3. The East Tributary Conveyance was constructed to provide a channel for surface flows

12

from the East Tributary and the Sediment Stockpile.

13
14

4. Excavation of the “knob,” a borrow area adjacent to the Stabilized Sediment Slope

15

advanced to completion, thereby providing sufficient material quantities to construct

16

portions of the Stabilized Sediment Slope.

17
18

5. Material screening continued through the early portion of this quarter to sort materials

19

for completing construction of the Stabilized Sediment Slope, Diversion Dike, and

20

Combined Flow Reach. Night work was conducted occasionally during this quarter

21

focusing on material processing and staging.

22
23

6. Work on the Diversion Dike to resolve noncompliant work from 2014 was completed.

24

Completion of habitat restoration at the DD is anticipated by the end of June 2016.

25
26

7. The contractor (Granite) continued pumping the Carmel River from the upstream

27

limits of work to downstream of the Diversion Dike in order to remove portions of the

28

diversion system. Portions of the diversion pipe located within the footprint of the
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Stabilized Sediment Slope and Diversion Dike were abandoned in place and filled with

2

concrete. Sheet piles that diverted the Carmel River into the diversion pipe were

3

removed.

4
5

8. Construction of the channel was completed this quarter. Elements of work completed

6

include: 53 step-pools in the CFR, 10 resting pools, two riffle pool reaches in the Reroute

7

Channel, Upper Carmel River grading, channel substrate placement, and grade transitions

8

to the existing river reaches.

9
10

9. Boulders from offsite sources were imported to the project site for construction of the

11

new Carmel River channel and overbank roughness elements. Large woody debris was

12

also imported to the project site.

13
14

10. Floodplain construction was completed which included construction of Fabric

15

Encapsulated Soil elements on the channel banks, LWD structures, and seasonal frog

16

ponds. Final grades were achieved and topographic complexity was incorporated on

17

graded slopes.

18
19

11. Erosion control fabric was installed in the floodplain below the 25 year

20

storm event water level.

21
22

12. Agency representatives were onsite to observe the third and final flow test.

23
24

13. Upon completing the channel construction, the Carmel River and San Clemente

25

Creek were allowed to flow into their new channel.

26
27

14. Irrigation mainlines were installed, installation of irrigation laterals will continue into

28

the next quarter.
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2

15. Monitoring instrumentation was installed at the Diversion Dike and the Stabilized

3

Sediment Slope.

4
5

16. Biological monitoring and SWPPP inspections continued on a daily and weekly basis

6

as required through the end of active construction.

7
8

17. Installation and management of erosion control best management practices was

9

conducted throughout the quarter and will continue in the next quarter. The entire site

10

with the exception of rock surfaces were hydroseeded with permanent seed mixes to

11

reduce erosion and augment the habitat restoration efforts.

12
13

18. The Sediment Stockpile was graded and hydroseeded. Habitat restoration at this

14

location will continue next quarter. Concrete from Old Carmel River Dam will be

15

abandoned in the Sediment Stockpile during the second and third quarter of 2016.

16
17

19. Mobilization and demobilization of equipment occurred throughout this quarter.

18
19

20. Groundwater was managed on site by pumping the nuisance water to the East

20

Tributary settling basin and then pumping it to the treatment system prior to releasing

21

downstream.

22
23

21. Browse fence was installed around the entire project site to keep wildlife from

24

grazing on plants. Planting of container plants began this quarter and continued during

25

the first quarter of 2016.

26
27

It is important to recognize two critical activities that are being performed in 2016. First,

28

the majority of the work related to the removal of the Old Carmel River Dam will be
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substantially complete by July 1, 2016. This work is directly related to that portion of the

2

dam which had previously blocked fish passage. Second, the construction of the Sleepy

3

Hollow Ford Bridge Crossing is estimated to be substantially complete by October 31,

4

2016. It should be noted that the new bridge work is being funded by a grant

5

administered by the California State Coastal Conservancy.

6
7
8
9

Q105. What are the current capital expenditures for this project?
A105. As of June 30, 2016, the total construction capital expenditures for the project were
$81,648,974. This amount includes $22,038,056 in funds contributed by the California

10

State Coastal Conservancy, which results in a net construction capital expenditures

11

amount of $59,610,918.

12
13

Q106. What is the final total estimated construction capital expenditure for this project?

14

A106. The total construction capital expenditure forecast for the project is estimated to be

15

approximately $83,995,394. After reflecting the total funds being contributed by the

16

California State Coastal Conservancy in the amount of $34,000,000, the net construction

17

capital expenditures incurred by California American Water for this project will be

18

$49,995,394. It is noted that this estimated total project cost is above the $49,000,000, as

19

authorized by D.12-06-040. In my opinion, this increase in cost (just slightly more than

20

2% or approximately $995,394) is remarkable for a project of this size, and reflects

21

California American Water’s dedication to managing the project, while working closely

22

with multiple stakeholders.

23
24
25
26

Q107. Does California American Water plan to request the Commission to recognize the
additional $995,394 in capital expenditures for this project?
A107. No, not at this time.

27
28
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2

Q108. What does California American Water request for this project in this GRC?
A108. California American Water requests and strongly recommends the Commission approve

3

the work completed for this capital investment project and allow the $49,000,000 in

4

capital expenditures to be recognized in rate base.

5
6
7
8

Q109. Has California American Water provided supporting documentation for the total project
costs?
A109. Yes. Attached hereto as Attachment 11-A is a summary schedule listing the costs for

9

this specific project. Additional information, justification and documentation can be

10

found in the Capital Investment Project Work Papers for this specific project, which

11

includes all the vendor invoices.

12
13
14
15

Q110. Does California American Water have additional information to provide the
Commission regarding the invoices?
A110. Yes. It is important to understand that as of the date this testimony was prepared, there is

16

some work that has been performed, but which has not yet been invoiced. In addition,

17

there is other work underway which will continue into the summer/fall that will be

18

invoiced in the near future. The total estimated amount of these future invoices is

19

approximately $1,291,000. These miscellaneous invoices reflect final project close-out

20

work items such as: 1) the remaining work related to the removal of the Old Carmel

21

River Dam (i.e., clean-up of the retaining walls along the shore and restoration around the

22

actual site); 2) final paving (which cannot be done until all site work is complete); 3)

23

continuing landscaping activities; 4) continuing plantings related to the native habitat;

24

and 5) on-going environmental restorative work. California American Water commits to

25

provide these miscellaneous invoices to ORA Staff by no later than October 31, 2016.

26

We respectfully request that ORA Staff let California American Water know if the timing

27

of providing this package of invoices presents any difficulty in their review process at

28

this time. For reference, the October 31, 2016 date was selected since it coincides with
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the end of the work “window” allowed under the permit conditions placed on the overall

2

project.

3
4
5
6
7
8
9

XX.

WATER MAIN RENEWAL USING TRENCHLESS REHABILITATION
TECHNIQUES

Q111. Please review the compliance item related to California American Water’s review of
trenchless rehabilitation (“TR”) methods/techniques.
A111. Yes. California American Water was directed to perform a review of TR methods as a
result of the 2010 GRC. I am repeating the discussion below from my 2013 GRC

10

testimony because of its importance in how California American Water will be evaluating

11

several of its proposed pipeline replacement projects. First, California American Water

12

continues to be proactive when considering pipeline project improvements and

13

identifying opportunities to implement TR methods. California American Water does

14

recognize that TR methods can reduce community impacts and can reduce pavement

15

replacement costs when considering a pipeline improvement project. Accordingly,

16

California American Water has developed and continues to refine guidelines for

17

identifying TR opportunities for future projects. In addition, a technical memo was

18

prepared to assist in the evaluation of projects to determine if TR is a good fit for the

19

specific circumstance. For reference, many other utilities have explored TR with varying

20

degrees of success and the “lessons learned” will be used to advance California American

21

Water’s implementation strategy and minimize the risk of implementing these

22

rehabilitation methods for specific projects. The technical memorandum evaluated the

23

various TR techniques used in the market today that are applicable to pipes less than 24-

24

inches in diameter and provided considerations for their effective use as an alternative to

25

open trench pipeline replacement.

26
27
28

Q112. What are the conclusions of the technical memorandum?
A112. In conclusion, California American Water continually evaluates pipeline projects for
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consideration of TR methods and understands that, in many situations, TR is a viable

2

alternative to open trench construction. For certain distribution main projects contained

3

within the 2016 GRC, California American Water will continue to consider TR as

4

another tool in the design team’s tool box and will compare it with open trench

5

construction where specific site and operating conditions warrant its consideration. Once

6

an analysis of the project is performed to understand the design criteria and risk factors,

7

the appropriate construction methodology will be selected on a case by case basis. For

8

reference, a copy of the technical memorandum is attached to my testimony as

9

Attachment 12. At this time, California American Water plans to utilize TR for one

10

capital project in the Sacramento County District and one capital project in the Sonoma

11

County (Larkfield) District.

12
13

XXI. POLYBUTYLENE SERVICE REPLACEMENTS

14
15
16

Q113. What is your next topic?
A113. My next topic concerns a project entitled Polybutylene Service Replacements that was

17

included in the 2010 GRC application. As part of that proceeding, California American

18

Water and DRA staff (now known as ORA) agreed to jointly develop the scope of a

19

piloting program for the Monterey County District. The scope would include the

20

selection of an appropriate contractor, a pre-determined number of pilot “spots”, and

21

what parameters should be used to properly evaluate this program. California American

22

Water was to install sacrificial anodes and test stations within the meter box for between

23

5 and 10% of the replaced services. In addition, California American Water was going to

24

monitor these locations once every other general rate case cycle (six years) or on another

25

mutually acceptable frequency agreed upon by CAW and DRA. Thereafter, CAW will

26

determine an appropriate monitoring frequency.

27
28

Q114. Did California American Water move forward with this program?
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 1

A114. Yes. California American Water completed a preliminary study on corrosion protection

2

of new copper service lines. As part of a quarterly update meeting with DRA on

3

November 27, 2012, California American Water shared its findings from the corrosion

4

report and sought input from DRA on the next steps. No further action was taken by

5

DRA.

6
7
8

Q115. Does California American Water have more information to share at this time?
A115. Yes. As an update, California American Water installed anode protection devices on 39

9

copper service lines in the Carmel portion of the Monterey service area in November

10

2013. California American Water will perform an assessment of these anodes and the

11

copper service lines going into the future. It is important to recognize that installation of

12

plastic (HDPE) service lines is now standard practice in the Monterey distribution

13

system, thereby making corrosion issues no longer a major concern. Therefore,

14

California American Water recommends this program be discontinued since it is no

15

longer warranted or needed.

16
17
18

Q116. Does this conclude your direct testimony?
A116. Yes, it does.

19
20
21
22
23
24
25
26
27
28
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 ATTACHMENT 1

CALIFORNIA ENGINEERING GROUP
The Engineering Group for California American Water is comprised of three main
functions: Project Delivery & Planning; Capital Administration; and Supply Chain. This
engineering support is provided across the entire state of California.
The first functional group is Project Delivery & Planning. This group has a number of
specific responsibilities, and the duties listed below are handled by engineering project
managers and senior engineering project managers. The group is directed by a Project
Delivery Manager in each division, who in turn reports to the Vice President of
Engineering. The duties of this Project Delivery subgroup include: 1) ensuring that
capital projects are delivered on time and within budget; 2) ensuring plant additions are
recorded on the company’s books correctly; 3) ensuring that any and all retirements are
recorded correctly; 4) maintaining a capital project’s cashflow within budget and as
accurate as possible; 5) handling permitting and other agency approvals; 6) pursuing rightof-way, easement and land acquisition activities; 7) managing the construction of projects
and the numerous consultants involved; 8) performing basic design on standard water
distribution projects; 9) capable of managing multiple contractors on numerous concurrent
projects; 10) negotiating effectively with contractors and assembling all necessary and
required contracts; 11) performing project inspection when necessary; 12) exercising
reasonable communication, relationship, and public interfacing skills; and 13)
documenting “as-built” drawings and associated manuals (as applicable) for all projects.
The second subgroup is Planning, whose primary responsibility is the capital project
development side of our business, of which the Comprehensive Planning Study (“CPS”) is
the primary driver for capital projects. The group is managed by the Capital Asset and
Planning Manager on a state-wide basis. This group is involved with: 1) actively
supporting operations staff in all California locations; 2) engaging in state level capital
planning; 3) serving as a resource and playing a key supporting role in rate cases related to
capital projects, including writing and providing oral testimony; 4) assisting with
regulated business development due diligence activities; 5) managing our “data” – like
2

 Geographical Information Systems (GIS), Computer Aided Drafting (CAD) work,
mapping and drafting; and 6) overseeing/updating/maintaining the computerized hydraulic
models of the various water distribution systems. This group is highly involved in water
resource planning activities for the local operations in their respective divisions/districts,
updating the plant description book for all locations, starting or continuously updating
CPSs, validating and calibrating the CPS for consistency purposes with California
American Water’s rate case filings before the Commission, reconciling cost estimates for
uniform format and contingency factors, while also writing and validating the project
justification and support. In summary, the Project Delivery & Planning group has a team
located in Sacramento, a team located in Monterey (Pacific Grove) and a team in Los
Angeles (Rosemead). Each group provides oversight/management of capital projects and
planning activities within each respective division (Northern, Central and Southern). The
following positions are part of this group in these office locations:

Project Delivery Manager (3) – Sacramento, Monterey and Coronado offices
Assistant Engineering Manager (1) – Monterey office
Senior Engineering Project Manager (5) – Sacramento and Monterey offices
Engineering Project Manager (2) - Sacramento and Monterey offices
Operations Engineer (2) – Rosemead office and Sacramento office
Project Engineer (2) – Rosemead office and Sacramento office
Project Manager GIS (1) – Sacramento office
Engineering Coordinator (1) – Monterey office
Engineering Operations Specialist (1) – Sacramento office
Engineering Construction Manager (1) – Sacramento office
Construction Inspector (1) – Sacramento office (covers all offices)
Design Engineer (1) – Sacramento office
Senior Engineering Technician (1) - Sacramento office
Engineering Technician (1) – Monterey office
3

 GIS Engineering Technician (1) – Rosemead office
Draftsperson (1) – Monterey office
Total – 25 positions

The second functional group is Capital Administration. The group is directed by the
Senior Capital Program Administrator, and this group includes three project analysts in a
support role. The primary responsibility of this group is to: 1) maintain and manage the
Strategic Capital Expenditure Plan (“SCEP”) for the state and individual districts; 2)
coordinate and manage the Capital Investment Management process in California (both
the Capital Investment Management Committee and Capital Investment Review
Committee); 3) respond quickly and efficiently with all capital investment management
requests from the corporate department in New Jersey; 4) interact/assist project delivery
managers in controlling their capital project budgets, including the effective utilization of
PowerPlant (a management accounting software tool); and 5) communicate all capital
planning issues with State President, Network Operations Director and General Managers.
The following positions are part of this group:

Senior Capital Program Administrator (1) – Sacramento office
Project Analyst (2) – Sacramento office
Vice President - Engineering (1) – Sacramento office
Total – 4 positions

The third functional group is Supply Chain. The group is directed by a Senior Buyer, and
this group includes one analyst in a support role. The Supply Chain group has many
functions and is comprised of Strategic Sourcing, Fleet, Energy Management, Operations
Management, and Regional Sourcing Management. Each section of Supply Chain directly
supports California American Water in their specific categories of expertise with the
ultimate ownership of the Supply Chain function falling to the Regional Sourcing section.
4

 Each section of Supply Chain uses their intimate knowledge of marketplace conditions,
economic conditions and local and regional nuances together with industry recognized
best practices to: 1) Source; 2) Bid; 3) Negotiate; and 4) Award our needs for goods and
services to the vendor or contractor presenting the best value for California American
Water. When sourcing is performed, vendors and contractors are pre-qualified prior to
invitation for bid and a thorough vetting of qualifications, financial stability, insurance
coverage and bonding capabilities is conducted including the search for qualified and
certified diverse candidates on every sourcing event exceeding $100,000. From this
process the bidders list is produced in a collective effort by Supply Chain and the
Engineering Team. Thereafter, bid packages are then produced and bid invitations sent to
all qualified bidders from the bidders list. Completed bids are compared and analyzed by
Supply Chain and the Engineering Team and a "short list" is created of bidders thought to
be able to offer a better value than the others. Further negotiations occur with the bidders
on the short list and a final award decision is made based on the outcome of the
negotiations by the Engineering Team. During the bidding period, all communications
between the bidders and California American Water are limited to Supply Chain only.
This best practice is strictly enforced and helps ensure that all bidders are given fair and
equal information with which to base their bids. Metrics are kept on file of each sourcing
event for future reference. In summary, Supply Chain at American Water is a customer
focused organization of highly skilled and dedicated professionals utilizing best practices
to proactively deliver timely value-added and innovative solutions to create a competitive
advantage. The American Water Supply Chain department is comprised of Strategic
Sourcing, Fleet, Energy Management, Operations Management, and Regional Sourcing
Management. The following positions are part of this group:

Senior Capital Buyer (1) – Coronado office
Senior Analyst – Procurement (1) – Coronado office
Total – 2 positions
5

 It is important to recognize that the recent hiring of qualified individuals for these
positions has reduced, and in some instances, eliminated the higher cost to employ outside
engineering consulting firms to perform the following tasks: project construction
management work; preliminary design work; and water system planning work.
Furthermore, these engineering employees support various roles in the GRC, including the
effort to compile and complete the Minimum Data Requests that are required for submittal
as part of the GRC applications filed with the Commission. Also, by improving the
planning process of certain capital projects with internal resources, California American
Water could potentially recognize a reduction in the “soft cost” expenditure portion of a
capital project’s total overall cost (e.g., preliminary design, preliminary engineering,
permitting, etc.). Finally, it should be noted that all engineering positions are capitalized.

6

 ATTACHMENT 2

CAPITAL INVESTMENT MANAGEMENT PROCESS
This summary of the Capital Investment Management (CIM) Process within California
American Water provides an understanding of the internal review that is typically
performed to monitor the potential of capital project cost overruns. This process includes
actions and recommended improvements in order to address this issue. California
American Water annually prepares and maintains a capital-investment plan that serves as
an integral component of California American Water’s overall strategic business plan.
Each year the capital expenditure plan is reviewed to identify and prioritize necessary
capital improvement projects to ensure quality water service, resolve operational
challenges, comply with regulatory requirements, and formalize and approve the annual
budget. An assessment of the completed prior year capital expenditures is performed and
adjustments, if applicable, are made in accordance with the remaining years of the current
five-year capital investment plan.

Members of the California Engineering Team prepare a project justification summary
document for each investment project, which concisely presents the need for the project,
details the recommended improvements, explains the scope of the work to be performed,
lists detailed cost estimates, presents a project schedule, and includes a financial analysis.
Thereafter, the IP is reviewed, critiqued and discussed in detail to ensure that the project is
a reasonable and prudent investment by the California Functional Sign-off Committee.
An important part of this process concerns the review given to all projects and their
respective funding/cost estimates. The funding levels are reviewed and approved by the
State and Corporate Engineering teams prior to inclusion in the five-year business plan.
All individual IPs with funding of $100,000 or greater need approval from these teams.
Normally, IPs are approved at a preliminary phase, which usually includes initial
engineering, design and permitting work. It is important to note that variances from the
preliminary phase approval amount of plus or negative 30 percent require a review and a
detailed explanation for the variance before approval of additional funding is granted.
2

 Once an IP moves beyond the preliminary phase to the implementation phase, this
movement usually means that construction activities are ready to commence. The final
engineering design and detailed drawings have been completed, permits are “in-hand,”
bids have been received and the contracts are ready to be awarded and executed. Again, it
is important to note that variances from the implementation phase approval amount of plus
or negative 10 percent require a review and a detailed explanation for the variance before
any approval of additional funding is granted.

As part of any individual IP’s on-going status, the State and Corporate Capital
Administration Teams perform an analysis, on a monthly basis, that details a particular
project’s spend level. This type of monitoring allows for quick, prompt action if the
approved funding level for a specific IP is at risk for being over its approved spending
level. The Capital Administration Team alerts local management of projects that are
exceeding their approved spending level through the monthly governance CIM meetings.
Before additional funding is approved for a capital project, the capital project would go
through another review that explains the reasons for the increased cost. In addition, where
appropriate, another review of alternate project options for achieving a similar result for
the water system would be performed. There are three state team committees, and their
responsibilities are described below.

State Capital Administration Team
•

Assures that proper funding project documentation (i.e. full and accurate
completion of the Details, Contacts, Estimate, and Justification tabs in PowerPlant
and SAP including all required attachments) is in place before they proceed to any
review or approval step.

•

Reviews and approves movement of money between RP funding projects per the
capital review/approval limits of tolerance.

•

Performs the administrative review of RP and DV funding projects, at a work
3

 order project level, prior to formal yearly approval.

State Functional Sign-off Committee
•

Performs the budget review step for funding projects per the capital
review/approval limits.

•

Performs the technical review step for funding projects, per the capital
review/approval limits.

State CIM Committee
•

Reviews the current investment performance of the State and initiates any action
as necessary down to a District level to address undesirable performance.

•

Reviews Sarbanes-Oxley Act (“SOX”)-related process performance as it applies to
Capital Investment Management, and all Capital Investment Management metrics,
and initiates any action as necessary, down to an individual employee level, to
address undesirable performance.

•

Discusses any new business related to Capital Investment Management as it effects
the individual state.

•

Approves funding projects and releases funds per the capital review/approval
limits. The committee should rely on the guidance of the Engineering Director (or
equivalent) related to the technical aspects of the funding project.

•

Reviews State investment plans and program reforecast prior to formal submittal.

Submits investment plan performance status updates to the local Board of Directors for
review at each board meeting.

4

 ATTACHMENT 3

INFRASTRUCTURE PLANNING
This summary will provide a general overview of California American Water’s
investment in capital for water system improvements. Investment in capital is a
significant and essential part of California American Water’s business strategy. California
American Water works to ensure that capital investment decisions are made that
efficiently utilize financial resources and minimize cost of service to the customer, while
assuring that California American Water continues to maintain regulatory compliance,
keeps pace with growth and infrastructure renewal, and provides safe, reliable, efficient,
and quality service. Meeting this goal requires the following components: 1) an ongoing
comprehensive engineering planning program, the CPS, as the primary tool for the
evaluation and recommendation of capital investment needs; 2) preparation of capital
budgets which are properly aligned with business plan objectives; and 3) effective
technical, functional, and financial oversight of the delivery of the capital program.

Sound engineering planning is obtained through American Water’s Comprehensive
Planning Program, or other comparable technical analysis, is very important and is the
primary driver for identifying specific capital project needs. These project
recommendations are aligned with American Water’s Asset Investment Strategy, and
include input from all appropriate functional areas. It is recognized that emerging project
needs will arise between planning study cycles, particularly as a result of acquisitions. It
is also recognized that certain types of projects cannot be identified via a typical
engineering analysis; however, they still must be properly evaluated and prioritized.
At California American Water, the planning process as it relates to assessing capital needs
and recommended projects is straightforward. All water and wastewater systems within
American Water are expected to be evaluated under American Water’s CPS planning
program, including California American Water’s systems. A key component of this
program is the completion of a CPS. The CPS recommends capital improvements that are
necessary in order to continue to provide safe, adequate and reliable service to its
2

 customers. The improvements will also ensure that California American Water will
continue to supply domestic, commercial and industrial customer demand, meet federal,
state and local regulatory requirements, and provide fire protection capability. All of
California American Water’s systems have been evaluated and have a CPS for a
respective system, and the majority of the capital improvements identified in this statewide GRC are grounded within the CPS. The following table summarizes by division all
the CPS and related documents prepared for the California American Water systems.

Northern Division

Year

Antelope

2012

Arden

2012

Isleton

2012

Lincoln Oaks

2012

Parkway

2012

Rosemont/Suburban

2012

Security Park

2012

Walnut Grove

2012

West Placer

2012

Larkfield (Sonoma County)

2013

Sacramento County Condition Based Assessment

2012

Sacramento County Urban Water Management Plan

2010

Coastal Division

Year

Monterey County Water

2012

Monterey County Condition Based Assessment

2012

Monterey County Wastewater

2012

Monterey County Urban Water Management Plan

2010

3

 Southern Division

Year

Ventura County

2012

Ventura County Condition Based Assessment

2012

Ventura County Urban Water Management Plan

2010

Baldwin Hills

2012

Duarte

2012

San Marino

2012

Los Angeles County Condition Based Assessment

2012

Los Angeles County Urban Water Management Plan

2010

San Diego County

2012

San Diego County Condition Based Assessment

2012

San Diego County Urban Water Management Plan

2010

It should be recognized that the 2015 Urban Water Management Plans are currently
underway for all districts, except for Larkfield. These plans are on schedule for submittal
to the State Department of Water Resources in July 2016. As they are finalized and
accepted by the State, California American Water plans to update/substitute the existing
2010 plans for the recently completed 2015 plans as part of this GRC proceeding.

The CPS remains the best method for providing a thorough system assessment and
providing a strategic capital investment plan. Generally speaking, these CPS documents
present a strategy for facility improvements in the water and wastewater systems.
Specifically, a Water System CPS document involves the following: 1) analyzes and
presents customer and demand projections; 2) examines the need for additional source of
supply; 3) evaluates the need to upgrade and renovate existing water system facilities; 4)
addresses existing and proposed water quality and treatment standards; 5) analyzes the
water system transmission, distribution and storage needs; 6) identifies facility needs; and
7) presents the capital improvement plan to address these facility needs. A Wastewater
4

 System CPS document includes the following: 1) analyzes and presents customer and
demand projections; 2) evaluates the need to upgrade and renovate existing wastewater
treatment facilities; 3) addresses existing and proposed discharge and effluent treatment
standards; 4) analyzes the wastewater system’s collection and pumping needs; 5)
identifies facility needs; and 6) presents the capital improvement plan to address these
facility needs. In summary, the purpose of the CPS is to provide an engineering analysis
that California American Water management can utilize, among other tools, to assist in
the long-term planning process and operation of the company. These CPS documents
typically detail the capital improvement recommendations for a fifteen year period.

In addition, there are other documents prepared and included with the CPS documents.
These other documents are called a Condition Based Assessment of Buried Infrastructure
and a Condition Based Assessment of Booster Stations (“CBAs”). First, the CBA of
Buried Infrastructure is a document that both presents a summary illustrating the
magnitude of the required future investment to replace buried infrastructure, and it also
proposes replacement of some of the worst performing infrastructure in the system that is
evidently deteriorating and in many cases is obsolete by today’s standards and/or has
reached the end of its useful life. Typically, the infrastructure would include the
following assets: pipes, valves, hydrants, meters and service lines. In order to identify this
information, this particular CBA utilized two methods to help identify these infrastructure
needs. The first method, called the “Broad Based Assessment” is a top-down approach
that: 1) forecasts replacement costs; 2) addresses highest priorities; 3) builds on the
inventory of assets; and 4) validates the benefits and effectiveness. The second method,
called the “Detailed Assessment” is a bottom-up approach that: 1) develops a
comprehensive inventory; 2) performs a condition assessment; 3) conducts a prioritization
of risks and failures of assets; and 4) identifies improvement programs to address
deficiencies. The findings contained in this particular CBA primarily are the result of the
Broad Based Assessment, and it is recognized that California American Water will benefit
5

 from the Detailed Assessment method once the Geographic Information System (GIS)
database (being developed by California American Water) and California American
Water’s existing distribution system hydraulic computer model are integrated in the very
near future. Second, the CBA for Booster Stations provides a review and assessment of
the booster pump stations operated by California America Water in its various districts.
The goal of the CBA for Booster Stations is to identify and prioritize capital improvement
projects necessary to ensure that the District can safely, adequately and reliably distribute
water to meet the current and projected water demands. This particular CBA has also been
developed as a companion document to the CPS documents. Two types of assessments
were performed. Approximately 56% of the pump stations were assessed by performing
on site physical evaluations of the facilities, interviewing operations and maintenance
personnel and reviewing available records. Observations and photographs taken during
the on-site evaluations are presented in attached appendices. The assessment narratives
also include photographs documenting the physical condition of the pumping facilities.
The remainder of the pump stations were assessed based on review of available records
provided by CAW. CAW personnel selected the pump stations for on-site assessments.
The pump stations selected for on-site assessments targeted critical and problematic pump
stations.

In summary, the CPS and the CBA documents represent a significant part of the “data”
that the Commission has requested from water utilities to fully justify and support its ongoing capital expenditure program. California American Water continues to make a
concerted effort in the filing of this statewide GRC application to provide a capital project
summary that is meaningful and easy to understand. Substantial back-up data is provided
in the Capital Investment Project Work Papers.

American Water continues to focus on incorporating principles of Integrated Water
Resource Management (IWRM) into American Water’s planning process. For purposes
6

 of my testimony, IWRM involves the integration of a variety of interests and components
that may have otherwise been peripheral to a project or planning study, such as the
inclusion of outside stakeholders, early Public Utilities Commission involvement,
innovative technologies (i.e.; aquifer storage/recovery, wastewater re-use), environmental
issues, regionalization of resources, demand management or other non-conventional
solutions, including demand management as a supply alternative. While some
components of IWRM may have been exercised on a project-specific basis in the past, the
goal of American Water at this time with IWRM is to provide guidelines on how to
consistently consider IWRM principles in undergoing the general course of planning.

7

 ATTACHMENT 4

11/14/2012

Water is crops

Water is ?sh

 

Water is jobs

Water is life

 

 

 

:v

California's Water Issues
Developing Solutions

 

 

 

Metropolitan Water District
of Southern California

 

- Regional water wholesale:

 

- Serve; 6 counties, 19 million people

 

- Giowth: 170.000 people/yr.

- $1 trillion legional economy

 

- 50%+ of regions Supply
(4 million 

 

 

 

Southern Colimeia?s Water Portfolio

 

25% Colorado River supplier)

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Los Angelle-a 



 

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Sources. of Water for
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Southern California's
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Delta Smelt

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Impacts of Regulation
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Bay-Delta Conservation Plan
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Multi-species approach to endangered
species protection

 

Habitat conservation, conveyance
improvements, and stressors control

 

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7- Bay-Delta Conservation Plan
I Steering Committee

 

 

Cal BayiDelta Authority Contra Costa Water District

The Resource Agency Kern County Water Agency

US Bureau of Reclamation Metropolitan Water District

Cal Dept of Water Resources North Delta Water Agency

State Water Res Control Board San Luis 8! Delta Mendota WA

US Corps of Engineers Santa Clara Valley Water Dist

Fish Agencies Westlands Water District

Cal Dept of Fish Game . 7 Wm? Agencv

us Fish 8. Wildlife ServIce EnVIronmental Org.

National Marine Fisheries Sennce American Rivers

Other Organizations Defenders of Wildlile

C3. Farm Bureau Federation Enwronmental Defense
eram Delta Natural Heritage Institute

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Support actions to Import:
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options

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recycle

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13

ATTACHMENT 5

Proposed Developer and Contributed Projects – ALL DISTRICTS
The various tasks included in these types of projects are funded entirely by non-company
funds. The tasks are mostly unscheduled, and California American Water typically has no
advance knowledge of them. Typical tasks for this RP include:
•

Developer/customer initiated main extension – developer/customer funded;

•

Main and valve replacement with upsizing – developer/customer funded;

•

Hydrants installed on existing mains – municipally funded;

•

Hydrants installed in conjunction with main extension projects Developer/customer/municipally funded;

•

Private hydrants installed by the Company – customer funded;

•

Service replacement with upsizing – developer/customer funded (usually customer
initiated based on new type of usage);

•

Services on current year main extensions to serve new or future customers –
developer/customer funded;

•

Services on prior year main extensions or existing mains (including customer
requests for additional service lines to existing account) – developer/customer
funded;

•

Meter replacement with upsizing or downsizing – customer funded (usually
customer initiated based on new type of usage);

•

Replacement with improvement (such as improved capacity, performance, and
functionality) – developer funded;

•

New facilities, such as wells, small treatment plants, small pump stations, small
storage tanks, and pressure regulating stations, needed to provide service to new
customers – developer/customer funded;

•

Additional units such as wells, pumps, filters, chemical feeders, or pressure
reducing valves (“PRV”) to increase capacity – developer/customer funded;

•

Meters for new customers or additional meters for existing customers/facilities
(usually only if customer initiated based on new type of usage) –
2

 developer/customer funded;
•

Hydrant replacement (accidental damage) – reimbursed;

•

Relocating hydrants to resolve issues due to municipal or state road or drainage
projects – reimbursed;

•

Relocating or relaying services to resolve issues due to municipal or state road or
drainage projects – reimbursed relocating or realignment or relaying mains to
resolve issues due to municipal or state road or drainage projects – reimbursed;
and

•

Associated building components (such as window and door replacement), and
equipment (such as wells, intake screens, pumps, electrical gear, chemical feeders,
control valves, SCADA, turbid meters, and sludge presses) – reimbursed.

California American Water typically develops the amount for this Recurring Project based
on documented and anticipated growth, developers’ inquiries, economic conditions and
historical information. All Districts are continuing to experience slower growth than in
previous years, and California American Water expects this growth to remain fairly
consistent into the foreseeable future. The anticipated annual contributions for the next
GRC period (2018-2020) are shown in the following table. Again, the lower budget for
contributions is a reflection of the overall economic slow-down from the residential and
commercial construction industry.

New Proposed Developer and Contributed Projects
Projects Funded By
2018 Plant
FP #
Others (District)
Expend.
DV-0550
Los Angeles County
$148,974
DV-0530
San Diego County
$ 23,836
DV-0551
Ventura County
$ 23,836
DV-0540
Monterey County
$372,435
DV-0560
Sacramento County
$178,769
DV-0561
Sonoma County
$ 5,719
GRAND TOTAL
$753,569

3

2019 Plant
Expend.
$148,974
$ 23,836
$ 23,836
$372,435
$178,769
$ 5,719
$753,569

2020 Plant
Expend.
$157,500
$ 26,400
$ 26,400
$416,249
$199,800
$ 5,989
$832,338

 ATTACHMENT 6

RECURRING PROJECTS

The RP capital expenditures are routine capital expenditures that are necessary to ensure
operation of a reliable water system. These types of capital expenditures are usually
comprised of short sections of distribution mains, valves, hydrants, services, meters, small
pumps and motors, and other items considered general equipment. The annual level of
expenditures for each of the individual recurring capital expenditure items discussed in
my testimony may vary from year-to-year based on need or unanticipated emergencies.

RPs are primarily for smaller unforeseen operational capital investment tasks and routine
every year type of projects, they are budgeted by taking into consideration the inflation
adjusted five-year historical average of the specific RP. In addition, the results from the
2013 GRC were also reviewed to determine consistency. A detailed description of the
typical scope of work for each of the seventeen RPs is provided below. It should be
recognized that the following codes are utilized by District: R15-50 – Los Angeles
County; R15-30 – San Diego County; R15-51 – Ventura County; R15-40 – Monterey
County Water; R15-48 – Toro Water District; R15-49 – Monterey County Wastewater;
R15-54 – Garrapata Water District; R15-60 – Sacramento County; R15-61 – Sonoma
County; and R15-62 – Dunnigan Wastewater District. For purposes of the following RP
summaries, the generic district designation of “ R15-xx has been used.

Project Code R15-xxA1 – Mains – New.
California American Water uses this RP for both scheduled and unscheduled tasks
involving installation of short lengths of main between dead-end mains in side streets and
installation of new short segments of main for certain road relocation projects. The tasks
include new water mains, including valves and other appurtenances necessary to install
the main (e.g. casing pipes and joint restraints) funded by California American Water.
The respective District operations identify these tasks and appropriate management
2

 reviews them. Examples of tasks in this item are:
•

Upsizing of developer initiated extension – Company funded;

•

New customer-initiated extensions in accordance with tariffs – Company funded
but may include some customer contribution; and Company-initiated and funded
new mains not related to immediate growth (e.g. new mains that eliminate existing
dead ends or provide system looping or new transmission capacity, new mains that
parallel existing mains to increase transmission capacity, provide reliability, or
establish an additional pressure gradient).

Project Code R15-xxB1 – Mains – Replacement/Renewal.
California American Water uses this RP for scheduled tasks that it funds itself. These
tasks involve replacement, renewal, or improvement of existing water mains, including
valves and other appurtenances necessary to perform the work (e.g. reconnection of
existing service lines and hydrant assemblies, joint restraint, etc.). Typically, pipelines
that are less than 1,500 feet in length, are less than sixteen-inches in diameter, and
generally cost less than $500,000, are included in this item. Management reviews any
tasks that the various District operations personnel plan under this item. Examples of
tasks in this RP are:
•

Replacement of short and intermediate sections of small diameter main (four-inch
and smaller). These types of projects include:

•

Cleaning and lining;

•

Slip lining;

•

Main replacement – no size change (due to failure - i.e. capitalized main breaks);

•

Valve replacement on serviceable mains;

•

Manhole replacement or lining;

•

Main and valve replacement – no size change;

•

Main and valve replacement with upsizing – Company funded; and

•

Relocating, realigning, or relaying mains to resolve issues due to municipal or
3

 state road or drainage projects – no reimbursement.
Project Code R15-xxC1 – Mains – Unscheduled.
California American Water uses this RP for unscheduled emergency main replacement
tasks funded by California American Water. These tasks involve installation of one foot
or more of main where main breaks have occurred or been reported and installation of
new short segments of main will be required to fix the break. These tasks include
installation of new water mains, including valves and other appurtenances necessary to
install the main (e.g. casing pipes and joint restraints) funded by California American
Water. Tasks for this line item occur on an emergency basis and California American
Water must repair them immediately to continue providing water to the customer. Since
these breaks and leaks are unplanned, the amount of emergency main breaks may vary
from year to year. However, as California American Water’s current facilities grow older
it will most likely result in more emergency main replacements. Examples of tasks in this
RP are:
•

Emergency breaks due to external construction work that resulted in accidental
damage to the system’s water main.

•

Company-initiated and funded new main installations resulting from incorrect
installation, corrosive soils, faulty pipe, pipe material, or faulty gaskets.

•

Company-initiated and funded new main installations that California American
Water performs on an emergency basis due to main leaks from the normal life
expectancies of pipe.

Project Code R15-xxD1 – Mains – Relocated.
California American Water uses this RP for unscheduled emergency or scheduled main
relocation tasks that it funds itself. Typical tasks will involve relocation of main in
existing streets where city or external consultants request main relocation usually resulting
from new construction, or upsizing of other street utilities. These tasks include new water
mains, including valves and other appurtenances necessary to install the main (e.g. casing
4

 pipes and joint restraints). Management reviews tasks that the various District operations
personnel plan under this item. Examples of tasks that are included in this item are:
•

Upsizing of existing utilities requires water main relocation due to clearance
standards,

•

Developer-initiated construction forced relocation of water main due to street
widening, utility relocation, and upgrading to current city standards,

•

Relocate due to city upsizing existing sewer, storm drain, or road widening and to
meet current city standards, and

•

Company-initiated relocations for system upgrades and realignment to meet
transmission alignments associated with new well or tank locations.

Project Code R15-xxE1 – Hydrants – New.
California American Water uses this RP for scheduled and unscheduled new hydrant
installation tasks funded by California American Water. Typical tasks include any new
hydrant installations that California American Water funds, including new fire hydrants
and valves that are for individual installations that are not a part of new main line
construction and occur where inadequate hydrant spacing exists, a pressure zone change
requires a new valve, or if an intersection is missing a valve requiring an additional valve
installation. These improvements will increase the redundancy of the system, protect vital
users from interruptions in supply, and reduce the risk of damage to property in the event
of a fire. Management reviews tasks that the various District operations personnel plan
under this item. Examples of tasks that are included in this item are:
•

Hydrants and valves installed on existing mains – Company funded; and

•

Hydrants and valves installed separately from new main extension projects that the
local fire department agency recommends – Company funded.

Project Code R15-xxF1 – Hydrants – Replacement.
California American Water uses this RP for scheduled and unscheduled hydrant
5

 replacement tasks funded by California American Water. Typical tasks involve
replacement of leaking, failed, or obsolete hydrant assemblies (including the hydrant
lateral and valve) that California American Water funds. Management reviews tasks that
the various District operations personnel plan under this item. Examples of tasks that are
included in this item are:
•

Hydrant replacement on serviceable mains (due to failure);

•

Hydrant replacement on serviceable mains (planned);

•

Hydrant replacement in conjunction with main replacement projects; and

•

Relocation of hydrants to resolve issues due to municipal or state road or drainage
projects – no reimbursement.

Project Code R15-xxG1 – Services – New.
California American Water uses this RP for scheduled and unscheduled new service line
installation tasks funded by California American Water. Typical tasks include costs
associated with new service installations including corporation stops and shutoff valves
for water if Company owned, including fire lines. These service lines begin with a
connection to the distribution main in the street and ultimately connect to the individual
plumbing system of the customer’s premises. California American Water’s portion of the
service line is that portion that begins at the distribution main in the street, and ends at the
curb, property line, meter, or valve on the customer’s premises. Management reviews
tasks that the various District operations personnel plan under this item. Examples of
tasks that are included in this item are:
•

Services on existing mains to serve new customers – Company funded;

•

Services on existing mains to serve future customers (such as may be installed
during road reconstruction to save future paving cost) – Company funded;

•

Services on current-year main extensions to serve new customers - Company
funded; and

•

Services on current-year main extensions to serve future customers - Company
6

 funded.
Project Code R15-xxH1 – Services – Replacement.
California American Water uses this RP for scheduled and unscheduled replacement
service line installation tasks funded by California American Water. Typical tasks involve
water service replacement or improvement, including replacement of corporation stops or
shut-off valves for water if Company owned. California American Water’s portion of the
service line begins at the distribution main in the street, and ends at the curb, property line,
meter or valve on the customer’s premises. Service lines are replaced based on age, leak
and break history, and coordination with any main installation/replacement projects.
Management reviews tasks that the various District operations personnel plan under this
item. Examples of tasks that are included in this item are:
•

Service replacement associated with main replacement projects - no size change;

•

Service replacement associated with main replacement projects - with upsizing Company funded;

•

Slip lining (larger services only);

•

Service replacement - no size change (due to failure);

•

Service replacement - no size change (planned);

•

Service replacement with upsizing - Company funded (usually Company- or
customer initiated based on existing service issues); and

•

Relocating or relaying services to resolve issues due to municipal or state road or
drainage projects – no reimbursement.

Project Code R15-xxI1 – Meters – New.
California American Water uses this RP for scheduled and unscheduled new meter
installation tasks funded by California American Water. Typical tasks involve purchasing
and installing all new customer meter installations including yokes, meters, and meter
readout devices, including meters on fire services (plant meters go in plant equipment).
The meters range in size from 5/8-inch up to 8-inches, with the typical residential
7

 customer having either a 5/8 by 3/4-inch or a 1-inch meter installed on their premises.
Management reviews tasks that the various District operations personnel plan under this
item. Examples of tasks that are included in this item are:
•

Meters for new customers – Company funded and connected to mains subject to
refunds;

•

Meters for new customers – Company funded and connected to mains not subject
to refunds; and

•

Additional meters for existing customers/facilities – Company funded (usually
Company or customer initiated based on existing service issues).

Project Code R15-xxJ1 – Meters – Replacement.
California American Water uses this RP for scheduled and unscheduled meter
replacement tasks funded by California American Water. Typical tasks include
replacement or improvement of existing customer metering (plant meters go in plant
equipment). The meters range in size from 5/8-inch up to 8-inches, with the typical
residential customer having either a 5/8 by 3/4-inch or a 1-inch meter installed on their
premises. California American Water plans to replace all customer according to the
criteria established in Commission’s General Order (GO) 103-A. Management reviews
tasks that the various District operations personnel plan under this item. Examples of
tasks that are included in this item are:
•

Meter replacement – no size or technology change (due to failure);

•

Meter replacement – no size or technology change (required by regulation)
(planned);

•

Meter replacement – no size or technology change (planned due to poor
condition);

•

Meter replacement with upsizing or downsizing – Company funded (usually
Company or customer initiated based on existing service issues);

•

Meter replacement with technology improvement (planned);
8

 •

Install or improve meter read output device (without core meter replacement) such
as adding remote readout, touch read, radio or telephone read capability;

•

Replace or improve meter pits (if Company owned); and

•

Move meters to eliminate meter pits (if Company owned).

Project Code R15-xxK1 – ITS Equipment and Systems
California American Water uses this RP for costs related to the purchase of personal
computers (PCs), printers, plotters, scanners, peripherals, networks, software, servers, and
associated equipment. Projects are planned under this item by the various District
operations personnel in conjunction with the Western Division IT Department and are
reviewed by California American Water management (as appropriate). Generally,
equipment (PC, Laptops and printers) is replaced on a five-year schedule. Software is
usually a one time purchase with annual subscriptions for updates. Internet work gear is
also on a five-year replacement schedule. Major phone system purchases are depreciated
over ten years but the handset replacement is five years.
Examples of projects that are included in this item are:
•

Replacement of existing equipment due to failure or obsolescence; and

•

New items to achieve efficiency or address new requirements.

Project Code R15-xxL1 – SCADA.
California American Water uses this RP for scheduled and unscheduled tasks associated
with the replacement and upgrade of the SCADA system. The SCADA system monitors
and controls the production, treatment, distribution and storage facilities with the various
operating Districts of California American Water. This includes the monitoring of pumps,
wells, tank water levels, chlorine concentrations and other key parameters essential to
ensure that the facilities are in proper working order. SCADA system also sends alarms to
the operators and warns them of possible equipment failures. SCADA improvements
include replacement of computers, programmable logic controllers (PLCs) antennas,
9

 wiring, peripherals, networks, software, servers, and associated equipment. SCADA tasks
are planned by California American Water operations personnel. Examples of tasks that
are included in this item are:
•

Replacement of existing equipment due to failure or obsolescence;

•

Installation of new software updates to the system, including new programming to
better monitor pump and storage facilities;

•

Installation of upgraded SCADA server that has a larger cooling system and a
better ventilated enclosure;

•

Replacement of SCADA computers – generally on a five-year schedule.
Replacement of software is usually a one-time purchase item; and

•

Replacement of antennas damaged during recent burglaries at California American
Water’s tank sites.

Project Code R15-xxM1 –Security.
California American Water uses this RP for scheduled and unscheduled tasks associated
with the replacement and upgrade of the security systems. The unscheduled and
emergency work under this task includes the replacement and restoration of the site
fences, gates, security camera and alarms. Installation of these improvements is a result of
ongoing evaluation of potential threats to the water facilities located within the various
operating Districts of California American Water. Examples of tasks that are performed
under this RP are:
•

Restoration and replacement of deficient security fencing.

•

Restoration and replacement of video surveillance camera’s physical entry alarms,
alarm communication equipment and accessories.

•

Replacement of locks used on gates along with tank hatch locks.

•

Installation of security lights to curtail vandalism and damage to the facilities.

10

 Project Code R15-xxN1 –Offices and Operations Center.
California American Water uses this RP for scheduled and unscheduled tasks involving
the replacement or improvement of building systems, equipment, or purchase of
furnishings, copy machines, fax machines and other related equipment for the offices and
operations centers. Examples of tasks that are included in this item are:
•

Replacement of systems or equipment due to failure, obsolescence, poor
performance, or poor condition (HVAC, electrical service, roofing, etc.);

•

Improvements (adding generators, reconfiguring walls/office space, additional
parking, building extensions, etc.);

•

Leasehold improvements (if capitalized);

•

Replacement of existing furniture or equipment due to failure, obsolescence, or
poor condition;

•

Purchase of new equipment to increase the efficiency of employees and address
any new requirements or office reorganization.

Project Code R15-xxP1 –Tools and Equipment.
California American Water uses this RP for scheduled and unscheduled purchases of new
or replacement tools and equipment. These tools and equipment are needed for the
operations conducted at the construction sites, fabrication shops, laboratories, storerooms
(material delivery, shipping and storage) and meter reading benches. Items may include:
a) the replacement of existing equipment due to failure or obsolescence; b) new equipment
as needed to improve the efficiency and productivity of the worker; and, c) address new
requirements by regulating agencies. Typical tools and equipment purchased under this
RP are as follows:
•

Laboratory coolers, icemakers, air conditioning and refrigerators, and waterquality testing equipment such as titrators, mass spectrophotometers, fume hoods,
cabinets, etc.
11

 •

Construction tools and power operated equipment such as backhoes, forklifts,
compressors, pipe saws, etc.

•

Specialty tools such as testing equipment, leak detectors, pipe locators, land
surveying equipment, GPS locators, etc.

•

Meter reading equipment, such as remote read-out tools.

•

Warehousing tools and machinery used for receiving, shipping, handling and
storage of materials and supplies.

Project Code R15-xxQ1 –Plant – Replacements/Additions.
California American Water uses this RP for scheduled and unscheduled tasks related to
the plant replacements or additions funded by California American Water. Typical plant
facilities covered under this RP are: a) water supply; b) water treatment; c) water
pumping; d) water storage; and, e) water pressure regulation facilities including the
associated building components (such as window and door replacement), and equipment
(such as wells, intake screens, pumps, electrical gear, chemical feeders, control valves,
turbidimeters, and sand separators). The tasks may include replacement, upgrade and/or
improvement of the electrical pumping, electrical switchgear, building and structural
(minor in scope), mechanical, instrumentation and control, and facility piping or valve
equipment in the aforementioned facilities. Tasks may also include installation of new
components, small complete facilities (higher-cost items would require an individual
project identification), structural additions, and equipment additions. A further
description of the tasks conducted under this RP is presented below:
•

Replacement in kind (due to failure);

•

Replacement in kind (planned);

•

Replacement with improvement (improved capacity, performance, functionality,
etc.) Company funded;

•

Additional units such as wells, pumps, filters, chemical feeders, or PRVs to
increase capacity or reliability – Company funded;
12

 •

Improvements or new equipment to protect existing facilities such as fencing,
flood protection, emergency generators; and

•

New process or monitoring improvements such as adding variable frequency
drives (VFDs), SCADA or control enhancements, new chemical feed systems, or
on-line instrumentation.

Project Code R15-xxR1 –Tank Rehabilitation.
California American Water uses this RP for scheduled and unscheduled tasks related to
tank rehabilitation work funded by California American Water. Tasks performed under
this RP include tank rehabilitation and routine restoration of the tank components.

The Proposed New RPs are those projects that are being submitted for review and
consideration by the Commission for adoption in the GRC period of 2018 to 2020. The
budgets proposed for each of the proposed New RPs are shown for all districts in
Attachment 7.

13

 ATTACHMENT 7

1
2
3
4
5
6

Proposed New RPs – Los Angeles County District
Project
code #
R15-50A1
R15-50B1
R15-50C1
R15-50D1
R15-50E1
R15-50F1

7
8
9
10
11
12
13
14

R15-50G1
R15-50H1
R15-50I1
R15-50J1
R15-50K1
R15-50L1
R15-50M1
R15-50N1
R15-50P1
R15-50Q1
R15-50R1

Description
Mains – New
Mains – Replaced/Restored
Mains - Unscheduled
Mains – Relocated
Hydrants, Valves and
Manholes New
Hydrants, Valves and
Manholes Replacements
Services and Laterals – New
Services and Laterals –
Replacements
Meters – New
Meters - Replacements
ITS Equipment and Systems
SCADA
Security
Offices and Operations
Centers
Tools and Equipment
Process Plant
Capitalized Tank Rehab
Total RP s

2018 Expend.
$38,830
$438,900
$109,440
$188,270
$12,945

2019 Expend.
$40,000
$861,120
$112,725
$193,920
$13,335

2020 Expend.
$41,200
$886,953
$116,107
$199,738
$13,735

$69,425

$71,510

$73,655

$12,945
$530,690

$13,335
$546,610

$13,735
$563,008

$7,060
$794,270

$7,275
$0

$7,493
$0

$81,200
$175,325
$25,890

$83,640
$180,585
$26,670

$86,149
$186,003
$27,470

$70,600
$712,735
$1,057,300
$4,325,825

$72,720
$1,544,570
$1,089,020
$4,857,035

$74,902
$906,936
$1,121,691
$4,318,774

15
16
17
18
19
20
21
22
23
24
25
26
27
28
2

 1
2
3
4
5
6

Proposed New RPs – San Diego County District
Project
code #
R15-30A1
R15-30B1
R15-30C1
R15-30D1
R15-30E1
R15-30F1

7
8
9
10
11
12
13
14

R15-30G1
R15-30H1
R15-30I1
R15-30J1
R15-30K1
R15-30L1
R15-30M1
R15-30N1
R15-30P1
R15-30Q1
R15-30R1

Description
Mains – New
Mains – Replaced/Restored
Mains - Unscheduled
Mains – Relocated
Hydrants, Valves and
Manholes New
Hydrants, Valves and
Manholes Replacements
Services and Laterals – New
Services and Laterals –
Replacements
Meters – New
Meters - Replacements
ITS Equipment and Systems
SCADA
Security
Offices and Operations
Centers
Tools and Equipment
Process Plant
Capitalized Tank Rehab
Total RP s

2018 Expend.
$41,300
$62,800
$143,800
$14,600
$12,000

2019 Expend.
$42,500
$252,400
$148,100
$15,000
$12,300

2020 Expend.
$43,775
$259,972
$152,543
$15,450
$12,669

$12,000

$12,300

$12,669

$10,300
$269,700

$10,600
$277,700

$10,918
$286,031

$8,600
$364,700
$0
$10,300
$17,500
$18,900

$8,800
$0
$0
$10,600
$18,000
$19,400

$9,064
$0
$0
$10,918
$18,540
$19,982

$87,500
$21,100
$0
$1,095,100

$90,100
$209,500
$0
$1,127,300

$92,803
$215,785
$0
$1,161,119

15
16
17
18
19
20
21
22
23
24
25
26
27
28
3

 1
2
3
4
5
6

Proposed New RPs – Ventura County District
Project
code #
R15-51A1
R15-51B1
R15-51C1
R15-51D1
R15-51E1
R15-51F1

7
8
9
10
11
12
13
14

R15-51G1
R15-51H1
R15-51I1
R15-51J1
R15-51K1
R15-51L1
R15-51M1
R15-51N1
R15-51P1
R15-51Q1
R15-51R1

Description
Mains – New
Mains – Replaced/Restored
Mains - Unscheduled
Mains – Relocated
Hydrants, Valves and
Manholes New
Hydrants, Valves and
Manholes Replacements
Services and Laterals – New
Services and Laterals –
Replacements
Meters – New
Meters - Replacements
ITS Equipment and Systems
SCADA
Security
Offices and Operations
Centers
Tools and Equipment
Process Plant
Capitalized Tank Rehab
Total RP s

2018 Expend.
$9,430
$80,125
$106,045
$89,550
$27,100

2019 Expend.
$9,715
$82,530
$109,225
$92,340
$27,915

2020 Expend.
$10,006
$85,006
$112,502
$95,110
$28,752

$114,295

$117,725

$121,257

$30,635
$1,073,400

$31,555
$1,465,800

$32,502
$1,518,774

$44,775
$640,975

$46,120
$0

$47,504
$0

$83,660
$83,660
$55,380

$86,170
$86,170
$57,040

$88,755
$88,755
$58,751

$50,670
$126,075
$45,950
$2,661,725

$52,190
$429,860
$47,330
$2,741,685

$53,756
$433,756
$48,750
$2,823,936

15
16
17
18
19
20
21
22
23
24
25
26
27
28
4

 1
2
3
4
5
6

Proposed New RPs – Monterey County Water District
Project
code #
R15-40A1
R15-40B1
R15-40C1
R15-40D1
R15-40E1
R15-40F1

7
8
9
10
11
12
13
14

R15-40G1
R15-40H1
R15-40I1
R15-40J1
R15-40K1
R15-40L1
R15-40M1
R15-40N1
R15-40P1
R15-40Q1
R15-40R1

Description
Mains – New
Mains – Replaced/Restored
Mains - Unscheduled
Mains – Relocated
Hydrants, Valves and
Manholes New
Hydrants, Valves and
Manholes Replacements
Services and Laterals – New
Services and Laterals –
Replacements
Meters – New
Meters - Replacements
ITS Equipment and Systems
SCADA
Security
Offices and Operations
Centers
Tools and Equipment
Process Plant
Capitalized Tank Rehab
Total RP s

2018 Expend.

2019 Expend.

2020 Expend.

$290,494

$299,209

$308,185

$30,904

$31,831

$32,786

$89,176

$89,176

$89,176

$317,000

$322,010

$327,170

$25,000

$25,000

$25,000

$27,633
$123,012
$43,328

$28,282
$125,202
$43,878

$28,950
$127,458
$44,444

$57,265
$1,414,221
$430,064
$2,848,096

$58,083
$1,447,648
$442,965
$2,913,284

$58,926
$1,482,077
$456,254
$2,980,426

15
16
17
18
19
20
21
22
23
24
25
26
27
28
5

 1
2
3
4
5
6

Proposed New RPs – Monterey County Wastewater District
Project
code #
R15-49A1
R15-49B1
R15-49C1
R15-49D1
R15-49E1
R15-49F1

7
8
9
10
11
12
13
14

R15-49G1
R15-49H1
R15-49I1
R15-49J1
R15-49K1
R15-49L1
R15-49M1
R15-49N1
R15-49P1
R15-49Q1
R15-49R1

Description
Mains – New
Mains – Replaced/Restored
Mains - Unscheduled
Mains – Relocated
Hydrants, Valves and
Manholes New
Hydrants, Valves and
Manholes Replacements
Services and Laterals – New
Services and Laterals –
Replacements
Meters – New
Meters - Replacements
ITS Equipment and Systems
SCADA
Security
Offices and Operations
Centers
Tools and Equipment
Process Plant
Capitalized Tank Rehab
Total RP s

2018 Expend.

2019 Expend.

2020 Expend.

$30,000

$30,000

$30,000

$12,000

$12,000

$12,000

$15,000
$200,000

$15,000
$200,000

$15,000
$200,000

$257,000

$257,000

$257,000

15
16
17
18
19
20
21
22
23
24
25
26
27
28
6

 1
2
3
4
5
6

Proposed New RPs – Toro District
Project
code #
R15-48A1
R15-48B1
R15-48C1
R15-48D1
R15-48E1
R15-48F1

7
8
9
10
11
12
13
14

R15-48G1
R15-48H1
R15-48I1
R15-48J1
R15-48K1
R15-48L1
R15-48M1
R15-48N1
R15-48P1
R15-48Q1
R15-48R1

Description
Mains – New
Mains – Replaced/Restored
Mains - Unscheduled
Mains – Relocated
Hydrants, Valves and
Manholes New
Hydrants, Valves and
Manholes Replacements
Services and Laterals – New
Services and Laterals –
Replacements
Meters – New
Meters - Replacements
ITS Equipment and Systems
SCADA
Security
Offices and Operations
Centers
Tools and Equipment
Process Plant
Capitalized Tank Rehab
Total RP s

2018 Expend.

2019 Expend.

2020 Expend.

$22,710

$23,170

$23,170

$18,680

$19,060

$19,060

$16,160

$16,500

$16,500

$70,630

$72,000

$72,000

$128,180

$130,730

$130,730

15
16
17
18
19
20
21
22
23
24
25
26
27
28
7

 1
2
3
4
5
6

Proposed New RPs – Garrapata District
Project
code #
R15-54A1
R15-54B1
R15-54C1
R15-54D1
R15-54E1
R15-54F1

7
8
9
10
11
12
13
14

R15-54G1
R15-54H1
R15-54I1
R15-54J1
R15-54K1
R15-54L1
R15-54M1
R15-54N1
R15-54P1
R15-54Q1
R15-54R1

Description
Mains – New
Mains – Replaced/Restored
Mains - Unscheduled
Mains – Relocated
Hydrants, Valves and
Manholes New
Hydrants, Valves and
Manholes Replacements
Services and Laterals – New
Services and Laterals –
Replacements
Meters – New
Meters - Replacements
ITS Equipment and Systems
SCADA
Security
Offices and Operations
Centers
Tools and Equipment
Process Plant
Capitalized Tank Rehab
Total RP s

2018 Expend.

2019 Expend.

2020 Expend.

$50,000

$50,000

$50,000

$50,000

$50,000

$50,000

15
16
17
18
19
20
21
22
23
24
25
26
27
28
8

 1
2
3
4
5
6

Proposed New RPs – Sacramento County District
Project
code #
R15-60A1
R15-60B1
R15-60C1
R15-60D1
R15-60E1
R15-60F1

7
8
9
10
11
12
13
14

R15-60G1
R15-60H1
R15-60I1
R15-60J1
R15-60K1
R15-60L1
R15-60M1
R15-60N1
R15-60P1
R15-60Q1
R15-60R1

Description
Mains – New
Mains – Replaced/Restored
Mains - Unscheduled
Mains – Relocated
Hydrants, Valves and
Manholes New
Hydrants, Valves and
Manholes Replacements
Services and Laterals – New
Services and Laterals –
Replacements
Meters – New
Meters - Replacements
ITS Equipment and Systems
SCADA
Security
Offices and Operations
Centers
Tools and Equipment
Process Plant
Capitalized Tank Rehab
Total RP s

2018 Expend.
$164,825

2019 Expend.
$169,770

2020 Expend.
$174,863

$123,620

$127,330

$131,150

$9,890

$10,190

$10,496

$65,930

$67,900

$69,937

$39,145
$370,850

$40,320
$381,975

$41,530
$393,434

$4,120
$117,024

$4,245
$120,535

$4,372
$124,151

$28,845
$160,700
$150,000

$29,710
$165,520
$12,730

$30,601
$170,486
$13,112

$24,725
$1,236,168
$100,000
$2,595,842

$25,470
$1,273,250
$103,000
$2,531,945

$26,234
$1,311,448
$106,090
$2,607,903

15
16
17
18
19
20
21
22
23
24
25
26
27
28
9

 1
2
3
4
5
6

Proposed New RPs – Sonoma County District (Larkfield)
Project
code #
R15-61A1
R15-61B1
R15-61C1
R15-61D1
R15-61E1
R15-61F1

7
8
9
10
11
12
13
14

R15-61G1
R15-61H1
R15-61I1
R15-61J1
R15-61K1
R15-61L1
R15-61M1
R15-61N1
R15-61P1
R15-61Q1
R15-61R1

Description
Mains – New
Mains – Replaced/Restored
Mains - Unscheduled
Mains – Relocated
Hydrants, Valves and
Manholes New
Hydrants, Valves and
Manholes Replacements
Services and Laterals – New
Services and Laterals –
Replacements
Meters – New
Meters - Replacements
ITS Equipment and Systems
SCADA
Security
Offices and Operations
Centers
Tools and Equipment
Process Plant
Capitalized Tank Rehab
Total RP s

2018 Expend.
$58,312

2019 Expend.
$58,312

2020 Expend.
$58,312

$16,288

$16,288

$16,288

$4,269

$4,269

$4,269

$16,660

$16,660

$16,660

$2,874
$16,660

$2,874
$16,660

$2,874
$16,660

$1,250
$3,332

$1,250
$3,332

$1,250
$3,332

$7,530
$22,492
$3,332

$7,530
$22,492
$3,332

$7,530
$22,492
$3,332

$7,081
$166,608

$7,081
$166,604

$7,081
$166,604

$326,688

$326,684

$326,684

15
16
17
18
19
20
21
22
23
24
25
26
27
28
10

 1
2
3
4
5
6

Proposed New RPs – Dunnigan Wastewater District
Project
code #
R15-62A1
R15-62B1
R15-62C1
R15-62D1
R15-62E1
R15-62F1

7
8
9
10
11
12
13
14

R15-62G1
R15-62H1
R15-62I1
R15-62J1
R15-62K1
R15-62L1
R15-62M1
R15-62N1
R15-62P1
R15-62Q1
R15-62R1

Description
Mains – New
Mains – Replaced/Restored
Mains - Unscheduled
Mains – Relocated
Hydrants, Valves and
Manholes New
Hydrants, Valves and
Manholes Replacements
Services and Laterals – New
Services and Laterals –
Replacements
Meters – New
Meters - Replacements
ITS Equipment and Systems
SCADA
Security
Offices and Operations
Centers
Tools and Equipment
Process Plant
Capitalized Tank Rehab
Total RP s

2018 Expend.

2019 Expend.

2020 Expend.

$10,000

$10,000

$10,000

$5,000

$5,000

$5,000

$5,000

$5,000

$5,000

$5,000

$5,000

$5,000

$10,000
$70,000

$10,000
$70,000

$10,000
$70,000

$105,000

$105,000

$105,000

15
16
17
18
19
20
21
22
23
24
25
26
27
28
11

 ATTACHMENT 8

STATE OF CALIFORNIA EDMUND G. BROWN JFI., Governor

PU BLIC UTILITIES COMMISSION

505 VAN NESS AVENUE
SAN FRANCISCO, CA 94102-3298

 

December 22, 2014

David P. Stephenson

Director, Rates Regulation
California-American Water Company
4701 Beloit Dr.

Sacramento, CA 95838-2434

Dear Mr. Stephenson,
The Commission has approved California-American Water Company?s Advice Letter No. 1062, filed

on December 18, 2014, regarding the inclusion in rate base associated with the Carmel Woods Tank
Capital Project in the Monterey County District submitted in accordance with 

Enclosed are copies of the following revised tariff sheets for the utility?s ?les:

P.U.C. Sheet No. Title of Sheet
Schedule No. MO-1, General Metered Service, Residential
and Multl-Residential Customers I
Schedule No. General Metered Service, Non
7566-W . .
ReSIdentlal Customers
Schedule No. General Metered Service, Other
Customers
Schedule No. General Metered Service, Other
Customers
7569-W Schedule No. MO-4, Private Fire Protection Service
7570-W Schedule No. MO-4H, Private Fire Hydrant Service
7571-W Schedule No. General Metered Service
7572-W Schedule No. MO-ARC-4, Private Fire Protection ServiCe
7573-W Table of Contents, Page 2
7574-W Table of Contents, Page 3
7575-W Table of Contents, Page 1

Please contact Bruce DeBerry at (415) 703-1279 if you have any questions.

Kie/L?lifefl?erez
Water Sewer Advisory Branch
Division of Water and Audits
Enclosures

 

CALIFORNIA PUBLIC UTILITIES
COMMISSION
DIVISION OF WATER AND
AUDITS
Advice Letter Cover Sheet

 

(Date Filed Received Stamp by CPUC)

 

FILED

 

 

will 2 A 2014

 

 

PUBLIC UTILITIES COMMISSION

 

 

 

 

 

 

?lms WATER AND AUDITS
AL Date Mailed to Service List: Requested Effective Date; 
1062 November 24, 2014 December 24, 2014 Drier 1 EITier 2 Ell?ier 3
Replacing Authorized by: Compliance Filing? Rate $104342
 . 1  6 EYBS DNOD Impact  

 

 

 

 

 

 

The public has 20 days from Date Mailed (above) to
protest this advice letter. If you chose to motest or
respond to the advice letter. sel_1d Protest a_nd/or

Correspondence within 20 days to:

Director

Division of Water and Audits

505 Van Ness Ave.

San Francisco, CA 94102

 

and if you have email capability, also email to:

 

water division@cpuc.ca.qov

 

Your protest also must be served on the Utility

 

(see attached advice letter for more information and grounds

 

 

 

 

 

for protest)
Company Name: CALIFORNIA AMERICAN WATER CPUC Utility Number:
WTA
Address: 1033 AVENUE, SUITE 200 WTB
City, State, Zip: CORONADO, CA 92118 
SWR
Contact Name: Phone No. Fax No. Email Address:

 

Filer

Sherrene Chew (916) 568-4233

(916) 568-4260

Sherrene.chew@amwater.com

 

Alternate

 

 

Todd Pray (916) 568-4232

 

(916) 568-4260

 

todd.pray@amwater.com

 

Description: (In this space or on the back of this form)
1. Explain justification for requested Tier Capital AL per Decision and D.12-06-020.
2. Describe service affected and how it is affected ?In Monterey 00. District, affects Main, Hidden Hills, Ryan Ranch,

 

 

 

 

Bishop.
3. Describe differences from related Advice Letters (Similar service, replacement ?ling) 
(FOR CPUC USE ONLY)
WTS Budget/Activity/Type Process as: 0 Tier 1 0 Tier 2 0 Tier 3
20th Day 30th Day I

 

Project Manager:

 

Analyst:

 

Due Date:

 

Completion Date:

 

 

 

 

 

Suspended on:
Extended on:

Resolution No.:

AL/Tariff Effective Date:

 

 

 

 

 

He V. 03/04/08

 

Ar

CALIFORNIA

4701 Beloit Drive

Sacramento, CA 9



AMERICAN WATER

November 24, 2014

ADVICE LETTER NO. 1062

SHEET

I

 

335 .

 



  
 

 

DEC 1.8 20M

  

 

 

PUBLIC UTILITIES COMMISSION
DIVISION OF WATER AND AUDITS

 

TO THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

California-American Water Company (California American Water) (U210W) hereby submits for
review this advice letter including the following tariff sheets applicable to its Monterey County
District which are attached hereto:

 

C.P.U.C.
Sheet No.

Title of Sheet

Canceling
Sheet No.

 

7565-W

Schedule No. MO-1
Monterey County District Tariff Area
GENERAL METERED SERVICE
RESIDENTIAL AND 
CUSTOMERS



 

7566-W

Schedule No. MO-1C
Monterey County District Tariff Area
GENERAL METERED SERVICE
NON RESIDENTIAL CUSTOMERS

7558-W

 

7567-W

Schedule No. MO-1O
Monterey County District Tariff Area
GENERAL METERED SERVICE
OTHER CUSTOMERS

7559-W

 



Schedule No. MO-1O (Continued)
Monterey County District Tariff Area
GENERAL METERED SERVICE
OTHER CUSTOMERS

7560-W

 

7569-W

Schedule No. MO-4
Monterey County District Tariff Area
PRIVATE FIRE PROTECTION SERVICE

7561 -W

 

7570-W

Schedule No. MO-4H
Monterey County District Tariff Area
PRIVATE FIRE HYDRANT SERVICE



 

7571 -W

 

 

Schedule No. MO-ARC-1
Monterey County District Tariff Area
Ambler Park, Ralph Lane, and Chualar Service Area
GENERAL METERED SERVICE

 

7220-W

 

 

 

Advice Letter 1062

SHEET November 24, 2014

Page 2 of 6

 

Schedule No. MO-ARC-4
Monterey County District Tariff Area
7572-W Ambler Park, Ralph Lane, and Chualar Service Area 6971-W
PRIVATE FIRE PROTECTION SERVICE

 

 

 

 

 

 

 

 

7573-W TABLE OF CONTENTS (PG 2) 7563-W

7574-W TABLE OF CONTENTS (PG 3) 7555-W

7575-W TABLE OF CONTENTS (PG 1) 7564-W
Purpose:

This advice letter filing is being made to request the inclusion in rate base of costs associated
with the Carmel Woods Tank (IF-0540494) capital project, in accordance with California Public
Utilities Commission (Commission) Decision (D.) 12-06-016. California American Water
previously requested this rate treatment in AL 1027, filed November 27, 2013. AL 1027 was
rejected by the Division of Water and Audits (DWA) on September 2, 2014, which California
American Water appealed on September 12, 2014. After conferring with DWA, California
American Water is refiling its request for the same amount it originally submitted in AL 1027.

The Carmel Woods Tank (IP-0540-194) capital project (Monterey County) rate base includes:

0 $685,000 in actual project costs (the capped amount pursuant to the
terms of the Partial Settlement Agreement between the Division of
Ratepayer Advocates, the Utility Reform Network and California American
Water Company on Revenue Requirement Issues (Settlement
Agreement) dated July 28, 2011), plus

0 $25,597 in accrued interest on actual project costs up to the capped
amount of $685,000, which interest is accrued from the date of
the completion of the project?s final design and permitting (beginning of
December 2011) to the in-service date (end of December 2012), when
the capital project was completed and used and useful, also pursuant to
the terms of the Settlement Agreement.

As such, plant in service is increased by $710,597 (the sum of the $685,000 in project costs and
the $25,597 in accrued interest). Recovery of costs addressed in this advice letter and
associated with the Carmel Woods Tank project will increase the annual revenue requirement
by $104,342 or 0.20% for a total authorized operating revenue for the Monterey County District
of $51,531,359.

Pursuant to the terms of the Settlement Agreement in D.12-06-016, accrued interest is

calculated using an annual rate equal to California American Water?s weighted average cost of
debt.

Background:

Page 185 and 186 of the Settlement Agreement (Section 10.4.5.8; lP-0540-194; Replace
Carmel Woods Tank) states:

Advice Letter 1027
November 24, 2014
Page 3 of 6

Resolution:

DRA and California American Water recognize that this investment project has
an estimated cost of $685,000 plus interest, and is currently designated as an
Advice Letter project. As part of this settlement agreement, certain capital
projects in California American Water?s 2010 general rate case application have
been agreed to by the parties to have actual project costs accrue interest at an
annual rate equal to California American Water?s weighted average cost of debt,
as explained in more detail in the supporting language for Special Request 33.
Please see Section 11.26 of this Settlement Agreement.?

As described in the Settlement Agreement, the weighted average cost of debt is calculated
using a formula blending long-term rates (California American Water's prevailing long-term debt
rate and outstanding long-term debt as determined in the triennial cost of capital proceeding)
with short-term rates (California American Water?s short-term debt allocation). Specifically:

TdebtRate)(L TdebtRate)(STdebt)] Tdebt) =(STdebt)] 100
Where:

LTdebtRate Test Year Authorized Effective Cost of long-term debt last
authorized in the cost of capital proceeding;

LTdebt Total net proceeds of long-term debt as last authorized in cost of capital
proceeding, adjusted as authorized per a decision in A. 1 1-05-003;

STdebtRate average rate for 90-day non-financial commercial
paper as published by the U. 8. Federal Reserve;

STdebt total of all California American Water?s short-term debt (both available
and outstanding, minus any short-term debt specifically acquired to fund
obligations as set forth in Regional Desalinization Plant as per the Water
Purchase Agreement).

As stated in the Settlement Agreement, the following equation shall be used to
determine the percentage rate to apply to balances:

100

Where:
rate
A annual WA 00% as calculated above.

Pursuant to the Settlement Agreement, interest will begin to accrue only after final design and
permitting have been completed when a permit is required, or after construction begins when no
permit is required. Interest will apply to only those projects requiring more than one year from
the start of construction to complete. Interest will continue to be accrued until such time as each

Advice Letter 1027
November 24, 2014
Page 4 of 6

portion of the project costs is included in rate base, or determined not to be allowed for
ratemaking purposes.

Reguest I Rate Impact:
California American Water is requesting authorization to increase the rates in Monterey County

District, excluding the Ralph Lane, Chualar and Garrapata Service Areas, to reflect the increase
in the revenue requirement of $104,341 or 0.20% for a total authorized operating revenue of
$51,531,359.

In accordance with Section 4.3 of General Order No. 96-3, a copy of this advice letter is being
sent to those entities listed in Exhibit A.

Copies of the detailed workpapers and the documents supporting this Advice Letter have
been furnished to the Commission Staff.

The actions requested in this advice letter are not now the subject of any formal filings with
the Commission, including a formal complaint, nor action in any court of law.

This ?ling will not cause the withdrawal of service, nor conflict with other schedules or rules.

Note: California American Water currently has an advice letter pending (on appeal) at the
Commission for the Monterey County District, AL1025 (Monterey 2014 Step Rates). If the
appeal on this advice letter results in changes to Monterey County base rates, California
American Water will supplement this AL 1062 to incorporate these appeal-driven changes.
Moreover, California American Water on November 23, 2014 filed an advice letter, AL 1061,
related to other capital projects in the Monterey County district. To the extent that AL 1061
results in changes to Monterey County base rates, California American Water will
supplement this AL 1062 to incorporate changes related to AL 1061.

Tier Designation:
Pursuant to D.12-06-016, this advice letter is submitted with a Tier 2 designation.
Effective Date:

Pursuant to D.12-06-016, California American requests an effective date of January 2, 2014,
which is the original effective date asked for in AL 1027.

Protests and Rgponses:
Anyone may respond to or protest this advice letter. 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 advice letter 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 advice letter;

Advice Letter 1062
November 24, 2014
Page 5 of 6

(2) The relief requested in the advice letter 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 advice letter contain material
error or omissions;

(4) The relief requested in the advice letter is pending before the
Commission in a formal proceeding; or

(5) The relief requested in the advice letter requires consideration in a
formal hearing, or is otherwise inappropriate for the advice letter process;
or

(6) The relief requested in the advice letter 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 shall provide citations or proofs where available to allow staff to properly consider
the protest.

A response or protest must be made in writing or by electronic mail and must be received by
the Water Division within 20 days of the date this advice letter is filed. The address for
mailing or delivering a protest is:

Tariff Unit, Water Division, 3rd floor

California Public Utilities Commission,

505 Van Ness Avenue, San Francisco, CA 94102



On the same date the response or protest is submitted to the Water Division, the respondent
or protestant shall send a copy by mail (or e-mail) to us, addressed to:

Recipients: E-Mail: Mailing Address:
David P. Stephenson ca.rates@amwater.com 4701 Beloit Drive
Director? Rates Regulatory Sacramento, CA 95838

Fax: (916) 568-4260

333 Hayes Street

Sarah E. Leeper sarah.leeper@amwater.com Suite 202

Vice President Legal, San Francisco, CA 94102
Regulatory Fax: (415) 863-0615
Bentley Erdwurm bentley.erdwurm@amwater.com 4701 Beloit Drive
Financial Analyst Ill Sacramento, CA 95838

Fax: (916) 568?4260

Advice Letter 1062
November 24, 2014
Page 6 of 6

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.

If you have not received a reply to your protest within 10 business days. contact this person
at (916) 568-4222.

CALIFORNIA-AMERICAN WATER COMPANY

David P. Stephenson

David P. Stephenson
Director - Rates Regulatory

 

SERVICE LIST PURSUANT TO SECTION 4.3 OF 6.0. NO. 96-B
CALIFORNIA-AMERICAN WATER COMPANY

ADVICE LETTER 1062

APPLICATION 10-07-007 SERVICE LIST

By Mail

JAN BEAT
690 VALLEY VISTA DRIVE,
CAMARILLO, CA 93010-1657

Email Only

B. TILDEN KIM
City of San Marino
EMAIL ONLY, CA


LLOYD W. LOWREY, JR., ESQ.
Independent Reclaimed Water Users
Group (IRWUG)

SALINAS, CA
Ilowrey@nheh.com

DAVID C. LAREDO
City of Pacific Grove Monterey
Peninsula Water Management District
(MPWM D)
PACIFIC GROVE, CA

TU RN
SAN FRANCISCO, CA


LORI ANNE DOLQUEIST
California American Water
SAN FRANCISCO, CA
Idolqueist@manatt.com

DAN L. CARROLL
Pebble Beach Company
SACRAMENTO, CA
dcarroll@downeybrand.com

DAVE STEPHENSON

EMAIL ONLY, CA
dave.stephenson@amwater.com

JAMES R. RILEY
Central Coast Coalition of Concerned
Communities for Wastewater Equity
EMAIL ONLY, CA
RossRiIey@aol.com

CARL WOOD
Utility Worders Union of America
OCEANSIDE, CA
carl.wood@uwua.net

BOB MCKENZIE
Coalition of Peninsula Businesses
CARMEL, CA
JRBochK@gmail.com

SARAH E. LEEPER
California-American Water Company
SAN FRANCISCO, CA
sarah.leeper@amwater.com

DOUG OBEGI
Natural Resources Defense Council
SAN FRANCISCO, CA
dobegi@nrdc.org

JAMES M. BOULER
Mark West Area Community Services
Committee
SANTA ROSA, CA
jbouler@comcast.net

BEATRIZ GARZA

EMAIL ONLY, CA
beatriz.garza@amwater.com

ED OSANN

EMAIL ONLY, CA
eosann@nrdc.org

JEFFREY DANA

EMAIL ONLY, CA
jeffrey.dana@amwater.com

KEN DURSA
Central Coast Coalition of Concerned
Communities for Wastewater Equity
SALINAS, CA
kdursa@salinas.net

BOB MCKENZIE
Monterey County Hospitality Association
CARMEL, CA
bobmac@qwest.net

Martha Perez
DRA
SAN FRANCISCO: CA
mpg@cpuc.ca.gov

JOHN L. CLARK
Towne Development of Sacramento, Inc.
SAN FRANCISCO, CA
jclark@goodinmacbride.com

STEVEN S. SHUPE
County of Sonoma
SANTA ROSA, CA


BRUCE D. GOLDSTEIN

EMAIL ONLY, CA


FARNKOPF

EMAIL ONLY, CA
jfarnkopf@ hfh?consultants.com

JODY S. LON DON

EMAIL ONLY, CA


SERVICE LIST PURSUANT TO SECTION 4.3 OF 6.0. NO. 96-3
CALIFORNIA-AMERICAN WATER COMPANY
APPLICATION 10-07-007 SERVICE LIST

LARRY HAM PSON

EMAIL ONLY, CA


ROBERT JAMES

EMAIL ONLY, CA
rjames456@yahoo.com

JEFFREY M. DANA

CORONADO, CA
jeffrey.dana@amwate r.com

FRANCES M. FARINA
Monterey Peninsula Water Management
District
SANTA BARBARA, CA
ffarina@cox.net

DAVID STOLDT

MONTEREY, CA


HEIDI A. QUINN

PACIFIC GROVE, CA
heidi@laredolaw.net

MICHAEL BOWHAY

PEBBLE BEACH, CA


NICHOLAS SUBIAS

SAN FRANCISCO, CA
Nicholas.Subias@amwater.com

JENNY KIDD

SANTA ROSA, CA


ADVICE LETTER 1062
MONICA NA

EMAIL ONLY, CA
monica.na@amwater.com

SHIRLEY MCCALEBB

EMAIL ONLY, CA
Shirley.mccalebb@amwater.com

ROBERT G. MACLEAN

CORONADO, CA
robert.maclean@amwater.com

ARTHUR MCLOUGHLIN
Central Coast Coalition of Concerned
Communities for Wastewater Equity

SALINAS, CA
mickey3643@aol.com

STEPHANIE PINTAR

MONTEREY, CA


TINA HAYNES

PACIFIC GROVE, CA
thay511@yahoo.com

JAVIER NARANJO

SAN FRANCISCO, CA
Javier.naranjo@amwater.com

REGINA COSTA

SAN FRANCISCO, CA
rcosta @turn.org

HALTERMAN

SACRAM NTO, CA
suzette.halterman@amwater.com

NINA SUETAKE

EMAIL ONLY, CA
nsueta ke@tu rn.org

EDWARD A. SIMON, Il

CORONADO, CA
edward.simon@amwater.com

JAN BEAT

CAMARILLO, CA

GLEN STRANSKY

CARMEL, CA


ALEX J. LORCA

PACIFIC GROVE, CA
alex@laredolaw.net

MARK STILWELL

PEBBLE BEACH, CA
StilwelM@PebbleBeach.com

MARGARET BAILES

SAN FRANCISCO, CA
ma rga ret.bailes@amwater.com

LENARD WEISS

SAN FRANCISCO, CA
lweiss@manatt.com

Douglas M. Long

SAN FRANCISCO, CA
dug@cpuc.ca.gov

Elizabeth Podolinsky

SAN FRANCISCO, CA
pod@cpuc.ca.gov

Lisa Bilir

SAN FRANCISCO, CA
lwa@cpuc.ca.gov

Richard Rauschmeier

SAN FRANCISCO, CA
rra@cpuc.ca.gov

SERVICE LIST PURSUANT TO SECTION 4.3 OF 6.0. NO. 96-3
CALIFORNIA-AMERICAN WATER COMPANY
APPLICATION 10-07-007 SERVICE LIST
ADVICE LETTER 1062

Joyce de Rossett

SAN FRANCISCO, CA
jdr@cpuc.ca.gov

Marcelo Poirier

SAN FRANCISCO, CA
mpo@cpuc.ca.gov

Shanna Foley
DRA
SAN FRANCISCO, CA
sf2@cpuc.ca.gov

Linda Rochester

SAN FRANCISCO, CA
lrr@cpuc.ca.gov

Praneet Row

SAN FRANCISCO, CA
pr1@cpuc.ca.gov

Terence Shia

SAN FRANCISCO, CA
t52@cpuc.ca.gov

SERVICE LIST PURSUANT TO SECTION 4.3 OF 6.0. NO. 96-B

 

Rami Kahlon

California Public Utilities Commission
Water Advisory Branch. Room 3106
505 Van Ness Avenue

San Francisco, CA 94102-3214

Los Angeles Docket Of?ce

California Public Utilities Commission
320 West 4?1 Street, Suite 500

Los Angeles, CA 90013

Fort 0rd Reuse Authority
100 12?? Street. 2880
Marina, CA 93933

Yazdan Emrani, P.E.

Deputy Pub Works Director Operations
Monterey County DPW

168 W. Alisal Street, 2"d ?oor

Salinas, CA 93901-2680

Ann Camel

City Clerk

City of Salinas

200 Lincoln Avenue
Salinas, CA 93901

Karen Crouch

City Clerk,
Carmel-By?The-Sea

PO Box CC
Carmel?by?the?Sea, CA 93921

Don Freeman

City of Seaside

City Attorney

440 Harcourt Avenue
Seaside, CA 93955

Marc J. Del Piero
4062 El Bosque Drive
Pebble Beach. CA 93953-3011

CALIFORNIA-AMERICAN WATER COMPANY

MONTEREY COUNTY DISTRICT
ADVICE 1062

Danilo Sanchez

California Public Utilities Commission
Division of Ratepayer Advocates

505 Van Ness Avenue, Room 3200
San Francisco, CA 94102

California Dept of Health Services

Division of Drinking Water Environmental
Management

PO Box 997416

Sacramento, CA 95899-7413

Monterey Regional Water Pollution Control
Agency 

5 Harris Court Road. D.

Monterey, CA 93940

City of Paci?c Grove

clo Community Development Department
Attention: Sarah Hardgrave

300 Forest Ave., 2nd ?oor

Paci?c Grove. CA 93950

City of Sand City

City Hall

California Sylvan Avenues
Sand City, CA 93955

Attn: City Clerk

Donald G. Freeman

City Attorney

City of Carmel-By-The-Sea
PO Box 805
Carmel-by-the-Sea, CA 93921

Edward W. O?Neill

Davis Wright Tremaine LLP
505 Montgomery Street

San Francisco, CA 94111-6533

Gerard A. Rose
PO Box 5427
Carmel, CA 93921

Ms. Lisa Bilir

California Public Utilities Commission
Division of Ratepayer Advocates

505 Van Ness Avenue

San Francisco, CA 94102

Alco Water Service
249 Williams Road
Salinas. CA 93901

Monterey Peninsula Water Dist.
Chief Financial Of?cer

P.O. Box 85

Monterey. CA 93942

City of Paci?c Grove
City Attorney/City Hall
300 Forest Ave 2nd ?oor
Paci?c Grove, CA 93950

Deborah Mall, City Attorney
City of Monterey

512 Pierce Street
Monterey, CA 93940

lrvin L. Grant

Deputy County Counsel
County of Monterey

168 w. Alisal Street, 3" floor
Salinas, CA 93901-2680

Darryl D. Kenyon

Monterey Commercial Property Owners
Ass0ciation

P.O. Box 1953

Monterey, CA 93942

SERVICE LIST PURSUANT TO SECTION 4.3 OF 6.0. NO. 96-3
CALIFORNIA-AMERICAN WATER COMPANY
MONTEREY COUNTY DISTRICT

 

Ms. Lisa Bilir

California Public Utilities Commission
Division of Ratepayer Advocates

505 Van Ness Avenue

San Francisco, CA 94102
lwa@cpuc.ca.gov

City of Del Rey Oaks

City Hall

650 Canyon Del Rey Road
Del Rey Oaks, CA 93940
Attn: City Clerk
citymanager@delreyoaks.org
kminami@delreyoaks.org

City of Seaside

City Hall

440 Harcourt Avenue
Seaside, CA 93955

Attn: City Clerk
dhodgson@ci.seaside.ca.us


David C. Laredo
Attorney at Law

DeLay Laredo

606 Forest Ave

Paci?c Grove, CA 93950


Frances M. Farina
Attorney at Law

389 Princeton Avenue
Santa Barbara, CA 93111
?arina@cox.net

City of Salinas

Vanessa W. Vallarta City Attorney
200 Lincoln Avenue

Salinas, CA 93901
vanessav@ci.salinas.ca.us
chrisc@ci.salinas.ca.us

Division of Ratepayer Advocates
California Public Utilities Commission


ADVICE LETTER 1062

Diana Brooks

California Public Utilities Commission
Room 4102

505 Van Ness Avenue

San Francisco, CA 94102-3214
dsb@cpuc.ca.gov

George Riley

Citizens for Public Water
1198 Castro Road
Monterey, CA 91940
georgetriley@gmail,com

Mike Niccum

General Manager

Pebble Beach Community Svcs. District
3101 Forest Lake Road

Pebble Beach, CA 93953


Carmel Area Wastewater District
3945 Rio Road

Carmel, CA 93923
buikema@cawd.org

Lloyd Lowery Jr.

Noland, Hammerly, Etienne Hoss RC.

333 Salinas St

PO Box 2510

Salinas, CA 93902-2510
llowrey@nheh.com

Pebble Beach Company
PO. Box 1767 
Pebble Beach, CA 93953
Attn: Mark Stilwell


Richard Rauschmeier

California Public Utilities Commission
DRA - Water Branch, Rm 4209

505 Van Ness Ave

San Francisco, CA 94102
rra@cpuc.ca.gov

John K. Hawks

Executive Director

California Water Association

601 Van Ness Avenue, Suite 2047
San Francisco, CA 94102-3200


Jim Heisinger

PO. Box 5427
Carmel, CA 93921
hbm@carmellaw.com

City of Monterey

City Hall

Monterey, CA 93940

Attn: City Clerk
connolly@ci.monterey.ca.us

Gail T. Borkowski, Clerk of the Board
County of Monterey

PO. Box 1728

Salinas, CA 93902
boydap@co.monterey.ca.us

Laura L. Krannawitter

California Public Utilities Commission
Exectivie Division, Rm 5303

505 Van Ness Avenue

San Francisco, CA 94102
llk@cpuc.ca.gov

Bernardo R. Garcia

PO Box 37

San Clemente, CA 92674-0037
uwua@redhabanero.com

Monterey Peninsula Water Dist.
Chief Financial Of?cer

P.O. Box 85

Monterey, CA 93942


CALIFORNIA-AMERICAN WATER COMPANY Revised C.P.U.C. SHEET NO. 7565_w
1033 Avenue, Suite 200
CORONADO, CA 92118 CANCELLING Revised C.P.U.C. SHEET NO. 7557-W

 

Schedule No. MO-1
Monterey County District Tariff Area

  GENERAL METERED SERVICE

RESIDENTIAL AND MULTI-RESIDENTIAL CUSTOMERS

APPLICABILITY

Applicable to all water furnished on a metered basis.

TERRITORY

The incorporated cities of Monterey, Pacific Grove, Carmel-by?the-Sea, Del Rey Oaks, Sand City, a portion of

Seaside. Hidden Hills and Ryan Ranch subdivisions, Bishop subdivision including the area known as Laguna
Seca Ranch Estates and vicinity and certain unincorporated areas in the County of Monterey.

 

 

 

 

 

 

 

 

 

 

 

BATES
Quantity Rates:
Base Rate
Residential Multi-Residential Customers: Per 10 cf Per 100 qal
Block 74.8 gal times Cust Allotment $04319 $05774 (I)
Block 74.8 gal times Cust Allotment $06479 $08661
Block 74.8 gal times Cust Allotment $17277 $23097
Block 74.8 gal times Cust Allotment $34553 $46194
Block 5 All water over 40 cu ft or 299.2 gal times Cust Allotment $43192 $57743 (I)
MONTEREY MAINI HIDDEN ngs. RANCH. AND BISHOP SYSTEMS:
Meter Rates:
MONTEREY MAINI HIDDEN HILLSI RYAN RANCH. BISHOP SYSTEMS:
Per Meter
Per Month
For 5/8 -inch meter $10.33
For 3/4 -inch meter $15.50 (I)
For 1-inch meter $25.83
For 1-1/2-inch meter $51.67
For 2-inch meter $82.67
For 3-inch meter $155.01
For 4-inch meter $258.35
For 6-inch meter $516.70
For 8-inch meter $826.72 (I)

 

The Meter Charge is a readiness-to?serve charge which is applicable to all metered service and to which
is added the charge for water used computed at the Quantity Rate.

 

 

 

 

 

(Continued)
(TO BE INSERTED BY UTILITY) ISSUED BY (TO BE INSERTED BY 
ADVICE LETTER NO. 1062 D. P. STEPHENSON DATE FILED It! 9 A 
NAME EFFECTIVE 
DECISION NO. D. 12-06-016 DIRECTOR Rates Regulation RESOLUTION NO.

 

 

TITLE

CALIFORNIA-AMERICAN WATER COMPANY

1033 Avenue, Suite 200
CORONADO, CA 92118

CANCELLING

Revised

Revised

C.P.U.C. SHEET NO.

C.P.U.C. SHEET NO.

7566-W

755 8-W

 

 

SHEET

APPLICABILITY

Applicable to all water furnished on a metered basis to non-residential customers in the service areas

defined below.

TERRITORY

The incorporated cities of Monterey, Pacific Grove. Carmel-by?the-Sea, Del Rey Oaks, Sand City. a
portion of Seaside, Hidden Hills and Ryan Ranch subdivisions. Bishop subdivision including the area
known as Laguna Seca Ranch Estates and vicinity and certain unincorporated areas in the County of

Monterey.
RATES

Quantity Rates:

Schedule No. 
Monterey County District Tariff Area
GENERAL METERED SERVICE
NON-RESIDENTIAL CUSTOMERS

MONTEREY MAIN, HIDDEN HILLS. RYAN AND BISHOP SYSTEMS:

Division 1

 

Division 2

 

Division 3

 

Division 4

Base Rate Base Rate
Per 10 cf Per 100 gal
$06804 $09096
$0.7654 $1.0233
$0.8505 $1.1370
$1.7010 $2.2740

 

Meter Rates:

MONTEREY MN. HIDDEN HILLS. RYAN RANCH. AND BISHOP 

For 5/8 -inch meter
For 3/4 -inch meter

For 1-inch meter

For 1-1/2-inch meter

For 2-inch meter
For 3-inch meter
For 4-inch meter
For 6-inch meter
For 8-inch meter

The Meter Charge is a readiness-to-serve charge which is applicable to all metered service and to which

 

 

 

 

 

 

 

 

 





$20.67
$31.00
$51.67
$103.34
$165.34
$310.02
$516.70
$1,033.40
$1,653.43

is added the charge for water used computed at the Quantity Rate.

 

(I)

 

 

 

 

(Continued)
(TO BE INSERTED BY UTILITY) ISSUED BY (TO BE INSERTED BY C.P U.C.)
ADVICE LETTER NO. 1062 D. P. STEPHENSON DATE FILED MIN 11 4
NAME EFFECTIVE I'm - 2 
DECISION NO. D. 12-06-016  RESOLUTION 



CALIFORNIA-AMERICAN WATER COMPANY Revised C.P.U.C. SHEET NO. 7567-w
1033 Avenue, Suite 200
CORONADO, CA 92118 CANCELLING Original C.P.U.C. SHEET NO. 7559-W

 

 

Schedule No. MO-1O

Monterey County District Tariff Area

GENERAL METERED SERVICE
OTHER CUSTOMERS

APPLICABILITY

Applicable to all water furnished on a metered basis to miscellaneous, construction, and other water utility
customers in the service areas defined below.

TERRITORY

The incorporated cities of Monterey, Pacific Grove, Carmel-by?the-Sea, Del Rey Oaks, Sand City, a portion of
Seaside, Hidden Hills and Ryan Ranch subdivisions, Bishop subdivision including the area known as Laguna
Seca Ranch Estates and vicinity and certain unincorporated areas in the County of Monterey.

RATES

Misc and Construction Quantity Rates:

MONTEREY MAIN. HIDDEN RANCH. SYSTEMS:

 

 

 

 

 

 

 

 

 

 

Base Rate Base Rate
Per 10 cf Per 100 gal
Miscellaneous Construction $28866 $38591 (I)
Misc and Construction Meter Rates:
MONTEREY MAIN, HIDDEN HILLS, RYAN RANCH, AND BISHOP SYSTEMS:
Per Meter
Per Month
For 5/8 -inch meter $20.93 (I)
For 3/4 -inch meter $31.40
For 1-inch meter $52.34
For 1-1/2-inch meter $104.67
For 2-inch meter $167.48
For 3-inch meter $314.02
For 4-inch meter $523.36
For 6-inch meter $1,046.72
For 8-inch meter $1,674.76 (I)

 

The Meter Charge is a readiness-to-serve charge which is applicable to all metered service and to which iS
added the charge for water used computed at the Quantity Rate

 

 

(Continued)
(TO BE INSERTED BY UTILITY) ISSUED BY (TO HIE li'f 
ADVICE LETTER NO. 1062 D. P. STEPHENSON DATE FILED a 2014

 

 

NAME EFFECTIVE  
DECISION N0. 12-06-016 RESOLUTION



CALIFORNIA-AMERICAN WATER COMPANY Revised C.P.U.C. SHEET N0. 7568-w
1033 Avenue, Suite 200
CORONADO, CA 92118 CANCELLING Original C.P.U.C. SHEET NO. 7560-W

 

 

Schedule No. MO-1O (Continued)

 P/s Monterey County District Tariff Area

GENERAL METERED SERVICE
OTHER CUSTOMERS

RATES (continued)
Other Water Utility (Permanent Service) Quantity Rates:

MONTEREY MAINI HIDDEN HILLS. RYAN RANCH. AND BISHOP SYSTEMS:

 

 

Base Rate Base Rate

Per 10 cf Per 100 gal
Block 1 $0.5773 $0.7718 (1)
Block 2 $1.1547 $1.5437
Block 3 $4.6186 $6.1746

 

Other Water Utility (Temporary Service) Quantity Rates:

MONTEREY MAIN. HIDDEN HILLS. RYAN RANCH. BISHOP SYSTEMS:

 

Base Rate Base Rate
Per 10 cf Per 100 gal
Other Water Utility (Temporary Service) .. $05773 $07718

Other Water Utility (Permanent Temporary) Meter Rates:

MONTEREY MAINI HIDDEN HILLSI RYAN RANCHI AND BISHOP SYSTEMS:

 

 

 

 

 

 

 

 

 

Per Meter

Per Month
For 5/8 3/4 -inch meter $34.89
For 314 -inch meter $52.34
For 1-inch meter $87.23
For 1-1/2-inch meter $174.45
For 2-inch meter $279.13
For 3-inch meter $523.36
For 4-inch meter $872.27
For 6-inch meter $1,744.54
For 8-inch meter $2,791.26

 

(I)

The Meter Charge is a readiness-to-serve charge which is applicable to all metered service and to which
is added the charge for water used computed at the Quantity Rate

 

 

(Continued)
(TO BE INSERTED BY UTILITY) ISSUED BY (TO BE INSERTED BY 
ADVICE LETTER NO. 1062 D. P. STEPHENSON DATE FILED I A 

 

 

EFFECTIVE 1m; -
DECISION N0. 122423165115? RESOLUTION

'l'l'l'LE

CALIFORNIA-AMERICAN WATER COMPANY Revised C.P.U.C. SHEET NO. 7569-W

1033 Avenue, Suite 200
CORONADO, CA 92118 CANCELLING Revised C.P.U.C. SHEET NO. 7561-W

 

 

Schedule No. MO-4
Monterey County District Tariff Area

PRIVATE FIRE PROTECTION SERVICE

 

APPLICABILITY
Applicable to all water service furnished for private fire protection systems.
TERRITORY
The incorporated cities of Monterey. Pacific Grove, Carmel-by?the-Sea, Del Rey Oaks, Sand City, a
portion of Seaside, Chualar and Ralph Lane sub-units, Bishop subdivision, including the area known as
Laguna Seca Ranch Estates and vicinity, and certain unincorporated areas in the County of Monterey.

RATES

Residential Private Fire Service

 

 

 

 

 

 

 

 

 

 

 

 

Per Meter
Per Month
For 1-inch meter $10.29 (I)
For 1-1/2-inch meter $15.44
For 2-inch meter $20.60
For 3-inch meter $30.90
For 4-inch meter $41.19
For 6-inch meter $83.37
For 8-inch meter $131.90
For 10-inch meter $186.70 (I)
All Other Private Fire Service
Per Month
For 4-inch meter $41.19 I)
For 6-inch meter $83.37
For 8-inch meter $131.90
For 10-inch meter $186.70 

 

The rates for private fire service are based upon the size of the service and no additional charges will be
made for fire hydrants, sprinklers, hose connections or standpipes connected to and supplied by such
private fire service.

 

 

(Continued)
(TO BE TNSERTED BY UTILITY) ISSUED BY (TO BE IN SIER In? 
ADVICE LETTER NO. 1062 D. P. STEPHENSON DATE FILED II 2014

 

NAME EFFECTIVE  
DECISION NO. RESOLUTION

TITLE

 WATER COMPANY Revised C.P.U.C. SHEET N0. 7570-W
1033 Avenue, Suite 200
CORONADO, CA 92118 CANCELLING Revised C.P.U.C. SHEET NO. 7562-W

 

 

Schedule No. MO-4H
Monterey County District Tariff Area
PRIVATE FIRE HYDRANT SERVICE

SHEET

APPLICABILITY
Applicable all water service furnished for private fire hydrant service.
TERRITORY

The incorporated cities of Monterey, Pacific Grove, Carmel-by?the-Sea, Del Rey Oaks, Sand City. a
portion of Seaside, certain unincorporated areas in the County of Monterey, the Ambler Park
subdivision, Rim Rock subdivision, Rancho El Toro Country Club, located nine miles southwest of
Salinas, Monterey County, the area known as Laguna Seca Ranch Estates, and vicinity.

RATES

Per Month
Private Fire Hydrant Service Installed at Cost of Applicant:
For each Fire Hydrant Installed .. $39.79 (I)

SPECIAL CONDITIONS
1. The fire protection service and connection shall be installed by the Utility or under the Utility's
direction. Cost of the entire fire protection installation shall be paid for by the applicant. Such
payment shall not be subject to refund.

2. The installation housing the detector type check valve and meter and appurtenances, thereto, shall
be in a location mutually agreeable to the applicant and the Utility. Normally such installation shall
be located on the premises of applicant, adjacent to the property line. The expense of maintaining
all facilities which are the sole property of the applicant (including the vault, meter, detector type
check valves, backflow device and appurtenances) shall be paid for by the applicant. 

3. All facilities paid for by the applicant, excluding the connection at the main and any service pipe
located in a public right-of-way, shall be the sole property of the applicant. The Utility and its duly
authorized agents shall have the right to ingress to and egress from the premises for all purposes
relating to said facilities.

4. The minimum diameter will be 6 inches, and the maximum diameter will be the diameter of the main
to which the service is connected.

5. If distribution main of adequate size to serve a private fire protection system in addition to all other
normal service does not exist in the street or alley adjacent to the premises to be served, then a
main from the nearest existing main of adequate capacity shall be installed by the Utility, or under
the Utility's direction, and the cost paid by the applicant. Such payment shall not be subject to

 

 

refund
(Continued)
(TO BE INSERTED BY UTILITY) ISSUED BY (TO BE INSERTED BY C.P U.C 
ADVICE LETTER NO. 1062 D. P. STEPHENSON DATE FILED [j

 

 

NM EFFECTIVE -2 mm
DECISION NO. D. . WM RESOLUTION

TITLE

CALIFORNIA-AMERICAN WATER COMPANY Revised C.P.U.C. SHEET NO. 7571-w
1033 Avenue, Suite 200
CORONADO, CA 92118 CANCELLING Revised C.P.U.C. SHEET NO. 7220-W

 

 

Schedule No. MO-ARC-1
Monterey County District Tariff Area
Ambler Park, Ralph Lane, and Chualar Service Area
GENERAL METERED SERVICE

 

SHEET

APPLICABILITY
Applicable to all metered water service.
TERRITORY

Ambler Park subdivision, Oaks subdivision, Rim Rock subdivision, Rancho El Toro Country Club, located nine
miles southwest of Salinas, Ralph Lane and Chualar sub-units, Monterey County, and vicinity.

RATES
AMBLER PARK
Quantity Rates:
Base Rate Base Rate
Residential Multi-Residential Customers: Per 10 cf Per 100 gal
Block 1: For the first 80 or 598 gal delivered, per 10 cu. ft or per
74.8 gal. .. $04280 $05722 (I)
Block 2: For the next 160 or 1197 gal delivered, per 10 cu. ft or
per 74.8 gal. .. $05706 $07629
Block 3: For all water delivered over 240 or 1795 gal delivered,
per 10 cu. ft or per 74.8 gal .. $14265 $19071
Non-Residential Customers:
For all water delivered, per 10 cu. ft  $05706 $07629 (I)
Meter Charge:

Per Meter

Per Month
For 5/8 3/4-inch  $9.95
For 3/4-inch meter .. $14.93
For 1-Iinch meter .. $24.88
For 1-1/2-inch meter .. $49.76
For 2-inch meter .. $79.62
For 3-inch meter .. $149.29
For 4-inch meter .. $248.81
For 6-inch meter .. $497.62
For 8-inch meter $796.20

The Meter Charge is a readiness-to?serve charge which is applicable to all metered service and to which
is added the charge for water used computed at the Quantity Rate.

 

 

 

 

(Continued)
(TO BE INSERTED BY UTILITY) ISSUED BY (TO BE INSERTED BY C.P.U C.)
ADVICE LETTER NO. 1062 D. P. STEPHENSON DATE FILED 9 2014
NAME EFFECTIVE ME - 2 1.111141
DECISION NO. D. 12-06-016 WW RESOLUTION

TITLE

CALIFORNIA-AMERICAN WATER COMPANY Revised C.P.U.C. SHEET NO. 7572-W

1033 Avenue, Suite 200
CORONADO, CA 92118 CANCELLING Original C.P.U.C. SHEET NO. 6971-W

 

 

Schedule No. MO-ARC-4
Monterey County District Tariff Area
Ambler Park. Ralph Lane, and Chualar Service Area
3 Li  ET PRIVATE FIRE PROTECTION SERVICE

APPLICABILITY

Applicable to all water service furnished for privately owned fire protection systems.

TERRITORY

The Ambler Park subdivision, Rim Rock subdivision, Rancho El Toro Country Club, located nine miles
southwest of Salinas, Monterey County and vicinity.

RATES

AMBLER PARK
Residential Private Fire Service
Per Meter


For 1-inch connection $10.29
For 1-1/2-inch  $15.44
For 2-inch connection $20.60
For 3-inch connection  $30.90
For 4-inch connection $41.19
For 6-inch connection $83.37
For 8-inch connection $131.90
For 10-inch connection $186.70

(I)

All Other Private Fire Service
mm
For each 4-inch connection $41.19
For each 6-inch connection $83.37
For each 8-inch connection $131.90
For each 10-inch connection $186.70 (I)

 

The rates for private fire service are based upon the size of the service and no additional charges will be
made for fire hydrants, sprinklers, hose connections or standpipes connected to and supplied by such
private fire service.

(Continued)

 

 

(TO BE INSERTED BY UTILITY) ISSUED BY (TO BE INSERTED BY C.P.UC 
ADVICE LETTER NO. 1062 D. P. STEPHENSON DATE FILED 2 ti 

NAME EFFECTIVE um: -2 4:
DECISION NO. D. 12-06-016  RESOLUTION 

 

 

 

 

 

 

 

 

CALIFORNIA-AMERICAN WATER COMPANY Revised C.P.U.C. SHEET NO. 7573-W
1033 AVENUE, SUITE 200
CORONADO, CA 92118 CANCELLING Revised C.P.U.C. SHEET NO. 7563-W
i "a I TABLE OF CONTENTS (Continued)
(P8962)
SUBJECT MATTER OF SHEET C.P.U.C. SHEET NO.
SERVICE AREA MAP (Continued):
Sacramento 6591-W, 6592-W, 6593-W, 6594-W,
6595-W, 6596-W, 7500-W, 6598-W,
6599-W, 6600-W
San Diego County 6601-W, 6602-W
Ventura County 6603-W. 6604-W
RATE SCHEDULES:
All Districts Low Income Ratepayer Assistance Program
California American Water 7122-W, 7463-W, 6804-W. 6805-W,
Low Income Ratepayer Assistance Program 6807-W
Larkfield District
General Metered Service 7314-W, 7315-W, 7457-W, 7164-

LK-4 Private Fire Protection Service 7316-W, 6864-W, 7166-W. 6112-W,
6299-W, 7519-W
Facilities Fees 6795-W
Los Angeles County District
LA-1 General Metered Service 7307-W, 7308-W, 7309-W, 7169-W,
7460-W, 7171-W, 7172-W, 7515-W
LA-3M Measured Irrigation Service 7310-W, 7174-W, 6933-W,
7175-W, 7516-W
LA-4 Private Fire Protection Service 7311-W, 6565-W, 7176-W, 7517-W
DSIC Rate Tariff 7038-W, 7039-W, 7040-W, 7041-W.
7042-W. 7043-W, 7044-W
Monterey County District
(Monterey Main, Hidden Hills, Ryan Ranch, Bishop Service Areas)
MO-1 General Metered Service 7565-W, 6500-W, 7252-W, 7253-W, (C)
Residential Multi-Residential Customers 7254-W, 7450-W, 7256-W, 7257-Wr
7347-W, 7259-W, 7141-W, 7142-W.
7143-W, 7260-W. 7261-W, 7262-W.
6509-W, 
MO-1C General Metered Service 7566-W, 7264-W, 7265-W, 7266-W, (C)
Non-Residential Customers 7267-W, 7268-W, 7269-W, 7451-W,
7348-W, 7272-W, 7273-W, 7523-W
MO-1O General Metered Service 7567-W, 7568-W, 7276-W, 7277-W, (C)
Other Customers 7278-W, 7452-W, 7349-W, 7281-W,
7282-W, 7524-W
MO-4 Private Fire Protection Service 7569-Wr 6520-W. 7214-W, 7215-W, (C)
7453-W. 7525-W
MO-4H Private Fire Hydrant Service 7570-W, 7217-W, 7454-W (C)
(Continued)
(TO BE INSERTED BY UTILITY) ISSUED BY (TO BE INSERTED BY C.P.U.C.)
ADVICE LETTER NO. 1062 D. P. STEPHENSON DATE FILED  f) A 2014
NAME EFFECTIVE  - j? 
DECISION NO. D.12-06-016 WW RESOLUTION 



CALIFORNIA-AMERICAN WATER COMPANY Revised C.P.U.C. SHEET NO. 7574-w
1033 Avenue, Suite 200
CORONADO, CA 92118 CANCELLING Revised C.P.U.C. SHEET NO. 7555-W

 

 

oninue
TABLE OF (C d)  

SUBJECT MATTER OF SHEET C.P.U.C. SHEET N0.

RATE SCHEDULES (Continued):
Monterey County District (Continued)
(Ambler Park, Ralph Lane Chualar Service Areas)
MO-ARC-1 General Metered Service 7571-W, 7290-W, 7222-W, 7344-W, (C)
7223-W, 7526-W

M0-ARC-4 Private Fire Protection Service 7572-W, 7225-W, 7226-W, (C)
(Toro)
MO-TO-1 General Metered Service 7330-W, 7228-W. 7528-W
(Garrapata)
General Flat Rate Service 7055-W, 7151-W
Private Fire Protection Service 7364-W, 7365-W
Private Fire Hydrant Service 7366-W, 7367-W
Sacramento District
SC-1 General Metered Service 7552-W, 7553-W, 7178-W, 7107-W,
7520-W
SC-2R Residential Flat Rate Service 6961-W, 7108-W
SC-4 Private Fire Protection Service 7554-W, 7179-W, 7521-W
San Diego County District
SD-1 General Metered Service 7295-W, 7296-W, 7359-W, 7188-W,
7096-W, 7509-W
SD-4 Private Fire Protection Service 7297-W, 6941-W. 7360-W, 7097-W,
7510-W
SD-4H Private Fire Hydrant Service 7298-W, 6944-W. 7361-W. 7511-W

Ventura County District

 

 

 

 

VN-1 General Metered Service 7466-W, 7182-W,
7512-W
VN-4 Private Fire Protection Service 7303-W. 6952-W, 7467-W, 7513-W
VN-9MC Metered Construction Water 7304-W. 7468-W, 7514-W
(Continued)
(TO BE INSERTED BY UTILITY) ISSUED BY rum in: :NSI-zlri BY c. 
ADVICE LETTER NO. 1062 D. P. STEPHENSON FILED it? 2 a 2014
Mb - 2 Jim

DECISION NO. 12-06-016 WW RESOLUTION

11th

CALIFORNIA-AMERICAN WATER COMPANY Revised C.P.U.C. SHEET NO. 7575-w
1033 Avenue, Suite 200
CORONADO, CA 92118 CANCELLING Revised C.P.U.C. SHEET NO. 

 

 

TABLE OF CONTENTS
(Page 1)

The following listed tariff sheets contain all effective rates and rules affecting the charges and services of the

Utility, together with other pertinent information:
SUBJECT 0F SHEET
TITLE PAGE

TABLE OF CONTENTS

PRELIMINARY STATEMENTS

SERVICE AREA MAP:
California-American Water Company
Larkfield
Los Angeles County

Baldwin Hills

Duane
San Marino

Monterey County

(Continued)

SHEET

C.P.U.C. SHEET NO.
7052-W

7575-W, 7573-W, 7574-W, 7396-W.
7550-W, 7248-W, 7249-W

(C)

4957-W, 4144-W, 6872-W, 5295-W,
7028-W, 6825-W, 6882-W, 5291-W,
6356-W, 5377-W. 4965-W, 5275-W,
6239-W, 5379-W, 
5289-W, 5402-W, 
5656-W, 5869-W,
5880-W, 5881-W, 6282-W, 7471-W,
7472-W, 7475-W,
7477-W, 6223-W, 6225-W,

6497-W, 6798-W, 6800-W, 6822-W,
6890-W, 6898-W, 7050-W, 7146-W
7056-W, 7285-W1 7293-W, 7352-W,
7478-W, 7403-W, 7489-W, 7491-W

5470-W
6569-W

6570-W

6571 -W, 6572-W,

6578-W

6573-W, 6574-W, 6575-W, 6576-W,
6577-W

7053-W, 6582-W,
6583-W, 6584-W, 6585-W, 6586-W,
6587-W, 6588-W, 6589-W, 6590-W,
944 -W, 945 -W, 947 948 -W,
949 -W, 950 -W. 951 -W, 952 -W,
953 -W, 954 -W, 955 -W, 957 -W,
958 959 -W, 960 -W. 961 -W,
962-W, 963 -W, 964 -W, 966 -W,
967 -W, 968 -W, 969 971 -W.
972 -W. 973 -W, 974 975 -WI
976 -W. 977 -W, 978 -W. 979 -W,
980 -W, 981 -W, 982 -W, 983 -W,
984 -W, 7054-W

 

 

(TO BE INSERTED BY UTILITY) ISSUED BY

ADVICE LETTER NO. 1062

D. P. STEPHENSON

(TO BE INSERTED BY C.P.U C.)

 

 

NAME

DECISION NO. D. 12-06-016

TITLE

DATE FILED my 2 A: 2014
-2 2014

EFFECTIVE

2 23 Bates Regulatory RESOLUTION

ATTACHMENT 9

COMPREHENSIVE PLANNING STUDY AND SYSTEM MAP MAINTENANCE
The proposed budgets account for tasks related to comprehensive planning studies and the
preparation of the associated planning reports for each district of California American
Water. These tasks are necessary for evaluation of present facility status, projection of
future needs, and identification of the capital projects and/or programs needed so that the
assets of each district are able to provide safe, adequate and reliable water service to the
our customers. These tasks are also necessary for developing a list of the proposed capital
improvements. Such projects are prioritized using either the recommendations of the
operations group, which is considered to be the asset owner, or various project
prioritization models, as applicable. The tasks will also evaluate and recommend
improvements that could reduce operating and maintenance costs. Four of the typical
tasks conducted under this budget are described below:

Comprehensive Planning Study (CPS) Reports. The scope of work for CPS tasks
includes assessment of the facility needs in light of current and future regulatory
requirements, growth opportunities, operational needs, American Water Planning Criteria,
and other asset investment strategies, as applicable. The CPS tasks will address a
planning horizon of at least fifteen years and evaluate the system components relative to
the present and future demands in the following areas: source of supply, treatment,
transmission, distribution and storage, and regional issues. The CPS tasks for California
American Water’s districts may include a complete assessment of the district’s operation
(usually every five years). As an alternative, California American Water will conduct
focused annual evaluations taking into account a limited portion of the district’s
operational needs, such as the water supply and the distribution system. The CPS tasks
will also cover special studies that are necessary to investigate the broader issues that must
be understood in order to support the development of a sound CPS. California American
Water will perform studies needed to analyze options and recommend a prudent and cost
effective solution that will result in a reliable, efficient and cost-effective operation of the
2

 system. Examples of such studies include well operation studies, SCADA planning
studies, and regulatory compliance studies. An updated copy of the CPS, or an
amendment to it, will be prepared and used for future GRCs. A detailed project
description and justification document including feasibility studies will be prepared for
projects identified by the CPS.

Emerging-Need Project (ENP) Evaluations. This task covers special studies and
evaluations that are needed to investigate the broader issues that must be understood in
order to identify and analyze all reasonable alternatives related to an emerging-need
project. These studies are needed to provide a prudent and cost-effective solution to the
contemporary problems that have not been identified and addressed by a district’s prior
CPS report.

Condition Based Assessments (CBAs). These tasks will include performing asset
condition evaluations for the various components in the system. Such components may
include wells, pumps, tanks, SCADA or buried assets. The tasks may address a renewed
evaluation of the complete system, or an annual update of prior studies. The most
important of these tasks is the buried asset CBA task and most recently, the booster station
CBA task. California American Water has conducted one of these two CBAs for each of
its districts. For those districts where an initial CBA exists, California American Water
plans to conduct an annual update of the existing CBA in order to develop a prioritized list
of main replacement projects and booster station rehabilitation projects to be proposed in
future GRCs. In order to be as comprehensive as possible, the respective CBA uses that
asset list in the GIS data base, as appropriate. In a typical CBA task, the GIS database
will be updated to include system leak, water quality and other useful data to allow for a
better analysis and prioritization of the main replacement tasks. Hydraulic models will
also be updated and additional analysis will be performed to ensure that the district’s fire
flow capacities and system pressure improvement needs are considered when making a
3

 main replacement or booster station rehabilitation recommendation. The deliverable of a
CBA task is either a grass-root report, an update of an existing CBA, or an amendment to
the CBA. The results of the CBA studies will be used to recommend projects for future
GRCs. For each recommended project, a detailed project description and justification
document, including feasibility studies, will be prepared to submit with future GRC
applications.

Strategic Capital Expenditure Plan (SCEP). This task includes performing
coordination and priority studies as needed to prepare and finalize a five year SCEP. The
policies of our parent company, American Water, require that each district (referred to as
Business Unit or BU) updates annually its project priority list in a SCEP covering the
necessary investment in that district. The SCEP, which will focus on a five-year outlook,
provides each district with budget guidance for capital investment and is developed based
on the findings of the CPS and studies addressing emerging need projects.

2015 Urban Water Management Plan (UWMP). The scope of this task includes an
update of each district’s UWMP to take into account the latest regional water supply and
planning information as well as new information, data and plans adopted in the CPS. As
required by the Urban Water Management Planning Act (Water Code Sections 10610 10656) adopted by the California Legislature in 1983 (referred to as the “Act”), the
UWMP must be updated at least once every five years, on or before December 31, in
years ending in five and zero. However, the California Department of Water Resources
has extended the submittal date for the 2015 UWMPs to July 2016. Accordingly, the
work on these UWMPs was deferred for several months until the third quarter of 2015.
The UWMPs are currently underway for all districts (except Larkfield), and are on target
for completion in late June/early July. As a reminder, the proposed 2015 UWMP
preparation task will be done in accordance with the requirements of the Act, which states
that every urban water supplier that provides water to 3,000 or more customers, or that
4

 provides over 3,000 acre feet of water annually, should make every effort to ensure the
appropriate level of reliability in its water service sufficient to meet the needs of its
various categories of customers during normal, dry, and multiple dry years.

System Map Maintenance. The requested budget accounts for acquiring services and
consumable material as needed to support California American Water’s asset records
management staff to maintain system plans, maps, drawings and other records as required
by the Commission’s G.O. 103-A, Chapter VII, Operations and Maintenance, Sections 4A
and 4B. Similar requirements are also imposed on water utilities by the Waterworks
Standards issued by the DPH, in Section 64604, Preparation and Maintenance of Records.
Both the Commission’s G.O. 103-A and the DPH Waterworks Standards require that
California American Water have on file updated plans, maps drawings or other records of
all system facilities.

For background, in 2008 American Water selected an ESRI based Geographic
Information System (GIS) software as a standard tool for managing the system plans,
maps, drawings or other records. GIS is a computer based program capable of integrating,
storing, editing, analyzing, sharing, and displaying geographically-referenced information.
Conversion of the system maps and records to GIS format allows us to centralize all of the
system data and be able to analyze our data and see the results in the form of powerful,
interactive maps. This will help California American Water make the most informed
decisions about its operations and make the daily operations easier to manage. Once the
GIS database is fully populated, it enables California American Water to discover
patterns, relationships, and trends in data that are not readily apparent using current tools.
The GIS database gives California American Water the power to manage and integrate its
maps, drawings, records and other data in order to perform advanced analysis and display
results on professional-quality maps.

5

 Following standardization of GIS software by our parent company, California American
Water’s Districts began converting their system maps from AutoCad to the GIS software.
While the initial conversion efforts were completed in 2009, and additional work was
completed in 2012, further work remains to continually update maps and populate the GIS
database. The proposed budgets and tasks shown below are for the year 2018. The
budgets and tasks for 2019 and 2020 are the same as 2018, with the exception that the
budgets have been escalated at a rate of three percent per year to account for inflation.
The basis for the estimated costs for the CPS documents is based on the following:

•

CPS and related tasks. California American Water estimated that about 30
percent of the work on each task will be performed by California American Water
staff, and the remaining 70 percent of the work will be performed by the American
Water Service Company staff. The estimate of the internal staff hourly rate is
about $49 per hour, plus 55 percent labor overhead, for a total of $76 per hour.
California American Water estimated $98 per hour for the average cost of support
by the American Water Service Company. This methodology applies to the CPS
and related tasks, which include the following: 1) Emerging Need Project
Evaluations; 2) Strategic Capital Expenditure Plan (SCEP); 3) Urban Water
Management Plan and; 4) Drought Management Plan.

•

System Map Tasks. California American Water estimated that about 20 percent
of the work on each system map task will be performed by California American
Water staff, 30 percent by the American Water Service Company staff, and the
remaining 50 percent by external consultants. The estimate of the internal staff
hourly rate is about $40 per hour, plus 55 percent labor overhead, for a total of $62
per hour. California American Water estimated $70 per hour for the average cost
of support by the American Water Service Company and about $120 per hour for
the average hourly rate by external consulting firms.
6

 The following provides a district-by-district summary of scope and budget for the CPSs
and the system map maintenance.

Sacramento District Comprehensive Planning Study and System Maps
Sacramento Task
Planning Studies

2018

2019

2020

$198,977

$204,947

$211,095

$147,103

$151,516

$156,061

Maintenance of System
Maps

The following specific planning studies tasks are scheduled for completion in the
Sacramento District during the GRC period:

Emerging-Need Project Evaluations. The proposed annual budget for the EmergingNeed Projects (ENP) is approximately $29,000 plus three percent per year allowance for
inflation. This budget is based on three ENP analysis per year.
CPS and Related Studies. The proposed annual budget for the annual updates of the
CPS, CBA and the related studies is approximately $135,000 plus three percent per year
allowance for inflation. The Sacramento District has nine systems. The budget is based
on an estimate of $15,000 per system.
Strategic Capital Expenditure Plan (SCEP) The proposed budget for the annual SCEP
updates is approximately $20,000 plus three percent per year allowance for inflation.
Urban Water Management Plan (UWMP). The proposed annual budget for UWMP is
approximately $15,000 plus three percent per year allowance for inflation. This estimate
is based on a cost of $45,000 for the completion of the UMWP, which includes the
additional efforts needed to obtain agency approvals.

A breakdown of the annual activities and the estimated budget for each task of system
map maintenance are presented in the below table. The proposed budgets are for the year
2018. The budgets for 2019 and 2020 are the same as 2018, with the exception that they
7

 have been escalated at a rate of three percent per year to account for inflation.
Task

Estimated Budget

Issue updated block map Atlas Books including
preparation of a camera ready copy from the
GIS database and printing 25 copies.
Updating GIS graphics and database to
incorporate as-built system information, leak
history, and water quality data. Populating the
attributes of system components such as valves,
meters service lines.
Scanning and linkage of system maps and
linkage to GIS database.

Field survey and collection of GPS coordinates
for critical components such as pumps, valves
and hydrants. Data correction task to include
but not limited to populating the attributed of
system components such as valves, meters,
hydrants, service lines and mains (excluding
Lincoln Oaks)
Training
GIS GIS License Fees

$8,000
$10,000

$20,000

$95,000

$7,000
$7,100

Total budget

$147,100

Larkfield District Comprehensive Planning Study and System Maps
Larkfield Task
Planning Studies

2018

2019

2020

$12,154

$12,519

$12,894

$17,587

$18,115

$18,658

Maintenance of System
Maps

The planning studies tasks will include updating the Larkfield District’s CPS while
focusing primarily on the water supply and distribution system improvement needs of the
Larkfield District. The proposed planning studies budget for 2018 is $12,100, which is
8

 based on approximately 80 hours of services provided by a planning engineering
consultant, at an estimated rate of $150 per hour. The 2019 and 2020 annual budgets are
the same as 2018, with the exception that they have been escalated at a rate of three
percent per annum to account for inflation.

A breakdown of the annual activities and the estimated budget for each task of system
map maintenance are presented in the below table.
Task
Issue updated block map Atlas Books including
preparation of a camera ready copy from the
GIS database and printing 25 copies.
Updating GIS graphics and database to
incorporate as-built system information, leak
history, and water quality data. Populating the
attributes of system components such as valves,
meters service lines.
Scanning and linkage of system maps and
linkage to GIS database.

Field survey and collection of GPS coordinates
for critical components such as pumps, valves
and hydrants. Data correction task to include
but not limited to populating the attributed of
system components such as valves, meters,
hydrants, service lines and mains
Training
ELA GIS Licensing Fees

Estimated Budget
$3,100
$2,500

$2,000

$3,000

$0
$7,000

Total budget

$17,600

9

 Monterey County District Comprehensive Planning Study and System Maps
Monterey Task
Planning Studies

2018

2019

2020

$112,691

$116,072

$119,554

$195,779

$201,653

$207,702

Maintenance of System
Maps

The following specific planning studies tasks are scheduled for completion in the
Monterey County Water District during the GRC period:

Full Scale CPS. An updated CPS is recommended for the Monterey County Water
District because California American Water’s application for a new source of water
supply continues to be in the review stage by the Commission. A regional desalination
plant has been proposed for the Monterey Peninsula, and this regional plant will have a
significant impact on the capital investment plans for the Monterey County Water District.
Furthermore, the State Water Resource Contract Board issued a Cease and Desist Order
(CDO), which could have a significant impact on the source of supply for the District.
For these reasons, California American Water proposes that an updated CPS should be
conducted for the Monterey County Water District. The proposed annual budget for the
CPS is approximately $67,700 plus three percent per year allowance for inflation.
Strategic Capital Expenditure Plan (SCEP). The proposed budget for the annual
SCEP updates is $15,000 plus three percent per year allowance for inflation. This cost is
based on 200 hrs of engineering support provided by internal staff at a rate of about $75
per hour.
Emerging Need Project Evaluations. The proposed annual budget for the Emerging
Need Projects is $15,000 plus three percent per year allowance for inflation.
2015 Urban Water Management Plan (UWMP). The proposed annual budget for
10

 UWMP is $15,000 plus three percent per year allowance for inflation.

The proposed budgets and tasks for system map maintenance shown in this table are for
the year 2018. The budgets and tasks for 2019 and 2020 are primarily the same as 2018,
with the exception that the budgets have been escalated at a rate of three percent per year
to account for inflation.
Task

Estimated Budget

Issue updated block map Atlas Books including
preparation of a camera ready copy from the
GIS database and printing 25 copies.
Updating GIS graphics and database to
incorporate as-built system information, leak
history, and water quality data. Populating the
attributes of system components such as valves,
meters service lines.
Scanning and linkage of system maps and
linkage to GIS database.

Field survey and collection of GPS coordinates
for critical components such as pumps, valves
and hydrants. Data correction task to include
but not limited to populating the attributed of
system components such as valves, meters,
hydrants, service lines and mains. Proper
location of and population of attributes and
geometric Network corrections.
Training
ELA GIS Licensing Fees

$15,600
$50,000

$45,000

$70,000

$8,000
$7,200

Total budget

$195,800

11

 Monterey Wastewater District Comprehensive Planning Study and System
Maps
Monterey Wastewater Task

2018

2020

$0

$0

$0

$48,721

$50,183

$51,688

Planning Studies & SSMP
Maintenance of System Maps

2019

A breakdown of the annual activities and the estimated budget for each task of system
map maintenance is presented in the table below. The proposed budgets and tasks shown
in this table are for the year 2018. The budgets and tasks for 2019 and 2020 are primarily
the same as 2018, with the exception that the budgets have been escalated at a rate of three
percent per year to account for inflation.
Task
Issue updated block map Atlas Books including
preparation of a camera ready copy from the
GIS database and printing 25 copies.
Updating GIS graphics and database to
incorporate as-built system information, leak
history, and repairs.
Scanning and linkage of system maps and
linkage to GIS database.

Field survey and collection of GPS coordinates
for critical components such as pumps, valves
and hydrants. Data correction task to include
but not limited to populating the attributed of
system components such as service laterals and
collection mains. Proper location of and
population of attributes and geometric Network
connections.
Training
ELA GIS License Fees

Estimated Budget
$6,200
$25,000
$8,000

$2,500

$0
$7,000

Total budget

$48,700
12

 Los Angeles County District Comprehensive Planning Study and System Maps
Los Angeles Task
Planning Studies

2018

2019

2020

$137,917

$142,055

$146,316

$87,447

$90,070

$92,773

Maintenance of System
Maps

The following specific planning studies tasks are scheduled for completion in the Los
Angeles County District during the GRC period:

Drought Management Plan. Because of the ongoing drought conditions in Southern
California, Metropolitan Water District’s water deliveries are anticipated to be limited in
the future. Also, the Los Angeles County District’s allocations above the limits set by the
Watermaster are not anticipated to be available in the future. The Los Angeles County
District’s Drought Management Plan task will analyze several scenarios and recommend a
drought management plan to be used by the Los Angeles County District as part of its
Urban Water Management Plan. The proposed annual budget for the Drought
Management Plan Task is $15,000 plus three percent per year allowance for inflation.
Well Assessment. The number of the Los Angeles County District’s wells being taken
out of service or facing decreased production has been increasing due to contaminated
groundwater supplies or aging well infrastructure. This has resulted in California
American Water’s greater dependence on - and higher production costs from - purchased
water. The Well Assessment task will retain a hydro-geologist to study the condition of
the wells, local aquifer conditions and refine improvement recommendations based on
video inspections of the wells and well performance tests. The study at each of the Los
Angeles County District’s well sites will be performed as the well is taken out of service
for testing. The proposed budget for this task is $20,000 per year plus three percent per
year allowance for inflation.
Emerging Need Project Evaluations. The proposed annual budget for the Emerging
13

 Need Projects is $25,000 plus three percent per year allowance for inflation.
CPS and Related. The planned annual budget for the annual updates of the CPS, CBA
and the related studies is $47,900 plus three percent per year allowance for inflation.
Strategic Capital Expenditure Plan (SCEP). The proposed budget for the annual SCEP
updates is $15,000 per year plus three percent per year allowance for inflation.
2015 Urban Water Management Plan (UWMP). The proposed annual budget for
UWMP is $15,000 plus three percent per year allowance for inflation.

A breakdown of the annual activities and the estimated budget for each task for system
map maintenance are presented in the below table. The proposed budgets and tasks
shown in this table are for the year 2018. The budgets and tasks for 2019 and 2020 are the
same as 2018, with the exception that the budgets have been escalated at a rate of three
percent per year to account for inflation.
Task
Issue updated block map Atlas Books including
preparation of a camera ready copy from the
GIS database and printing 25 copies.
Updating GIS graphics and database to
incorporate as-built system information, leak
history, and water quality data. Populating the
attributes of system components such as valves,
meters service lines.
Scanning and linkage of system maps and
linkage to GIS database.

Field survey and collection of GPS coordinates
for critical components such as pumps, valves
and hydrants. Data correction task to include
but not limited to populating the attributed of
system components such as valves, meters,
hydrants, service lines and mains. Proper
location of and population of attributes and
geometric Network corrections
Training

14

Estimated Budget
$10,700
$25,500

$8,000

$36,000

$0

 ELA GIS License Fees

$7,200

Total budget

$87,400

San Diego County District Comprehensive Planning Study and System Maps
San Diego Task
Planning Studies

2018

2019

2020

$91,876

$94,632

$97,471

$80,085

$82,487

$84,962

Maintenance of System
Maps

The proposed planning studies budget is based on California American Water’s recent
experience involving the development of a CPS for the San Diego County District.

In

general, California American Water is proposing the following specific planning studies
tasks to be scheduled for completion in the San Diego County District during the GRC
period:
Drought Management Plan. Because of the ongoing drought conditions in Southern
California, California American Water anticipates purchased water deliveries will be
limited in the future. The San Diego County District’s Drought Management Plan task
will analyze several scenarios and recommended a drought management plan to be used
by the San Diego County District as part of its UWMP. The proposed annual budget for
the Drought Management Plan Task is $5,000 plus three percent per year allowance for
inflation.
Emerging Need Project Evaluations. The proposed annual budget for the Emerging
Need Projects is $25,000 plus three percent per year allowance for inflation.
CPS and Related. The proposed budget for annual updates of the CPS, CBA and the
related studies is $31,900 plus three percent per year allowance for inflation.
Strategic Capital Expenditure Plan (SCEP). The proposed budget for the annual SCEP
updates is $15,000 plus three percent per year allowance for inflation.
2015 Urban Water Management Plan (UWMP). The proposed annual budget for the
15

 UWMP is $15,000 plus three percent per year allowance for inflation.

A breakdown of the annual activities and the estimated budgets for each task of system
map maintenance are presented in the table below. The proposed budgets and tasks
shown in this table are for the year 2018. The budgets and tasks for 2019 and 2020 are the
same as 2018, with the exception that the budgets have been escalated at a rate of three
percent per year to account for inflation.
Task

Estimated Budget

Issue updated block map Atlas Books including
preparation of a camera ready copy from the
GIS database and printing 25 copies.
Updating GIS graphics and database to
incorporate as-built system information, leak
history, and water quality data. Populating the
attributes of system components such as valves,
meters service lines.
Scanning and linkage of system maps and
linkage to GIS database.

Field survey and collection of GPS coordinates
for critical components such as pumps, valves
and hydrants. Data correction task to include
but not limited to populating the attributed of
system components such as valves, meters,
hydrants, service lines and mains. Proper
location of and population of attributes and
geometric Network corrections.
Training
ELA GIS License Fees

$7,700
$26,000

$12,000

$24,200

$3,000
$7,200

Total budget

$80,100

16

 Table 29: Ventura County District Comprehensive Planning Study and System
Maps
Ventura Task
Planning Studies

2018

2019

2020

$81,576

$84,023

$86,544

$77,438

$79,762

$82,154

Maintenance of System
Maps

The following specific planning studies tasks are scheduled for completion in the Ventura
County District during the GRC period:

Emerging Need Project (ENP) Evaluations. The proposed annual budget for the
Emerging Need Projects is $15,000 plus three percent per year allowance for inflation.
Full-Scale CPS and Related Studies. The Ventura County District’s CPS, which was
performed in 2011/2012 is planned to be updated in the 2015 to 2017 timeframe. It is
anticipated that the work will begin in early 2016. To support the CPS, California
American Water will perform other focused planning studies. The proposed annualized
budget for this task is $41,600 per year plus three percent per year allowance for inflation.
Strategic Capital Expenditure Plan (SCEP). The proposed budget for the annual SCEP
updates is $10,000 plus three percent per year allowance for inflation.
2015 Urban Water Management Plan (UWMP). The proposed annual budget for the
UWMP is $15,000 plus three percent per year allowance for inflation.

A breakdown of the annual activities and the estimated budgets for each task of system
map maintenance are presented in the table below. The proposed budgets and tasks
shown in this table are for the year 2018. The budgets and tasks for 2019 and 2020 are the
same as 2018, with the exception that the budgets have been escalated at a rate of three
percent per year to account for inflation.

17

 Task

Estimated Budget

Issue updated block map Atlas Books including
preparation of a camera ready copy from the
GIS database and printing 25 copies.
Updating GIS graphics and database to
incorporate as-built system information, leak
history, and water quality data. Populating the
attributes of system components such as valves,
meters service lines.
Scanning and linkage of system maps and
linkage to GIS database.

Field survey and collection of GPS coordinates
for critical components such as pumps, valves
and hydrants. Data correction task to include
but not limited to populating the attributed of
system components such as valves, meters,
hydrants, service lines and mains. Proper
location of and population of attributes and
geometric Network corrections.
Training
ELA GIS License Fees

$7,700
$27,000

$12,500

$20,000

$3,000
$7,200

Total budget

$77,400

18

 ATTACHMENT 10

CALIFORNIA-AMERICAN WATER
DEPRECIATION RATE STUDY
AT DECEMBER 31, 2014

http://www.utilityalliance.com

 CALIFORNIA-AMERICAN WATER
DEPRECIATION RATE STUDY
EXECUTIVE SUMMARY

California-American Water (‘CAW’ or ‘Company’) engaged Alliance
Consulting Group to conduct a depreciation study of the Company’s water and
waste water operations depreciable assets as of December 31, 2014.
Overall, this study recommends an increase of $2.3 million in annual
depreciation expense when compared to the depreciation rates currently in
effect.

This study reflects changes to all eight districts in which California

American operates. Where possible, consistent life and net salvage parameters
were applied to all districts for similar asset groups.
Appendix A-1 provides the comparison in depreciation expense for all
districts and accounts. Appendix B provides the calculation of the recommended
depreciation rates. Appendix C provides the mortality characteristics (life, curve,
salvage and cost of removal) for the accounts and districts analyzed. Appendix
D shows the net salvage history for each district.

1

 CALIFORNIA-AMERICAN WATER
DEPRECIATION RATE STUDY
TABLE OF CONTENTS
PURPOSE ...................................................................................................................................................... 3 
STUDY RESULTS ........................................................................................................................................ 4 
GENERAL DISCUSSION ............................................................................................................................ 5 
DEFINITION ................................................................................................................................................ 5 
BASIS OF DEPRECIATION ESTIMATES ....................................................................................................... 5 
SURVIVOR CURVES .................................................................................................................................... 6 
ACTUARIAL ANALYSIS ................................................................................................................................ 8 
SIMULATED PLANT RECORD PROCEDURE ................................................................................................ 9 
JUDGMENT ............................................................................................................................................... 12 
AVERAGE LIFE GROUP DEPRECIATION .................................................................................................. 13 
THEORETICAL DEPRECIATION RESERVE ............................................................................................... 14 
DETAILED DISCUSSION ......................................................................................................................... 15 
DEPRECIATION STUDY PROCESS ............................................................................................................. 15 
DEPRECIATION RATE CALCULATION ..................................................................................................... 18 
REMAINING LIFE CALCULATION ............................................................................................................ 18 
LIFE ANALYSIS .......................................................................................................................................... 19 
SALVAGE ANALYSIS.................................................................................................................................. 20 
SALVAGE CHARACTERISTICS .................................................................................................................... 20 
GENERAL PLANT ACCOUNTS ........................................................................................................... 182 
MONTEREY WASTE WATER DISTRICT .......................................................................................... 210 
CORPORATE ........................................................................................................................................... 236 
APPENDIX A COMPARISON OF EXISTING VS PROPOSED DEPRECIATION RATES ......... 249 
APPENDIX B COMPUTATION OF ANNUAL DEPRECIATION ACCRUAL RATE ................... 258 
APPENDIX C SUMMARY OF EXISTING & PROPOSED DEPRECIATION PARAMETERS ... 268 
APPENDIX D NET SALVAGE HISTORY BY DISTRICT ................................................................ 277 

2

 PURPOSE
The purpose of this study is to develop depreciation rates for depreciable
property as recorded on California American Water’s books at December 31,
2014. The account based depreciation rates were designed to recover the total
remaining undepreciated investment for the analyzed accounts, adjusted for net
salvage, over the remaining life of the property on a straight-line basis.
California American Water owns and operates water and wastewater
systems in communities across the state of California. The Company operates
and maintains water systems that treat water from wells, rivers, lakes and
reservoirs across several districts. In the Monterey District, the Company also
provides wastewater systems, designed and operated with careful attention to
the local environment.

3

 STUDY RESULTS
Overall depreciation rates, for the specific depreciable property analyzed
and included in this study, are shown in Appendix A. These rates translate into
an annual depreciation accrual of $23.9 million based on California American’s
depreciable investment at December 31, 2014.

The annual equivalent

depreciation expense calculated by the same method using the approved rates
was $21.6 million. Appendix A presents a comparison of approved rates versus
proposed rates by account and district.

Appendix B demonstrates the

development of the annual depreciation rates and accruals.

Appendix C

presents a summary of mortality and net salvage estimates by account.
Appendix D shows the net salvage history for each district.

4

 GENERAL DISCUSSION
Definition
The term "depreciation" as used in this study is considered in the
accounting sense, that is, a system of accounting that distributes the cost of
assets, less net salvage (if any), over the estimated useful life of the assets in a
systematic and rational manner. It is a process of allocation, not valuation. This
expense is systematically allocated to accounting periods over the life of the
properties.

The amount allocated to any one accounting period does not

necessarily represent the loss or decrease in value that will occur during that
particular period. The Company accrues depreciation on the basis of the original
cost of all depreciable property included in each functional property group. On
retirement the full cost of depreciable property, less the net salvage value, is
charged to the depreciation reserve.
Basis of Depreciation Estimates
The straight-line, broad (average) life group, remaining-life depreciation
system was employed to calculate annual and accrued depreciation in this study.
In this system, the annual depreciation expense for each group is computed by
dividing the original cost of the asset less allocated depreciation reserve less
estimated net salvage by its respective average life group remaining life. The
resulting annual accrual amounts of all depreciable property within a function
were accumulated, and the total was divided by the original cost of all functional
depreciable property to determine the depreciation rate.

The calculated

remaining lives and annual depreciation accrual rates were based on attained
ages of plant in service and the estimated service life and salvage characteristics
of each depreciable group.

The computations of the annual account level

depreciation rates are shown in Appendix B and remaining life calculations are
shown in the workpapers.
To determine life estimation, both Actuarial Analysis and Simulated Plant
Record (SPR) analysis was used. SPR is a commonly used mortality analysis
techniques for electric utility property where vintaged data is not available.
5

 Survivor Curves
To fully understand depreciation projections in a regulated utility setting,
there must be a basic understanding of survivor curves. Individual property units
within a group do not normally have identical lives or investment amounts. The
average life of a group can be determined by first constructing a survivor curve
which is plotted as a percentage of the units surviving at each age. A survivor
curve represents the percentage of property remaining in service at various age
intervals. The Iowa Curves are the result of an extensive investigation of life
characteristics of physical property made at Iowa State College Engineering
Experiment Station in the first half of the prior century. Through common usage,
revalidation and regulatory acceptance, these curves have become a descriptive
standard for the life characteristics of industrial property. An example of an Iowa
Curve is shown below.

6

 There are four families in the Iowa Curves that are distinguished by the
relation of the age at the retirement mode (largest annual retirement frequency)
and the average life.

For distributions with the mode age greater than the

average life, an "R" designation (i.e., Right modal) is used. The family of “R”
moded curves is shown below.

Similarly, an "S" designation (i.e., Symmetric modal) is used for the family
whose mode age is symmetric about the average life. An "L" designation (i.e.,
Left modal) is used for the family whose mode age is less than the average life.
A special case of left modal dispersion is the "O" or origin modal curve family.
Within each curve family, numerical designations are used to describe the
relative magnitude of the retirement frequencies at the mode. A "6" indicates that
the retirements are not greatly dispersed from the mode (i.e., high mode
frequency) while a "1" indicates a large dispersion about the mode (i.e., low
mode frequency). For example, a curve with an average life of 30 years and an
7

 "L3" dispersion is a moderately dispersed, left modal curve that can be
designated as a 30 L3 Curve. An SQ, or square, survivor curve occurs where no
dispersion is present (i.e., units of common age retire simultaneously).
Most property groups can be closely fitted to one Iowa Curve with a unique
average service life. The blending of judgment concerning current conditions
and future trends along with the matching of historical data permits the
depreciation analyst to make an informed selection of an account's average life
and retirement dispersion pattern.
Actuarial Analysis
Actuarial analysis (retirement rate method) was used in evaluating historical
asset retirement experience where vintage data were available and sufficient
retirement activity was present. In actuarial analysis, interval exposures (total
property subject to retirement at the beginning of the age interval, regardless of
vintage) and age interval retirements are calculated. The complement of the
ratio of interval retirements to interval exposures establishes a survivor ratio.
The survivor ratio is the fraction of property surviving to the end of the selected
age interval, given that it has survived to the beginning of that age interval.
Survivor ratios for all of the available age intervals were chained by successive
multiplications to establish a series of survivor factors, collectively known as an
observed life table. The observed life table shows the experienced mortality
characteristic of the account and may be compared to standard mortality curves
such as the Iowa Curves. Where data was available, accounts were analyzed
using this method.

Placement bands were used to illustrate the composite

history over a specific era, and experience bands were used to focus on
retirement history for all vintages during a set period. The results from these
analyses for those accounts which had data sufficient to be analyzed using this
method are shown in the Life Analysis section of this report.

8

 Simulated Plant Record Procedure

The SPR - Balances approach is one of the commonly accepted
approaches to analyze mortality characteristics of utility property.

SPR was

applied to accounts. In this method, an Iowa Curve and average service life are
selected as a starting point of the analysis and its survivor factors applied to the
actual annual additions to give a sequence of annual balance totals. These
simulated balances are compared with the actual balances by using both
graphical and statistical analysis. Through multiple comparisons, the mortality
characteristics (as defined by an average life and Iowa Curve) that are the best
match to the property in the account can be found.
The Conformance Index (CI) is one measure used to evaluate various SPR
analyses. CIs are also used to evaluate the "goodness of fit" between the actual
data and the Iowa Curve being referenced.

The sum of squares difference

(SSD) is a summation of the difference between the calculated balances and the
actual balances for the band or test year being analyzed. This difference is
squared and then summed to arrive at the SSD.

SSD = 1n (Calculated Balancei - Observed Balancei )2

Where n is the number of years in the test band.
This calculation can then be used to develop other calculations, which the
analyst feels might give a better indication for the “goodness of fit” for the
representative curve under consideration.

The residual measure (RM) is the

square root of the average squared differences as developed above.
residual measure is calculated as follows:

RM = (
9

SSD
)
n

The

 The CI is developed from the residual measure and the average observed plant
balances for the band or test year being analyzed.

The calculation of

conformance index is shown below:
CI =

n
1 Balancesi / n
RM

The retirement experience index (REI) gives an indication of the maturity of the
account and is the percent of the property retired from the oldest vintage in the
band at the end of the test year. Retirement indices range from 0 percent to 100
percent and an REI of 100 percent indicates that a complete curve was used. A
retirement index less than 100 percent indicates that the survivor curve was
truncated at that point.

The originator of the SPR method, Alex Bauhan,

suggests ranges of value for the CI and REI. The relationship for CI proposed by
Bauhan is shown below1:
CI
Over 75
50 to 75
25 to 50
Under 25

Value
Excellent
Good
Fair
Poor

The relationship for REI proposed by Bauhan2 is shown below:
REI
Over 75
50 to 75
33 to 50
17 to 33
Under 17

Value
Excellent
Good
Fair
Poor
Valueless

Despite the fact there has not been empirical research to validate Bauhan’s
conclusions, depreciation analysts have used these measures in analyzing SPR
results for nearly 60 years, since the SPR method was developed.

1 Public Utility Depreciation Practices, p. 96.
2 Public Utility Depreciation Practices, p. 97.

10

 Each of these statistics provides the analyst with a different perspective of
the comparison between a band of simulated or calculated balances and the
observed or actual balances in the account being studied. Although one statistic
is not necessarily superior over the others, the conformance index is the one
many analysts use in depreciation studies.

The depreciation analyst should

carefully weigh the data from REIs to ensure that a mature curve is being used to
estimate life.
Statistics are useful in analyzing mortality characteristics of accounts as
well as determining a range of service lives to be analyzed using the detailed
graphical method. However, these statistics boil all the information down to one,
or at most, a few numbers for comparison. Visual matching through comparison
between actual and calculated balances expands the analysis by permitting the
analyst to view many points of data at a time. The goodness of fit should be
visually compared to plots of other Iowa Curve dispersions and average lives for
the selection of the appropriate curve and life. Detailed information for each
account is shown later in this study and in workpapers.

11

 Judgment
Any depreciation study requires informed judgment by the analyst
conducting the study.

A knowledge of the property being studied, company

policies and procedures, general trends in technology and industry practice, and
a sound basis of understanding depreciation theory are needed to apply this
informed judgment. Judgment was used in areas such as survivor curve
modeling and selection, depreciation method selection, simulated plant record
method analysis, and actuarial analysis.
Judgment is not defined as being used in cases where there are specific,
significant pieces of information that influence the choice of a life or curve.
Those cases would simply be a reflection of specific facts into the analysis.
Where there are multiple factors, activities, actions, property characteristics,
statistical inconsistencies, implications of applying certain curves, property mix in
accounts or a multitude of other considerations that impact the analysis
(potentially in various directions), judgment is used to take all of these factors
and synthesize them into a general direction or understanding of the
characteristics of the property. Individually, no one factor in these cases may
have a substantial impact on the analysis, but overall, may shed light on the
utilization and characteristics of assets. Judgment may also be defined as
deduction, inference, wisdom, common sense, or the ability to make sensible
decisions. There is no single correct result from statistical analysis; hence, there
is no answer absent judgment.

At the very least for example, any analysis

requires choosing which bands to place more emphasis.
The establishment of appropriate average service lives and retirement
dispersions for each account requires judgment to incorporate the understanding
of the operation of the system with the available accounting information analyzed
using the Retirement Rate actuarial methods. The appropriateness of lives and
curves depends not only on statistical analyses, but also on how well future
retirement patterns will match past retirements.

12

 Current applications and trends in use of the equipment also need to be
factored into life and survivor curve choices in order for appropriate mortality
characteristics to be chosen.

Average Life Group Depreciation
California American Water is authorized to use the average life group
(“ALG”) depreciation procedure. Continuing the same depreciation system, this
study uses the ALG depreciation procedure to group the assets within each
account. After an average service life and dispersion were selected for each
account, those parameters were used to estimate what portion of the surviving
investment of each vintage was expected to retire. The depreciation of the group
continues until all investment in the vintage group is retired. ALG groups are
defined by their respective account dispersion, life, and salvage estimates. A
straight-line rate for each ALG group is calculated by computing a composite
remaining life for each group across all vintages within the group, dividing the
remaining investment to be recovered by the remaining life to find the annual
depreciation expense and dividing the annual depreciation expense by the
surviving investment.

The resultant rate for each ALG group is designed to

recover all retirements less net salvage when the last unit retires. The ALG
procedure recovers net book cost over the life of each account by averaging
many components.

13

 Theoretical Depreciation Reserve
The book depreciation reserve was derived from Company records where
the provision for depreciation is maintained on a plant account level. As a point
of comparison, a theoretical depreciation reserve model was computed for each
account. This study used a reserve model that relied on a prospective concept
relating future retirement and accrual patterns for property, given current life and
salvage estimates. The theoretical reserve of a group is developed from the
estimated remaining life, total life of the property group, and estimated net
salvage. The theoretical reserve represents the portion of the group cost that
would have been accrued if current forecasts were used throughout the life of the
group for future depreciation accruals. The computation involves multiplying the
vintage balances within the group by the theoretical reserve ratio for each
vintage. The average life group method requires an estimate of dispersion and
service life to establish how much of each vintage is expected to be retired in
each year until all property within the group is retired. Estimated average service
lives and dispersion determine the amount within each average life group. The
straight-line remaining-life theoretical reserve ratio at any given age (RR) is
calculated as:

RR = 1 -

(Average Remaining Life)
* (1 - Net Salvage Ratio)
(Average Service Life)

14

 DETAILED DISCUSSION
Depreciation Study Process
This depreciation study encompassed four distinct phases.
phase involved data collection and field interviews.

The first

The second phase was

where the initial data analysis occurred.

The third phase was where the

information and analysis was evaluated.

Once the first three stages were

complete, the fourth phase began.

This phase involved the calculation of

deprecation rates and the documenting the corresponding recommendations.
During the Phase I data collection process, historical data was compiled
from continuing property records and general ledger systems.

Data was

validated for accuracy by extracting and comparing to multiple financial system
sources.

Audit of this data was validated against historical data from prior

periods, historical general ledger sources, and field personnel discussions. This
data was reviewed extensively to put in the proper format for a depreciation
study. Further discussion on data review and adjustment is found in the Salvage
Considerations Section of this study. Also as part of the Phase I data collection
process, numerous discussions were conducted with engineers and field
operations personnel to obtain information that would assist in formulating life
and salvage recommendations in this study. One of the most important elements
of performing a proper depreciation study is to understand how the Company
utilizes assets and the environment of those assets. Interviews with engineering
and operations personnel are important ways to allow the analyst to obtain
information that is beneficial when evaluating the output from the life and net
salvage programs in relation to the Company’s actual asset utilization and
environment. Information that was gleaned in these discussions is found both in
the Detailed Discussion of this study in the life analysis and salvage analysis
sections and also in workpapers.

15

 Phase 2 is where the SPR is performed. Phase 2 and 3 overlap to a
significant degree. The detailed property records information is used in phase 2
to develop statistics and graphical representations of how various industry
standard retirement patterns match the actual experience of the company for life
analysis.

These statistics are analyzed and tables are visually compared to

company’s experience to determine historical life characteristics. It is possible
that the analyst would cycle back to this phase based on the evaluation process
performed in phase 3.

Net salvage analysis consists of compiling historical

salvage and removal data by functional group to determine values and trends in
gross salvage and removal cost. This information was then carried forward into
phase 3 for the evaluation process.
Phase 3 is the evaluation process which synthesizes analysis, interviews,
and operational characteristics into a final selection of asset lives and net
salvage parameters. The historical analysis from phase 2 is further enhanced by
the incorporation of recent or future changes in the characteristics or operations
of assets that were revealed in phase 1. Phases 2 and 3 allow the depreciation
analyst to validate the asset characteristics as seen in the accounting
transactions with actual Company operational experience.
Finally, Phase 4 involved the calculation of accrual rates, making
recommendations and documenting the conclusions in a final report.

The

calculation of accrual rates is found in Appendix A. Recommendations for the
various accounts are contained within the Detailed Discussion of this report. The
depreciation study flow diagram shown as Figure 13 documents the steps used in
conducting this study. Depreciation Systems, page 289 documents the same
basic processes in performing a depreciation study which are:

Statistical

analysis, evaluation of statistical analysis, discussions with management,
forecast assumptions, write logic supporting forecasts and estimation, and write
final report.

3

Introduction to Depreciation for Public Utilities and Other Industries, AGA EEI, 2013

16

 Book Depreciation Study Flow Diagram

 

 

 

 

Data Collection Analysis* Evaluation Calculation
Account content
Additions, retirements, Calculate
survivors, and Life I
plantfreserre balances Emma rates

 

 

Discussions with accounting,
engineering, planning and
operations personnel

 

 

 

 

 

Evaluation of analysis
results and selection of

 

 

 

 

Retirements, gross
salvage, and cost of
removal

 

 

Other

Net salvage

Source: Introduction to Depreciation for
Public Udlities and Other Industries: AGA

EELEUIS.

Recommendations

   
 

 

 

 

 

mortality
Calculate theoretical
Reserve [required for
1trhole life,
recommended for
other options)

 

 

 

*Although not speci?cally noted: the mathematical
analysis may need some level of input from other
sources (for example: to determine analysis hands for
life and adjustments to data used in all analysis).

Figure 1

CALIFORNIA AMERICAN WATER
DEPRECIA TION STUDY PROCESS

17

Depreciation Rate Calculation
Annual depreciation expense amounts for the depreciable accounts of
California American Water were calculated by the straight line method, average
life group (“ALG”) procedure, and the remaining life technique. With this approach, remaining lives were calculated according to standard ALG group
expectancy techniques, using the Iowa Survivor Curves noted in the calculation.
For each plant account, the difference between the surviving investment,
adjusted for estimated net salvage, and the book depreciation reserve, was
divided by the average remaining life to yield the annual depreciation expense.
These calculations are shown in Appendix B.

Remaining Life Calculation
The establishment of appropriate average service lives and retirement
dispersions for each account within a functional group was based on engineering
judgment that incorporated available accounting information analyzed using the
Retirement Rate actuarial methods. After establishment of appropriate average
service lives and retirement dispersion, remaining life was computed for each
account. Theoretical depreciation reserve with zero net salvage was calculated
using theoretical reserve ratios as defined in the theoretical reserve portion of the
General Discussion section.

The difference between plant balance and

theoretical reserve was then spread over the ALG depreciation accruals.
Remaining life computations are found for each account in the workpapers.

18

 Life Analysis
The retirement rate actuarial analysis method was applied to some
accounts within CAW. For each account, an actuarial retirement rate analysis
was made with placement and experience bands of varying width. The historical
observed life table was plotted and compared with various Iowa Survivor Curves
to obtain the most appropriate match. A selected curve for each account is
shown in the Life Analysis Section of this report. The observed life tables for all
analyzed placement and experience bands are provided in workpapers.
For each account on the overall band (i.e. placement from earliest vintage
year which varied for each account through 2014), approved survivor curves from
Docket 06-161-U were used as a starting point. (Some accounts had available
history beginning as early as 1999, while others had smaller experience bands
available for analysis.) Then using the same average life, various dispersion
curves were plotted. Frequently, visual matching would confirm one specific
dispersion pattern (i.e. L, S. or R) as an obviously better match than others. The
next step would be to determine the most appropriate life using that dispersion
pattern.

Next placement bands of varying width were plotted with each

experience band discussed above.

Repeated matching usually pointed to a

focus on one dispersion family and small range of service lives. The goal of
visual matching was to minimize the differential between the observed life table
and Iowa curve in top and mid-range of the plots. These results are used in
conjunction with all other factors that may influence asset lives.
The SPR balances method was applied to all accounts for California
American Water that have sufficient history to analyze. For each account with
sufficient history, bands of varying width were analyzed and the analysis
combined with judgment was used to select the appropriate life for the account.
To the degree possible, the lives for the same asset groups between districts
were synchronized. In some cases, slightly different life indications were seen
between districts.

For consistency, where significant factors did not justify

different lives, one life was chosen for all districts.
19

 Salvage Analysis
When a capital asset is retired, physically removed from service and finally
disposed of, terminal retirement is said to have occurred. The residual value of a
terminal retirement is called gross salvage.

Net salvage is the difference

between the gross salvage (what the asset was sold for) and the removal cost
(cost to remove and dispose of the asset).

Salvage and removal cost

percentages are calculated by dividing the current cost of salvage or removal by
the original installed cost of the asset.

Some plant assets can experience

significant negative removal cost percentages due to the timing of the original
addition versus the retirement. Inflation from the time of installation of the asset
until the time of its removal must be taken into account in the calculation of the
removal cost percentage because the depreciation rate, which includes the
removal cost percentage, will be applied to the original installed cost of assets.

Salvage Characteristics
For each account in the study, retirement and salvage and removal cost, were
analyzed to the degree information was available. For all districts, net salvage
was statistically analyzed using the historical cost for salvaging and removing
assets with rolling and shrinking bands from 2001-2014.

This study makes

recommendations based on the analysis, discussions with Company personnel
on policies and practices around salvage and cost of removal, and knowledge of
types of assets routinely incurring salvage or cost of removal from experience
with other utilities.

20

 ACCOUNT SPECIFIC INFORMATION

FERC Account 304100 Structures and Improvements Supply
This account consists of structures and improvements used in connection
with source of supply.

LIFE ANALYSIS

Larkfield District
The account balance is $197 thousand for this account. The approved life
characteristic for this account is 40 R5. Based on judgment, this depreciation
study recommends retaining a 40 R5 dispersion curve for this account.

21

 Los Angeles District
The account balance is $87 thousand for this account. The approved life
characteristic for this account is 26 R4. Based on SPR life analysis and the
different mix of assets for this account in this district compared to other districts,
the depreciation study recommends a 32 R4 dispersion curve for this account. A
plot comparing actual vs. simulated balances for this account is shown below.

Monterey Water District
The account balance is $1.1 million for this account. The approved life
characteristic for this account is 40 R5.

Based on SPR life analysis, this

depreciation study recommends a 41 R5 dispersion curve for this account. A plot
comparing actual vs. simulated balances for this account is shown below.

22

 Sacramento District
The account balance is $5.7 million for this account. The approved life
characteristic for this account is 45 R4. Based on judgment, this depreciation
study recommends moving to a 40 R5 dispersion curve for this account. A graph
of the proposed curve is shown below.

23

 Ventura County Water District
The account balance is $69 thousand for this account. The approved life
characteristic for this account is 40 R5.

Based on SPR life analysis, this

depreciation study recommends a 30 R4 dispersion curve for this account. A plot
comparing actual vs. simulated balances for this account is shown below.

24

 NET SALVAGE

Larkfield District
The approved net salvage for this account is negative 5 percent. There
has been no retirement activity from 2001-2014. Based on knowledge of the
assets in this account and judgment, this depreciation study recommends
negative 5 percent net salvage for this account.

Los Angeles District
The approved net salvage for this account is negative 5 percent. There
has been no retirement activity from 2001-2014. Based knowledge of the assets
in this account and judgment, this depreciation study recommends retaining
negative 5 percent net salvage for this account.
25

 Monterey Water District
The approved net salvage for this account is negative 5 percent. There
has been no retirement activity from 2001-2014. Based knowledge of the assets
in this account and judgment, this depreciation study recommends negative 5
percent net salvage for this account.

Sacramento District
The approved net salvage for this account is 0 percent. There has been
no retirement activity from 2001-2014. Based on knowledge of the assets in this
account and judgment, this depreciation study recommends a negative 5 percent
net salvage for this account.

Ventura County Water District
The approved net salvage for this account is 0 percent. There has been
no retirement activity from 2001-2014. Based knowledge of the assets in this
account and judgment, this depreciation study recommends a negative 5 percent
net salvage for this account.

26

 FERC Account 304200 Structures and Improvements Pumping
This account consists of structures and improvements used in connection
with pumping from the source of supply.

LIFE ANALYSIS

Larkfield District
The account balance is $138 thousand for this account. The approved life
characteristic for this account is 65 R5. Based on judgment, this depreciation
study recommends retaining a 65 R5 dispersion curve for this account.

27

 Los Angeles District
The account balance is $619 thousand for this account. The approved life
characteristic for this account is 35 S6. Based on SPR life analysis and the asset
mix in this account, this depreciation study recommends retention of a 35 S6
dispersion curve for this account.

A plot comparing actual vs. simulated

balances for this account is shown below.

28

 Monterey Water District
The account balance is $4 million for this account. The approved life
characteristic for this account is 65 S1.5.

Based on SPR life analysis, this

depreciation study recommends a 66 S0.5 dispersion curve for this account. The
assets in this account related to the Los Padres and San Clemente Dams are
segregated from the remainder of the account and depreciated over the
remaining lives of the Dams. A plot comparing actual vs. simulated balances for
this account is shown below.

Sacramento District
The account balance is $5.7 million for this account. The approved life
characteristic for this account is 55 L1.5. Based on judgment, this depreciation
study recommends a 65 R5 dispersion curve for this account.

29

  

 

5'6 Surviving

100

California American Water Sacramento
Account 3042 65 R5

 

 

 

 

 

 

 

 

 

 

 

 

 

3O

 

Ventura County Water District
The account balance is $303 thousand for this account. The approved life
characteristic for this account is 65 R5.

Based on SPR life analysis, this

depreciation study recommends a 45 R1.5 dispersion curve for this account. A
plot comparing actual vs. simulated balances for this account is shown below.

NET SALVAGE

Larkfield District
The approved net salvage for this account is negative 20 percent. Based
on knowledge of the assets in this account and experience with other California
American districts, this depreciation study recommends a negative 5 percent net
salvage for this account.
31

 Los Angeles District
The approved net salvage for this account is negative 20 percent.
Negative net salvage has been experience during the period from 2001-2014.
Based on the limited activity in the account, knowledge of the assets and
judgment, this depreciation study recommends a negative 5 percent net salvage
for this account.

Monterey Water District
The approved net salvage for this account is negative 20 percent. Based
knowledge of the assets in this account and experience with other California
American districts, this depreciation study recommends a negative 5 percent net
salvage for this account.

Sacramento District
The approved net salvage for this account is negative 20 percent. Based
on knowledge of the assets in this account and experience with other California
American districts, this depreciation study recommends a negative 5 percent net
salvage for this account.

Ventura County Water District
The approved net salvage for this account is negative 20 percent. There
has been no retirement activity from 2001-2014. Based knowledge of the assets
in this account and judgment, this depreciation study recommends a negative 5
percent net salvage for this account.

32

 FERC Account 304300 Structures and Improvements Water Treatment
This account consists of structures and improvements used in connection
with water treatment.

LIFE ANALYSIS

Larkfield District
The account balance is $452 thousand for this account. The approved life
characteristic for this account is 50 R5. Based on judgment, this depreciation
study recommends a 20 R5 dispersion curve for this account.

Los Angeles District
The account balance is $250 thousand on for this account. The approved
33

 life characteristic for this account is 50 S6. Based on SPR life analysis, this
depreciation study recommends a 38 R3 dispersion curve for this account. A plot
comparing actual vs. simulated balances for this account is shown below.

Monterey Water District
The account balance is $9.9 million for this account. The approved life
characteristic for this account is 50 R5.

Based on SPR life analysis, this

depreciation study recommends a 43 R5 dispersion curve for this account. A plot
comparing actual vs. simulated balances for this account is shown below.

34

 Sacramento District
The account balance is $8 million for this account. The approved life
characteristic for this account is 50 L1.5. Based on judgment, this depreciation
study recommends a 50 R5 dispersion curve for this account.

35

 NET SALVAGE

Larkfield District
The approved net salvage for this account is negative 5 percent. There
has been no retirement activity from 2001-2014. Based on knowledge of the
assets in this account and judgment, this depreciation study recommends
negative 5 percent net salvage for this account.

Los Angeles District
The approved net salvage for this account is negative 5 percent. There
has been no retirement activity from 2001-2014 at a lower level in this account.
36

 Based on knowledge of the assets in this account and judgment, this
depreciation study recommends negative 5 percent net salvage for this account.

Monterey Water District
The approved net salvage for this account is negative 5 percent. There
has been no retirement activity from 2001-2014. Based knowledge of the assets
in this account and judgment, this depreciation study recommends negative 5
percent net salvage for this account.

Sacramento District
The approved net salvage for this account is 0 percent. There has been
no retirement activity from 2001-2014. Based on knowledge of the assets in this
account and judgment, this depreciation study recommends a negative 5 percent
net salvage for this account.

37

 FERC Account 304400 Structures and Improvements T & D
This account consists of gross salvage and cost of removal for structures
and improvements used in connection with transmission and distribution
operations.

LIFE ANALYSIS

Larkfield District
The account balance is $421 thousand for this account. The approved life
characteristic for this account is 40 R5. There is no retirement history for this
account. Based on judgment, a 40 R5 dispersion curve is recommended for this
account.

38

 Los Angeles District
The account balance is $25 thousand for this account. The approved life
characteristic for this account is 25 S6. There is no retirement history for this
account. Based on asset mix in this account and judgment, a 25 S6 dispersion
curve is recommended for this account.

Monterey Water District
The account balance is $443 thousand for this account. The approved life
characteristic for this account is 25 S1.5. There is no retirement history for this
account.

Based on the asset mix in this account and judgment, a 25 S1.5

dispersion curve is recommended for this account.

39

 Sacramento District
The account balance is $303 thousand for this account. The approved life
characteristic for this account is 30 R3. There is no retirement history for this
account. Based on judgment, a 40 R5 dispersion curve is recommended for this
account.

40

 Ventura County District
The account balance is $181 thousand for this account. There is no
currently approved life characteristic for this account. There is no retirement
history for this account. Based on judgment, a 32 S1 dispersion curve is
recommended for this account.

41

 CAW Ventura County Account 304400
Actual vs Simulated Balance 32 S1

Balance Am ount $

178,000
158,000
138,000
118,000
98,000
78,000
58,000
38,000
18,000
1985

1990

1995

2000

2005

2010

Transaction Year
Actual

Simulated

NET SALVAGE

Larkfield District
The approved net salvage for this account is negative 5 percent. There
has been no retirement activity from 2001-2014. Based on knowledge of the
assets in this account and judgment, this depreciation study recommends
negative 5 percent net salvage for this account.

Los Angeles District
The approved net salvage for this account is 5 percent. There has been
no retirement activity from 2001-2014 at a lower level in this account. Based on
42

 knowledge of the assets in this account and judgment, this depreciation study
recommends 5 percent net salvage for this account.

Monterey Water District
The approved net salvage for this account is negative 5 percent. There
has been no retirement activity from 2001-2014. Based knowledge of the assets
in this account and judgment, this depreciation study recommends negative 5
percent net salvage for this account.

Sacramento District
The approved net salvage for this account is 0 percent. There has been
no retirement activity from 2001-2014. Based on knowledge of the assets in this
account and judgment, this depreciation study recommends a negative 5 percent
net salvage for this account.

Ventura County District
There is currently no approved net salvage for this account. There has
been no retirement activity from 2001-2014. Based on knowledge of the assets
in this account and judgment, this depreciation study recommends a negative 5
percent net salvage for this account.

43

 FERC Account 304500 Structures and Improvements General
This account consists of structures and improvements used in as general
plant such as company offices.

LIFE ANALYSIS

Coronado District
The account balance is $28 thousand for this account.

There is no

approved life characteristic for this account. Based on SPR life analysis of a
group which included accounts 304600 and 304700, this depreciation study
recommends a 10 SQ dispersion curve for this account. No graph is provided.

Larkfield District
The account balance is $39 thousand for this account. The approved life
characteristic for this account is 25 R2. The primary investment in this account is
a small electronic asset.

Based on judgment, this depreciation study

recommends a 25 R2 dispersion curve for this account.

44

 Los Angeles District
The account balance is $395 thousand for this account. The approved life
characteristic for this account is 44 R4. The largest asset in this account is a
composite building.

Based on SPR and the assets in the account, this

depreciation study recommends a 43 R3 dispersion curve for this account. A plot
comparing actual vs. simulated balances for this account is shown below.

45

 Monterey Water District
The account balance is $1.6 million for this account. The approved life
characteristic for this account is 44 R4. Based on SPR analysis and the asset
mix in the account, this depreciation study recommends a 43 R4 dispersion curve
for this account.

46

 Sacramento District
The account balance is $3.8 million for this account. The approved life
characteristic for this account is 65 L0.5. Based on judgment, this depreciation
study recommends a 44 R4 dispersion curve for this account.

Ventura County Water District
The account balance is $106 thousand for this account. The approved life
characteristic for this account is 32 R2.5.

The only asset in this account is

landscaping. Based on SPR life analysis in a group which included accounts
304500, 304600, and 304700, this depreciation study recommends a 32 S1
dispersion curve for this account.

A plot comparing actual vs. simulated

balances for this account is shown below.
47

 NET SALVAGE

Coronado District
There is no approved net salvage for this account. There has been no
retirement activity from 2001-2014. Based on knowledge of the assets in this
account and judgment, this depreciation study recommends negative 5 percent
net salvage for this account.

Larkfield District
The approved net salvage for this account is 0 percent. There has been
no retirement activity from 2001-2014. Based on knowledge of the assets in this
account and judgment, this depreciation study recommends 0 percent net
salvage for this account.
48

 Los Angeles District
The approved net salvage for this account is 5 percent. The retirement
activity from 2001-2014 continues to show 5 percent net salvage, Based on
experience in this account and knowledge of the assets in this account, this
depreciation study recommends 5 percent net salvage for this account.

Monterey Water District
The approved net salvage for this account is negative 5 percent. There
has been no retirement activity from 2001-2014. Based knowledge of the assets
in this account and judgment, this depreciation study recommends negative 5
percent net salvage for this account.

Sacramento District
The approved net salvage for this account is negative 5 percent. There
has been no retirement activity from 2001-2014. Based on knowledge of the
assets in this account and judgment, this depreciation study recommends
negative 5 percent net salvage for this account.

Ventura County Water District
The approved net salvage for this account is negative 5 percent. There
has been no retirement activity from 2001-2014. Based knowledge of the assets
in this account and judgment, this depreciation study recommends negative 5
percent net salvage for this account.

49

 FERC Account 304600 Structures and Improvements Offices
This account consists of structures and improvements associated with the
Ambler office.

LIFE ANALYSIS

Coronado District
The account balance is $681 thousand for this account. The approved life
characteristic for this account is 28 S6. Based on SPR life analysis of a group
which included accounts 304600 and 304700, this depreciation study
recommends a 28 S6 dispersion curve for this account. A plot comparing actual
vs. simulated balances for this account is shown below.

Califonia American Water Coronado District Account 304600 & 304700
Actual vs Simulated Balance 28 S6

Balance Amoun

400,000

300,000

200,000

100,000

0
1975

1980

1985

1990

1995

2000

2005

Transaction Year
Actual

Simulated

Los Angeles District
The account balance is $340 thousand for this account. The approved life
characteristic for this account is 33 S6. Based on the higher level of electronic
and building related assets in this account, judgment was used to reduce the life
of this account from the life found for the combined accounts 304500, 304600
50

 and 304700. This depreciation study recommends a 33 S6 dispersion curve for
this account.

Monterey Water District
The account balance is $39 thousand for this account. The approved life
characteristic for this account is 30 R4. Based on the asset mix in this account
and judgment, this depreciation study recommends a 30 R4 dispersion curve for
this account.

51

 Ventura County Water District
The account balance is $181 thousand for this account. The approved life
characteristic for this account is 32 R2.5. Based on the combined SPR analysis
of accounts 304500, 304600 and 304700, this depreciation study recommends a
32 S1 dispersion curve for this account.

52

 NET SALVAGE
Coronado District
The approved net salvage parameter is negative 5 percent. Based on the
retirement activity in this account from 2001-2014 and judgment, this
depreciation study recommends negative 5 percent net salvage for this account.

Los Angeles District
The approved net salvage for this account is 5 percent. There has been
limited retirement activity from 2001-2014 at a lower level than the currently
approved 5 percent. Given the limited experience and knowledge of the assets
in this account, this depreciation study recommends 5 percent net salvage for
this account.

53

 Monterey Water District
The approved net salvage for this account is negative 5 percent. There
has been no retirement activity from 2001-2014. Based knowledge of the assets
in this account and judgment, this depreciation study recommends negative 5
percent net salvage for this account.

Ventura County Water District
The approved net salvage for this account is negative 5 percent. There
has been no retirement activity from 2001-2014. Based knowledge of the assets
in this account and judgment, this depreciation study recommends negative 5
percent net salvage for this account.

FERC Account 304620 Structures and Improvements Leaseholds
This account consists of structures and improvements associated with the
leased buildings.

LIFE ANALYSIS

Ventura County District
The account balance is $15 thousand for this account.

There is no

currently approved life characteristic for this account. Based on SPR life analysis
of a group which included accounts 304600 and 304700, this depreciation study
recommends a 32 S1 dispersion curve for this account.

54

 NET SALVAGE
Ventura County District
There is currently no approved net salvage.

Based on the retirement

activity in this account from 2001-2014 and judgment, this depreciation study
recommends negative 5 percent net salvage for this account.

55

 FERC Account 304700 Structures and Improvements Tools, Shop
and Garage Equipment
This account consists of structures and improvements used in connection
with tools, shop, and garage operations.

LIFE ANALYSIS

Coronado District
The account balance is $108 thousand for this account. The approved life
characteristic for this account is 28 S6. Based on SPR analysis with account
304600, this depreciation study recommends a 28 S6 as discussed above.

Los Angeles District
The account balance is $277 thousand for this account. The approved life
56

 characteristic for this account is 33 S6. Based on the higher level of electronic
and building related assets in this account, judgment was used to reduce the life
of this account from the life found for the combined accounts 304500, 304600
and 304700.

Based on the asset mix in this account and judgment, this

depreciation study recommends a 33 S6.

Monterey Water District
The account balance is $156 thousand for this account. The approved life
characteristic for this account is 40 R5. Based on the asset mix in this account
and judgment, this depreciation study recommends a 40 R5.

57

 Sacramento Water District
The account balance is $135 thousand for this account.

There is no

current approved life characteristic for this account. Based on the asset mix in
this account and judgment, this depreciation study recommends a 40 R5.

58

 Ventura County Water District
The account balance is $2 thousand for this account. The approved life
characteristic for this account is 32 R2.5. Based on the combined SPR analysis
of accounts 304500, 304600 and 304700, this depreciation study recommends a
32 S1, dispersion curve for this account.

59

 NET SALVAGE
Coronado District
The approved net salvage parameter is negative 5 percent. There has
been no retirement activity in this account from 2001-2014. Based on judgment
and experience in account 304600, this depreciation study recommends negative
5 percent net salvage for this account.

Los Angeles District
The approved net salvage for this account is negative 5 percent. There
has been limited retirement activity from 2001-2014 at a highly negative level.
Given the limited experience and knowledge of the assets in this account, this
depreciation study takes a conservative approach in recommending negative 5
percent net salvage for this account.

60

 Monterey Water District
The approved net salvage for this account is negative 5 percent.
Retirement activity from 2001-2014 shows 0 percent net salvage.

Based on

knowledge of the assets in this account and historical experience, this
depreciation study recommends negative 5 percent net salvage for this account.

Sacramento Water District
There is no currently approved net salvage for this account. Retirement
activity from 2001-2014 shows 0 percent net salvage. Based on knowledge of
the assets in this account and historical experience, this depreciation study
recommends negative 5 percent net salvage for this account.

Ventura County Water District
The approved net salvage for this account is negative 5 percent. There
has been no retirement activity from 2001-2014. Based on knowledge of the
assets in this account and judgment, this depreciation study recommends
negative 5 percent net salvage for this account.

61

 FERC Account 304800 Structures and Improvements Miscellaneous
This account consists of miscellaneous structures and improvements such
as gates, filters, and security apparatus.

LIFE ANALYSIS

Monterey Water District
The account balance is $126 thousand for this account. The approved life
characteristic for this account is 20 R4. Based on judgment considering the
assets in this account, this depreciation study recommends a 20 R4 dispersion
curve for this account.

NET SALVAGE
62

 Monterey Water District
The approved net salvage for this account is negative 5 percent. There
has been no retirement activity from 2001-2014. Based on knowledge of the
assets in this account and judgment, this depreciation study recommends
negative 5 percent net salvage for this account.

63

 FERC Account 305000 Collecting and Impounding Reservoirs
This account consists of structures and improvements used for
impounding, collecting and storing water such as aerators, bridges, and culverts.

LIFE ANALYSIS
Los Angeles District
The account balance is $56 thousand for this account. The approved life
characteristic for this account is 65 R2. There is no retirement history on which
to perform life analysis.

Based on judgment, this depreciation study

recommends a 65 R2 dispersion curve for this account.

Monterey Water District
The account balance is $2.4 million for this account. The approved life
characteristic for this account is 60 S4.

Based on SPR life analysis and

judgment, this depreciation study recommends a 65 S4 dispersion curve for this
64

 account. The assets in this account related to the Los Padres and San Clemente
Dams are segregated from the remainder of the account and depreciated over
the remaining lives of the Dams. A plot comparing actual vs. simulated balances
for this account is shown below.

NET SALVAGE
Los Angeles District
The approved net salvage for this account is 0 percent. There has been
no retirement activity from 2001-2014. Given the knowledge of the assets in this
account and judgment, this depreciation study recommends retaining 0 percent
net salvage for this account.

Monterey Water District
The approved net salvage for this account is 0 percent. The retirement
activity from 2001-2014 has been limited, but greatly in excess of the currently
65

 approved net salvage percent. Based knowledge of the assets in this account
and judgment, this depreciation study recommends 0 percent net salvage for this
account.

FERC Account 306000 Lake, River and Other Intakes
This account consists of lake, river and other intakes used as a source of
water. Such items might include conduit, fences, intake pipes, intake wells or
lighting systems.

LIFE ANALYSIS

Los Angeles District
The account balance is $30 thousand for this account. The approved life
characteristic for this account is 40 R3. There is no retirement history for this
account.

Based on judgment on the type of assets in this account, this

depreciation study recommends a 40 R3 dispersion curve for this account.

66

 Monterey Water District
The account balance is $12 thousand for this account. The approved life
characteristic for this account is 40 S4. There is no retirement history for this
account. Based on judgment, this depreciation study recommends a 40 S4
dispersion curve for this account.

Sacramento District
The account balance is $13 thousand for this account. The approved life
characteristic for this account is 16 R2.5. Based on judgment, this depreciation
study recommends a 25 SQ dispersion curve for this account.

67

  

 

5'6 Surviving

100

California America Water Sacramento

 

 

 

 

 

 

 

 

 

 

 

 

Account 3060 25 SQ
0 I10 1:0 2:0 ?lm :50 (it) Elm-
Age

 

68

 

Ventura County Water District
The account balance is $912 thousand for this account. The approved life
characteristic for this account is 40 R3. SPR results give lives that are too short
for this type of asset. Based on judgment, this depreciation study recommends a
31 R0.5 dispersion curve for this account.

NET SALVAGE
Los Angeles District
The approved net salvage for this account is 0 percent. There has been
no retirement activity from 2001-2014. Given the knowledge of the assets in this
account and judgment, this depreciation study recommends retaining 0 percent
net salvage for this account.

69

 Monterey Water District
The approved net salvage for this account is 0 percent. There has been
no retirement activity from 2001-2014. Based knowledge of the assets in this
account and judgment, this depreciation study recommends retaining 0 percent
net salvage for this account.

Sacramento District
The approved net salvage for this account is negative 5 percent. There
has been no retirement activity from 2001-2014. Based on knowledge of the
assets in this account and judgment, this depreciation study recommends a
negative 5 percent net salvage for this account.

Ventura County Water District
The approved net salvage for this account is 0 percent. There has been
no retirement activity from 2001-2014. Based knowledge of the assets in this
account and judgment, this depreciation study recommends retaining 0 percent
net salvage for this account.

FERC Account 307000 Wells and Springs
This account consists of wells and springs used as a source of water
supply. Such items might include collecting basins, fences, or wells, casings,
and appurtenances.

LIFE ANALYSIS

Larkfield District
The account balance is $1.5 million for this account. The approved curve
and life is 45 R4 for this account. Based on the asset mix in this account and
judgment, this depreciation study recommends retention of the approved 45 R4.

70

 Los Angeles District
The account balance is $8 million for this account. The approved life
characteristic for this account is 45 R3.

Based on SPR life analysis, this

depreciation study recommends a 47 R3 dispersion curve for this account. A plot
comparing actual vs. simulated balances for this account is shown below.

71

 Monterey Water District
The account balance is $14.8 million for this account. The approved life
characteristic for this account is 29 R3. Due to the soil conditions in Monterey,
the life of these assets is shorter than those of other districts. Based on SPR life
analysis, this depreciation study recommends a 30 R3 dispersion curve for this
account.

72

 Sacramento District
The account balance is $9.7 million for this account. The approved life
characteristic for this account is 45 R4. Based on judgment, this depreciation
study recommends a 45 R3 dispersion curve for this account.

NET SALVAGE
Larkfield District
The approved net salvage for this account is negative 50 percent. More
recent activity shows a lower (less negative) net salvage in recent years for this
account.

Based on knowledge of the assets in this account and historical

experience, this depreciation study conservatively recommends a negative 10
percent net salvage for this account.
73

 Los Angeles District
The approved net salvage for this account is negative 50 percent. There
has been limited retirement activity from 2001-2014 with a higher level of
negative net salvage than currently approved. Given the limited experience and
knowledge of the assets in this account, this depreciation study conservatively
recommends retaining negative 50 percent net salvage for this account.

Monterey Water District
The approved net salvage for this account is negative 50 percent. The
retirement history from 2001-2014 shows less negative net salvage, with
negative 30 percent for the overall band. Based knowledge of the assets in this
account and historical experience, this depreciation study conservatively
recommends negative 20 percent net salvage for this account.

Sacramento District
The approved net salvage for this account is negative 50 percent. Based
on knowledge of the assets in this account and historical experience, this
depreciation study conservatively recommends negative 50 percent net salvage
for this account.

FERC Account 309000 Supply Mains
This account consists of supply mains, pipes, aqueducts and canals and
their appurtenances. Such items might include air chambers, blow-offs and
overflows, canals, manholes, and mains.

74

 LIFE ANALYSIS

Larkfield District
The account balance is $173 thousand for this account. The approved life
characteristic for this account is 70 R2. Based on judgment, this depreciation
study recommends retaining a 70 R2 dispersion curve.

Los Angeles District
The account balance is $241 thousand for this account. The approved life
characteristic for this account is 70 L0.

Based on SPR life analysis and

judgment, this depreciation study recommends a 70 L0 dispersion curve. A plot
comparing actual vs. simulated balances for this account is shown below.

75

 Califonia American Water Los Angeles District Account 309000
Actual vs Simulated Balance 70 L0

Balance Amount $

120,000

90,000

60,000

30,000

0
1975

1980

1985

1990

1995

2000

2005

Transaction Year
Actual

Simulated

Monterey Water District
The account balance is $5 million for this account. The approved
life characteristic for this account is 70 S6. Based on SPR life analysis and
judgment, this depreciation study recommends a 75 S2.5 dispersion curve. The
same curve is recommended for account 331, Mains. A plot comparing actual
vs. simulated balances for this account is shown below.

76

 Sacramento District
The account balance is $6.5 million for this account. The approved life
characteristic for this account is 60 R3. Based on judgment, this depreciation
study recommends a 70 R2 dispersion curve.

Ventura County Water District
The account balance is $424 thousand for this account. The approved life
characteristic for this account is 70 R5. SPR life analysis results are too short for
this type of asset. Based on judgment, this depreciation study recommends a 70
R5 dispersion curve. A plot comparing actual vs. simulated balances for this
account is shown below.
77

 NET SALVAGE
Larkfield District
The approved net salvage for this account is negative 35 percent. There
has been no retirement activity from 2001-2014. Based on knowledge of the
assets in this account and judgment, this depreciation study recommends
retaining negative 35 percent net salvage for this account.

Los Angeles District
The approved net salvage for this account is negative 50 percent. There
has been no retirement activity from 2001-2014. Given knowledge of the assets
in this account and judgment, this depreciation study recommends retaining a
negative 50 percent net salvage for this account.

Monterey Water District
78

 The approved net salvage for this account is negative 70 percent. There
has been no retirement activity from 2001-2014. Based knowledge of the assets
in this account and judgment, this depreciation study recommends negative 70
percent net salvage for this account.

Sacramento District
The approved net salvage for this account is negative 30 percent. There
has been no retirement activity from 2001-2014. Based on knowledge of the
assets in this account and judgment, this depreciation study recommends moving
to a negative 50 percent net salvage for this account.

Ventura County Water District
The approved net salvage for this account is negative 30 percent. There
has been no retirement activity from 2001-2014. Based knowledge of the assets
in this account and experience with other California American water districts, this
depreciation study recommends negative 50 percent net salvage for this account.

FERC Account 310000 Power Generation Equipment
This account consists of any equipment used for the production of power
principally used in pumping operations.

LIFE ANALYSIS

Larkfield District
The account balance is $15 thousand for this account. The approved life
characteristic for this account is 22 R1.
experience for this account.

There has been no retirement

Based on judgment, this depreciation study

recommends retaining a 22 R1 dispersion curve for this account.
79

 Monterey Water District
The account balance is $1.6 million for this account. The approved life
characteristic for this account is 22 R1.
experience for this account.

There has been no retirement

Based on judgment, this depreciation study

recommends a 24 S3 dispersion curve for this account.

80

 Sacramento District
The account balance is $1.8 million for this account. The approved life
characteristic for this account is 22 R1.
experience for this account.

There has been no retirement

Based on judgment, this depreciation study

recommends a 22 R1 dispersion curve for this account.

NET SALVAGE
Larkfield District
The approved net salvage for this account is negative 15 percent. There
has been no retirement activity from 2001-2014. Based on knowledge of the
assets in this account and judgment, this depreciation study recommends
negative 10 percent net salvage for this account.

81

 Monterey Water District
The approved net salvage for this account is negative 15 percent. There
has been no retirement activity from 2001-2014. Based knowledge of the assets
in this account and judgment, this depreciation study recommends negative 10
percent net salvage for this account.

Sacramento District
The approved net salvage for this account is negative 15 percent. There
has been no retirement activity from 2001-2014. Based on knowledge of the
assets in this account and judgment, this depreciation study recommends
negative 15 percent net salvage for this account.

82

 FERC Account 311200 Pumping Equipment Electric
This account consists of pumping equipment driven by electric power.

LIFE ANALYSIS

Coronado District
The account balance is $139 thousand for this account. The approved life
characteristic for this account is 28 S6. In examining shorter bands of 15 to 20
years, the 28 S6 curve was the best match. Based on SPR life analysis, this
depreciation study recommends a 28 S6 dispersion curve for this account. A plot
comparing actual vs. simulated balances for this account is shown below.

Califonia American Water Coronado District Account 311200
Actual vs Simulated Balance 28 S6

Balance Amoun

200,000

150,000

100,000

50,000

0
1975

1980

1985

1990

1995

2000

2005

Transaction Year
Actual

Simulated

Larkfield District
The account balance is $966 thousand for this account. The approved life
characteristic for this account is 28 S6. Based on judgment, this depreciation
study recommends a 28 R0.5 dispersion curve for this account.

83

  

 

9'5 Surviving

100 -

California American Water La rkfield
Account 3112 28 R05

 

 

 

 

 

 

 

 

 

 

 

 

 

84

 

Los Angeles District
The account balance is $10.6 million for this account. The approved life
characteristic for this account is 28 R1.

Based on SPR life analysis, this

depreciation study recommends a 28 R2 dispersion curve for this account. A plot
comparing actual vs. simulated balances for this account is shown below.

85

 Monterey Water District
The account balance is $14.1 million for this account. The approved life
characteristic for this account is 29 L1. The SPR life analysis study combined
results for accounts 311200, 311300, and 311400, and 311540 into one group.
PSC records used as the source for historic information did not distinguish
amount those account subgroups. Based on SPR life analysis, this depreciation
study recommends a 28 L1 dispersion curve for this account overall. The assets
in this account related to the Los Padres and San Clemente Dams are
segregated from the remainder of the account and depreciated over the
remaining lives of the Dams. A plot comparing actual vs. simulated balances for
this account is shown below.

86

 Sacramento District
The account balance is $22.6 million for this account. The approved life
characteristic for this account is 22 R1. Based on judgment, this depreciation
study recommends a 28 S6 dispersion curve for this account.

Ventura County Water District
The account balance is $5.1 million for this account. The approved life
characteristic for this account is 27 S6.

Based on SPR life analysis, this

depreciation study recommends a 27 S6 dispersion curve for this account. A plot
comparing actual vs. simulated balances for this account is shown below.

87

 NET SALVAGE
Coronado District
The approved net salvage parameter is negative 15 percent. There has
been no retirement activity in this account from 2001-2014. Based on judgment,
this depreciation study recommends negative 15 percent net salvage for this
account.

Larkfield District
The approved net salvage for this account is negative 15 percent. Based
on knowledge of the assets in this account and historical experience, this
depreciation study recommends negative 15 percent net salvage for this account.

Los Angeles District
The approved net salvage for this account is negative 10 percent. There
has been limited retirement activity from 2001-2014 at a slightly higher level than
88

 the currently approved negative 10 percent. Given the limited experience and
knowledge of the assets in this account, this depreciation study recommends
retaining negative 15 percent net salvage for this account.

Monterey Water District
The approved net salvage for this account is negative 15 percent. The
retirement activity from 2001-2014 is impacted by a large retirement in 2014 with
lower net salvage than prior years. Moving averages prior to 2014 show net
salvage of ranging from negative 11 percent to negative 21 percent in bands
three years and longer. Based knowledge of the assets in this account and
historical experience, this depreciation study recommends negative 10 percent
net salvage for this account.

Sacramento District
The approved net salvage for this account is negative 15 percent. Based
on knowledge of the assets in this account and historical experience, this
depreciation study recommends negative 15 percent net salvage for this account.

Ventura County Water District
The approved net salvage for this account is negative 15 percent. Based
knowledge of the assets in this account and experience with other California
American water districts, consistent with this account in other districts, this
depreciation study recommends negative 10 percent net salvage for this account.

FERC Account 311300 Pumping Equipment Diesel
This account consists of pumping equipment driven by diesel power.

89

 LIFE ANALYSIS

Monterey Water District
The account balance is $63 thousand for this account. The approved life
characteristic for this account is 29 L1. As discussed above for account 311200,
this depreciation study recommends a 28 L1 dispersion curve for this account.

NET SALVAGE

Monterey Water District
The approved net salvage for this account is negative 15 percent. Based
knowledge of the assets in this account and historical experience of account
311000 discussed above, this depreciation study recommends negative 10
90

 percent net salvage for this account.

FERC Account 311400 Pumping Equipment Hydraulic
This account consists of pumping equipment driven by hydraulic power.

LIFE ANALYSIS

Larkfield District
The account balance is $6 thousand for this account. The approved life
characteristic for this account is 28 S6. As discussed above for account 311200,
this depreciation study recommends a 28 S6 dispersion curve for this account.

91

 Monterey Water District
The account balance is $111 thousand for this account. The approved life
characteristic for this account is 29 L1. As discussed above for account 311200,
this depreciation study recommends a 28 L1 dispersion curve for this account.

Sacramento District
The account balance is $1.1 million for this account. The approved life
characteristic for this account is 22 R1. As discussed above for account 311200,
this depreciation study recommends a 28 S6 dispersion curve for this account.

92

 Ventura County District
The account balance is $431 for this account.

There is no currently

approved life characteristic for this account. As discussed above for account
311200, this depreciation study recommends a 27 S6 dispersion curve for this
account.

93

 NET SALVAGE
Larkfield District
The approved net salvage for this account is negative 15 percent. Based
on knowledge of the assets in this account, this depreciation study recommends
negative 15 percent net salvage for this account.

Monterey Water District
The approved net salvage for this account is negative 15 percent. Based
knowledge of the assets in this account and historical experience of account
311000 discussed above, this depreciation study recommends negative 10
percent net salvage for this account.

94

 Sacramento District
The approved net salvage for this account is negative 15 percent. Based
on knowledge of the assets in this account and historical experience of account
311000 discussed above, this depreciation study recommends negative 15
percent net salvage for this account.

Ventura County District
There is no currently approved net salvage for this account. Based on
knowledge of the assets in this account and historical experience of account
311000 discussed above, this depreciation study recommends negative 10
percent net salvage for this account.

FERC Account 311500 Pumping Equipment Other
This account consists of pumping equipment other. The account balance
is $2 thousand for this account.

LIFE ANALYSIS

Sacramento District
The account balance is $320 thousand for this account. The approved life
characteristic for this account is 22 R1. As discussed above for account 311200,
this depreciation study recommends a 28 S6 dispersion curve for this account.

95

 Monterey Water District
The account balance is $344 thousand for this account. The approved life
characteristic for this account is 29 L1. As discussed above for account 311200,
this depreciation study recommends a 28 L1 dispersion curve for this account.

96

 NET SALVAGE
Sacramento District
The approved net salvage for this account is negative 15 percent. Based
on knowledge of the assets in this account and historical experience of account
311000 discussed above, this depreciation study recommends negative 15
percent net salvage for this account.

Monterey Water District
The approved net salvage for this account is negative 15 percent. Based
on knowledge of the assets in this account and historical experience of account
311000 discussed above, this depreciation study recommends negative 10
percent net salvage for this account.
97

 FERC Account 320100 WT Equipment Non-Media
This account consists of water treatment equipment excluding filtration
systems.

LIFE ANALYSIS

Coronado District
The account balance is $16 thousand for this account. The approved life
characteristic for this account is 16 S4.

This account has a different mix of

assets than in other districts and exhibits a shorter life.

Based on SPR life

analysis, this depreciation study recommends a 16 S4 dispersion curve for this
account.

A plot comparing actual vs. simulated balances for this account is

shown below.
Califonia American Water Coronado District Account 320100
Actual vs Simulated Balance 16 S4

Balance Amoun

20,000

15,000

10,000

5,000

0
1990

1995

2000

2005

Transaction Year
Actual

Simulated

Larkfield District
The account balance is $1.6 million for this account. The approved life
98

 characteristic for this account is 42 R2. Based on judgment, this depreciation
study recommends a 42 R2 dispersion curve for this account.

Los Angeles District
The account balance is $1.6 million for this account. The approved life
characteristic for this account is 43 S3.

Based on SPR life analysis, this

depreciation study recommends a 43 R2 dispersion curve for this account. A plot
comparing actual vs. simulated balances for this account is shown below.

99

 Monterey Water District
The account balance is $20 million for this account. The approved life
characteristic for this account is 42 R2.

Based on SPR life analysis, this

depreciation study recommends a 45 R2 dispersion curve for this account. The
assets in this account related to the Los Padres and San Clemente Dams are
segregated from the remainder of the account and depreciated over the
remaining lives of the Dams. A plot comparing actual vs. simulated balances for
this account is shown below.

100

 Sacramento District
The account balance is $25.6 million for this account. The approved life
characteristic for this account is 15 R0.5. Based on judgment, this depreciation
study recommends a 42 R2 dispersion curve for this account.

101

 Ventura County Water District
The account balance is $105 thousand for this account. The approved life
characteristic for this account is 42 R2. There is no retirement activity over the
history of this account that can be used for life analysis. Based on experience in
the Coronado Water district, this depreciation study recommends a 45 R2
dispersion curve for this account.

102

 NET SALVAGE
Coronado District
The approved net salvage parameter is 0 percent.

Based on the

retirement activity in this account from 2001-2014 and judgment, this
depreciation study recommends 0 percent net salvage for this account.

Larkfield District
The approved net salvage for this account is negative 15 percent. The
retirement activity from 2001-2014 shows an overall net salvage of negative 4
percent in the widest band. Based on knowledge of the assets in this account
and historical experience, this depreciation study recommends negative 5
percent net salvage for this account.

103

 Los Angeles District
The approved net salvage for this account is negative 15 percent.
Retirement activity from 2001-2014 shows no net salvage. Given the experience
over recent years and knowledge of the assets in this account, this depreciation
study recommends negative 15 percent net salvage for this account.

Monterey Water District
The approved net salvage for this account is negative 15 percent. The
retirement activity from 2001-2014 shows a large retirement in 2014 with lower
net salvage than prior years. Based knowledge of the assets in this account and
historical experience, this depreciation study recommends negative 10 percent
net salvage for this account.

Sacramento District
The approved net salvage for this account is negative 15 percent. The
retirement activity from 2001-2014 shows a negative net salvage in the negative
15 percent range.

Based on knowledge of the assets in this account and

historical experience, this depreciation study recommends negative 15 percent
net salvage for this account.

Ventura County Water District
The approved net salvage for this account is negative 15 percent. There
has been no retirement activity from 2001-2014. Based knowledge of the assets
in this account and judgment, this depreciation study recommends retaining
negative 10 percent net salvage for this account.

104

 FERC Account 320200 WT Equipment Filter Media
This account consists of the media for water treatment equipment
including filtration systems.

LIFE ANALYSIS

Larkfield District
The account balance is $124 thousand for this account. The approved life
characteristic for this account is 10 S4. Based on judgment and consideration of
assets in this account, this depreciation study recommends a 10 R2 dispersion
curve for this account.

105

 Monterey Water District
The account balance is $403 thousand for this account. The approved life
characteristic for this account is 10 R2. Based on judgment and consideration of
assets in this account, this depreciation study recommends a 10 R2 dispersion
curve for this account.

Sacramento District
The account balance is $901 thousand for this account. The approved life
characteristic for this account is 15 R0.5. Based on judgment and consideration
of assets in this account, this depreciation study recommends a 10 R2 dispersion
curve for this account.

106

  

 

5'6 Surviving

100 --

California American Water Sacramento
Account 3202 107

 

NET SALVAGE
Larkfield District
The approved net salvage for this account is negative 5 percent. Based
on knowledge of the assets in this account and historical experience with account
320100, this depreciation study recommends retaining negative 5 percent net
salvage for this account.

Monterey Water District
The approved net salvage for this account is negative 5 percent. Based
knowledge of the assets in this account and historical experience with account
320100, this depreciation study recommends negative 5 percent net salvage for
this account.

Sacramento District
The approved net salvage for this account is negative 5 percent. Based
on knowledge of the assets in this account and historical experience with account
320100, this depreciation study recommends retaining negative 5 percent net
salvage for this account.

108

 FERC Account 330000 Distribution Reservoirs and Standpipes
This account consists of reservoirs, tanks, standpipes, and appurtenances
used in storing water for distribution.

LIFE ANALYSIS

Coronado District
The account balance is $1.2 million for this account. The approved life
characteristic for this account is 43 R5. Based on SPR life analysis combining
accounts 330000 and 330200, this depreciation study recommends a 46 R5
dispersion curve for this account.

A plot comparing actual vs. simulated

balances for this account is shown below.

Larkfield District
The account balance is $1.5 million for this account. The approved life
characteristic for this account is 65 R4. Based on judgment, this depreciation
study recommends a 65 R4 dispersion curve for this account.
109

 Los Angeles District
The account balance is $7.5 million for this account. The approved life
characteristic for this account is 74 R5.

Based on SPR life analysis, this

depreciation study recommends a 74 R5 dispersion curve for this account. A plot
comparing actual vs. simulated balances for this account is shown below.

110

 Califonia American Water Los Angeles District Account 330000
Actual vs Simulated Balance 74 R5

Balance Amoun

8,000,000

6,000,000

4,000,000

2,000,000

0
1975

1980

1985

1990

1995

2000

2005

Transaction Year
Actual

Simulated

Monterey Water District
The account balance is $18.6 million for this account. The approved life
characteristic for this account is 65 R4.

Based on SPR life analysis, this

depreciation study recommends a 65 R4 dispersion curve for this account. The
assets in this account related to the Los Padres and San Clemente Dams are
segregated from the remainder of the account and depreciated over the
remaining lives of the Dams. A plot comparing actual vs. simulated balances for
this account is shown below. Historic SPR analysis included 330000 and 330200
in the same group.

111

 Califonia American Water Monterey District Account 330000
Actual vs Simulated Balance 65 R4

Balance Amoun

20,000,000
16,000,000
12,000,000
8,000,000
4,000,000
0
1975

1980

1985

1990

1995

2000

2005

Transaction Year
Actual

Simulated

Sacramento District
The account balance is $5.7 million for this account. The approved life
characteristic for this account is 80 R2. Based on judgment, this depreciation
study recommends a 65 R4 dispersion curve for this account.

112

 Ventura County Water District
The account balance is $19.5 million for this account. The approved life
characteristic for this account is 65 R4.

Based on SPR life analysis, this

depreciation study recommends a 65 S2 dispersion curve for this account. A plot
comparing actual vs. simulated balances for this account is shown below.

113

 NET SALVAGE
Coronado District
The approved net salvage parameter is negative 15 percent. Based on
the retirement activity in this account from 2001-2014 and judgment, this
depreciation study recommends negative 5 percent net salvage for this account.

Larkfield District
The approved net salvage for this account is negative 15 percent. There
has been no retirement activity from 2001-2014. Based on knowledge of the
assets in this account and judgment, this depreciation study recommends
retaining negative 15 percent net salvage for this account.

114

 Los Angeles District
The approved net salvage for this account is negative 15 percent.
Retirement activity from 2001-2014 shows a higher level of negative net salvage
than the currently approved negative 15 percent. Given the limited experience
and knowledge of the assets in this account, this depreciation study
conservatively recommends retaining negative 15 percent net salvage for this
account.

Monterey Water District
The approved net salvage for this account is negative 15 percent. There
has been no retirement activity from 2001-2014. Based knowledge of the assets
in this account and judgment, this depreciation study recommends retaining
negative 15 percent net salvage for this account.

Weird transaction in net

salvage should be explained- makes it look like near 0 percent.

Sacramento District
The approved net salvage for this account is negative 15 percent. There
has been no retirement activity from 2001-2014. Based on knowledge of the
assets in this account and judgment, this depreciation study recommends a
negative 10 percent net salvage for this account.

Ventura County Water District
The approved net salvage for this account is negative 15 percent. There
has been limited retirement activity from 2001-2014. Based knowledge of the
assets in this account and judgment, this depreciation study recommends
retaining negative 15 percent net salvage for this account.

115

 FERC Account 330002 Tank Original Painting
This account consists of tank original painting.

LIFE ANALYSIS

Sacramento District
The account balance is $25 thousand for this account.

There is no

currently approved life characteristic for this account. Based on judgment, this
depreciation study recommends a 41 R4 dispersion curve for this account. A plot
of a 41 R4 dispersion curve for this account is shown below.

116

 NET SALVAGE

Sacramento District
There is currently approved net salvage for this account. There has been
no retirement activity from 2001-2014. Based on knowledge of the assets in this
account and judgment, this depreciation study recommends a 0 percent net
salvage for this account.

FERC Account 330003 Tank Repainting
This account consists of tank repainting.

LIFE ANALYSIS

Sacramento District
The account balance is $609 thousand for this account.

There is no

currently approved life characteristic for this account. Based on judgment, this
depreciation study recommends a 41 R4 dispersion curve for this account. A plot
of a 41 R4 is shown below.

117

 NET SALVAGE

Sacramento District
There is currently no approved net salvage for this account. There has
been no retirement activity from 2001-2014. Based on knowledge of the assets
in this account and judgment, this depreciation study recommends a 0 percent
net salvage for this account.

118

 FERC Account 330100 Elevated Tanks & Standpipes
This account consists of elevated tanks and stand pipes.

LIFE ANALYSIS

Larkfield District
The account balance is $8 thousand for this account. The approved life
characteristic for this account is 41 R4. Based on judgment and consistent with
the life of ground level tanks in this district, this depreciation study recommends a
41 R4 dispersion for this account.

119

 NET SALVAGE
Larkfield District
The approved net salvage for this account is 0 percent. There has been
no retirement activity from 2001-2014. Based on knowledge of the assets in this
account and judgment, this depreciation study recommends negative 5 percent
net salvage for this account.

FERC Account 330200 Ground Level Tanks
This account consists of ground level tanks used in storing water for
distribution.

LIFE ANALYSIS

Larkfield District
The account balance is $163 thousand for this account. The approved life
characteristic for this account is 41 R4. Based on judgment, this depreciation
study recommends a 41 R4 dispersion for this account.

120

 Monterey Water District
The account balance is 3.5 million for this account. The approved life
characteristic for this account is 41 R4. Based on judgment, this depreciation
study recommends a 65 R4 dispersion for this account.

121

 Sacramento District
The account balance is $3.5 million for this account. The approved life
characteristic for this account is 80 R2. Based on judgment, this depreciation
study recommends a 41 R4 dispersion for this account.

122

 Ventura County Water District
The account balance is $713 thousand for this account. The approved life
characteristic for this account is 46 S6. Based on SPR life analysis combining
this account and account 330000 as well as judgment, this depreciation study
recommends a 52 S6 dispersion for this account.

123

 NET SALVAGE
Larkfield District
The approved net salvage for this account is negative 15 percent. There
has been no retirement activity from 2001-2014. Based on knowledge of the
assets in this account and judgment, this depreciation study recommends
negative 5 percent net salvage for this account.

Monterey Water District
The approved net salvage for this account is 0 percent. There has been
no retirement activity from 2001-2014. Based knowledge of the assets in this
account and judgment, this depreciation study recommends a 0 percent net
124

 salvage for this account.

Sacramento District
The approved net salvage for this account is 0 percent. There has been
no retirement activity from 2001-2014. Based on knowledge of the assets in this
account and judgment, this depreciation study recommends negative 15 percent
net salvage for this account.

Ventura County Water District
The approved net salvage for this account is negative 15 percent. There
has been no retirement activity from 2001-2014. Based knowledge of the assets
in this account and judgment, this depreciation study recommends negative 10
percent net salvage for this account.

FERC Account 330300 Below Ground Tanks
This account consists of below ground tanks used in storing water for
distribution.

LIFE ANALYSIS

Sacramento District
The account balance is $69 thousand for this account. The approved life
characteristic for this account is 80 R2. Based on judgment, this depreciation
study recommends a 41 R4 dispersion for this account consistent with Account
330200.

125

 NET SALVAGE
Sacramento District
The approved net salvage for this account is negative 15 percent. There
has been no retirement activity from 2001-2014. Based on knowledge of the
assets in this account and judgment, this depreciation study recommends
negative 10 percent net salvage for this account.

126

 FERC Account 331 Transmission and Distribution Mains
This account consists of transmission and distribution mains of varying
material types and diameters.

LIFE ANALYSIS

Coronado District
The SPR life analysis study combined results for accounts 331100,
331200, and 331300, and 331400 discussed below into one group. PSC records
used as the source for historic information did not distinguish amount those
account subgroups.

The composition, plant balance, and approved life

characteristic of the subgroups is shown in the table below.

Account Description

Plant Balance

Approved

Life

Characteristic
331100

TD Mains 4” and less

$470,259

75 S3

331200

TD Mains 6” to 8”

$7,777,079

75 S3

331300

TD Mains 10” to 16”

$5,880,988

75 S3

331400

TD Mains 18” and Greater

$2,067,816

75 S3

Based on SPR life analysis and knowledge of company operations, this
depreciation study recommends a 70 S3 dispersion curve for this account. A plot
comparing actual vs. simulated balances for this account is shown below.

127

 Larkfield District
The SPR life analysis study combined results for accounts 331001,
331100, 331200, and 331300 discussed below into one group. PSC records
used as the source for historic information did not distinguish amount those
account subgroups.

The composition, plant balance, and approved life

characteristic of the subgroups is shown in the table below.

Account Description

Plant Balance

Approved

Life

Characteristic
331001

TD Mains Not Classified by

$173,022

75 S3

$156,527

75 S3

Size
331100

TD Mains 4” and less

331200

TD Mains 6” to 8”

$2,837,225

75 S3

331300

TD Mains 10” to 16”

$1,594,679

75 S3

Based on knowledge of company operations and analysis of other
128

 districts,

account.

this depreciation study recommends a 75 S3 dispersion curve for this

 

5'6 Surviving

 

100 -

California American Water La rkfield
Account 331 100 110
Age

 

129

 

Los Angeles District
The SPR life analysis study combined results for accounts 331001.
331100, 331200, and 331300, and 331400 discussed below into one group.
PSC records used as the source for historic information did not distinguish
amount those account subgroups.

The composition, plant balance, and

approved life characteristic of the subgroups is shown in the table below.
Account Description

Plant Balance

Approved Life
Characteristic

331001

TD Mains not classified

$3,021,500

75 L2

331100

TD Mains 4” and less

$1,205,291

75 L2

331200

TD Mains 6” to 8”

$22,976,264

75 L2

331300

TD Mains 10” to 16”

$19,088,779

75 L2

331400

TD Mains 18” and Greater

$316,775

75 L2

Based on SPR life analysis and knowledge of company operations, this
depreciation study recommends a 75 S0.5 dispersion curve for this account. A
plot comparing actual vs. simulated balances for this account is shown below.

130

 Monterey Water District
The SPR life analysis study combined results for accounts 331001,
331100, 331200, and 331300, and 331400 discussed below into one group.
PSC records used as the source for historic information did not distinguish
amount those account subgroups.

The composition, plant balance, and

approved life characteristic of the subgroups is shown in the table below.
Account Description

331001

TD Mains Unclassified

331100

TD Mains 4” and less

331200

Plant Balance

Approved

Life

$ million

Characteristic

$114,007

None

$5,796,425

75 S6

TD Mains 6” to 8”

$50,804,721

75 S6

331300

TD Mains 10” to 16”

$32,227,122

75 S6

331400

TD Mains 18” and Greater

$16,947,228

75 S6

Based on SPR life analysis and knowledge of company operations, this
depreciation study recommends a 86 S6 dispersion curve for this account. A plot
comparing actual vs. simulated balances for this account is shown below.

131

 Sacramento District
The SPR life analysis study combined results for accounts 331001,
331100, 331200, 331300, and 331400 discussed below into one group. PSC
records used as the source for historic information did not distinguish amount
those account subgroups. The composition, plant balance, and approved life
characteristic of the subgroups is shown in the table below.

Account Description

Plant Balance

Approved

Life

Characteristic
331001

TD Mains Not Classified by

$201,569

65 R2

Size
331100

TD Mains 4” and less

$40,601,231

65 R2

331200

TD Mains 6” to 8”

$19,014,766

65 R2

331300

TD Mains 10” to 16”

$17,914,634

65 R2

132

 331400

TD Mains 18” and Greater

$4,409,013

65 R2

Based on knowledge of company operations and analysis of other districts, this
depreciation study recommends a 75 S3 dispersion curve for this account.

133

 Ventura County Water District
The SPR life analysis study combined results for accounts 331100,
331200, and 331300 discussed below into one group. PSC records used as the
source for historic information did not distinguish amount those account
subgroups. The composition, plant balance, and approved life characteristic of
the subgroups is shown in the table below.

Account Description

Plant Balance

Approved

Life

Characteristic
331100

TD Mains 4” and less

$392,656

75 S6

331200

TD Mains 6” to 8”

$14,328,689

75 S6

331300

TD Mains 10” to 16”

$14,340,457

75 S6

Based on SPR life analysis and knowledge of company operations, this
depreciation study recommends a 75 S6 dispersion curve for this account. A plot
comparing actual vs. simulated balances for this account is shown below.

134

  

Balance Amount 

 

CAW Ventura Cnunty Accaunt 3311 Mains
Actual vs Simulated Balance 75 SB

 

 

 

 

 

 

 

 

 

25,500,000 
21,500,000 Hiya

15,500,000 .51 


x"

11,500,000 


F'1985 1990 1995 2000 2005 2010

Transaction Year

 

Simulated

 

 

 

 

135

 

NET SALVAGE
Coronado District
The approved net salvage parameter is negative 30 percent. Based on
the retirement activity in this account from 2001-2014 and judgment, this
depreciation study recommends a conservative negative 50 percent net salvage
for this account.

Larkfield District
The approved net salvage for this account is negative 35 percent. Based
on knowledge of the assets in this account and historic experience, this
depreciation study recommends retaining negative 35 percent net salvage for
this account.

Los Angeles District
The approved net salvage for this account is negative 50 percent. Based
on retirement activity from 2001-2014, negative net salvage has increased over
the most recent period. For the period 2001-2014, negative net salvage has
increased with the most recent five year band showing negative 388%. Based
on knowledge of the assets in this account and judgment, this depreciation study
conservatively recommends negative 50 percent net salvage for this account.

Monterey Water District
The approved net salvage for this account is negative 70 percent. The
retirement activity from 2001-2014 shows a net salvage percent in between
negative 91 to negative 285 percent for the most recent, three, four, five and six
year periods.

Based knowledge of the assets in this account and historic

experience, this depreciation study recommends negative 70 percent net salvage
for this account.

136

 Sacramento District
The approved net salvage for accounts 331001 & 331400 is negative 30
percent and for accounts 331100, 331200, & 331300 the approved net salvage is
negative 35 percent. Based knowledge of the assets in this account and
experience with other California American water districts, this depreciation study
recommends negative 50 percent net salvage for these accounts.

Ventura County Water District
The approved net salvage for this account is negative 30 percent. Little
retirement activity has occurred in recent years in this account.

Based

knowledge of the assets in this account and experience with other California
American water districts, this depreciation study recommends negative 50
percent net salvage for this account.

137

 FERC Account 332000 Fire Mains
This account consists of fire mains.

LIFE ANALYSIS

Larkfield District
The account balance is $18 thousand for this account. The approved life
characteristic for this account is 75 S3. Based on judgment and knowledge of
company operations, this depreciation study recommends a 75 S3 dispersion
curve for this account.

Sacramento District
The account balance is $20 thousand for this account. The approved life
characteristic for this account is 65 R2. Based on judgment and knowledge of
138

 company operations, this depreciation study recommends a 75 S3 dispersion
curve for this account.

Ventura County District
The account balance is $113 thousand for this account.

There is no

currently approved life characteristic for this account. Based on judgment and
knowledge of company operations, this depreciation study recommends a 75 S6
dispersion curve for this account.

139

 NET SALVAGE
Larkfield District
The approved net salvage for this account is negative 35 percent. Based
on knowledge of the assets in this account and historic experience, this
depreciation study recommends negative 35 percent net salvage for this account.

Sacramento District
The approved net salvage for this account is negative 30 percent. Based
on knowledge of the assets in this account and historic experience, this
depreciation study recommends negative 50 percent net salvage for this account.
140

 Ventura County District
There is no currently approved net salvage for this account. Based on
knowledge of the assets in this account and historic experience, this depreciation
study recommends negative 50 percent net salvage for this account.

141

 FERC Account 333000 Services
This account consists of service pipes and accessories leading from the
main to the customers’ premises.

LIFE ANALYSIS

Coronado District
The account balance is $8.2 million for this account. The approved life
characteristic for this account is 56 S5.

Based on SPR life analysis and

knowledge of company operations, this depreciation study recommends a 60 S3
dispersion curve for this account.

A plot comparing actual vs. simulated

balances for this account is shown below.

Larkfield District
The account balance is $2 million for this account. The approved life
characteristic for this account is 50 S3. Based on judgment and knowledge of
company operations, this depreciation study recommends a 60 S3 dispersion
curve for this account.
142

  

 

9'5 Surviving

-

California American Water La rkfield
Account 333000 100 110
Age

 

143

 

Los Angeles District
The account balance is $21.2 million for this account. The approved life
characteristic for this account is 50 R1.

Based on SPR life analysis and

knowledge of company operations, this depreciation study recommends a 50
R1.5 dispersion curve for this account. A plot comparing actual vs. simulated
balances for this account is shown below.

144

 Monterey Water District
The account balance is $26.1 million for this account. The approved life
characteristic for this account is 60 S3.

Based on SPR life analysis and

knowledge of company operations, this depreciation study recommends a 72 S2
dispersion curve for this account.

A plot comparing actual vs. simulated

balances for this account is shown below.

Sacramento District
The account balance is $26 million for this account. The approved life
characteristic for this account is 31 L4. Based on judgment and knowledge of
company operations, this depreciation study recommends a 60 S3 dispersion
curve for this account.

145

 Ventura County Water District
The account balance is $19 million for this account. The approved life
characteristic for this account is 43 S6.

Based on SPR life analysis and

knowledge of company operations, this depreciation study recommends a 46 R5
dispersion curve for this account.

A plot comparing actual vs. simulated

balances for this account is shown below.

146

 NET SALVAGE
Coronado District
The approved net salvage parameter is negative 50 percent. Based on
the retirement activity in this account from 2001-2014 and judgment, this
depreciation study recommends negative 50 percent net salvage for this account.

Larkfield District
The approved net salvage for this account is negative 50 percent. Based
on knowledge of the assets in this account and historic experience, this
depreciation study conservatively recommends a negative 50 percent net
salvage for this account.

Los Angeles District
The approved net salvage for this account is negative 50 percent. Based
on retirement activity from 2001-2014, negative net salvage has increased over
147

 the most recent period. For the period 2001-2014, negative net salvage has
increased with the most recent five year band showing negative 1828%. Based
on knowledge of the assets in this account and judgment, this depreciation study
conservatively recommends negative 50 percent net salvage for this account.

Monterey Water District
The approved net salvage for this account is negative 50 percent. The
retirement activity from 2001-2014 shows a net salvage percent in excess of
negative 70 percent for the most recent, three, four, five, six, and seven year
periods respectively are -160, -153, -141, -131, -123, and -119 percent. Based
knowledge of the assets in this account and historic experience, this depreciation
study conservatively recommends negative 50 percent net salvage for this
account.

Sacramento District
The approved net salvage for this account is negative 50 percent. Based
on knowledge of the assets in this account and historic experience, this
depreciation study conservatively recommends negative 50 percent net salvage
for this account.

Ventura County Water District
The approved net salvage for this account is negative 50 percent. There
has been no retirement activity from 2001-2014. Based knowledge of the assets
in this account and experience with other California American water districts, this
depreciation study recommends negative 50 percent net salvage for this account.

148

 FERC Account 334100 Meters
This account consists of meters, devices and other appurtenances used
for measuring the quantity of water delivered to users, whether actually in service
or held in reserve. The life of meters is set by Commission order.

LIFE ANALYSIS

Coronado District
The account balance is $2.7 million for this account. The approved life
characteristic for this account is 20 SQ. Based on a Commission Order, this
depreciation study recommends a 20 SQ dispersion curve for this account.

149

 Lark field District
The account balance is $635 thousand for this account. The approved life
characteristic for this account is 20 SQ. Based on a Commission Order, this
depreciation study recommends a 20 SQ dispersion curve for this account.

150

 Los Angeles District
The account balance is $5.3 million for this account. The approved life
characteristic for this account is 20 SQ. Based on a Commission Order, this
depreciation study recommends a 20 SQ dispersion curve for this account. A 20
SQ life also is supported by SPR life analysis. A plot comparing actual versus
simulated balances for this account is shown below.

Califonia American Water Los Angeles District Account 334100
Actual vs Simulated Balance 20 SQ

Balance Amoun

3,000,000

2,000,000

1,000,000

0
1975

1980

1985

1990

1995

Transaction Year
Actual

151

Simulated

2000

2005

 Monterey Water District
The account balance is $6.8 million for this account. The approved life
characteristic for this account is 20 SQ. Based on a Commission Order, this
depreciation study recommends a 20 R3 dispersion curve for this account. A 20
R3 life also is supported by SPR life analysis. A plot comparing actual versus
simulated balances for this account is shown below.

Sacramento District
The account balance is $15.7 million for this account. The approved life
characteristic for this account is 20 R3. Based on judgment and knowledge of
company operations, this depreciation study recommends a 20 SQ dispersion
curve for this account.

152

  

 

5'6 Surviving

100

California American Water Sacramento

 

 

 

 

 

 

 

 

 

 

 

 

Account 3341 20 SQ
0 I10 1:0 2:0 ?lm :50 (it) 7'1?0 Elm-
Age

 

153

 

Ventura County Water District
The account balance is $3.3 million for this account. The approved life
characteristic for this account is 20 SQ. Based on a Commission Order, this
depreciation study recommends a 20 SQ dispersion curve for this account. A 20
SQ life also is supported by SPR life analysis. A plot comparing actual versus
simulated balances for this account is shown below.

NET SALVAGE
Coronado District
The approved net salvage parameter is 0 percent.

Based on the

retirement activity in this account from 2001-2014 and judgment, this
depreciation study recommends negative 10 percent net salvage for this account.

154

 Larkfield District
The approved net salvage for this account is 0 percent.

Based on

knowledge of the assets in this account and experience with other California
American water districts, this depreciation study recommends negative 10
percent net salvage for this account.

Los Angeles District
The approved net salvage for this account is 0 percent.

Based on

retirement activity from 2001-2014, negative net salvage is not apparent over the
most recent period.

Based on knowledge of the assets in this account and

judgment, this depreciation study recommends negative 10 percent net salvage
for this account.

Monterey Water District
The approved net salvage for this account is negative 5 percent. Based
knowledge of the assets in this account and experience with other California
American water districts, this depreciation study recommends 0 percent net
salvage for this account.

Sacramento District
The approved net salvage for this account is 0 percent.

Based on

knowledge of the assets in this account and experience with other California
American water districts, this depreciation study recommends negative 10
percent net salvage for this account.

Ventura County Water District
The approved net salvage for this account is 0 percent.

Retirement

activity from 2001-2014 shows a net salvage of negative 13 percent. Based
knowledge of the assets in this account and historical experience, this
depreciation study recommends negative 10 percent net salvage for this account.
155

 FERC Account 334200 Meter Installation
This account consists of meter installations.

LIFE ANALYSIS

Coronado District
The account balance is $196 for this account.

There is no currently

approved life characteristic for this account. Based on judgment and knowledge
of company operations, this depreciation study recommends a 20 R3 dispersion
curve for this account consistent with Account 334100.

Los Angeles District
The account balance is $457 thousand for this account. The approved life
characteristic for this account is 20 Sq. Based on judgment and knowledge of
156

 company operations, this depreciation study recommends a 20 R3 dispersion
curve for this account consistent with Account 334100.

Sacramento District
The account balance is $33.6 million for this account. The approved life
characteristic for this account is 20 R3. Based on judgment and knowledge of
company operations, this depreciation study recommends a 20 R3 dispersion
curve for this account consistent with Account 334100.

157

 Ventura County District
The account balance is $255 thousand for this account.

There is no

currently approved life characteristic for this account. Based on judgment and
knowledge of company operations, this depreciation study recommends a 20 R3
dispersion curve for this account consistent with Account 334100.

158

 NET SALVAGE
Coronado District
There is no currently approved net salvage for this account. There has
been no retirement activity from 2001-2014. Based on knowledge of the assets
in this account and comparison with the assets in account 334100, this
depreciation study recommends negative 10 percent net salvage for this account.

Los Angeles District
The approved net salvage for this account is 0 percent. There has been
no retirement activity from 2001-2014. Based on knowledge of the assets in this
account and comparison with the assets in account 334100, this depreciation
study recommends negative 10 percent net salvage for this account.

159

 Sacramento District
The approved net salvage for this account is 0 percent.

Based on

knowledge of the assets in this account and experience with other California
American water districts, this depreciation study recommends negative 10
percent net salvage for this account.

Ventura County District
There is no currently approved net salvage for this account. Based on
knowledge of the assets in this account and experience with other California
American water districts, this depreciation study recommends negative 10
percent net salvage for this account.

FERC Account 334300 Meter Vaults
This account consists of meters vaults used for measuring the quantity of
water delivered to users, whether actually in service or held in reserve.

LIFE ANALYSIS

Coronado District
The account balance is $48 thousand for this account.

There is no

currently approved life characteristic for this account. Based on judgment and
knowledge of company operations, this depreciation study recommends a 40 R2
dispersion curve for this account.

160

 Los Angeles District
The account balance is $8.6 thousand for this account.

There is no

currently approved life characteristic for this account. Based on judgment and
knowledge of company operations, this depreciation study recommends a 40 R2
dispersion curve for this account.

161

 Monterey Water District
The account balance is $25 thousand for this account. The approved life
characteristic for this account is 40 R2. Based on judgment and knowledge of
company operations, this depreciation study recommends a 40 R2 dispersion
curve for this account.

162

 NET SALVAGE
Coronado District
There is no currently approved net salvage for this account. There has
been no retirement activity from 2001-2014. Based knowledge of the assets in
this account and experience with other California American water districts, this
depreciation study recommends negative 10 percent net salvage for this account.

Los Angeles District
There is no currently approved net salvage for this account. There has
been no retirement activity from 2001-2014. Based knowledge of the assets in
this account and experience with other California American water districts, this
depreciation study recommends negative 10 percent net salvage for this account.
163

 Monterey Water District
The approved net salvage for this account is 0 percent. There has been
no retirement activity from 2001-2014. Based knowledge of the assets in this
account and experience with other California American water districts, this
depreciation study recommends negative 10 percent net salvage for this account.

164

 FERC Account 335000 Hydrants
This account consists of hydrants in service owned by the utility.

LIFE ANALYSIS

Coronado District
The account balance is $1.3 million for this account. The approved life
characteristic for this account is 53 R4.

Based on SPR life analysis and

knowledge of company operations, this depreciation study recommends a 60 R4
dispersion curve for this account.

A plot comparing actual vs. simulated

balances for this account is shown below.

Larkfield District
The account balance is $678 thousand for this account. The approved life
characteristic for this account is 55 R4. Based on judgment and knowledge of
165

 company operations, this depreciation study recommends retaining a 55 R4
dispersion curve for this account.

Los Angeles District
The account balance is $3.5 million for this account. The approved life
characteristic for this account is 52 R1.

Based on SPR life analysis and

knowledge of company operations, this depreciation study recommends a 55
R0.5 dispersion curve for this account. A plot comparing actual vs. simulated
balances for this account is shown below.

166

 Monterey Water District
The account balance is $7.9 million for this account. The approved life
characteristic for this account is 55 S3.

Based on SPR life analysis and

knowledge of company operations, this depreciation study recommends a 55 S3
dispersion curve for this account.

A plot comparing actual vs. simulated

balances for this account is shown below.

Califonia American Water Monterey District Account 335000
Actual vs Simulated Balance 55 S3

Balance Amoun

5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
0
1975

1980

1985

1990

1995

Transaction Year
Actual

167

Simulated

2000

2005

 Sacramento District
The account balance is $9.5 million for this account. The approved life
characteristic for this account is 55 R4. Based on judgment and knowledge of
company operations, this depreciation study recommends a 55 R3 dispersion
curve for this account.

Ventura County Water District
The account balance is $3.5 million for this account. The approved life
characteristic for this account is 45 S6.

Based on SPR life analysis and

knowledge of company operations, this depreciation study recommends a 51 R4
dispersion curve for this account.

A plot comparing actual versus simulated

balances for this account is shown below.
168

 NET SALVAGE
Coronado District
The approved net salvage parameter is negative 30 percent. Based on
the retirement activity in this account from 2001-2014 and judgment, this
depreciation study recommends negative 30 percent net salvage for this account.

Larkfield District
The approved net salvage for this account is negative 30 percent. There
has been no retirement activity from 2001-2014. Based on knowledge of the
assets in this account and judgment, this depreciation study recommends
negative 20 percent net salvage for this account.

Los Angeles District
The approved net salvage for this account is negative 30 percent. For the
169

 period 2001-2014, negative net salvage has increased with the most recent five
year band showing negative 570%.

Conservatively, this depreciation study

recommends negative 30 percent net salvage for this account.

Monterey Water District
The approved net salvage for this account is negative 30 percent. There
has been no retirement activity from 2001-2014. Based knowledge of the assets
in this account and judgment, this depreciation study recommends negative 30
percent net salvage for this account.

Sacramento District
The approved net salvage for this account is negative 30 percent. There
has been no retirement activity from 2001-2014. Based on knowledge of the
assets in this account and judgment, this depreciation study recommends
negative 30 percent net salvage for this account.

Ventura County Water District
The approved net salvage for this account is negative 30 percent. Based
knowledge of the assets in this account and comparison with other California
American water districts, this depreciation study recommends negative 20
percent net salvage for this account.

170

 FERC Account 339100 Other P/E Intangible
This account consists of other intangible property and equipment.
LIFE ANALYSIS

Larkfield District
The account balance is $109 thousand for this account. The approved life
characteristic for this account is 22 L2. Based on similarity of assets in account
339200 and knowledge of company operations, this depreciation study
recommends retaining a 22 L2 dispersion curve for this account.

Ventura County Water District
The account balance is $2 thousand for this account. The approved life
characteristic for this account is 22 L2. There is no retirement history on which to
perform a life analysis.

Based on judgment and knowledge of company
171

 operations, this depreciation study recommends retaining the 22 L2 dispersion
curve for this account.

NET SALVAGE

Larkfield District
The approved net salvage for this account is 0 percent. There has been
no retirement activity from 2001-2014. Based on knowledge of the assets in this
account and judgment, this depreciation study recommends retaining 0 percent
net salvage for this account.

Ventura County Water District
The approved net salvage for this account is 0 percent. There has been
172

 no retirement activity from 2001-2014. Based knowledge of the assets in this
account and judgment, this depreciation study recommends retaining 0 percent
net salvage for this account.

173

 FERC Account 339200 Other P/E SS
This account consists of property and equipment associated with the
source of supply.

LIFE ANALYSIS

Monterey Water District
The account balance is $124 thousand for this account. The approved life
characteristic for this account is 22 R1.

Based on SPR life analysis and

knowledge of company operations, this depreciation study recommends a 26 R1
dispersion curve for this account. The assets in this account related to the Los
Padres and San Clemente Dams are segregated from the remainder of the
account and depreciated over the remaining lives of the Dams. A plot comparing
actual versus simulated balances for this account is shown below.

174

 NET SALVAGE

Monterey Water District
The approved net salvage for this account is 0 percent. There has been no
retirement activity from 2001-2014.

Based knowledge of the assets in this

account and judgment, this depreciation study recommends retaining 0 percent
net salvage for this account.

175

 FERC Account 339500 Other P/E TD
This account consists of property and equipment associated with
transmission and distribution operations.

LIFE ANALYSIS

Coronado District
The account balance is $7 thousand for this account. The approved life
characteristic for this account is 10 SQ. There is no retirement history for his
account. Based on judgment and comparable assets in account 339300, this
depreciation study recommends a 10 SQ dispersion curve for this account.

176

 Los Angeles District
The account balance is $170 thousand for this account. The approved life
characteristic for this account is 10 SQ. There is no retirement history for his
account. Based on judgment and comparable assets in account 339300, this
depreciation study recommends a 10 SQ dispersion curve for this account.

Monterey Water District
The account balance is $1.9 million for this account. The approved life
characteristic for this account is 40 R2. There is no retirement history for his
account. Based on judgment and comparable assets in account 339300, this
depreciation study recommends a 30 R2 dispersion curve for this account.

177

 NET SALVAGE
Coronado District
The approved net salvage parameter is 0 percent. There has been no
retirement activity in this account from 2001-2014.

Based on judgment, this

depreciation study recommends retaining 0 percent net salvage for this account.

Los Angeles District
The approved net salvage parameter is 0 percent. There has been no
retirement activity in this account from 2001-2014.

Based on judgment, this

depreciation study recommends retaining 0 percent net salvage for this account.

Monterey Water District
The approved net salvage parameter is 0 percent. There has been no
178

 retirement activity in this account from 2001-2014.

Based on judgment, this

depreciation study recommends retaining 0 percent net salvage for this account.

FERC Account 339600 Other P/E CPS
This account consists of property and equipment associated with
comprehensive planning software.

LIFE ANALYSIS
Monterey Water District
The account balance is $6 thousand for this account.

There is no

currently approved life characteristic for this account. There is no retirement
history for his account. Based on judgment and comparable assets in account
339300, this depreciation study recommends a 25 R4 dispersion curve for this
account.

179

 Sacramento District
The account balance is $1 thousand for this account.

There is no

currently approved life characteristic for this account. There is no retirement
history for his account. Based on judgment and comparable assets in account
339300, this depreciation study recommends a 22 L2 dispersion curve for this
account.

NET SALVAGE
Monterey Water District
There is no currently approved net salvage parameter. There has been
no retirement activity in this account from 2001-2014. Based on judgment, this
180

 depreciation study recommends a 0 percent net salvage for this account.

Sacramento District
There is no currently approved net salvage parameter. There has been
no retirement activity in this account from 2001-2014. Based on judgment, this
depreciation study recommends a 0 percent net salvage for this account.

181

 GENERAL PLANT ACCOUNTS
This section includes Life Analysis and Net Salvage parameters be used
for all General Plant accounts across all districts where appropriate.

All

Corporate and Waste Water accounts are presented in their own sections
included later in this report.

LIFE ANALYSIS
The lives for this account were analyzed using Actuarial analysis where
sufficient information was available and judgment applied to project lives and
dispersions for assets in this account.
FERC Account 340100 Office Furniture and Equipment
This account consists of furniture and equipment such as chairs, desks,
tables, and bookcases. For all districts excluding Corporate, the account balance
is $1.6 million for these accounts. The approved life characteristics for these
accounts range from 13-25. Since those items have a much shorter life than
office furniture, actuarial analysis was used to establish the recommended life
characteristic for this account. Based on judgment, the type of assets in this
account, and knowledge of company operations, this depreciation study
recommends a 22 R3 dispersion curve for this account. A graph of the proposed
curve vs the observed life for this account is shown below,

182

 Below is a table of the amounts and parameters for each district.

District

Plant Balance Approved

Life Proposed

Characteristic
Coronado

Life

Characteristic

$189,287

25 L4

22 R3

$43,073

25 L4

22 R3

Los Angeles

$205,880

25 L4

22 R3

Monterey Water

$396,343

25 L4

22 R3

Sacramento

$639,998

13 L3

22 R3

Ventura County

$128,758

25 L4

22 R3

Larkfield

183

 FERC Account 340200 Computer and Peripheral Equipment
This account consists of computers and other peripheral equipment. The
account balance is $1.2 million for this account. The approved life characteristic
for these accounts range from 10 to 13. Based on judgment, the type of assets
in this account, and knowledge of company operations, this depreciation study
recommends a 7 L1 dispersion curve for this account. A graph of the proposed
curve vs the observed life for this account is shown below.

Below is a table of the amounts and parameters for each district.

District

Plant Balance Approved

Life Proposed

Characteristic
Coronado

$164,469

10 L2
184

Life

Characteristic
7 L1

 Larkfield

$19,075

10 L2

7 L1

Los Angeles

$74,618

10 L2

7 L1

Monterey Water

$332,999

10 L2

7 L1

Sacramento

$572,536

13 L3

7 L1

$33,113

10 L2

7 L1

Ventura County

FERC Account 340300 Computer Software
This account consists of computer software. The account balance is $221
thousand for this account. The approved life characteristic for these accounts
range from 7 to 13. Based on judgment, the type of assets in this account, and
knowledge of company operations, this depreciation study recommends a 10 R3
dispersion curve for this account. A graph of the proposed curve vs the observed
life for this account is shown below.

185

 Below is a table of the amounts and parameters for each district.

District

Plant Balance Approved

Life Proposed

Characteristic
Larkfield

Life

Characteristic

$8,632

7 L2

10 R3

Los Angeles

$19,244

7 L2

10 R3

Sacramento

$98,361

13 L3

10 R3

Ventura County

$95,191

7 L2

10 R3

FERC Account 340500 Other Office Equipment
This account consists of furniture and equipment such as other office
equipment such as copiers, maps, camcorders, and cameras.

The account

balance is $38 thousand for this account. The approved life characteristic for
these accounts is 20 years.

Based on judgment, the type of assets in this

account, actuarial analysis and knowledge of company operations, this
depreciation study recommends a 15 L3 dispersion curve for this account.

A

graph of the proposed curve vs the observed life for this account is shown below.

186

 Below is a table of the amounts and parameters for each district.

District

Plant Balance Approved

Life Proposed

Characteristic

Life

Characteristic

Los Angeles

$20,510

20 L0

15 L3

Monterey Water

$16,474

20 L0

15 L3

Ventura County

$962

20 L0

15 L3

187

 FERC Account 341100 Transportation Equipment Light Duty Trucks
This account consists of light duty trucks, such as a Ford Ranger or Ford
F150. The approved life characteristics for this account are between 9 and 11
years. Based on judgment, the type of assets in this account, actuarial analysis
and knowledge of company operations, this depreciation study recommends a 11
R3 dispersion curve for this account.

A graph of the proposed curve vs the

observed life for this account is shown below.

Below is a table of the amounts and parameters for each district.

District

Plant Balance Approved

Life Proposed

Characteristic
Coronado

$59,792

11 R1
188

Life

Characteristic
11 R1

 Larkfield
Sacramento
Ventura County

$23,641

11 R1

11 R1

$563,064

9 R5

11 R1

$52,355

11 R1

11 R1

FERC Account 341200 Transportation Equipment Heavy Duty Trucks
This account consists of heavy duty trucks, such as a dump truck for Ford
F350. The approved life characteristic for this account is 11 R1. Based on
judgment, the type of assets in this account, actuarial analysis and knowledge of
company operations, this depreciation study recommends a 11 L3 dispersion
curve for this account.

A graph of the proposed curve vs the observed life for

this account is shown below.

Below is a table of the amounts and parameters for each district.
189

 District

Plant Balance Approved

Life Proposed

Characteristic
Coronado
Larkfield
Los Angeles

Life

Characteristic

$53,031

11 R1

11 L3

$477

11 R1

11 L3

$33,771

11 R1

11 L3

FERC Account 341400 Transportation Equipment Other Light Duty Trucks
This account consists of other transportation equipment such as trailers
and backhoes. Based on judgment, the type of assets in this account, actuarial
analysis and knowledge of company operations, this depreciation study
recommends a 10 R5 dispersion curve for this account.

A graph of the

proposed curve vs the observed life for this account is shown below.

Below is a table of the amounts and parameters for each district.
190

 District

Plant Balance Approved

Life Proposed

Characteristic

Life

Characteristic

Coronado

$18,324

11 R1

10 R5

Los Angeles

$71,347

11 R1

10 R5

$124,360

11 R1

10 R5

Monterey Water

FERC Account 342000 Stores Equipment
This account consists of stores equipment. The account balance is $17
thousand for this account. The approved life characteristic is 30 R1.5. Based on
judgment, the type of assets in this account, actuarial analysis and knowledge of
company operations, this depreciation study recommends a 29 L4 dispersion
curve for this account.

A graph of the proposed curve vs the observed life for

this account is shown below.

Below is a table of the amounts and parameters for each district.
191

 District

Plant Balance Approved

Life Proposed

Characteristic
Los Angeles
Ventura County

Life

Characteristic

$6,512

30 R1.5

29 L4

$10,121

30 R1.5

29 L4

FERC Account 343000 Tools, Shop, and Garage Equipment
This account consists of tools, shop and garage equipment such as drilling
machines and detection equipment. The account balance is $2.1 million for this
account. The approved life characteristic for these accounts range from 20 to 28.
Based on judgment, this depreciation study recommends a 23 L3 dispersion
curve for this account.

A graph of the proposed curve vs the observed life for

this account is shown below.

192

 Below is a table of the amounts and parameters for each district.

District

Plant Balance Approved

Life Proposed

Characteristic
Coronado

Life

Characteristic

$332,512

28 S6

23 L3

$62,987

28 S6

23 L3

Los Angeles

$182,553

28 S6

23 L3

Monterey Water

$371,165

28 S6

23 L3

Sacramento

$481,028

20 R1

23 L3

Ventura County

$230,236

28 S6

23 L3

Larkfield

FERC Account 344000 Laboratory Equipment
This account consists of laboratory equipment such as water monitoring
equipment and other devices. The account balance is $.397 thousand for this
account. The approved life characteristic for these accounts is 20 years. Based
on judgment and actuarial analysis, this depreciation study recommends a 17 L2
dispersion curve for this account. A graph of the proposed curve vs the observed
life for this account is shown below.

193

 Below is a table of the amounts and parameters for each district.

District

Plant Balance Approved

Life Proposed

Characteristic
Larkfield
Los Angeles
Monterey Water
Sacramento

Life

Characteristic

$3,412

20 R2

17 L2

$842

20 R2

17 L2

$270,517

20 R2

17 L2

$54,436

20 L3

17 L2

FERC Account 345000 Power Operated Equipment
This account consists of power operated equipment such as backhoes
and forklifts. The account balance is $1.7 million for this account. The approved
life characteristic for these accounts range from 15 to 23. Based on judgment
and actuarial analysis, this depreciation study recommends a 23 R2.5 dispersion
194

 curve for this account. A graph of the proposed curve vs the observed life for this
account is shown below.

Below is a table of the amounts and parameters for each district.

District

Plant Balance Approved

Life Proposed

Characteristic
Coronado

Life

Characteristic

$208,047

23 S6

23 R2.5

Larkfield

$78,693

23 S6

23 R2.5

Los Angeles

$61,149

23 S6

23 R2.5

Monterey Water

$180,681

23 S6

23 R2.5

Sacramento

$452,286

15 R2

23 R2.5

Ventura County

$505,645

23 S6

23 R2.5

195

 FERC Account 346100 Communication Equipment Non-Telephone
This account consists of non-telephone communication equipment such
as analytical water monitoring instruments, telemetry and other related
equipment. The account balance is $9.1 million for this account. The current
approved lives in this account range from 10 to 18 years. Based on judgment
and actuarial analysis, this depreciation study recommends a 15 L4 dispersion
curve for this account. A graph of the proposed curve vs the observed life for this
account is shown below.

Below is a table of the amounts and parameters for each district.

District

Plant Balance Approved

Life Proposed

Characteristic
Coronado

$41,887

18 R3
196

Life

Characteristic
15 L4

 Larkfield

$22,152

18 R3

15 L4

Los Angeles

$1,846,895

18 R3

15 L4

Monterey Water

$5,955,615

10 R4

15 L4

Sacramento

$1,369,782

18 R3

15 L4

$17,152

18 R3

15 L4

Ventura County

FERC Account 346190 Communication Equipment Remote Control and
Instrumentation
This

account

consists

of

remote

control

and

instrumentation

communication equipment such as data loggers, RTUs, and other related
equipment.

The account balance is $810 thousand for this account.

The

approved life characteristic for these accounts range from 10 to 18 years.
Based on judgment and experience with account 346190, this depreciation study
recommends moving to 15 L4 dispersion curve for this account. Below is a table
of the amounts and parameters for each district.

District

Plant Balance Approved

Life Proposed

Characteristic
Coronado

Life

Characteristic

$78,076

none

15 L4

Larkfield

$200,350

18 R3

15 L4

Los Angeles

$335,346

18 R3

15 L4

Monterey Water

$1,033,548

18 R3

15 L4

Sacramento

$1,393,073

10 R4

15 L4

$769,231

18 R3

15 L4

Ventura County

FERC Account 346200 Communication Equipment Telephone
This

account

consists

of

telephone

systems

and

other

related

communication equipment. The account balance is $3.0 million for this account.
The approved life characteristic for these accounts is 10 years.
197

Based on

 actuarial analysis, this depreciation study recommends moving to a 16 R3
dispersion curve for this account. A graph of the proposed curve vs the observed
life for this account is shown below.

Below is a table of the amounts and parameters for each district.

District

Plant Balance Approved

Life Proposed

Characteristic
Sacramento

$3,016,586

10 R4

198

Life

Characteristic
16 R3

 FERC Account 347000 Miscellaneous Equipment
This account consists of miscellaneous equipment such as storage tanks.
The account balance is $1.0 million for this account.

The approved life

characteristic for these accounts range from 13 to 15 years. Based on judgment,
this depreciation study recommends moving to a 15 R4 dispersion curve for this
account. A graph of the proposed curve vs the observed life for this account is
shown below.

Below is a table of the amounts and parameters for each district.

District

Plant Balance Approved

Life Proposed

Characteristic
Coronado

$72,025

13 S5
199

Life

Characteristic
15 R4

 Larkfield

$2,693

13 S5

15 R4

Los Angeles

$38,214

13 S5

15 R4

Monterey Water

$92,665

13 S5

15 R4

$649,600

15 R3

15 R4

$77,170

13 S5

15 R4

Sacramento
Ventura County

FERC Account 348000 Other Tangible Property
This account consists of other tangible property such as chart records and
analytic water monitoring equipment. The account balance is $260 thousand for
this account. The approved life characteristic for these accounts is 20 years.
Based on judgment, this depreciation study recommends retaining a 20 R2
dispersion curve for this account.

Below is a table of the amounts and

parameters for each district.

District

Plant Balance Approved

Life Proposed

Characteristic
Larkfield
Los Angeles
Ventura County

Life

Characteristic

$23,969

20 R2

20 R2

$201,628

20 R2

20 R2

$24,535

20 R2

20 R2

200

 NET SALVAGE
For all districts, net salvage was statistically analyzed using the historical
cost for salvaging and removing assets with rolling and shrinking bands from
2001-2014.

A brief discussion of the existing net salvage and current study

recommendations for each account in those functions follow below.

FERC Account 340100 Office Furniture and Equipment
This account consists of gross salvage and cost of removal for furniture
and equipment such as chairs, desks, tables, and bookcases. For all districts
and Corporate, the approved net salvage ranged is 0 percent.

Retirement

activity from 2001-2014 shows approximately a 0 percent net salvage. Based on
knowledge of the assets in this account and historic activity, this depreciation
study recommends 0 percent net salvage for this account.
District

Approved

Net Proposed

Salvage

Net

Salvage

Coronado

0%

0%

Larkfield

0%

0%

Los Angeles

0%

0%

Monterey Water

0%

0%

Sacramento

0%

0%

Ventura County

0%

0%

201

 FERC Account 340200 Computer and Peripheral Equipment
This account consists of gross salvage and cost of removal for computers
and other peripheral equipment. For all districts and Corporate, the approved net
salvage ranged is 0 percent.

The approved net salvage for all districts and

Corporate ranges from is 0 percent. Based on retirement activity from 20012014 and knowledge of the assets in this account, this depreciation study
recommends retaining 0 percent net salvage for this account.
District

Approved

Net Proposed

Salvage

Net

Salvage

Coronado

0%

0%

Larkfield

0%

0%

Los Angeles

0%

0%

Monterey Water

0%

0%

Sacramento

0%

0%

Ventura County

0%

0%

FERC Account 340300 Computer Software
This account consists of gross salvage and cost of removal for computer
software. For all districts and Corporate, the approved net salvage is 0 percent.
Based on retirement activity from 2001-2014 and knowledge of the assets in this
account, this depreciation study recommends retaining 0 percent net salvage for
this account.
District

Approved

Net Proposed

Salvage

Net

Salvage

Coronado

0%

0%

Larkfield

0%

0%

Los Angeles

0%

0%

Sacramento

0%

0%

Ventura County

0%

0%

202

 FERC Account 340500 Other Office Equipment
This account consists of gross salvage and cost of removal for furniture
and equipment such as other office equipment such as copiers, maps,
camcorders, and cameras.
salvage is 0 percent.

For all districts and Corporate, the approved net

Based on retirement activity from 2001-2014 and

knowledge of the assets in this account, this depreciation study recommends
retaining 0 percent net salvage for this account.

District

Approved

Net Proposed

Salvage

Net

Salvage

Los Angeles

0%

0%

Ventura County

0%

0%

FERC Account 341100 Transportation Equipment Light Duty Trucks
This account consists of gross salvage and cost of removal for light duty
trucks, such as a Ford Ranger or Ford F150. For all districts and Corporate, the
approved net salvage ranged is 0 percent. The approved net salvage for all
districts and Corporate ranges from positive 10 percent. Based on retirement
activity from 2001-2014 and judgment, positive 10 percent net salvage is
recommended for this account.
District

Approved

Net Proposed

Salvage

Net

Salvage

Coronado

10%

10%

Larkfield

10%

10%

Los Angeles

10%

10%

Sacramento

10%

10%

Ventura County

10%

10%

203

 FERC Account 341200 Transportation Equipment Heavy Duty Trucks
This account consists of gross salvage and cost of removal for heavy duty
trucks, such as a dump truck or Ford F350. The approved net salvage for all
districts is positive between 10 and 15 percent positive.

After reviewing

retirement activity from 2001-2014, positive 10 percent net salvage is
recommended for this account.
District

Approved

Net Proposed

Salvage

Net

Salvage

Coronado

15%

10%

Larkfield

10%

10%

Los Angeles

15%

10%

FERC Account 341400 Transportation Equipment Other Light Duty Trucks
This account consists of gross salvage of removal for other transportation
equipment such as trailers and backhoes.

The net salvage indications are

between positive 5 and positive 10 percent. A positive 10 percent net salvage is
recommended for this account.

District

Approved

Net Proposed

Salvage
Coronado

Net

Salvage
10%

10%

Los Angeles

5%

10%

Monterey Water

5%

10%

FERC Account 342000 Stores Equipment
This account consists of gross salvage and cost of removal for stores
equipment. The approved net salvage for this account is 0 percent. Based on
retirement activity from 2001-2014 and knowledge of the assets in this account,
this depreciation study recommends retaining 0 percent net salvage for this
account.
204

 District

Approved

Net Proposed

Salvage

Net

Salvage

Los Angeles

0%

0%

Ventura County

0%

0%

FERC Account 343000 Tools, Shop, and Garage Equipment
This account consists of gross salvage and cost of removal for tools, shop
and garage equipment such as drilling machines and detection equipment. The
approved net salvage for this account for all districts is 0 percent. Based on
knowledge of the assets in this account and judgment, this depreciation study
recommends retaining 0 percent net salvage for this account.

District

Approved

Net Proposed

Salvage

Net

Salvage

Coronado

0%

0%

Larkfield

0%

0%

Los Angeles

0%

0%

Monterey Water

0%

0%

Sacramento

0%

0%

Ventura County

0%

0%

FERC Account 344000 Laboratory Equipment
This account consists of gross salvage and cost of removal for laboratory
equipment such as water monitoring equipment and other devices.

The

approved net salvage for this account is 0 percent for all districts. Based on
retirement activity from 2001-2014 and knowledge of the assets in this account
and judgment, this depreciation study recommends retaining 0 percent net
salvage for this account.
205

 District

Approved

Net Proposed

Salvage

Net

Salvage

Larkfield

0%

0%

Los Angeles

0%

0%

Monterey Water

0%

0%

Sacramento

0%

0%

FERC Account 345000 Power Operated Equipment
This account consists of gross salvage and cost of removal for power
operated equipment such as backhoes and forklifts. The approved net salvage
for all districts is positive 15 percent. Based on retirement activity from 20012014 and knowledge of the assets in this account and judgment, this
depreciation study recommends retaining 15 percent net salvage for this
account.
District

Approved

Net Proposed

Salvage

Net

Salvage

Coronado

15%

15%

Larkfield

15%

15%

Los Angeles

15%

15%

Monterey Water

15%

15%

Sacramento

15%

15%

Ventura County

15%

15%

FERC Account 346100 Communication Equipment Non-Telephone
This account consists of gross salvage and cost of removal for nontelephone communication equipment such as analytical water monitoring
instruments, telemetry and other related equipment. The approved net salvage
for all districts is 0 percent net salvage.

There has been limited retirement

activity from 2001-2014. Based on knowledge of the assets in this account and
judgment, this depreciation study recommends 0 percent net salvage for this
206

 account.
District

Approved

Net Proposed

Salvage

Net

Salvage

Coronado

0%

0%

Larkfield

0%

0%

Los Angeles

0%

0%

Monterey Water

0%

0%

Sacramento

0%

0%

Ventura County

0%

0%

FERC Account 346190 Communication Equipment Remote Control and
Instrumentation
This account consists of gross salvage and cost of removal for remote
control and instrumentation communication equipment such as data loggers,
RTUs, and other related equipment. The approved net salvage for all districts is
0 percent net salvage. There has been limited retirement activity from 20012014. Based on knowledge of the assets in this account and judgment, this
depreciation study recommends 0 percent net salvage for this account.

District

Approved

Net Proposed

Salvage
Coronado

Net

Salvage
None

0%

Larkfield

0%

0%

Los Angeles

0%

0%

Monterey Water

0%

0%

Sacramento

0%

0%

Ventura County

0%

0%

207

 FERC Account 346200 Communication Equipment Telephone
This account consists of gross salvage and cost of removal for
communication equipment such as telephones. The approved net salvage for
this account is 0 percent. There has been limited retirement activity from 20012014. Based on knowledge of the assets in this account and judgment, this
depreciation study recommends retaining 0 percent net salvage for this account.

District

Approved

Net Proposed

Salvage
Sacramento

Net

Salvage
0%

0%

FERC Account 347000 Miscellaneous Equipment
This account consists of gross salvage and cost of removal for
miscellaneous equipment such as storage tanks. The approved net salvage for
this account is 0 percent. There has been limited retirement activity from 20012014. Based on knowledge of the assets in this account and judgment, this
depreciation study recommends retaining 0 percent net salvage for this account.

District

Approved

Net Proposed

Salvage

Net

Salvage

Coronado

0%

0%

Larkfield

0%

0%

Los Angeles

0%

0%

Monterey Water

0%

0%

Sacramento

0%

0%

Ventura County

0%

0%

208

 FERC Account 348000 Other Tangible Property
This account consists of gross salvage and cost of removal for other
tangible property such as analytical water monitoring instruments. The approved
net salvage for this account is 0 percent. There has been limited retirement
activity from 2001-2014. Based on knowledge of the assets in this account and
judgment, this depreciation study recommends retaining 0 percent net salvage
for this account.
District

Approved

Net Proposed

Salvage

Net

Salvage

Larkfield

0%

0%

Los Angeles

0%

0%

Ventura County

0%

0%

209

 MONTEREY WASTE WATER DISTRICT

FERC Account 354400 Waste Water Structures and Improvements
Treatment
This account consists of structures and improvements used in connection
with wastewater collection, pumping, treatment and disposal, reclaimed water
treatment and distribution and general plant operations.

LIFE ANALYSIS
The account balance is $1.8 million for this account. The approved life
characteristic is 40 R2.

Since the facilities were acquired in 2002, there is

insufficient data available to perform life analysis.

Based on judgment and

comparison to water facilities owned by California American Water, this
depreciation study recommends a 40 R2 dispersion curve for this account.

210

 NET SALVAGE
The approved net salvage for this account is negative 10 percent. Based
on knowledge of the assets and judgment, this depreciation study recommends
negative 10 percent net salvage for this account.

211

 FERC Account 355400 Waste Water Power Gen Equipment Treatment
This account consists of power generator equipment used in connection
with wastewater collection, pumping, treatment and disposal, reclaimed water
treatment and distribution and general plant operations.

LIFE ANALYSIS
The account balance is $22 thousand for this account. The approved life
characteristic is not known. Since the facilities were acquired in 2002, there is
insufficient data available to perform life analysis.

Based on judgment and

comparison to water facilities owned by California American Water, this
depreciation study recommends a 24 S3 dispersion curve for this account.

212

 NET SALVAGE
There was no investment in this account at the time of the last
depreciation study.

Based on knowledge of the assets and judgment, this

depreciation study recommends retaining 0 percent net salvage for this account.
FERC Account 360000 Waste Water Collection Sewers Forced
This account consists of all sewers which are used to lift sewage from a
low elevation to a higher elevation.

LIFE ANALYSIS
The account balance is $33 thousand for this account. The approved life
characteristic is 40 R2.

Since the facilities were acquired in 2002, there is

insufficient data available to perform life analysis.

Based on judgment and

comparison to water facilities owned by California American Water, this
depreciation study recommends a 40 R2 dispersion curve for this account.

213

 NET SALVAGE
The approved net salvage for this account is negative 10 percent. Based
on knowledge of the assets and judgment, this depreciation study recommends
negative 10 percent net salvage for this account.

214

 FERC Account 361100 Waste Water Collecting Mains
This account consists of gravity collecting sewers, interceptor, branch,
trunk, and laterals.

LIFE ANALYSIS
The account balance is $3.9 million for this account. The approved life
characteristic is 40 R2.

Since the facilities were acquired in 2002, there is

insufficient data available to perform life analysis.

Based on judgment and

comparison to water facilities owned by California American Water, this
depreciation study recommends a 40 R2 dispersion curve for this account.

NET SALVAGE
The approved net salvage for this account is 0 percent.

Based on

knowledge of the assets and judgment, this depreciation study recommends
215

 negative 10 percent net salvage for this account.
FERC Account 363000 Waste Water Services Sewers
This account consists of service sewers, from collection sewer to the
customer’s property or curbs line.

LIFE ANALYSIS
The account balance is $23 thousand for this account. The approved life
characteristic is 40 R2.

Since the facilities were acquired in 2002, there is

insufficient data available to perform life analysis.

Based on judgment and

comparison to water facilities owned by California American Water, this
depreciation study recommends a 40 R2 dispersion curve for this account.

216

 NET SALVAGE
The approved net salvage for this account is 0 percent.

Based on

knowledge of the assets and judgment, this depreciation study recommends
negative 10 percent net salvage for this account.
FERC Account 370000 Waste Water Receiving Wells
This account consists of wells at pumping stations or at other junction
points along the collecting system, used for intercepting wastewater for clearing
and screening, transfer to a pumping well or otherwise further convey it along the
collecting system to the treatment plant or point of final discharge.

LIFE ANALYSIS
The account balance is $19 thousand for this account. The approved life
characteristic is 20 R2.

Since the facilities were acquired in 2002, there is

insufficient data available to perform life analysis.

Based on judgment and

comparison to water facilities owned by California American Water, this
depreciation study recommends 20 R2 dispersion curve for this account.

217

 NET SALVAGE
The approved net salvage for this account is negative 5 percent. Based
on knowledge of the assets and judgment, this depreciation study recommends
negative 15 percent net salvage for this account.

218

 FERC Account 371100 Waste Water Pumping Equipment Electric
This account consists of pumping equipment driven by electric power.

LIFE ANALYSIS
The account balance is $1.4 million for this account. The approved life
characteristic is 30 R1.

Since the facilities were acquired in 2002, there is

insufficient data available to perform life analysis.

Based on judgment and

comparison to water facilities owned by California American Water, this
depreciation study recommends a 28 L1 dispersion curve for this account.

NET SALVAGE
The approved net salvage for this account is negative 5 percent. Based
on knowledge of the assets and judgment, this depreciation study recommends
negative 5 percent net salvage for this account.
219

 FERC Account 371200 Waste Water Pumping Equipment Other
This account consists of pumping equipment not driven by electric power.

LIFE ANALYSIS
The account balance is $12 thousand for this account. The approved life
characteristic is 20 R2.

Since the facilities were acquired in 2002, there is

insufficient data available to perform life analysis.

Based on judgment and

comparison to water facilities owned by California American Water, this
depreciation study recommends a 20 R2 dispersion curve for this account.

NET SALVAGE
The approved net salvage for this account is 0 percent.

Based on

knowledge of the assets and judgment, this depreciation study recommends
negative 5 percent net salvage for this account.
220

 FERC Account 380000 Waste Water Treatment and Disposal Equipment
This account consists of apparatus equipment and other facilities used for
the treatment of wastewater, disposal of sewage wastes and the treatment of
effluent for reuse.

LIFE ANALYSIS
The account balance is $9 million for this account. The approved life
characteristic is 40 R2.

Since the facilities were acquired in 2002, there is

insufficient data available to perform life analysis.

Based on judgment and

comparison to water facilities owned by California American Water, this
depreciation study recommends a 40 R2 dispersion curve for this account.

221

 NET SALVAGE
The approved net salvage for this account is 0 percent.

Based on

knowledge of the assets and judgment, this depreciation study recommends
negative 5 percent net salvage for this account.

FERC Account 381000 Waste Water Plant Sewers
This account consists of plant yard piping and appurtenances, and
facilities required to dispose of treatment plant liquid effluent into the outfall
sewer line.

LIFE ANALYSIS
The account balance is $91 thousand for this account. The approved life
characteristic is 40 R2.

Since the facilities were acquired in 2002, there is

insufficient data available to perform life analysis.

Based on judgment and

comparison to water facilities owned by California American Water, this
depreciation study recommends a 40 R2 dispersion curve for this account.

222

 NET SALVAGE
The approved net salvage for this account is negative 5 percent. Based
on knowledge of the assets and judgment, this depreciation study recommends
negative 5 percent net salvage for this account.

223

 FERC Account 382000 Waste Water Outfall Sewer Lines
This account consists of sewer line carrying effluent from treatment facility
to point of discharge, including headwall or outlet.

LIFE ANALYSIS
The account balance is $22 thousand for this account. The approved life
characteristic is 40 R2.

Since the facilities were acquired in 2002, there is

insufficient data available to perform life analysis.

Based on judgment and

comparison to water facilities owned by California American Water, this
depreciation study recommends a 40 R2 dispersion curve for this account.

NET SALVAGE
The approved net salvage for this account is negative 5 percent. Based
on knowledge of the assets and judgment, this depreciation study recommends
224

 negative 5 percent net salvage for this account.

FERC Account 389100 Waste Water Oth Plt & Misc Eqp Intang
This account consists of sewer line carrying effluent from treatment facility
to point of discharge, including headwall or outlet.

LIFE ANALYSIS
The account balance is $53 thousand for this account. The approved life
characteristic is 40 R2.

Since the facilities were acquired in 2002, there is

insufficient data available to perform life analysis.

Based on judgment and

comparison to water facilities owned by California American Water, this
depreciation study recommends a 40 R2 dispersion curve for this account.

225

 NET SALVAGE
The approved net salvage for this account is negative 5 percent. Based
on knowledge of the assets and judgment, this depreciation study recommends
negative 5 percent net salvage for this account.

FERC Account 389600 Waste Water Other P/E - CPS
This account consists of comprehensive planning software.

LIFE ANALYSIS
The account balance is $52 thousand for this account. The approved life
characteristic is 40 R2.

Since the facilities were acquired in 2002, there is

insufficient data available to perform life analysis.

Based on judgment and

comparison to water facilities owned by California American Water, this
depreciation study recommends a 40 R2 dispersion curve for this account.

226

 NET SALVAGE
The approved net salvage for this account is 0 percent.

Based on

knowledge of the assets and judgment, this depreciation study recommends 0
percent net salvage for this account.

FERC Account 390000 Waste Water Office Furniture and Equipment
This account consists of office furniture such as desks or chairs.

LIFE ANALYSIS
The account balance is $15 thousand for this account. The approved life
characteristic is 25 L2.

Since the facilities were acquired in 2002, there is

insufficient data available to perform life analysis.

Based on judgment and

comparison to water facilities owned by California American Water, this
depreciation study recommends a 22 R3 dispersion curve for this account.

227

 NET SALVAGE
The approved net salvage for this account is 0 percent.

Based on

knowledge of the assets and judgment, this depreciation study recommends 0
percent net salvage for this account.

FERC Account 391200 Waste Water Trans Equip & Hvy Dty Trks
This account consists of trucks used for heavy duty transporting.

LIFE ANALYSIS
The account balance is $337 thousand for this account. The approved life
characteristic is 7 R2.

Since the facilities were acquired in 2002, there is

insufficient data available to perform life analysis.

Based on judgment and

comparison to water facilities owned by California American Water, this
depreciation study recommends a 7 R2 dispersion curve for this account.

228

 NET SALVAGE
The approved net salvage for this account is 0 percent.

Based on

knowledge of the assets and judgment, this depreciation study recommends 0
percent net salvage for this account.

FERC Account 393000 Waste Water Tool Shop & Garage Equipment
This account consists of tools and garage equipment.

LIFE ANALYSIS
The account balance is $25 thousand for this account. The approved life
characteristic is not known. Since the facilities were acquired in 2002, there is
insufficient data available to perform life analysis.

Based on judgment and

comparison to water facilities owned by California American Water, this
depreciation study recommends a 23 L3 dispersion curve for this account.

229

 NET SALVAGE
The approved net salvage for this account is not known.

Based on

knowledge of the assets and judgment, this depreciation study recommends 0
percent net salvage for this account.

230

 FERC Account 394000 Waste Water Laboratory Equipment
This account consists of laboratory equipment.

LIFE ANALYSIS
The account balance is $40 thousand for this account. The approved life
characteristic is 25 L0.

Since the facilities were acquired in 2002, there is

insufficient data available to perform life analysis.

Based on judgment and

comparison to water facilities owned by California American Water, this
depreciation study recommends a 25 L0 dispersion curve for this account.

NET SALVAGE
The approved net salvage for this account is 0 percent.

Based on

knowledge of the assets and judgment, this depreciation study recommends 0
percent net salvage for this account.
231

 FERC Account 395000 Waste Water Power Operated Equipment
This account consists of power operated equipment such as bulldozers or
trenchers.

LIFE ANALYSIS
The account balance is $20 thousand for this account. The approved life
characteristic is 25 L0.

Since the facilities were acquired in 2002, there is

insufficient data available to perform life analysis.

Based on judgment and

comparison to water facilities owned by California American Water, this
depreciation study recommends a 23 R2.5 dispersion curve for this account.

NET SALVAGE
The approved net salvage for this account is 10 percent.

Based on

knowledge of the assets and judgment, this depreciation study recommends 10
232

 percent net salvage for this account.

FERC Account 396000 Waste Water Communication Equipment
This account consists of communication equipment.

LIFE ANALYSIS
The account balance is $15 thousand for this account. The approved life
characteristic is not known. Since the facilities were acquired in 2002, there is
insufficient data available to perform life analysis.

Based on judgment and

comparison to water facilities owned by California American Water, this
depreciation study recommends a 15 L4 dispersion curve for this account.

233

 NET SALVAGE
The approved net salvage for this account is not known.

Based on

knowledge of the assets and judgment, this depreciation study recommends 0
percent net salvage for this account.
FERC Account 397000 Waste Water Miscellaneous Equipment
This account consists of miscellaneous general property such as
instruments, lifting equipment and other items.

LIFE ANALYSIS
The account balance is $44 thousand for this account. The approved life
characteristic is 25 R2.

Since the facilities were acquired in 2002, there is

insufficient data available to perform life analysis.

Based on judgment and

comparison to water facilities owned by California American Water, this
depreciation study recommends a 25 R2 dispersion curve for this account.

234

 NET SALVAGE
The approved net salvage for this account is not known.

Based on

knowledge of the assets and judgment, this depreciation study recommends 0
percent net salvage for this account.

235

 CORPORATE

FERC Account 304500 Structures & Imp - General
This account consists of structures and improvements.

LIFE ANALYSIS
The account balance is $139 thousand for this account. The approved life
characteristic for this account is not known. Based on judgment, the type of
assets in this account, and knowledge of company operations, this depreciation
study recommends a 30 R2 dispersion curve for this account.

NET SALVAGE
The approved net salvage for this account is not known.

Retirement

activity from 2001-2014 shows 0 percent net salvage. Based on knowledge of
the assets in this account and historic activity, this depreciation study
recommends 0 percent net salvage for this account.
236

 FERC Account 304620 Structures & Imp - Leasehold
This account consists of structures and improvements on leased buildings.

LIFE ANALYSIS
The account balance is $116 thousand for this account. The approved life
characteristic for this account is not known. Based on judgment, the type of
assets in this account, and knowledge of company operations, this depreciation
study recommends a 30 R2 dispersion curve for this account. .

NET SALVAGE
The approved net salvage for this account is not known.

Retirement

activity from 2001-2014 shows a small amount if negative net salvage. Based on
knowledge of the assets in this account and historic activity, this depreciation
study recommends 0 percent net salvage for this account.
237

 FERC Account 339600 Other P/E - CPS
This account consists of comprehensive planning software.

LIFE ANALYSIS
The account balance is $564 thousand for this account. The approved life
characteristic for this account is not known. Based on judgment, the type of
assets in this account, and knowledge of company operations, this depreciation
study recommends a 5 SQ dispersion curve for this account.

NET SALVAGE
The approved net salvage for this account is not known.

Retirement

activity from 2001-2014 shows 0 percent net salvage. Based on knowledge of
the assets in this account and historic activity, this depreciation study
recommends 0 percent net salvage for this account.
238

 FERC Account 340100 Office Furniture and Equipment
This account consists of office furniture and equipment.

LIFE ANALYSIS
The account balance is $189 thousand for this account. The approved life
characteristic for this account is 25 L4. Based on judgment, the type of assets in
this account, and knowledge of company operations, this depreciation study
recommends a 26 L4 dispersion curve for this account.

NET SALVAGE
The approved net salvage for this account is 0 percent.

Retirement

activity from 2001-2014 shows 0 percent net salvage. Based on knowledge of
the assets in this account and historic activity, this depreciation study
recommends retaining 0 percent net salvage for this account.

239

 FERC Account 340200 Comp & Periph Equipment
This account consists of comp. and periph. equipment.

LIFE ANALYSIS
The account balance is $837 thousand for this account. The approved life
characteristic for this account is 10 L2. Based on judgment, the type of assets in
this account, and knowledge of company operations, this depreciation study
recommends a 6 R4 dispersion curve for this account.

NET SALVAGE
The approved net salvage for this account is 0 percent.

Retirement

activity from 2001-2014 shows 0 percent net salvage. Based on knowledge of
the assets in this account and historic activity, this depreciation study
recommends retaining 0 percent net salvage for this account.

240

 FERC Account 340300 Computer Software
This account consists of computer software.

LIFE ANALYSIS
The account balance is $423 thousand for this account. The approved life
characteristic for this account is 10 L2. Based on judgment, the type of assets in
this account, and knowledge of company operations, this depreciation study
recommends a 6 SQ dispersion curve for this account.

NET SALVAGE
The approved net salvage for this account is 0 percent.

Retirement

activity from 2001-2014 shows 0 percent net salvage. Based on knowledge of
the assets in this account and historic activity, this depreciation study
recommends retaining 0 percent net salvage for this account.

241

 FERC Account 340310 Main Frame Computer Software
This account consists of computer software for the main frame.

LIFE ANALYSIS
The account balance is $14 million for this account. The approved life
characteristic for this account is not known. Based on judgment, the type of
assets in this account, and knowledge of company operations, this depreciation
study recommends a 10 SQ dispersion curve for this account.

NET SALVAGE
The approved net salvage for this account is not known.

Based on

knowledge of the assets in this account and historic activity and experience with
accounts 340100 through 340300, this depreciation study recommends 0 percent
net salvage for this account.

242

 FERC Account 340500 Other Office Equipment
This account consists of furniture and equipment such as other office
equipment such as copiers, maps, camcorders, and cameras.

LIFE ANALYSIS
The account balance is $1 thousand for this account. The approved life
characteristic for this account is 10 L0. Based on judgment, the type of assets in
this account, and knowledge of company operations, this depreciation study
recommends a 10 L0 dispersion curve for this account.

NET SALVAGE
The approved net salvage for this account is 0 percent. Recent retirement
activity shows a 0 percent net salvage. Based on knowledge of the assets in this
account and historic activity, this depreciation study recommends retaining 0
percent net salvage for this account.
243

 FERC Account 341100 Transportation Equipment Light Duty Trucks
This account consists of transportation equipment such as light duty
trucks.

LIFE ANALYSIS
The account balance is $43 thousand for this account. The approved life
characteristic for this account is 11 R1. Based on judgment, the type of assets in
this account, and knowledge of company operations, this depreciation study
recommends a 11 R1 dispersion curve for this account.

NET SALVAGE
The approved net salvage for this account is 0 percent. Recent retirement
activity shows a 0 percent net salvage. Based on knowledge of the assets in this
account and historic activity, this depreciation study recommends 10 percent net
salvage for this account.
244

 Account 343000 Tools, Shop, & Garage Equipment
This account consists of tools, shop and garage equipment.

LIFE ANALYSIS
The account balance is $5 thousand for this account. The approved life
characteristic for this account is 20 R2. Based on judgment, the type of assets in
this account, and knowledge of company operations, this depreciation study
recommends retaining 20 R2 dispersion curve for this account.

NET SALVAGE
The approved net salvage for this account is 0 percent. Recent retirement
activity shows a 0 percent net salvage. Based on knowledge of the assets in this
account and historic activity, this depreciation study recommends 0 percent net
salvage for this account.

245

 FERC Account 346200 Comm. Equipment Telephone
This account consists of communication equipment such as telephones.

LIFE ANALYSIS
The account balance is $33 thousand for this account. The approved life
characteristic for this account is not known. Based on judgment, the type of
assets in this account, and knowledge of company operations, this depreciation
study recommends retaining 10 R2 dispersion curve for this account.

NET SALVAGE
The approved net salvage for this account is not known.

Recent

retirement activity shows a 0 percent net salvage. Based on knowledge of the
assets in this account and historic activity, this depreciation study recommends 0
percent net salvage for this account.

246

 FERC Account 347000 Misc. Equipment
This account consists of miscellaneous equipment.

LIFE ANALYSIS
The account balance is $210 thousand for this account. The approved life
characteristic for this account is 13 S5. Based on judgment, the type of assets in
this account, and knowledge of company operations, this depreciation study
recommends moving to a 15 R2 dispersion curve for this account.

NET SALVAGE
The approved net salvage for this account is 0 percent. Recent retirement
activity shows a 0 percent net salvage. Based on knowledge of the assets in this
account and historic activity, this depreciation study recommends 0 percent net
salvage for this account.

247

 FERC Account 348000 Other Tangible Property
This account consists of other tangible property.

LIFE ANALYSIS
The account balance is $492 for this account.

The approved life

characteristic for this account is 20 R2. Based on judgment, the type of assets in
this account, and knowledge of company operations, this depreciation study
recommends retaining 20 R2 dispersion curve for this account.

NET SALVAGE
The approved net salvage for this account is 0 percent. Recent retirement
activity shows a 0 percent net salvage. Based on knowledge of the assets in this
account and historic activity, this depreciation study recommends 0 percent net
salvage for this account.
248

 ATTACHMENT 11

    

511 Forest Lodge Road 831.646.3201

Suite 100 831.375.4367
Paci?c Grove. CA 93950

March 21, 2016



Mr. Timothy Sullivan, Executive Director
California Public Utilities Commission
505 Van Ness Ave

San Francisco, CA 94120

RE Quarterly Status Report (2015 Q4)
Carmel River Reroute and San Clemente Dam Removal Project (?Project?)
Application 10-09-018, Decision 12-06-040

Dear Mr. Sullivan:

Pursuant to Order Item No. 3 of the referenced Decision, California American Water hereby
submits this Status Report for the fourth Quarter of 2015 for the subject Project.

Provided below is an overview of progress made through this quarter for the Project.
Permitting:

0 California American Water has completed its permit obligations for the project with the
exception of California Department of Water Resources Division of Safety of Dams
(DSOD) canceling the Dam Operation Permit, which is anticipated in the second quarter
of 2016. The Dam Operation permit allowed California American Water to store surface
water behind the San Clemente Dam. With the removal of San Clemente Dam, surface
water storage is obsolete and the permit can be cancelled.

0 Granite obtained construction work window extensions past October 31, 2015 from the
Army Corps of Engineers, National Marine Fisheries Service, United States Fish 
Wildlife, California Department of Fish Wildlife, Regional Water Quality Control Board,
and Monterey County.

0 Additional permits obtained during this quarter include a CDFW LSAA Amendment for
winter planting and temporary bridge installation/removal and an extension to the
Monterey County haul hour requirements.

0 Monterey County Permits that were closed this quarter include: Temporary Electrical
Permit; San Clemente Dam (SCD) Demolition Permit; Grading Permits (Water
Treatment Basin, Diversion Dike (DD), Reroute Channel, Stabilized Sediment Slope
and Combined Flow Reach and Encroachment Permits (CFR Metal
Plates and CVR Traffic Control).

Mr. Timothy Sullivan
March 21. 2016

0

Granite is pursuing the demolition permit for the Old Carmel River Dam (OCRD).
Demolition is expected to begin in the second quarter of 2016. Substantial completion of
this work is expected by June 30, 2016.

Granite is pursuing the building permit for the construction of the Sleepy Hollow Ford
Bridge which is anticipated in the first quarter of 2016. The installation of the Sleepy
Hollow Ford Bridge and the removal of the Old Carmel River Dam will be funded through
a grant administered by the State Coastal Conservancy.

Granite continued to maintain environmental compliance as required by the Project
Permits.

Community Outreach:

California American Water continued its community outreach efforts to inform the public about
the Project and to address community questions and concerns. Some of the highlights from
efforts this quarter include:

0

California American Water and the Design/Builder posted updates on the project website
(WW.sanclementedamremovalprq) to inform the public of the Project?s progress. Two
web cams are installed on the Project Site which are viewable on the project website.

California American Water continued discussions with the adjacent landowners to
coordinate access through the project site, discuss easement acquisitions, and discuss
overall progress of the work. Execution of easement documents is anticipated in the
second quarter of 2016.

CAW held the third Friday of every month available for project stakeholder and
regulatory agency site visits. These site visits have been attended by media, the public,
project funders, and several State and Federal agencies including: National Marine
Fisheries Service National Oceanic Administration; United States Geologic
Service; California Department of Fish and Wildlife Army Corps of Engineers;
United States Bureau of Reclamation; and the Bureau of Land Management.

On several occasions this quarter CAW and Granite have provided access to the project
site for college classes learning about river restoration and watershed science.

On Wednesday November 4th a site tour was provided to the United States Society on
Dams allowing interested technical and regulatory professionals to discuss lessons
learned.

Design and Construction:

0





AMI RK AN WAT 

Design related activities that were conducted this quarter or are ongoing include:
1. Efforts this quarter focused on finalizing the Channel Design and Habitat
Restoration Design. Regulatory agencies were closely involved with the
Design process in order to obtain the required approvals.
2. The Threat of Major Storm Action Plan for 2015 was developed and
updated in coordination with CDFW and NMFS as construction advanced
with the uncertainty of fall and winter weather events.

Page 2 of 6

Mr. Timothy Sullivan
March 21. 2016

 

3. A diversion pipe abandonment plan was developed for reaches of the
pipe located at the DD and 888.

4. Field Design Changes for construction of the Channel were completed
and approved during this quarter. Changes included the design and
construction of a temporary bridge crossing at Plane Bed Reach for
access during the monitoring period; and bank slope and toe boulder
improvements.

5. A Field Design Change for the installation of erosion control fabric on the
floodplains was developed.

6. Two Field Design Changes were developed regarding the East Tributary
Hydrologic Grade Control Structure.

7. Design changes regarding plant species that will be used for habitat
restoration were developed. Final approval of the planting approach is
anticipated in the first quarter of 2016.

8. Granite developed and is amending the Project?s Post Construction
Activity Plan, with approval anticipated in the first quarter of 2016.

9. The Design/Builder worked on completing as-builts for completed
construction work. This effort will continue into the first quarter of 2016.

10. Close coordination continued with DSOD through the Design and
Construction process.

11. Ongoing evaluations of excavated slopes and geologic mapping
con?nued.

0 Construction activities that have been conducted this quarter or are ongoing include:

1. The project?s major definable features of work were completed this
quarter with the exception of removing OCRD and the Sleepy Hollow
Ford low water crossing; and construction of the permanent bridge at the
Sleepy Hollow Ford location. Certification of Substantial Completion is
anticipated in the first quarter of 2016.

2. Fill placement and construction of erosion protection elements at the 888
were completed this quarter. Completion of the habitat restoration at the
888 is anticipated in the second quarter of 2016.

3. The East Tributary Conveyance was constructed to provide a channel for
surface flows from the East Tributary and the Sediment Stockpile (SS).

4. Excavation of the ?knob?, a borrow area adjacent to the advanced to
completion this quarter and provide sufficient material quantities to
construct portions of the 888.

5. Material screening continued through the early portion of this quarter to
sort materials for completing construction of the DD, and CFR.
Night work was conducted occasionally during this quarter focusing on
material processing and staging.

6. Work on the DD to resolve noncompliant work from 2014 was completed.
Completion of habitat restoration at the DD is anticipated in the second
quanerof2016.

7. Granite continued pumping the Carmel River from the upstream limits of
work to of the DD in order to remove portions of the
diversion system. Portions of the diversion pipe located within the
footprint of the and DD were abandoned in place and filled with
concrete. Sheet piles that diverted the Carmel River into the diversion
pipe were removed.

f.

CALIFDRMIA

Lit \?ul xi .1 Page 3 of6

Mr Timothy Sullivan
March 21, 2016

10.

11.

12.

13.

14.

15.
16.

17.

18.

19.

20.

21.

Construction of the channel was completed this quarter. Elements of
work completed include: 53 step-pools in the CFR, 10 resting pools, two
riffle pool reaches in the Reroute Channel, Upper Carmel River grading,
channel substrate placement, and grade transitions to the existing river
reaches.

Boulders from offsite sources were imported to the project site for
construction of the new Carmel river channel and overbank roughness
elements. Large woody debris (LWD) was also imported to the project
site.

Floodplain construction was completed which included construction of
Fabric Encapsulated Soil elements on the channel banks, LWD
structures, and seasonal frog ponds. Final grades were achieved and
topographic complexity was incorporated on graded slopes.

Erosion control fabric was installed in the floodplain below the 25 year
storm event water level.

Agency representatives were onsite to observe the third and final flow
test.

Upon completing the channel construction, the Carmel River and San
Clemente Creek were allowed to flow into their new channel.

Irrigation mainlines were installed, installation of irrigation laterals will
continue into the next quarter.

Monitoring instrumentation was installed at the DD and 888.

Biological monitoring and inspections continued on a daily and
weekly basis as required through the end of active construction.
Installation and management of erosion control best management
practices was conducted throughout the quarter and will continue in the
next quarter. The entire site with the exception of rock surfaces were
hydroseeded with permanent seed mixes to reduce erosion and augment
the habitat restoration efforts.

The 88 was graded and hydroseeded. Habitat restoration at this location
will continue next quarter. Concrete from OCRD will be abandoned in the
SS during the second and third quarter of 2016.

Mobilization and demobilization of equipment occurred throughout this
quaner

Groundwater was managed on site by pumping the nuisance water to the
East Tributary settling basin and then pumping it to the treatment system
prior to releasing 

Browse fence was installed around the entire project site to keep wildlife
from grazing on plants. Planting of container plants began this quarter
and is expected to continue through the first quarter of 2016.

Sleepy Hollow Steelhead Rearing Facility:

0 Due to drought conditions and low flows in the Carmel River, Monterey Peninsula Water
Management District did not operate the Sleepy Hollow Steelhead Rearing
Facility in 2015.

intends to upgrade the intake facility to the and has requested that
CAW coordinate Project traffic along the THR access to accommodate construction
traffic associated with upgrading the intake. Accordingly, California American Water will
continue ongoing coordination efforts with MPWM D.

Page 4 of 6

Mr. Timothy Sullivan
March 21, 2016

 

Costs:

0 Through December 31, 2015, the balance of the regulatory asset balancing account
established through Decision 12-06-040 is $79,545,648 which includes $18,465,490 in
contributions from the State Coastal Conservancy.

Attachments: Cumulative cost projection curve and expenditures to-date

Schedule:

0 Tasks completed during this quarter include: Sediment embanking at the 88; DD
construction; construction; channel construction; floodplain construction; knob
excavation; diversion pipe removal and abandonment; East tributary conveyance
construction; and monitoring instrumentation installation.

0 Construction activities planned for 2016 include: demolition of the Habitat
plantings and seeding, demolition of the Sleepy Hollow Ford; and bridge construction to
replace the Sleepy Hollow Ford low water crossing.

0 Granite is preparing a revised ?recovery? schedule for the 2016 season which is
anticipated to be approved in the first quarter of 2016.

Post-construction monitoring and maintenance will continue through 2021.

The State Coastal Conservancy has secured their $35 million commitment from public
and private sources.

0 California American Water and the Conservancy amended the Grant Agreement
(Amendment 5) on December 10, 2015, increasing the Grant amount to $31,479,862.

0 California American Water has received funds from the Conservancy for portions of work
covered by the grants. California American Water is eligible for disbursement of funds
from the Conservancy through this quarter totaling $24,870,97649. This total is
exclusive of the required 10% withhold from the Conservancy.

The Project Team continued conversations with the Bureau of Land Management (BLM)
to develop a work plan to resolve the conditions set out by BLM in their August 2010
letter of intent to accept donation of California American Water?s land.

0 DSOD conducted their final inspection of site improvements on December 



CALIFORNDR

Page 5 of 6

Mr. Timothy Sullivan
March 21. 2016

If you have any questions regarding this status report or require any further information please
do not hesitate to call.

Sincerely,

2 I 
.Jt .611: 

Richard C. Svindland
Vice President - Operations

Enclosures: One (1)

cc: A1009018 (Service List via email)

if

PageeofG

 

 

Carmel River Reroute and San Clemente Dam Removal Project

Design-Build Cost Forecast and
Actual Cost To-Date as of December 31, 2015

and Post Construction Monitoring Costs.
70,000,000

 

$60,000,000 

 

$50,000,000 - -

 

540,000,000 1?

 

$30,000,000

 

$20,000,000 

 

  

$10,000,000

$0

 

 

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+Projected (Including
Post Construction
Monitoring Costs)

?O?Cost to date

Date

CERTIFICATE OF SERVICE
1, Jawad Russell, declare as follows:

I am employed in the City and County of San Francisco, California. I am over the
age of eighteen years and not a party to this action. My business address is 555 Montgomery
Street, Suite 816, San Francisco, California 94111. On the below date, I served the within:

Quarterly Status Report (2015 Q4)
Carmel River Reroute and San Clemente Dam Removal Project (?Project?)
Application 10-09-018, Decision 12-06-040

on the interested parties in this action addressed as follows:
See attached service list

(BY E-MAIL SERVICE) By transmitting such document(s) electronically from
Califomia-American Water Company, San Francisco, California, to the electronic mail
addresses listed on the Of?cial Service List, which is current as of this date. I am readily
familiar with the practice of California-American Water Company for transmitting
documents by electronic mail, said practice being that in the ordinary course of business,
such electronic mail is transmitted immediately after such document has been tendered
for ?ling. Said practice also complies with Rule 1.10(b) of the Public Utilities
Commission of the State of California and all protocols described therein.

(BY US. MAIL) By placing such document(s) in a sealed envelope, addressed as set
forth on the Of?cial Service List, with postage thereon fully prepaid for ?rst-class mail,
for collection and mailing at Califomia?American Water Company, San Francisco,
California, following the ordinary business practice. I am readily familiar with the
practice of California-American Water Company for collection and processing of
correspondence for mailing with the United States Postal Service, said practice being that
in the ordinary course of business, correspondence is deposited in the United States
Postal Service the same day as it is placed for collection.

I declare under penalty of perjury under the laws of the State of California that the
foregoing is true and correct and that this declaration was executed on March 21, 2016, in San
Francisco, California.

Jawad Russell
Jawad Russell

CALIFORNIA PUBLIC UTILITIES COMMISSION

Service Lists

PROCEEDING: A1009018 - CALIFORNIA-AMERICAN
FILER: CALIFORNIA-AMERICAN WATER COMPANY

LIST NAME: LIST

LAST CHANGED: APRIL 15, 2014

 

Parties

FRANCES M. FARINA

DE LAY LAREDO

389 PRINCETON AVENUE

SANTA BARBARA, CA 93111-1637
FOR: MONTEREY PENINSULA WATER
MANAGEMENT DISTRICT

SELINA SHEK

CALIF PUBLIC UTILITIES COMMISSION
LEGAL DIVISION

ROOM 4107

505 VAN NESS AVENUE

SAN FRANCISCO, CA 94102-3214
FOR: DRA

STEVEN KASOWER

STRATEGIC ECONOMIC APPLICATIONS COMPANY

1720 STREET

SACRAMENTO, CA 95814-6717

FOR: PLANNING CONSERVATION LEAGUE
FOUNDATION

Informatjon only
DAVE STEPHENSON
CALIFORNIA AMERICAN WATER COMPANY
EMAIL ONLY

EMAIL ONLY, CA 00000

LARRY HAMPSON

MONTEREY PENINSULA WATER DIST.

EMAIL ONLY
EMAIL ONLY, CA 00000

SHIRLEY MCCALEBB

CALIFORNIA AMERICAN WATER COMPANY
EMAIL ONLY

EMAIL ONLY, CA 00000

ANTHONY J. CERASUOLO

CALIFORNIA AMERICAN WATER COMPANY
1033 200

SAN DIEGO, CA 92118

DAVID C. LAREDO

ATTORNEY

DE LAY LAREDO

606 FOREST AVENUE

PACIFIC GROVE, CA 93950-4221
FOR: MONTEREY PENINSULA WATER
MANAGEMENT DISTRICT

LORI ANNE DOLQUEIST, ESQ.

MANATT, PHELPS PHILLIPS, LLP

ONE EMBARCADERO CENTER, 30TH FLOOR
SAN FRANCISCO, CA 94111

FOR: CALIFORNIA-AMERICAN WATER

JEFFREY DANA

CALIFORNIA AMERICAN WATER COMPANY
EMAIL ONLY

EMAIL ONLY, CA 00000

MONICA NA

CALIFORNIA AMERICAN WATER COMPANY
EMAIL ONLY

EMAIL ONLY, CA 00000

STACEY FULTER

CALIFORNIA AMERICAN WATER COMPANY
EMAIL ONLY

EMAIL ONLY, CA 00000

ROBERT G. MACLEAN

PRESIDENT

CALIFORNIA AMERICAN WATER COMPANY
1033 AVENUE, SUITE 200
CORONADO, CA 92118

TIMOTHY J. MILLER, ESQ.

CORPORATE COUNSEL

CALIFORNIA AMERICAN WATER COMPANY
1033 B. AVENUE, SUITE 200
CORONADO, CA 92118

RON WEITZMAN
PRESIDENT

WATER PLUS

PO BOX 146
CARMEL, CA 93921

GLEN STRANSKY

HIDDEN HILLS SUBUNIT RATEPAYERS ASSC.
92 SADDLE ROAD

CARMEL VALLEY, CA 93924

ALEX J. LORCA

DE LAY LAREDO
606 FOREST AVENUE
PACIFIC GROVE, CA 93950
MICHAEL BOWHAY

MONTEREY PENINSULA COUNTRY CLUB
PO BOX 2090

PEBBLE BEACH, CA 93953-2090

MARGARET BAILES
CALIFORNIA-AMERICAN WATER COMPANY
333 HAYES STREET, STE. 202

SAN FRANCISCO, CA 94102

HILLARY CORRIGAN

CALIFORNIA ENERGY MARKETS

425 DIVISIDERO ST., STE. 303
SAN FRANCISCO, CA 94117-2242

S_tate Sgrvice

DIANA BROOKS

CALIF PUBLIC UTILITIES COMMISSION
COMMUNICATIONS AND WATER POLICY BRANCH
ROOM 4208

505 VAN NESS AVENUE

SAN FRANCISCO, CA 94102?3214

MAX GOMBERG

CALIF PUBLIC UTILITIES COMMISSION
WATER BRANCH

ROOM 4208

505 VAN NESS AVENUE
SAN FRANCISCO, CA 94102~3214
RAVI KUMRA

CALIF PUBLIC UTILITIES COMMISSION
WATER AND SEWER ADVISORY BRANCH
AREA 3-C

505 VAN NESS AVENUE

SAN FRANCISCO, CA 94102-3214

LLOYD W. LOWREY, JR.
NOLAND, HAMERLY, ETIENNE HOSS
PO BOX 2510

SALINAS, CA 93902-2510

BOB MCKENZIE
PO BOX 223542
CARMEL, CA 93922

DAVID STOLDT

GENERAL MANAGER

MONTEREY PENINSULA WATER DIST.
5 HARRIS COURT, BLDG. 

MONTEREY, CA 93940

HEIDI QUINN

DE LAY LAREDO

606 FOREST AVENUE
PACIFIC GROVE, CA 93950

JAVIER NARANJO
WATER COMPANY
333 HAYES ST., STE. 202

SAN FRANCISCO, CA 94102

SARAH E. LEEPER

ATTORNEY

CALIFORNIA AMERICAN WATER COMPANY
333 HAYES STREET, STE. 202

SAN FRANCISCO, CA 94102

JOYCE AMBROUSIUS

NATIONAL MARINE FISHERIES SERVICE
777 SONOMA AVENUE, ROOM 325

SANTA ROSA, CA 95404

LINDA BARRERA

CALIF PUBLIC UTILITIES COMMISSION
LEGAL DIVISION

ROOM 4107

505 VAN NESS AVENUE

SAN FRANCISCO, CA 94102-3214
FOR: ORA

PATRICK HOGLUND

CALIF PUBLIC UTILITIES COMMISSION
WATER BRANCH

ROOM 4208

505 VAN NESS AVENUE
SAN FRANCISCO, CA 94102?3214
RICHARD RAUSCHMEIER

CALIF PUBLIC UTILITIES COMMISSION
WATER BRANCH

ROOM 4209

505 VAN NESS AVENUE

SAN FRANCISCO, CA 94102-3214

RICHARD SMITH

CALIF PUBLIC UTILITIES COMMISSION
DIVISION OF ADMINISTRATIVE LAW JUDGES
ROOM 5005

505 VAN NESS AVENUE

SAN FRANCISCO, CA 94102-3214

TRISH CHAPMAN

STATE COASTAL CONSERVANCY
1330 BROADWAY, SUITE 1300
OAKLAND, CA 94612

STEPHEN ST. MARIE

CALIF PUBLIC UTILITIES COMMISSION
POLICY PLANNING DIVISION

ROOM 5119

505 VAN NESS AVENUE

SAN FRANCISCO, CA 94102-3214

D. ISAIAH LARSEN

CALIF PUBLIC UTILITIES COMMISSION
GAS SAFETY AND RELIABILITY BRANCH
180 Promenade Circle, Suite 115
Sacramento, CA 95834

 

U.S. Mail:

Mr. Timothy Sullivan, Executive Director
California Public Utilities Commission
505 Van Ness Ave

San Francisco, CA 94102

Email Addresses:

timothy.sullivan@cpuc.ca.gov
ffarina@cox.net

sel@cpuc.ca.gov
LDoIqueist@manatt.com
steve@seacom pa ny.org
dave.stephenson@amwater.com
jeffrey.dana@amwater.com

monica.na@amwater.com
shirley.mccalebb@amwater.com

ACerasuolo@amwater.com
robert.maclean@amwater.com

Ilowrey@nheh.com
ronweitzman@redshift.com
bobmac@qwest.net


alex@laredolaw.net


Javier.naranjo@amwater.com
margaret.bailes@amwater.com

sa rah.leeper@amwater.com
cem@newsdata.com
joyce.ambrosius@noaa.gov
dsb@cpuc.ca.gov
 b3@cpuc.ca.gov
mzx@cpuc.ca.gov
phh@cpuc.ca.gov
rkk@cpuc.ca.gov
rra@cpuc.ca.gov
rsl@cpuc.ca.gov
sst@cpuc.ca.gov
tchapman@scc.ca.gov
md7@cpuc.ca.gov

ATTACHMENT 11-A

Attachment 11-A

CARMEL RIVER REROUTE, SAN CLEMENTE DAM REMOVAL, AND

ENVIRONMENTAL RESTORATION

Invoices

Environmental invoices post-June 30, 2016
Sales use tax accrual

Overhead

Internal (direct labor, labor overhead)

Sub-total construction and interim dam safety measures
Contributed cost, paid directly to vendors
Interim dam safety measures

Total construction

Total authorized construction estimate per 0.12-06-040

Construction amount over authorized estimate

77,415,775
1,291,143
156,844
4,080,320
444,730
83,388,812
3,753,937
(3,147,355)
83,995,394

83,000,000

995,394

ATTACHMENT 12

 

CALIFORNIA

AMERICAN WATER
California American W/aier Company

WATER MAIN RENEWAL
USING TRENCHLESS
REHABILITATION
TECHNIQUES

Prqunw/ y: RBF Consulting,
a company of Michael Baker Corporation

9755 (ll-aircmom? Mesa Blvd. San Diego, CA 92124
858.614.5000 'l'elcphonc I 858.614.5300 I Fax

 



- A. .

California American Water Company

Water Main Renewal using Trenchless Rehabilitation Techniques

Table of Contents
1.0 Executive Summary .. 1
2.0 Trenchless Rehabilitation Techniques .. 2
3.0 Comparison to Open Trench Construction .. 5
4.0 Historical use of TR .. 9
5.0 Conclusion .. 9
Appendices

A. Renewal of Water Mains Using Trenchless Technologies, Presentation by East Bay
Municipal Utility District, North American Society of Trenchless Technology, 2013 No-
Dig Show, March 3-7, 2013.

B. Description of Trenchless Rehabilitation Techniques

 

Water Main Renewal using Trenchless Rehabilitation Techniques
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i
CEINEULTIHB

i .3- 

1.0 Executive Summary

1.1 Purpose

Increasingly, water utility managers, contractors, and engineers across the country look at a
typical open trench water main replacement project through an urbanized community and think
there should be a better way to reduce community impact, time, and if possible, cost. This
thought has led to the advancement of many trenchless solutions (techniques and materials) to
rehabilitate or replace existing water mains. This technical memorandum will evaluate the
various trenchless rehabilitation (TR) techniques used in the market today that are applicable to
pipes less than 24-inches in diameter and provide considerations for their effective use as an
alternative to open trench pipeline replacement.

1.2 Implementation Plan

California American Water (CAW) continues to be proactive when considering pipeline project
improvements and identifying opportunities to implement TR methods. CAW recognizes that TR
can reduce community impacts and can reduce pavement replacement costs when considering a
pipeline improvement project, and is developing a guideline for identifying TR opportunities for
future projects. This technical memo will assist in the evaluation of projects to determine if TR is
a good ?t for the speci?c circumstance. Many other utilities have explored TR with varying
degrees of success and the ?lessons learned? will be used to advance implementation
strategy and minimize the risk of implementing these rehabilitation methods for speci?c projects.
Additionally, national publications, such as the AWWA Manual of Practice No. 28.
Rehabilitation of Water Mains and AWWA Research Foundation, Prioritizing Water Main
Replacement and Rehabilitation will be referenced and used to assist with developing
speci?cations for construction.

 

1.3 Proposed CAW Projects

The proposed pipeline projects for the 2013General Rate Case (GRC) covering the years 2015
through 2017 are listed in Table 1. These projects cover all the CAW service districts within
California and as noted cover a wide range of size and complexity. The total proposed length of
pipelines that has been determined to be de?cient is just over 15 miles with an approximate
construction value of more than $14 million. Each project will be evaluated for rehabilitation
except where replacement will be required due to pipe age and service life or increasing pipe
capacity to meet new ?re ?ow requirements. TR may be appropriate for some of these
installations, particularly the larger projects where mobilization costs can be spread over a
greater quantity of pipe installation. As noted in some of the pilot projects listed in Appendix A,
TR applications have realized savings over open trench construction. However, there is certainly
no guarantee that savings will be achieved on each and every pipeline project. At a minimum,
CAW will consider the potential use of TR on these future CAW projects.

 

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Table 1
CAW Water Main Replacement Projects (2015-2017)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Length of Poterigzl for
PrOJect Description Piggtline Rehabilitation Comments
(YIN)
1200' of main Rolling Oaks 1 200 New project to connect the systems and
LP ensure reliability.
Replace 1,400 Ft of 10" 1 400 Potential because the main traverses a
Main to Las Posas Tanks canyon with questionable geology
Londonberry Drive Creek 100 Bore and Jack to route pipe under the
Crossing creek
Monterey Main 20 000 Pipelines with high failure rate as evident
Replacement Program by leak and break records.
. Pipe will likely be built within the bridge
Enl?a??irta Road Br'dge water 280 structure or hung from the side based on
bridge design.
. The crossing under Rte 50 needs to be
 Rte 50 P'pe 450 upsized to address a hydraulic capacity
de?ciency
Isleton Levee Pipe 285 This pipe is located within a levee which
Relocation needs to be relocated.
This purpose of this program is to identify
Sacramento Main pipes with hydraulic or other issues and
Improvement Program determine the best method for improving
the water system.
Qg?rcgemi?kyard Mam 1,000 Pipe needs to be relocated to road ROW
Replace 52,000 Ft of 16" This project will involve exploring
Main- the Strand 52,000 alternate pipeline installation
(Coronado) methodologies.
Replace 2,450 Ft of 18" 2 450 Structural integrity of main does not
Main in Elm Avenue permit rehabilitation
Replace 500 Ft of 20? 500 Structural integrity of main does not
Main in Palm Avenue permit rehabilitation
Small Main Replacement Various Structural integrity of main does not
Program permit rehabilitation
Replace Mains in Los Various Structural integrity of main does not
Angeles permit rehabilitation
Total Pipeline Length (ft) 80,865

 

 

 

 

 

Note - of the approximate 15 miles of water main identi?ed in 2013 GRC, the majority
will be considered for TR.

2.0 Trenchless Rehabilitation Techniques

In recent years, there have been great advances in the technologies, methods and materials
available for TR of water mains. Trenchless pipe rehabilitation can be utilized to upsize existing
facilities, replace existing facilities or spot repair facilities. Due to the congestion of
underground utilities, aging infrastructure, environmental restrictions, public safety concerns,

 

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2 A a Company

community impacts and cost, trenchless rehabilitation methods are being considered for many
projects as an alternative to open trench pipeline replacement. TR is a generic term that covers a
wide range of installation techniques and in its basic de?nition means a new conveyance pipe is
installed primarily using trenchless techniques and requires minimal open trench excavation.

Depending on the speci?c application, TR can be a faster, less disruptive and more cost effective
solution. It is important to understand the project objective, unique site limitations and to
identify the appropriate design criteria based on all known factors. It should be noted that other
agencies are looking at TR to create a triple win-win-win situation of lower project cost, reduced
construction timeline, and less community/environmental disturbance. Presentations of similar
TR case studies have been included in the appendices to demonstrate the varied success of TR in
real world applications.

TR methods for water main rehabilitation can be divided into two basic categories: 1)
rehabilitation of the existing pipe or pipe pathway and 2) new pipe installation in a new path. A
listing of the common TR techniques under each category is shown below in Table 2.

 

 

 

 

 

Table 2
Trenchless Rehabilitation Categories
Rehabilitation of Existing Pipe New Pipe Installation
Sliplining Horizontal Directional Drilling (HDD)
Pipe Bursting
Swagelining
Fold?N-Form

 

Cured-in-Place Pipe

 

Polymeric Lining

 

 

 

 

Cement Mortar Lining

 

A description of each technique and a summary of their selection criteria are included in
Appendix B.

The basic de?nition and description of sliplining for water mains is the process of pushing or
pulling a new pipeline inside of an existing pipeline. This process involves opening a pit at each
end of the pipe section to be rehabilitated and cutting out a section of the existing pipe from each
pit. The existing pipe must be out of service during the sliplining process. The de?ning
characteristic of the sliplining technique is the sliplined pipe (carrier pipe) OD must be less than
the ID of the existing pipe (host pipe). The new pipe may result in less capacity than the existing
pipe, so adequacy must be checked through hydraulic analysis. The annular space between the
OD of the new pipe and ID of the existing pipe is typically ?lled with cellular grout, blow sand
or similar material. The joints of the new pipe must be ?ush or nearly ?ush and seamless. Any
curves and offsets (horizontal and vertical) within the existing pipe alignment must be evaluated
to determine if sliplining is a feasible solution.

Variations of sliplining include close ?t techniques: swagelining, fold-n-form lining and cured-
in-place pipe lining. All sliplining techniques can provide a structural replacement of the existing

 

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pipe within the same pipeline alignment. Sprayed-on linings such as polymeric and cement
mortar, only provide a new corrosion resistant interior liner and the existing pipe must be
structurally sound. Pipe bursting uses the same pathway but essentially discards the original pipe
as a new pipe is pulled through. It can be argued that pipe bursting is a new pipe installation as

opposed to a rehabilitation technique.

Horizontal directional drilling (HDD) installations are parallel installations installed with fusible
plastic pipe, either high density polyethylene (HDPE) or polyvinyl chloride (PVC). HDD
technique is used to drill a pilot bore along the desired horizontal and vertical alignment and then
the new pipe is pulled back through the enlarged pilot hole into place.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pipe has
structural problems
l?
Renovation would Renovation would
not preserve preserve structural
structural interity integrity of pipe
of pipe


I 
Renovated pipe Renovated plpe i Renovated plpe Renovated pipe
would give would give would give would give
adequate inadequate Inadequate adequate
hydraulic hydraulic hydraulic hydraulic
performance perfmmanco performance performance

I l? i 

Many connectiona??
Easy excavation!
restoration?

Many connections?
Easy excavation!
restoration?

 

 

 

 

 

 

Many connections?
Easy excavation:f
restoration?

 

 

 

Many connection 5?
Easy excavatlon/
restoration?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Low social Low soclal Low social Low social
disrupllon? disruption? disruption? disruptionall
Filo] me) are} ewe) FttC) are} mean
Lt-t) 


 

 

 

 

 

FRO) Replacement (conventional or boring/directional drilling)
(pipe bursting)
(slip-lining)

(semislructural?Claes 



(str uctural?Clase IV)

Ref A WWA Manual of Practice No. 28, Rehabilitation of Water Mains

Figure Structural Rehabilitation Technique Decision Flowchart

 

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macaw

The decision methodology to choose between conventional open trench pipe replacement and the
various TR techniques is diverse as shown below in Figure 1. Engineering elements, such as
hydraulic capacity, pipeline structural condition, soil parameters, and depth of installation, and
physical conditions, such as location of valves, branch lines and service connections and social
elements, such as traf?c, existing site improvements, and public safety must be factored into the
decision matrix to select the appropriate techniques for a project. Some projects may be
appropriate for multiple techniques and the bid strategy would then have the Contractor?s
provide alternate pricing to help determine the most cost ef?cient technique. In addition to cost,
service life of the TR technique should also be a factor in the decision.

3.0 Comparison to Open Trench Construction

The TR alternatives mentioned above provide a wide range of tools to meet most pipeline
improvement projects. The decision to utilize a TR technique versus conventional open trench
pipeline replacement involves understanding the bene?ts of each technique and their associated
limitations. Open trench construction provides a new pipeline either as a replace-in-place option
or parallel option. The bene?ts of the open trench option are:

a Ability to design the pipe to meet speci?c hydraulic, working pressure and
live/soil loading conditions.

0 Flexibility to meet branch line and service connections to include easy conversion
of services to the new line to avoid the need for loss of service or temporary
services

0 Provide complete system renovation within a speci?c street

0 Access to the entire installation to remedy defects

1- Achieve enhanced competitive bidding due the large number of pipeline
contractors and material suppliers
Direct examination of adjacent utility structures and soils
Based on historic pipe ages, the longest predictable pipe life.

Conversely, open trench construction results in extensive surface disruption that can create
severe impacts to environmentally sensitive areas, high traf?c roadways or high value
community areas. Such disruption causes project delays to secure permit approvals and increases
project cost to mitigate such impacts. Open trench construction also is often constrained by the
proximity of existing structures and the associated risk of excavating in these locations. These
situations have led to the advancement of TR as an acceptable option.

When deciding between open trench replacement and a TR technique, the designer must evaluate
the following design and risk factors

Design/Risk Factor N0. 1 Hydraulic conveyance capacity needed and allowable pressure
loss due to reduced pipe diameter

Current and future ?ow requirements must be evaluated to determine if upsizing is required
and/or if reduced diameter after sliplining is suf?cient to convey the desired ?ow without

 

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excessive pressure loss. The reduced sliplined diameter may improve the hydraulic conveyance
capacity in a particular situation due to improved friction loss coef?cients from the removal of
tuberculation inside the iron pipe to be replaced. However, in most cases, sliplining?s reduced
diameter increases the system?s pressure loss which may impact long-term pumping and energy
costs and change distribution zone pressures. Current water demand for land use regulations and
?re code compliance must also be considered with this factor.

Design/Risk Factor No. 2 Size of Project

Due to mobilization of specialty equipment, TR is more ef?cient on larger projects where the
quantity of pipe is over about one mile. Projects with less than this amount, TR solutions are
dif?cult to be cost competitive with open trench construction due to number of open trench
contractors, ability to store standard pipeline materials and ease of equipment and material
mobilization,

Design/Risk Factor No. 3 - Number of services and branch lines to be encountered

Under open trench replacement, typically new service laterals are replaced to the meter box and
branch lines are re-connected beyond the limits of the roadway to provide a complete renovation
of the distribution system within a particular street. Under some TR options, all existing service
connections and branch lines must be excavated and re-connected to the new carrier pipe. This
causes signi?cant surface disruption if there are many connections and branch lines on the
pipeline. Non-structural linings (cement and polymeric) may not require restoration. CIPP
rehabilitation can re-establish service and branch line connections from inside the pipe but this
method leaves the original service lateral pipe in place and can be a risk factor in the future.
Consideration must be given to how the hydrant laterals, service connections and branch lines
will be re-connected, the number of such lines on the subject pipeline, and the importance of
renovating the entire water system within a street under one project.

Design/Risk Factor No. 4 Location of existing isolation valves, air valves, hydrants and
blow-off assemblies

Such appurtenances should be considered for replacement under both the open trench and TR
options to provide a complete system renovation. Excavation maybe required to complete this
work. It is important to note where these appurtenances are located, identify associated impacts
and remind constituents that even some trenching is required under so-called ?trenchless?
solutions.

Design/Risk Factor No. 5 - Location of access man-ways

Access man-ways are typically provided on larger diameter pipelines (greater than TR
through these points is feasible but follow on work is needed to restore their function. There may
also be some need to access points for future monitoring (acoustics or pressure) that will require
excavation.

 

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Design/Risk Factor No. 6 - Ability to take pipeline out of service for an extend period of
time

In-place TR requires the existing host pipe to be taken out of service during the rehabilitation
process. Coordination with the Operations staff is needed to determine the maximum allowable
downtime to complete the work. If the existing pipeline cannot be taken out of service for an
extended period of time, then highlining1 around the subject pipeline may be required or open
trench construction or TR installation of a parallel pipeline is needed.

Design/Risk Factor No. 7 - Existing horizontal and vertical alignment of the host pipe

TR around existing horizontal and vertical ?ttings is problematic for conventional sliplining
techniques; some reduced diameter options can navigate through 11-1/4? bends but are stymied
by larger de?ections. Lining techniques can traverse bends up to Access pits are then
required at locations that cannot be navigated. If the number of access pits becomes too great, the
bene?t of a trenchless option is diminished.

Accurate record drawings are needed to evaluate this design/risk factor or as an alternative, the
pipeline can be pre-inspected with a robotic CCTV camera. This process is time consuming and
expensive as access pits must be provided for the camera equipment, which in turn, may trigger
environmental permitting and/0r traf?c control permitting. Without accurate information of the
existing pipeline, the risk of failure with the TR process is increased due to the probability of
unforeseen conditions.

Design/Risk Factor No. 8 - Construction impact to surrounding buildings, businesses or
facility operations

Open trench construction requires surface disruption which may impact surrounding buildings,
access to businesses and residents and facility operations. Trench plating can usually mitigate
access impacts and the trenching and back?lling operation usually moves forward 200?-300? per
day so the impact duration is not excessive. Access pits for TR operations will remain until the
rehabilitation section is completed. Prudent planning of these locations is needed to avoid long-
terrn impacts

Design/Risk Factor No. 9 - Construction Impact area that will disturb high value
environmental, cultural or social features or highway and railway crossings

TR provides a tremendous advantage over open trench construction in these situations, especially
for large diameter transmission mains where no service connections, branch lines or
appurtenances are located. Proposing to disturb high value habitat, important cultural or social
features or critical infrastructure assets using open trench construction will trigger extensive
permitting through a number of regulatory agencies and cost the project a signi?cant amount of
time and money. Control of the project is lost to the regulatory process. The best practicable

 

I Highlining involves the placement of a second temporary water main, typically installed in the street cutter to
provide temporary water service to existing customers.

 

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trenchless option or open trench option that avoids such areas will be requested by the regulatory
agencies.
Design/Risk Factor N0. 10 Availability of skilled workforce to perform the work

TR is a developing market and the availability of skilled technicians and experienced contractors
is continuing to expand for all TR techniques. The project location and history of successfully
completed rehabilitation projects in the general vicinity should be considered. Pre-quali?cation
of bidders should be considered to determine the interest and availability of experienced
contractors.

Design/Risk Factor No. 11 - Ability to maintain quality control and affect remedial repairs

Quality control during the completion of TR operations is challenging to observe and document.
Speci?c performance standards and test samples must be speci?ed to demonstrate satisfactory
installation procedures and uniform application results. CCTV inspection should be performed at
appropriate time and especially following the installation to demonstrate success. The issue is
correcting defects or repairing a leaky joint. Depending on the TR method and the pipe size,
remedial repairs may be dif?cult to perform without excavation. Understanding this risk factor is
important when selecting the TR technique.

Design/Risk Factor No. 12 Life Cycle cost.

In many instances, the TR option provides the lowest initial project cost and should be
considered for applications with a minimal number of service and branch line connections,
isolation valves, appurtenances, and horizontal and vertical bends that can be taken out of service
for an extended period of time. It is important to recognize the total renovation cost of the system
and complete a whole street renovation when the construction crews are present. Many TR
solutions extend the life of the existing pipe but not for the same length of time as a new pipe
replacement. An analysis should examine the life cycle cost.

Design/Risk Factor N0. 13 Operation and Maintenance with the TR pipe

Related to the life cycle costs are the future issues working with the rehabilitated pipe. American
Water is very reluctant to use close ?t and conventional sliplining because of future issues
involving connections and leaks. If a new connection is required, the host pipe would have to be
carefully cut away to access the TR pipe. If the TR pipe has a leak, the host pipe may be
suf?ciently intact to prevent detection of the leak and may carry the leaking water some distance
from where the actual problem is located.

Design/Risk Factor o. 14 - Trenchless pipe replacement
In addition to sliplining rehabilitation and open trench construction, the third option to consider

is trenchless replacement, using such techniques as horizontal directional drilling (HDD),
microtunneling, bore and jack or pipe ramming and/or conventional tunneling. For the purposes

 

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of this technical memo and the reference to TR on pipelines less than 24-inches in diameter,
HDD should be considered as an alternate to open trench construction.
Information obtained from the supplier of fusible PVC pipe indicates that over 3,000 HDD
installations have been completed in North America in the past 10 years. Likely a similar number
of installations using HDPE pipe have been completed as well.

For longer pipe replacement projects with minimal branch lines and service connections, HDD
has proven to be a cost effective replacement solution.

4.0 Historical use ofTR

In the past, CAW has identi?ed opportunities to utilize TR techniques to improve its water
supply network. Based on an evaluation of the design/risk factors, the majority of the projects
completed by the CAW fell into the following categories.

1. Small replacement projects, less than one mile of pipe, which means TR is generally
not a cost-effective alternative.

2. Large replacement projects, greater than one mile, requiring pipe diameter upsizing
to meet future projected water demands and current ?re code requirements.

Emergency projects needed to immediately ?x main breaks and leaks

4. Limited as-built record drawings of acquired systems which creates high risk for
unforeseen conditions.

5. Pipelines under consideration are typically 6-inch, 8-inch, and 12-inch diameters
which cannot easily sustain loss of diameter and still meet hydraulic conveyance
requirements. CIPP could be a good sliplining option for these smaller diameters, if
other design/risk factors are met.

5.0 Conclusion

CAW continually evaluates pipeline projects for consideration of TR methods and understands
that, in many situations, TR is a viable alternative to open trench construction. For the projects
in the 2013 GRC, CAW will continue to focus its direction to consider TR as another tool in the
design team?s tool box and will compare it with open trench construction where speci?c site and
operating conditions warrant its consideration. Once an analysis of the project is performed to
understand the design criteria and risk factors, the appropriate construction methodology will be
selected on a case by case basis.

 

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APPENDIX A

Renewal of Water Mains Using Trenchless Technologies, Presentation by East Bay Municipal
Utility District, North American Society of Trenchless Technology, 2013 No-Dig Show, March
3-7, 2013.

Return to Index Search

North American Society for Trenchless Technology (NASTT)
2013 No-Dig Show

   

Sacramento, California
March 3-7. 2013

MM-T1-03

Renewal of Water Mains Using Trenchless Technologies

Marisa Boyce, East Bay Municipal Utility District, Oakland, CA
Serge Terentieff, East Bay Municipal Utility District, Oakland, CA

ABSTRACT: East Bay Municipal Utility District (District) recently completed a $4 million Trenchless
Technology Pilot Program. This paper addresses issues with which many water utilities struggle: limited resources
and increasing costs of their infrastructure renewal programs. As part of this pilot, the District completed seven
pipeline replacements using horizontal directional drilling (HDD), and eight using pipe bursting, totaling over three
miles.

Pilot projects replaced mains using hi gh?density polyethylene (HDPE) and fusible polyvinyl chloride (FPVC) pipes,
including 1.7 miles using HDD and 1.3 miles using pipe bursting. The District completed Pipe bursting projects in
two phases, with the ?rst phase consisting of replacing 6- and 8-inch Cast Iron (CI) mains with equivalent size
pipes, and the second phase consisting of upsizing CI pipes from 4- to 6 inches and ??om 6- to 8-inches.

Through the successful completion of these pilot projects, it was demonstrated that HDD and pipe bursting can often
be less costly and result in fewer community impacts than open trench installations. This paper covers ?lessons
learned? during the pilot, including limitations of these technologies, and how the District plans to use HDD on a
wider scale as part of its ongoing pipeline renewal program. While trenchless technologies cannot replace open
trench, they can be a viable alternative for the routine replacement of water mains in paved streets.

1 . INTRODUCTION

The East Bay Municipal Utility District (District) supplies water to approximately 1.4 million people in a 325-square
mile area that extends from Crockett to the north, Hayward to the south, Walnut Creek to the east, and southeast
through San Ramon. The water distribution system includes 122 pressure zones, composed of over 4,100 miles of
distribution pipelines, 150 pumping plants, and 176 storage reservoirs.

In recent years, the cost of the District?s pipeline replacement projects has increased signi?cantly. This rise in cost is
primarily due to increases in material costs and more restrictive permit conditions, such as increases in paving
restoration and traffic control requirements that are often required by permitting agencies to minimize community
disruptions. Higher replacement costs have resulted in a reduction in the District?s rate of replacements and have put
a strain on the District?s Capital Improvement Program budget. Results of District studies and predictive models
indicate that to continue to maintain a stable leak rate, the District will eventually need to increase its pipeline
replacement rate from approximately 8 miles per year (current rate) to approximately 20 miles or more per year.
Given the challenges of managing its aging in?astructure in an era of limited public works funding, the District in
2007 started a Trenchless Technology Pilot Program to evaluate more economical pipe installation methods. The
purpose of this program was to investigate other installation options to help reduce unit costs and improve ef?ciency
of installation, with the ultimate goal of increasing the District?s pipeline replacement rate.

The District?s current practice is to install most of its new pipelines using primarily welded steel or polyvinyl

chloride (PVC) pipe materials, using conventional open trench methods. This report explains how the pilot program
was developed and compares the advantages, disadvantages, and costs of HDD and pipe bursting versus

Paper MM-T1-03 - 1

25 of 69

Return to Index Search

conventional open trench methods for the routine replacement of 6 and 8-inch water mains. This paper also
discusses the District?s new guidelines and methods used to decide which pipelines are good candidates for
replacement using trenchless technologies.

2. EBMUD PIPELINE INVENTORY, LEAK RATES, AND REPLACEMENT NEEDS

About 80 percent of the District?s distribution system consists of 6, 8, or 12-inch diameter pipelines, located mostly
in paved streets and with cover depths typically ranging ?om approximately 36 to 42 inches. The remaining 20
percent consists primarily of pipes with diameters ranging ??om 16- to 48-inch. As shown on Figure 1, these pipes
are comprised of four primary material types: steel, PVC, cast iron (CI), and asbestos-cement (AC). Some of the
pipe in the system is over 90 years old with an average age of approximately 53 years. The average ages for the four
primary pipe materials are 76 years for CI, 39 years for steel, 46 years for AC, and 19 years for PVC.

The AC and CI pipelines make up the highest percentages of pipe material in the system at 28% and 35%
respectively and represent some of the oldest pipe. CI, AC and PVC dominate the smaller size pipe with 86 percent
of the mileage of pipe having diameters less than or equal to 8 inches. Steel dominates the larger size pipe by
constituting 82 percent of the mileage of pipe having diameters greater than 8 inches.

 

Pipe +Steei Pipe M'les of P'pe

 

 

 

 

 

Pipe Pipe Steel

 

 

 

 

ICI


Decade Installed

 

Figure 1. EBMUD Pipe Inventory

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The District currently installs
primarily steel and WC material  All Pipe Repair Rates Per Year Per 100 Miles
for both its new and replacement (M ap A7)

pipelines. PVC pipe installations
started in the 19805, and replaced
AC pipe as an alternate to steel

pipe.

 

  
     

 

CI pipes, virtually all of which the i:
District installed prior t01960, are 
currently responsible for 74 ?hi? .
percent of the District?s average Berkeley?i
leaks. Older parts of the District?s 2:11 
I 
a

distribution system, which have
Oakland

 

 

 

 

 

 

 

higher concentrations of CI pipe
and, therefore higher leak rates,
are shown in red on Figure 2.

 

 

 

A majority of the remaining leaks,
approximately 17 percent, occur
in AC pipe. Pipes having
diameters less than 12 inches
constitute 92 percent of the leaks.

The District?s pipeline

 

 

 

 

 

replacement program primarily .
focuses on the replacement of 6- All Pipe Repair Rateal Year Par 100 Miles
and 8_inch  pipesl Results Ufa (Repair Ratasipipa Repairsl Pipe 
. . 2
recent study, however, 1ndlcate 2_ if!?
that the District?s AC pipes may 11-21 
need replacing at a signi?cantly - \/fi 1' 
hlgher rate to prevent a future 

 

 

increase in AC leak rate.
Figure 2. Normalized Distribution of Yearly Leak Rate for Service Area

3. RE-EVALUATING STANDARDS AND REPLACEMENT TECHNOLOGIES

The District based its historical use of open trench construction methods in part on:
0 the limited choice of standard pipe materials, namely welded steel and jointed PVC pipe, and
the perception that trenchless technologies were not well suited for the replacement of relatively shallow
water mains in paved streets.
Historically, the primary use of trenchless installations is for the replacement of sewer lines, which do not have the
same outage constraints and are typically deeper than water mains, where potential for ground heave associated with
the use of HDD or pipe bursting is less of a risk.

Traditionally, the District limited its use of HDD and pipe bursting for specialized applications such as replacement
of mains located in steep or narrow right-of?ways, or mains crossing highways, railroads, or rivers, where open-
trench installations are not feasible. However, in recent years, the development of new pressure pipe materials such
as ?lsible PVC (F PVC), and the availability of additional high-density polyethylene (HDPE) ?ttings and mechanical
repair methods have made the use of trenchless technologies for the installation of water mains more practical.
These fusible materials, in combination with more stringent permit conditions such as increased traffic control and
more extensive pavement restoration, have made the use of trenchless technologies more attractive not just for
specialized applications, but also for the routine replacement of water mains in paved streets.

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As part of an overall effort to reduce the unit costs of its main replacement program, the District developed a
Trenchless Technology Pilot Program, which required new design guidelines, details, and speci?cations on the use
of trenchless technologies. The District modi?ed design standards to incorporate the use of FPVC and HDPE pipe
materials, in addition to steel and jointed PVC, developed new standard drawings, details, and speci?cations to
allow the use of these materials for trenchless installations, and increased its standard cover depth ?om
approximately 3 to 4 feet for HDD installations, to reduce the risk for ground heave and frac?outs.

The District also performed an evaluation to estimate the number of locations where the use of trenchless
installations would be feasible for the routine replacement of water mains on a wider scale. A Geographical
Information System (GIS) analysis was performed to identify where favorable soil types (clayey soil) and slopes 
5 percent) are located within the District?s service area. The results of this GIS analysis indicate that of all the
District water mains that qualify for replacement under its program, approximately 40 percent fall within areas
where trenchless installations may be a viable alternative (see highlighted areas on Figure 3). This result indicates
that it may be feasible to design approximately 3 miles of replacement projects per year for installations using
trenchless technologies, out of the current replacement rate of 8 miles per year. A step-by-step guideline was
developed to streamline the HDD selection process during the design phase of a project, as discussed in more detail
below.

4. PILOT PROGRAM

As discussed above, the District initiated the Trenchless Technology Pilot Program to investigate cost-effective
alternatives to upgrading its pipeline distribution system. The primary goal of the pilot program was to evaluate the
use and suitability of trenchless technologies as an alternative to open trench, in an effort to reduce construction
costs. Other goals were to evaluate the use of trenchless construction as a way to reduce environmental impacts
paving, carbon footprint), community affects dust, noise, traf?c), and to assess the use of ?Jsible pipe
materials required for trenchless installations, such as FPVC and HDPE. The pilot program focused on the
replacement of 6- and 8-inch mains in paved streets, which represents the bulk (~75 percent) of the distribution
system and pipeline replacement candidates.

Program Description, Findings, and Recommendations

Table 1 lists the 15 projects included in the pilot program and the reasons behind their selection. Figure 3 shows the
approximate locations of the pilot projects. The District completed these projects in the following two phases:

I Phase 1 HDD: District crews completed the ?rst phase in May 2009, which included seven projects. District
crews, with the exception of actual HDD operation and pipe pull, performed all of the work.

 

0 Phase 2, Pipe Bursting: Due to concerns over ground heave, the District used contractors to implement this
second phase, completed in September 2011 and included eight projects.

The District used both FPVC and HDPE pipe materials for the pilot. The District evaluated the use of HDD for the
?rst phase of the pilot program because it allows the existing water main to remain in service while installing the
replacement main, similar to the District?s typical open trench installations. The District evaluated pipe bursting as
the second phase of its pilot, due to concerns over ground heave and because it requires installation of a temporary
aboveground main, to maintain uninterrupted water service to customers.

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BMAP GRID

BMAP 7 HDD PROJECT
BMAP - BURST PRO-.ECT

TR NCH LES FAVORABLE

MUD

TRENCHLESS TENCHNOLOGIES wasme

BMAP EVALUATION

- WMER

I 2 4 MIIES


Figure 3. Favorable Trenchless Installation Areas

Paper - 5



wfa

FIGURE

POTENTIAL BMAP
HDD AND PIPE
BU RSTING AREAS

JAN UARY 201 2

 

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Table 1. Summary of Trenchless Pilot Projects

 

Project Description Reasons Behind Selection

Phase I HDD

 

 

1 Diablo Drive, Oakland 300? 6? HDPE Minimize paving repairs, one service, bedrock

 

2 Marina Boulevard, San 1,275? 8? HDPE Stringent pavement replacement conditions by City lane

 

 

 

Leandro paving), relatively few services

3 O?Connor Drive, 1,030? 8? HDPE Minimize paving repairs, relatively few services
Lafayette

4 19th Street, San Pablo 1,380 8? HDPE Limited services because school on one side of street

5 Thornton Street, San 490? 8? HDPE Straight alignment, stringent pavement conditions
Leandro

 

6 Grayson Road, Pleasant 226? 8? HDPE Crossing of busy, 4-lane intersection (Taylor Blvd)

 

 

 

Hill
7 Hampton Road, 4,300? 8? FPVC Straight alignment, 6? cover due to roadway cuts and sewer
Hayward laterals
Phase 2 Pipe Bursting
1 Las Aromas, Orinda 510? 10? HDPE Narrow 10? steep side yard fences paths, no services

 

2 Calvert Court, Oakland 920? 8? HDPE Steep w/dif?cult access, two services, heavily vegetated

 

 

canyon
3 Pershing Drive, San 565? 6? FPVC No services, stringent paving conditions (full lane for open cut)
Leandro
4 Hidden Valley Road, 670? 8? HDPE Limited number of services, high PCI index T-cuts
Lafayette required)

 

5 Curtis Street, Berkeley 1,235? 6? FPVC Limited services due to school on one side of street

 

6 Burkhart Avenue, San 535? 8? FPVC Stringent pavement conditions, upsize of 6? CI pipe

 

 

 

 

 

 

 

 

Leandro
7 Gaynor Avenue, 1,240? 6? FPVC Linear alignment, replacement of 4? CI pipe (upsize)
Richmond
8 Grayson Road, Pleasant 985? 8? HDPE Major arterial with high traffic upsize of 6? CI pipe
Hill
Phase 1 HDD

As summarized in Table 1, the District completed seven HDD
pilot projects in phase 1. Figure 4 is an example of one of the
HDD pilot projects. Typically, the HDD projects were drilled
intersection to intersection, strategically locating pits at
interconnection points.

Upon completion of the ?rst four projects, the District compared
HDD projects with similar open trench ?partner? projects. The
District completed a triple bottom line analysis to consider the
?nancial, environmental, and social/community factors of HDD
versus open cut. Results of this analysis indicated that HDD

 

Figure 4. HDD Installation on Marina Blvd, San Leandro

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projects, on average, have a unit cost that is approximately 20 percent lower than their open-trench ?partner?
projects under certain site conditions. The District based this cost analysis on the pilot projects which is a relatively
small sampling of projects, and costs may vary signi?cantly depending on actual site conditions. The environmental
and social factors community impacts) were less for HDD than for open trench construction.

In addition to the triple bottom line analysis, the District compared the productivity of HDD projects to similar open
trench projects. The results of this analysis indicate that HDD projects have similar production rates as open trench
projects. However, when factoring in paving durations, HDD is more productive (requires less time) than open
trench installations.

Given the estimated average cost savings of 20 percent associated with HDD projects, the District originally
anticipated that production rates for HDD projects would be signi?cantly higher than open trench. However, the
District attributes this apparent discrepancy is to the fact that, even with similar production rates and therefore
similar labor costs, the overall construction cost for HDD projects is lower because of signi?cantly lower excavation
and pavement restoration quantities associated with trenchless projects. Excavation, back?ll, and paving costs (and
therefore materials and trucking costs) account for a signi?cant portion of the total construction cost of open trench
projects, and HDD projects require only a fraction of the excavation/back?ll/pavement quantities.

In summary, the District estimates that production rates and cost savings associated with the use of HDD will
improve ?irther over time, making HDD both faster and less costly than open trench under certain site conditions.

Other advantages of HDD include minimal spoils, ground disturbance, site maintenance and clean up, surface
distribution, and reduced construction time and impacts. Challenges or disadvantages associated with HDD include
utility location being more critical, drilling ?uid disposal, specialized crews and equipment required, and pipe
material limitations. However, the District could overcome these challenges, particularly in light of the cost bene?ts.
Based on the results of the pilot projects, other challenges include potential for ground heaving/frac-outs under
certain soil/roadway conditions, and the increased cover depth that is required to avoid existing utilities and reduce
potential for heave and frac-outs about 4 feet instead of 3 for open trench), which may result in higher future
maintenance costs.

Despite these challenges and disadvantages, the District?s pilot demonstrated that HDD offers many bene?ts and can
be economically advantageous. Based on the initial results of the pilot, PHDD proved to be a feasible alternative to
open trench for the routine replacement of water mains even in paved streets. As discussed above, optimal
conditions for HDD include sites with clayey soil, gentle grades slope), streets with relatively few existing
utilities, and relatively straight horizontal and vertical alignments.

Phase 2 Pipe Bursting

The District implemented its pipe bursting pilot projects in two separate phases, Phase 2A and 2B, because of the
higher risk of ground heave associated with the upsizing projects in Phase 2B. Phase 2A included three size-on-size
replacements of 6- and 8-inch cast iron mains. Phase 2B consisted of upsizing one 4-inch cast iron main to a 6-inch
main, and two 6-inch cast iron mains to 8?inch diameter mains (Figure 5).

The District selected the ?rst two pipe bursting projects listed in Table 1 because of limited site access hand
excavation), where the use of conventional open trench methods would result in prohibitive costs. These two
projects represent site conditions ideally suited for pipe bursting no other feasible options, right-of-ways that
eliminate concerns about ground heave, and few to no services). The three size-on-size replacements under Phase
2A of the Pilot Program did not result in ground heave and proved to be viable applications of pipe bursting in paved
streets. Two of the three upsize replacements under Phase 2B of the Pilot Program resulted in some minor pavement
cracking, in limited sections where the existing mains had cover depths ranging between 29 to 35-inches.

Since pipe bursting requires using the alignment of the existing pipeline, some preliminary work is required prior to
bursting the pipe. A major step is the set-up and transfer of services to a temporary, aboveground line (Figure 6) so

customers continue to receive the same level of service during the construction of the project. The temporary line
set-up is time intensive, requiring a long lead-time to install, transfer services, and bring the temporary main into

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service after water quality testing. The temporary by?pass line is typically set up in the gutter, which results in some
impacts to street parking and customer?s driveway access for the duration of the project.

For the pipe-burstin pilot, the District selected water main segments between valves to limit customer outages and
easily isolate the burst section. However, since the water mains being burst were cast iron with leaded joints, the
projects required the construction of reverse anchors (Figure 7) to resist in-line thrust on the existing valves prior to
removing a section of the main to be burst. The construction of the anchors represents additional work required prior
to the bursting process, also adding to the cost and project duration. In situations where valve spacing would result
in too signi?cant of an outage, installation of new valves were required, which also added to the cost/duration of the
set-up process.


i? .

  

        

- .
Figure 5. Pipe bursting of District cast iron Figure 6. Temporary Figure 7_ Valve anchor
water main. by_pass line.

Despite these challenges/limitations, a cost analysis indicates that pipe bursting is cost competitive with open trench,
under certain site conditions, for the replacement of water mains in paved streets, and resulted in a signi?cant cost
savings in right-of-ways with dif?cult access conditions.

The pilot results concluded that ideal pipe bursting projects include those in steep right-of-ways with limited access,
and size-on-size pipe replacements projects located in paved streets with no services cast iron mains where
potential for ground heave due to shallow cover is low and where there is no need for a temporary line).

Comparison of HDD with Pine Bursting and Recommendations for Implementation

To compare both of these trenchless technologies, the District conducted several workshops with intemal
stakeholders to develop options for the long?term implementation of trenchless technologies. Based on these
workshops and results of the pilot projects discussed above, the District decided to focus on the use of HDD as its
main alternative installation method for the replacement of mains in paved streets. The District will still consider
pipe bursting on a case-by-case basis, particularly for the replacement of mains in inaccessible right of ways, and for
size-on-size replacements of 6- or 8-inch cast iron mains with few or no services. The District based its decision to
focus on this technology on the following comparison between HDD and pipe bursting:

HDD installation is more similar to open trench, in that it includes a new parallel pipeline.

HDD and pipe bursting installations have similar excavation areas.

Pipe bursting typically requires a more extensive set-up process, including an above-grade temporary bypass
line that adds to the project construction duration and community impacts.

Regulations restrict the pipe bursting of AC pipe.

- While all of the HDD pilot projects were successful, some of the Phase ZB pipe-bursting pilot projects had
mixed results, with some pavement cracking observed on the upsizing pilot projects where the cover depth was
36-inches or less. Since most of the District?s main replacements require upsizin g, and many of the District?s
existing cast iron mains only have 36 inches of cover or less, District staff does not recommend the use
of pipe bursting as a routine replacement method.

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As part of a formal ?Jll-scale program, the District developed and is currently implementing design guidelines to
assist in determining which projects are best suited for the use of HDD. The following summarizes these step-by-
step HDD pipeline design guidelines:

1. Complete site survey and prepare base drawings, showing all existing utilities.

2. Determine if project falls within a location conducive to HDD (areas highlighted in yellow on Figure 3).

3. Conduct a site visit to assess if site conditions meet criteria outlined below, and to identify any other unusual
site conditions. Select sites with:

Relatively few existing utilities residential neighborhoods, not urban areas)

Relatively straight alignments (both horizontally and vertically)

Streets in which a relatively constant cover depth of 4 feet can be maintained for majority of the alignment
vertical alignments with relatively few offset returns)

Horizontal alignments that can maintain approximately 5 feet of separation from adjacent parallel utilities
(10 feet ?'om sewers and high priority utilities, such as large diameter gas lines)

Streets with no or relatively few high priority utility crossings; or site that can accommodate open trench
installations for limited sections where high priority utility crossings are required design critical
crossing locations as entrance/exit pits)

4. Avoid using HDD when the following site conditions are encountered:

Sites with parallel high priority utility within 10 feet of proposed pipeline alignment (see above)

Sites where a minimum cover of 4?feet cannot be maintained (see above)

Site with contaminated soils soils that preclude the use of HDPE pipe)

Curvy streets and urban areas with high utility congestion

5. Select projects that are 1,000 feet or greater in length, or select sites where projects can be clustered in a

particular geographical area, to eliminate multiple mobilizations/demobilizations

Use engineering judgment when making ?nal decision on which installation method should be used

7. Prior to starting detailed design, meet with construction staff to review selected HDD candidates to con?rm that
HDD is the preferred method of installation for a particular site

57?

5. CONCLUSIONS

The District?s pilot program included a total of 8 HDD and 7 pipe bursting pilot projects completed in various site
conditions within the District?s service area. Results indicate that while both of these trenchless methods can work
well for the replacement of mains in paved streets, where site conditions include relatively few existing utilities,
clayey soil, and straight alignments, the use of HDD provides more bene?ts and is more adaptable to different site
conditions upsizing, bedrock, etc.), and is therefore being implemented as the primary trenchless method at the
District. The District will consider pipe bursting projects on a case-by?case basis, when certain speci?c site
conditions exist such as no services and right-of-ways with restricted access.

As shown on Figure 3 a majority of sites suitable for HDD installations are located in the western portion of the
District?s service area, in cities such as San Leandro, Berkeley, San Pablo, and Richmond. This is because these
areas have a higher concentration of cast iron pipes, which result in a majority of the District?s leaks and are
therefore the focus of the replacement program, and where site conditions are favorable to HDD clayey soils
and relatively level terrain, allowing for straight pipe alignments).

The District?s pilot projects indicate that HDD and pipe bursting, under certain site conditions, result in signi?cantly
lower unit costs and fewer overall impacts when compared to open trench. HDD and pipe bursting are viable
alternatives to open trench, even for the installation of water mains in paved streets, and utility owners should
consider them as part of their ?tool box? of options for water main renewals. Discussions of other factors associated
with the District?s use of HDD are below.

Financial Factors
The average unit cost of HDD projects is approximately 20 percent lower than the cost of open trench projects. The
increased use of HDD should therefore result in a reduction in the unit cost of the District?s pipe replacement

program. Actual cost savings will depend on how many HDD installations the District can complete and actual site
conditions. Assuming District crews install approximately two miles of HDD projects in a year, and assuming an

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average cost saving of 20 percent, the overall cost saving to the District?s pipeline replacement program should be
approximately $400,000. As District crews become more familiar and ef?cient with the use of HDD, the percent of
savings should increase.

Initially, The District will offset some of the estimated cost savings by training District crews on the ?ising of HDPE
pipe. The use of HDD may also result in higher ?lture maintenance costs, due to an increase in the cover depth
required for HDD projects. Installations of HDD projects will have a cover depth of approximately 48 inches, to
reduce the potential for frac-outs, which is approximately 6 to l2-inches deeper than the normal cover depth used for
open trench installations. The increased cover depth may require additional shoring when performing future
maintenance activities, and may result in additional utility con?icts. Also, when the District uses HDPE for future
HDD installations, the repair time required for this type of pipe is typically longer and the repair parts are more
costly than for other standard District pipe materials such as PVC and steel. The District will have to stock HDPE
pipe materials for the maintenance and repair of such installations.

HDD Challenges/Limitations and Next Steps

The results of the pilot projects con?rmed that HDD is a viable pipeline installation method under certain site
conditions, including those in suitable slope and soil conditions and paved streets with relatively few existing
utilities and services. HDD is also a viable method at sites with difficult excavation conditions bedrock). While
these site conditions are present in a number of locations, actual site speci?c conditions may, in some cases, turn out
to be less than optimal and reduce the bene?ts of HDD such that it may be preferable for District crews to use open-
trench methods instead. District crews will make the ?nal determination on which method of installation to use,
even on projects designed for HDD installations.

Another challenge associated with HDD is the containment and disposal of drilling ?uids. For some of the HDD
pilot projects, District crews assisted in the handling of the drilling mud, including collection and disposal. For some
of the pilot projects, the method of disposal included spreading and drying out the drilling ?uids at a District-owned
trench spoils disposal site, and mixing the dried out mud with trench spoils. This disposal method may preclude the
use of HDD during the rainy season unless drilling ?uids are disposed of at a commercial land?ll, at an additional
cost to the project. The District will re-assess the use of HDD in one or two years, after completion of a number of
additional projects.

Results of the District?s GIS analyses, shown on Figure 3, indicate that it may be feasible to design approximately 3
miles of HDD projects per year, out of the current replacement rate of 8 miles per year. However, to allow District
crews time to train and transition to using more HDD, the decision was made to initially design 1 to 2 miles of
replacement mains in Fiscal Year 2013 for installation using the HDD methods. Once the program is up
and running, in one or two years, the District will adjust the number of HDD designs depending on the actual
number of HDD projects completed by District crews. Next steps required to implement HDD projects are listed
below.

0 Select HDD candidates, using new guidelines, and complete designs of 1-2 miles of HDD projects.

0 Determine the most ef?cient crew complement required for different phases of HDD installations.

0 Determine the feasibility of developing a dedicated trenchless crew, or if HDD projects should be spread around
all of the pipeline crews.

0 Determine if District forces will strictly perform HDD in the summer months, giving any disposed drilling
slurry the opportunity to dry out at District trench spoil sites, or if the District will perform HDD projects year-
round and the slurry collected and disposed of by a subcontractor.

0 Develop best management practices (BMPs) for HDD projects. This may include the adjustment of crew sizes
to complement the subcontractor based on site-speci?c HDD projects, and developing the most ef?cient
methods for working with an HDD subcontractor optimize work?ow by staggering construction activities
over multiple blocks, to utilize inherent ?down times? for other activities).

0 Complete the installation of about 1?2 miles of mains using HDD within the next 12 months.

The main goal for these projects will be to assess the long-term applicability of HDD installations as a part of the

District?s overall Infrastructure Renewal Program. Based on the success of these additional projects, the District will
determine the number of projects that should be designed and constructed using HDD on a routine basis.

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APPENDIX 

Description of Trenchless Rehabilitation Techniques

Sliplining is the process of pushing or pulling a new pipeline inside of an existing pipeline.
This process involves opening a pit at each end of the pipe section to be rehabilitated and
cutting out a section of the existing pipe from each pit. The existing pipe must be out of
service during the sliplining process. The de?ning characteristic of the sliplining technique
is the sliplined pipe (carrier pipe) OD must be less then the ID of the existing pipe (host
pipe). The new pipe may result in less capacity than the existing pipe, though this must be
checked through hydraulic analysis. The annular space between the OD of the new pipe and
ID of the existing pipe is typically ?lled with cellular grout, blow sand or similar material.
The joints of the new pipe must be ?ush and seamless. Any curves and offsets (horizontal
and vertical) within the existing pipe alignment must be evaluated to determine if sliplining
is a feasible solution.

Rollers

New Carrier Pipe Existing Host
Pipe

  
  

Pipe
Protector

  
    

 

 

 

I 
1 I
i?

. Winch Line
Access Pit Nose Cone

on Carrier

Pipe

Pipe Bursting - This process
is typically to replace a

pipeline in the same location
at the same diameter or larger
diameter. Pipe bursting
consists of running a tool
through an existing pipeline
that has a front-end expander
that bursts the existing pipe
apart or a piercing tool that
cuts the pipe apart. The
bursting tool has a connecting
head the attaches to the new
pipe and pulls the new
pipeline through at the same
line and grade.

  

lune WRITING
OUTING- 
##ggn 

. 
I-y?lh?-Io In I-Won; - 

PIPE meme 

 

Ref: Technologies

Swagelining Fused HDPE pipe is used in this application and consists of pulling the pipe
through a heating unit followed by a diameter reducing die and into the existing host pipe.
While the pulling tension is maintained, the pipe remains at the smaller diameter. After full
insertion is completed, the pulling tension is removed and the pipe rebounds to its original
diameter creating a tight ?t within the existing pipeline.

  

Rulutiug Dil-
Pusher 

   



Mien large-diameter PE pipe is used, especially in cold Weather, special heating units
are n?en used to warm the PE before if is reduced and pulled into the pipe being lined.

 

 

he PE pipe is reduced during lire installation process. This allows it to be
pulled eusilv through an existing pipeline.

Folded Pine {fold and farm: deformedireformed} Fused plastic pipe, either PVC or
HDPE, are typically used for folded pipe applications. Folded pipe is delivered from the
factory or molded in the ?eld into a or shape so that is can be inserted inside
of the existing pipe. Folded pipe manufactured at the plant typically comes in long coils as
one continuous piece of pipe. The pipe in its folded shaped is a smaller diameter than the
existing pipe and is held in position by heat-sensitive straps. Once the folded pipe is inserted
into the existing pipe it is heated by steam or hot water to break the restraining bands. The
pipe rebounds to its original circular shape to ?t within the existing pipePolymerproxforethane Lining spin cast} This process is typically used

when the existing pipe is structurally sound but requires a new corrosion-resistant lining.
The process involves a special pump that delivers the lining material to a spinning
application head. The liner is centrifugally cast with constant drawback tension to achieve
the proper thickness. An onboard computer controls the liner application and distribution.
The liner requires 2-5 hours of cure time. For larger pipes where manned entry is possible,
the liner material can be applied manually. The blow-thru technology utilizes a closed-loop
air system to distribute the liner material inside the pipe. For these processes, the pipes must
be taken out of service and cleaned.

 

Cnred-in-nlaee Pine (CIPP) Cured-in-place pipe is a technology that pulls a felt material inside
of the existing pipe. The felt is saturated with an epoxy, epoxy vinyl or a polyester resin material.
The material is then in?ated to make a close-?tting form inside of the existing pipeline. The water
in the pipe is then heated, which activates the epoxy resin. The felt/epoxy resin structure is then
allowed to cure to create the hardened product. The felt material can be a reinforced material to act
as a structural pipe material or without reinforcement to act as a corrosion-resistant liner. The felt is
in?ated using hot water or compressed air, and either hot water or steam is used for curing. UV
light is also being used in some applications as a curing compound. CIPP can be used in
applications Where bends, size changes, and shape changes exist. This method can also be used to
make spot repairs, or sectional point repairs.

Metallic Sliglining Materials Ductile Iron (DIP) and Welded Steel (WSP) pipe are options for
larger diameter and higher working pressure applications. DIP is available with restrained ?exible
joints and is installed as a slipliner pipe using nominal 18-foot standard pipe sections. Hydraulic
capacity is decreased substantially with DIP due to the loss of diameter needed to ?t pipe bells
inside the host pipe. WSP can be installed as a continuous slipliner pipe provided the existing pipe
has minimal horizontal and vertical de?ections. Collapsed split seam WSP is used in larger
diameter applications where manned entry can be achieved. Under this process, individual pipe
sections of bare steel are installed into the existing pipe in a collapsed (smaller diameter) form.
Once in position, adjacent to the adjoining pipe section, the restraining bands are removed and pipe
rebounds to ?t the inside diameter of the existing pipe. Circumferential joint and longitudinal joints
are then welded. Grouting of the annular spacing and the inside diameter completes this sliplining
application. This process can be individually tailored to suit the existing pipeline?s alignment and
working pressure requirements.

Carbon Fiber Wrap Carbon Fiber wrap is a process that uses manually applied carbon
?ber sheets sandwiched with an epoxy resin binder. The CFW process is speci?cally designed for
the application to determine the number carbon ?ber layers needed in the horizontal and hoop
directions. It can be designed as a structural liner with no support from the host pipe or as partial
structural liner. Existing liner materials, such as mortar lining, must be removed ?rst to achieve a
bond with the host pipe. The bene?t of CFW is the minimal access needed compared to the other
sliplining alternatives. Typically, existing access manways can be used for pipe entry. The
disadvantage of CFW is its application cost, hence it is typically used for spot repair applications
rather than conventional sliplining projects.

Summary of Sliplining Considerations

 

 

 

 

 

 

 

 

izs??liglfe Advantages Disadvantages
Basic 1. Fusible PVC and HDPE can be 1. Limited availability for pipe
Sliplining used. diameters over 36-inches and
2. Long installation over working pressures over 200 psi.
2,000 feet can be achieved. 2. Reduced pipe diameter yields loss
3. Materials are available in a wide of hydraulic capacity.
variety of diameters and pressure 3. Existing service laterals and
classes and in conformance with branches must be connected using
AWWA standards. conventional open trench methods
4. Excellent hydraulic properties to
minimize loss of internal pipe
diameter
5. Lightweight materials to facilitate
installation by conventional
excavation equipment.
6. Flexible materials to accommodate
de?ections within the existing pipe
Pipe-Bursting 1. Fusible PVC and HDPE can be 1. Limited availability for pipe
used. diameters over 36-inches and
2. Materials are available in a wide working pressures over 200 psi.
variety of diameters and pressure 2. Potential for soil heave and
classes and in conformance with damage to adjacent utilities as the
AWWA standards. existing trench creates a
3. No loss of hydraulic capacity and weakened joint compared to the
possible increase can be achieved. surrounding soil material and
4. Lightweight materials to facilitate bursting forces causes the existing
installation by conventional trench to move upward as the
excavation equipment. least path of resistance.
5. Flexible materials to accommodate 3. Existing pipe must have suf?cient
de?ections within the existing pipe. cover to minimize soil heave.
4. Dependent on compressibility of
existing soil conditions
5. Dependent on break-ability of
existing pipe material
6. Bursting cannot traverse existing
concrete thrust blocks.
Swagelining 1. Similar to Conventional Sliplining. 1. Limited to thinner wall, low
2. Hydraulic loss is minimized pressure Sliplining pipe.
2. Limited to HDPE pipe.
3. Limited number of quali?ed
installation contractors
Fold-n-Form 1. Similar to Conventional Sliplining. 1. Limited to thinner wall, low
2. Hydraulic loss is minimized pressure Sliplining pipe.

 

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2. Limited to HDPE pipe
3. Limited number of quali?ed
installation contractors

CIPP . Excellent hydraulic properties, 1. Shorter installation runs than
possibly better than the existing other processes.
pipe. 2. Dif?cult to make future

. Partial or ?ll] structural design can connections to CIPP material.
be achieved. 3. Limited to lower pressure and
. Existing service connections can be smaller diameter applications.
re-established from within the pipe 4. Limited number of installation
contractors.

Epoxy Lining 1. New corrosion-resistant lining. 1. Limited to new interior liner with

2. Excellent hydraulic properties, no structural support.
possibly better than the existing
pipe.

DIP . Applicable to larger existing pipe 1. Large hydraulic capacity loss.
diameters and high working 2. Heavy pipe which limits length of
pressures. installation.

. Restrained and ?exible pipe joints
available to traverse internal
de?ections.

. Installation performed by
conventional pip_e_1ine contractors.

WSP . Applicable to larger existing pipe 1. Limited to pipe diameters large
diameters and high working enough for manned entry.
pressures. 2. Limited hydraulic loss with
Segmental (Split-seam) or segmental option.
continuous options dependent on 3. Large hydraulic loss with

 

. Manned

existing pipe alignment

entry and welding
procedures allow internal repairs to
be performed.

 

continuous option.