WEBVTT 00:00:00.340 --> 00:00:04.099 --public participation hearing where we will share information 00:00:04.110 --> 00:00:07.950 and take public input on the application for California 00:00:07.960 --> 00:00:12.099 American Water Company to acquire East Pasadena Water 00:00:12.099 --> 00:00:24.179 Company on this day, Monday, August 3, 2020. 00:00:24.179 --> 00:01:04.840 (speaks in Spanish) 00:01:04.840 --> 00:01:06.865 Thank you, Ms. Sanchez. 00:01:06.877 --> 00:01:08.629 Thank you, Operator. Court reporters, 00:01:09.010 --> 00:01:12.250 Miss Mendez and Miss Ross. Please confirm you hear 00:01:12.250 --> 00:01:13.463 me and are ready. 00:01:13.487 --> 00:01:17.640 Yes, I'm ready. Thank you. 00:01:17.640 --> 00:01:20.540 Yes, I'm ready. Thank you. 00:01:20.540 --> 00:01:23.819 We will now be on the record. The Commission will come 00:01:23.819 --> 00:01:29.609 to order. Good evening. This is the time and place set 00:01:29.620 --> 00:01:33.790 for the public participation hearing on the application 00:01:33.799 --> 00:01:38.060 for California American Water Company to acquire East 00:01:38.069 --> 00:01:45.640 Pasadena Water Company, application 2004003. My name 00:01:45.640 --> 00:01:49.849 is Camille Watts-Zagha, and I'm the assigned Administrative 00:01:49.849 --> 00:01:52.540 Law Judge to this proceeding. 00:01:52.540 --> 00:01:56.140 We're also joined by Genevieve Shiroma who is the assigned 00:01:56.150 --> 00:01:59.340 Commissioner for this case. Commissioner, would you 00:01:59.340 --> 00:02:01.719 please begin? 00:02:01.719 --> 00:02:05.890 Yes. Thank you, Judge. Good evening, everyone. I'm 00:02:05.890 --> 00:02:09.430 pleased to join Judge Watts-Zagha and our court reporters, 00:02:09.430 --> 00:02:14.050 Shannon Ross and Caroline Mendez, and our Spanish announcer, 00:02:14.439 --> 00:02:18.349 Claudio Sanchez, and our Spanish translator, Sorio 00:02:18.360 --> 00:02:21.849 Vargas, today for this public participation hearing. 00:02:22.539 --> 00:02:26.050 We're here to give the public an opportunity to learn 00:02:26.639 --> 00:02:32.469 about and-or express your opinions on the issues before 00:02:32.469 --> 00:02:36.229 for us with the CalAm's proposed acquisition of East 00:02:36.229 --> 00:02:40.270 Pasadena. As we review this application, I anticipate 00:02:40.270 --> 00:02:43.949 navigating with Judge Watts-Zagha through the reasonableness 00:02:43.960 --> 00:02:47.099 of the proposed acquisition and determining whether 00:02:47.099 --> 00:02:51.979 it is in the public interest for East Pasadena's and CalAm's 00:02:51.990 --> 00:02:56.099 customers to approve this acquisitions. Also, as we 00:02:56.099 --> 00:02:58.919 continue to operate in this new normal with the current 00:02:58.919 --> 00:03:03.370 COVID 19 pandemic, I am encouraged by the potential 00:03:03.370 --> 00:03:06.560 assistance to low income customers with this proposed 00:03:06.560 --> 00:03:10.360 transaction as many are deeply affected by the economic 00:03:10.360 --> 00:03:14.129 impacts of this current state of emergency. With all that 00:03:14.129 --> 00:03:17.090 said, I look forward to working with Judge Watts-Zagha 00:03:17.270 --> 00:03:20.479 on this proceeding and listening to everyone's views on 00:03:20.479 --> 00:03:24.139 this case this evening. Thank you. 00:03:24.139 --> 00:03:26.565 Thank you, Commissioner. 00:03:26.577 --> 00:03:28.240 We will soon hear introductory 00:03:28.240 --> 00:03:33.030 remarks from the Commission's Public Advisor, Miss Allison 00:03:33.030 --> 00:03:37.550 Brown, followed by overviews from the water companies, 00:03:37.939 --> 00:03:40.879 and then, finally from the Public Advocate's Office 00:03:40.889 --> 00:03:43.949 here at the California Public Utilities Commission. 00:03:44.639 --> 00:03:48.129 These introductions will take about 20 minutes, and 00:03:48.129 --> 00:03:51.250 the remaining time is devoted to hearing from 00:03:51.250 --> 00:03:56.560 all of you. If you intend to speak, I remind you that 00:03:56.569 --> 00:03:59.560 you must have called the phone number, and you will 00:03:59.560 --> 00:04:03.770 press *1 to get in line. You will then be prompted 00:04:03.780 --> 00:04:08.060 for your name. At any time during this meeting, you 00:04:08.060 --> 00:04:12.289 can press *1 and join the speaking line. I will 00:04:12.289 --> 00:04:15.990 take this opportunity to provide some orientation about 00:04:16.000 --> 00:04:19.870 today's hearing. The basic purpose of today's hearing 00:04:20.439 --> 00:04:24.889 is to hear directly from CalAm customers, East Pasadena 00:04:25.009 --> 00:04:27.439 customers, 00:04:27.439 --> 00:04:32.439 and members of the public about how this application 00:04:32.720 --> 00:04:36.040 may impact them. 00:04:36.040 --> 00:04:39.779 The Public Utilities Commission is the state agency that 00:04:39.790 --> 00:04:43.949 decides if the proposed acquisition of East Pasadena 00:04:44.339 --> 00:04:47.629 by California American Water Company is in the public 00:04:47.639 --> 00:04:52.389 interest and consistent with California state law governing 00:04:52.389 --> 00:04:57.839 transactions of investor-owned water utilities. The Public 00:04:57.839 --> 00:05:00.730 Utilities Commission has five Commissioners who are 00:05:00.730 --> 00:05:03.720 appointed by the Governor and confirmed by the State 00:05:03.720 --> 00:05:06.740 Senate, and Commissioner Shiroma is one of those five 00:05:06.750 --> 00:05:10.740 Commissioners. While I manage the day-to-day activities 00:05:10.740 --> 00:05:14.470 of this case, the five Commissioners are ultimately 00:05:14.480 --> 00:05:18.079 the ones who will decide and vote on whether or not 00:05:18.089 --> 00:05:23.379 to approve CalAm and East Pasadena's joint request. My 00:05:23.379 --> 00:05:27.600 job is to evaluate all the evidence that is submitted 00:05:27.610 --> 00:05:31.829 during this proceeding and input from you and write 00:05:31.829 --> 00:05:35.060 a proposed decision for the five Commissioners to consider. 00:05:36.139 --> 00:05:39.600 The five Commissioners will decide whether to adopt 00:05:39.610 --> 00:05:44.389 my proposed decision or adopt their own alternate decisions, 00:05:44.470 --> 00:05:48.910 based on the evidence is proceeding. Water acquisitions 00:05:48.990 --> 00:05:52.189 such as this one are supposed to take approximately 00:05:52.189 --> 00:05:56.779 nine months from start to finish. We expect the Commission 00:05:56.779 --> 00:06:02.350 will vote on this decision in early next year, 2021. 00:06:03.639 --> 00:06:07.069 Each piece of information on which we base our decision 00:06:07.079 --> 00:06:10.660 is listed on the Commission's website and available 00:06:10.670 --> 00:06:15.339 for you to view. In fact, your comments today will 00:06:15.350 --> 00:06:19.699 also be included on the Commission's website on our 00:06:19.709 --> 00:06:24.600 Docket Card. Because our court reporters are transcribing 00:06:24.610 --> 00:06:28.050 today's hearing, taking down everything that is said, 00:06:28.740 --> 00:06:31.810 today's transcript will be available on the Docket 00:06:31.819 --> 00:06:36.339 Card within one week from today. 00:06:36.339 --> 00:06:38.959 I thank you for spending your precious time with us 00:06:39.079 --> 00:06:42.689 to share your experiences as customers and your perspective 00:06:43.040 --> 00:06:46.689 or perhaps just to listen. The Commissioner and I are 00:06:46.699 --> 00:06:50.600 paying close attention to what you say. This is not 00:06:50.600 --> 00:06:54.050 your only opportunity to tell us how this will affect 00:06:54.050 --> 00:06:57.959 you. Throughout the proceeding, we accept written comments 00:06:58.000 --> 00:07:02.610 on the same docket card. So far, we have received 00:07:02.620 --> 00:07:06.290 approximately 25 written public comments, and I have 00:07:06.290 --> 00:07:10.389 reviewed each comment. While we hope that all the notices 00:07:10.399 --> 00:07:14.649 of today's meeting via email, text and postcard sent 00:07:14.660 --> 00:07:18.009 by the company's reached each customer in adequate 00:07:18.009 --> 00:07:22.139 time to participate today, 00:07:22.139 --> 00:07:25.060 the public comments form on the docket card will remain 00:07:25.069 --> 00:07:29.480 available, whether or not you speak today. Because of the 00:07:29.480 --> 00:07:33.399 limitations and restrictions we are all under as California 00:07:33.399 --> 00:07:37.170 attempts to contain the coronavirus, we were not able 00:07:37.170 --> 00:07:40.490 to offer this forum in person and instead are here 00:07:40.490 --> 00:07:44.300 remotely. Typically, the idea of public participation 00:07:44.310 --> 00:07:48.079 hearings for us to visit and hear from you in your 00:07:48.089 --> 00:07:52.959 own community, so this is not possible. We are especially 00:07:52.970 --> 00:07:57.379 appreciative of you joining us via the Internet and 00:07:57.379 --> 00:07:59.740 the telephone. 00:07:59.740 --> 00:08:02.980 Now we will hear from Miss Allison Brown, the Commission's 00:08:02.990 --> 00:08:06.139 Public Advisor, who will share information regarding 00:08:06.399 --> 00:08:09.610 further participation in this proceeding. Miss Brown, 00:08:09.620 --> 00:08:13.040 please proceed. 00:08:13.040 --> 00:08:16.620 Thank you, Judge. Welcome, everyone. My name is Allison 00:08:16.620 --> 00:08:18.779 Brown, and I'm the Public Advisor for the California 00:08:18.779 --> 00:08:22.009 Public Utilities Commission. One of the primary roles 00:08:22.019 --> 00:08:25.279 of the Public Advisor's office is to assist and advise 00:08:25.290 --> 00:08:28.050 the public with participation in Commission proceedings. 00:08:28.939 --> 00:08:31.449 First, I want to thank you all for participating today. 00:08:32.139 --> 00:08:34.789 As the Judge and Commissioner stated, public participation 00:08:34.789 --> 00:08:37.490 and input are essential to the Commission's decision 00:08:37.490 --> 00:08:41.049 making process. This is your opportunity to be heard, 00:08:41.539 --> 00:08:43.379 to share your thoughts on the application with the 00:08:43.379 --> 00:08:46.389 Administrative Law Judge and the Commissioner. If you 00:08:46.389 --> 00:08:49.110 have questions about your service or this application, 00:08:49.639 --> 00:08:52.740 please reach out to the Public Advisor's office, which 00:08:52.740 --> 00:08:58.570 is public.advisor@cpuc.ca.gov 00:08:58.570 --> 00:09:01.710 Or visit the California Public Utilities Commission, California 00:09:01.710 --> 00:09:05.100 American, or East Pasadena Water Company websites for 00:09:05.100 --> 00:09:09.090 more information. Second, if you or anyone else is 00:09:09.090 --> 00:09:11.259 not able to make a comment today or you don't feel 00:09:11.259 --> 00:09:13.700 prepared to make a comment, there are several other 00:09:13.700 --> 00:09:17.090 ways to become involved. If you wish to find more information 00:09:17.090 --> 00:09:20.509 on becoming a party, subscribing to this proceeding, 00:09:20.860 --> 00:09:23.990 or submitting comments by email, phone or the docket 00:09:23.990 --> 00:09:27.629 card, as the judge just described, please go to our website 00:09:27.649 --> 00:09:29.879 cpuc.ca.gov 00:09:29.903 --> 00:09:31.639 or email the Public Advisor's 00:09:31.639 --> 00:09:38.198 office. Again, that email is public.advisor@cpuc.ca.gov 00:09:38.222 --> 00:09:40.169 All of this information 00:09:40.179 --> 00:09:43.730 is on the notice that you received for this event. Lastly, 00:09:43.740 --> 00:09:46.059 we encourage you to fill out a survey about how you 00:09:46.059 --> 00:09:48.889 learned about this hearing and additional information 00:09:48.889 --> 00:09:51.799 to improve our public engagement. The survey is on 00:09:51.799 --> 00:09:55.389 the screen streaming during this event and can be viewed 00:09:55.600 --> 00:10:00.530 as cpuc.ca.gov/publicparticipationsurvey 00:10:00.554 --> 00:10:03.039 Which is all one word. We look forward to your comments 00:10:03.049 --> 00:10:08.440 today. Thank you again for joining us. 00:10:08.440 --> 00:10:12.139 Thank you, Miss Brown. We will now hear from the water 00:10:12.139 --> 00:10:15.750 utilities themselves, starting with Mr. Brian Barreto 00:10:15.809 --> 00:10:19.279 who has joined us from California American Water Company 00:10:19.500 --> 00:10:35.639 Mr. Barreto, please proceed. 00:10:35.639 --> 00:10:38.690 I do not hear Mr Baretto on the line at this time 00:10:38.700 --> 00:10:43.210 and I will actually ask if Mr Lawrence Morales, the 00:10:43.220 --> 00:10:47.759 president of East Pasadena Water Company, who's with us on 00:10:47.759 --> 00:10:51.279 the line and prepared to make opening comments first. 00:10:52.610 --> 00:10:55.549 Yes, I am here, Judge, and that would not be a problem. 00:10:56.340 --> 00:10:58.740 Thank you. 00:10:58.740 --> 00:11:02.429 Please proceed, Mr Morales, and we will return to 00:11:02.440 --> 00:11:06.740 Mr Baretto right after that. Thank you. 00:11:06.740 --> 00:11:09.700 Good evening. Thank you, everyone, for attending 00:11:09.950 --> 00:11:12.789 today's meeting, today's hearing. I would also like 00:11:12.789 --> 00:11:16.690 to thank Judge Camille Watts-Zagha and Commissioner 00:11:16.690 --> 00:11:19.440 Genevieve Shiroma. 00:11:19.440 --> 00:11:22.360 California's water challenges resulting from stricter 00:11:22.360 --> 00:11:25.840 water quality standards, water supply issues, and the 00:11:25.840 --> 00:11:29.259 need to develop new water conservation strategies has 00:11:29.269 --> 00:11:33.320 steadily increased and will continue to do so. In the 00:11:33.320 --> 00:11:36.110 years to come, water utilities, especially smaller 00:11:36.110 --> 00:11:39.299 ones, must develop creative ways to respond to these 00:11:39.309 --> 00:11:43.090 challenges by implementing enhanced and more frequent 00:11:43.190 --> 00:11:47.149 water quality testing, seeking alternative water supplies, 00:11:47.590 --> 00:11:50.889 installing additional water treatment facilities and 00:11:50.899 --> 00:11:54.350 implementing new water conservation programs. We must 00:11:54.360 --> 00:11:57.149 do this while balancing the ever increasing need for 00:11:57.149 --> 00:12:01.669 affordability. For about 90 years now, East Pasadena 00:12:01.669 --> 00:12:04.639 Water Company has been doing its level best 00:12:04.950 --> 00:12:08.149 to deliver high quality water at reasonable rates. 00:12:08.889 --> 00:12:12.730 I believe we have done just that. Well, 90 years is 00:12:12.740 --> 00:12:16.929 a long time, and during that time, various manufacturers 00:12:17.100 --> 00:12:20.450 and other entities have, in most cases unwittingly, 00:12:20.879 --> 00:12:23.950 polluted California aquifers to some extent or another. 00:12:24.539 --> 00:12:27.940 Fortunately, science has continually improved upon 00:12:27.940 --> 00:12:31.360 test methods to detect the presence of various pollutants 00:12:31.370 --> 00:12:35.320 in groundwater. In many cases, we can test down to just 00:12:35.330 --> 00:12:39.009 one part per trillion. That's the same as one drop 00:12:39.009 --> 00:12:43.360 of water in an Olympic sized swimming pool or one drop 00:12:43.669 --> 00:12:49.649 to 2.5 million liters, or 660,400 gallons of water. 00:12:50.539 --> 00:12:53.669 This precision testing has not only facilitated detection 00:12:53.669 --> 00:12:56.649 of pollutants, which enhances overall water quality. 00:12:57.389 --> 00:13:00.610 It has aided government regulators to develop 00:13:00.610 --> 00:13:03.840 new standards, and those standards are becoming stricter 00:13:04.009 --> 00:13:09.840 year after year. East Pasadena has been diligent, has 00:13:09.850 --> 00:13:13.250 diligently adhered to its water testing schedule, 00:13:13.639 --> 00:13:17.950 consisting of testing for, among other things, nitrate, 00:13:18.440 --> 00:13:23.639 123 Trichloropropane, which is 123-TCP, and volatile 00:13:23.639 --> 00:13:26.850 organic compounds compounds such as Tetrachloroethylene, 00:13:26.860 --> 00:13:31.450 which is PCE, and trichloroethylene, which is TCE, 00:13:31.889 --> 00:13:35.879 each of which has a maximum contaminant level, or MCL. 00:13:36.580 --> 00:13:39.889 In early 2018, the government implemented a new MCL 00:13:39.889 --> 00:13:45.590 for 123 TCP of five parts per trillion. Now, when you 00:13:45.590 --> 00:13:48.799 look at it, that's only five drops of water in a 50 00:13:48.799 --> 00:13:52.470 meter swimming pool containing roughly 660,000 gallons 00:13:52.480 --> 00:13:54.539 of water. 00:13:54.539 --> 00:13:57.789 In early 2018, East Pasadena Water Company detected 00:13:57.789 --> 00:14:01.639 123-TCP in one of its wells, so it immediately shut 00:14:01.639 --> 00:14:04.600 it off and is now working on securing state funding 00:14:04.600 --> 00:14:08.740 to install a treatment facility. As testing and technology 00:14:08.740 --> 00:14:11.970 becomes more enhanced and efficient, water quality standards 00:14:11.970 --> 00:14:15.549 will become stricter as they should. Our decision to 00:14:15.559 --> 00:14:20.710 sell East Pasadena stems directly from our sound management 00:14:20.710 --> 00:14:24.309 strategy. You see, we recognize that stricter water 00:14:24.309 --> 00:14:27.720 quality standards are inevitable. We also perceive 00:14:27.720 --> 00:14:30.860 the need for greater conservation programs as climate 00:14:30.860 --> 00:14:34.070 change takes a more prominent role among the many 00:14:34.070 --> 00:14:37.490 challenges water company face, particularly challenging 00:14:37.500 --> 00:14:40.529 for small water companies who must pay steadily increasing 00:14:40.529 --> 00:14:42.950 pumping fees to water basins that are implementing 00:14:42.950 --> 00:14:46.450 measures to deal with conservation and climate change. 00:14:47.740 --> 00:14:52.340 From 2013 to 2018, pumping fees East Pasadena has to 00:14:52.340 --> 00:14:55.950 pay increase by a compound annual growth rate of nearly 00:14:55.950 --> 00:15:00.220 19%. There is no doubt in my mind that water quality 00:15:00.230 --> 00:15:02.450 standards will become stricter, resulting in the need 00:15:02.460 --> 00:15:06.289 for costly water treatment. Also, water basin regulators 00:15:06.299 --> 00:15:09.470 will continue to raise basin fees to encourage conservation 00:15:09.759 --> 00:15:12.620 and pay for imported water. Further compounding the 00:15:12.620 --> 00:15:16.450 challenges faced by small water companies. To deny these 00:15:16.450 --> 00:15:19.950 uncomfortable truths by being complacent or having 00:15:19.950 --> 00:15:22.679 an attitude of oh, we're doing just fine, our current 00:15:22.679 --> 00:15:25.840 water quality and financial management or just fine, 00:15:25.950 --> 00:15:30.549 so why sell? Well, I must say that attitude is reckless 00:15:30.559 --> 00:15:34.230 and irresponsible. It kicks the can down the road, only 00:15:34.230 --> 00:15:38.909 delaying the hard choices. We prefer not to procrastinate 00:15:38.919 --> 00:15:41.649 or manage by the seat of our pants. We're looking 00:15:42.539 --> 00:15:46.960 3, 5, and even 10 years down the road. And all indicators 00:15:46.960 --> 00:15:50.029 are pointing to the undeniable fact that it is far 00:15:50.029 --> 00:15:53.509 better to make a transition now to a much larger company 00:15:54.139 --> 00:15:56.960 with a greater, with greater resources and the ability 00:15:56.970 --> 00:16:00.259 to spread costs than to wait, which would only pass 00:16:00.259 --> 00:16:03.120 on greater compliance costs to our ratepayers in future. 00:16:03.909 --> 00:16:07.679 Selling now benefits ratepayers by providing much greater 00:16:07.679 --> 00:16:11.950 long term potential for affordability and sustainability 00:16:12.940 --> 00:16:17.039 That concludes my remarks. Thank you. 00:16:17.039 --> 00:16:22.809 Thank you, Mr Morales. And just before I introduce 00:16:22.820 --> 00:16:26.269 Mr Barreto from California American Water Company, 00:16:26.799 --> 00:16:30.730 I would remind listeners who wish to make a comment 00:16:30.740 --> 00:16:34.879 following these introductory remarks that you may call 00:16:35.190 --> 00:16:45.299 our phone number 1-800-857-1917 and use the pass code 00:16:45.389 --> 00:16:53.279 5248329 to access the phone call. And 00:16:53.289 --> 00:16:59.629 finally, you can press *1 and join the list of 00:16:59.629 --> 00:17:04.740 those who wish to speak. It is a very short line. 00:17:04.740 --> 00:17:08.660 Thank you for your patience, Mr. Barreto, and I will 00:17:08.660 --> 00:17:12.460 now turn to you. Mr. Barreto is with California American 00:17:12.470 --> 00:17:16.440 Water Company. Please proceed. 00:17:16.440 --> 00:17:20.240 Right. Thank you, Judge. Good evening. My name is Brian 00:17:20.240 --> 00:17:23.490 Barreto and I serve as the External Affairs Manager 00:17:23.500 --> 00:17:26.700 at California American Water. I would like to welcome 00:17:26.700 --> 00:17:30.329 everyone who has taken the time out of their busy schedule 00:17:30.339 --> 00:17:33.549 to attend this evening's hearing and participate in 00:17:33.549 --> 00:17:37.799 the regulatory process. I would also like to thank the representatives 00:17:38.240 --> 00:17:41.509 from the California Public Utilities Commission, including 00:17:41.519 --> 00:17:45.799 Administrative Law Judge Watts-Zagha and Commissioner 00:17:45.799 --> 00:17:49.099 Shiroma, who are present to hear from East Pasadena 00:17:49.099 --> 00:17:52.160 Water customers and California American Water customers. 00:17:52.980 --> 00:17:55.339 There are several other members 00:17:55.339 --> 00:17:58.380 of our staff on the line today who are available to 00:17:58.380 --> 00:18:01.599 respond to questions and provide information about 00:18:01.599 --> 00:18:05.190 our filing and proposed acquisition. Members of the 00:18:05.190 --> 00:18:09.509 team include Wes Owens, Director of Rates and Regulatory 00:18:10.539 --> 00:18:14.859 and Nick Suvious, Director Corporate Counsel. 00:18:14.859 --> 00:18:17.349 California American Water has a strong legacy and 00:18:17.349 --> 00:18:20.759 presence in the Los Angeles region, where we have provided 00:18:20.759 --> 00:18:24.740 water service for over 50 years. We provide water service 00:18:24.750 --> 00:18:29.269 to the cities of Bradbury, Dorte and San Marino and portions 00:18:29.269 --> 00:18:34.240 of Elmonte, Irwindale Monroevo Growsneed, San Gabriel, 00:18:34.250 --> 00:18:37.730 and Temple City, as well as unincorporated portions 00:18:37.730 --> 00:18:41.769 of Los Angeles County and the Baldwin Hills area. The 00:18:41.779 --> 00:18:45.160 East Pasadena Water Company serves approximately 3000 00:18:45.160 --> 00:18:49.470 customers in communities of Arcadia, East Pasadena 00:18:49.789 --> 00:18:52.910 and Temple City, which are near our Los Angeles County 00:18:52.910 --> 00:18:57.079 Operations Center, located in Rosemead. 00:18:57.079 --> 00:18:59.839 East Pasadena Water Company has been family owned for 00:18:59.839 --> 00:19:04.359 more than 85 years. The fact that the family and leadership 00:19:04.529 --> 00:19:08.019 of East Pasadena Water chose California America 00:19:08.019 --> 00:19:11.410 Water to continue their tradition of customer and community 00:19:11.420 --> 00:19:14.990 service speaks to our values and commitment to keep 00:19:15.000 --> 00:19:18.579 rates competitive, maintain customer service and water 00:19:18.579 --> 00:19:22.319 quality at equal or higher standards, and our pledge 00:19:22.319 --> 00:19:25.630 to invest in the water system to ensure its viability 00:19:25.640 --> 00:19:30.680 in the future. On April 6, 2020, California American 00:19:30.680 --> 00:19:37.299 Water submitted Application 2004003 to the California 00:19:37.299 --> 00:19:40.539 Public Utilities Commission. 00:19:40.539 --> 00:19:43.579 The application requests that the Commission authorize 00:19:43.589 --> 00:19:47.519 the sale of East Pasadena Water Company's assets and 00:19:47.519 --> 00:19:50.160 California American Water's purchase of these assets. 00:19:50.940 --> 00:19:54.049 The application further requests Commission authorization 00:19:54.440 --> 00:19:58.700 to expend, excuse me, to expand California America Water's 00:19:58.700 --> 00:20:02.829 service area, so the company may assume all public utility 00:20:02.839 --> 00:20:06.930 responsibilities for the operation and ownership of 00:20:06.930 --> 00:20:10.210 the water utility operations in East Pasadena's current 00:20:10.210 --> 00:20:14.950 service area. Finally, the application requests approval 00:20:14.960 --> 00:20:18.390 of regulatory accounts to track costs related to the 00:20:18.390 --> 00:20:21.710 acquisition and unforeseen environmental compliance 00:20:21.710 --> 00:20:26.539 costs for potential future recovery. 00:20:26.539 --> 00:20:30.230 All Californians have a right to safe, clean, affordable, 00:20:30.240 --> 00:20:33.670 and accessible water. Disadvantaged water utilities 00:20:33.680 --> 00:20:36.990 and communities often struggle to provide an adequate 00:20:36.990 --> 00:20:41.119 supply of safe, affordable drinking water. The reasons 00:20:41.119 --> 00:20:44.220 for this are numerous. Changes in drinking water quality 00:20:44.220 --> 00:20:48.680 standards, pollution, aging infrastructure, lack of 00:20:48.680 --> 00:20:51.849 funding for basic infrastructure, lack of funding for 00:20:51.849 --> 00:20:55.529 ongoing operation and maintenance, and unreliable supplies 00:20:55.869 --> 00:20:59.230 resulting in service interruptions. The State Water 00:20:59.230 --> 00:21:02.990 Action Plan and Senate Bill 88 signed by the Governor 00:21:02.990 --> 00:21:07.670 in 2015 both encourage the consolidation and operation 00:21:07.670 --> 00:21:10.650 of small struggling water systems with large water 00:21:10.650 --> 00:21:12.789 systems. 00:21:12.789 --> 00:21:15.970 If this purchase is approved, California American Water 00:21:15.980 --> 00:21:19.119 in a future general rate case, will seek 00:21:19.130 --> 00:21:22.769 to consolidate its East Pasadena customers with those 00:21:22.769 --> 00:21:25.660 of the Los Angeles District for rate making purposes. 00:21:26.740 --> 00:21:29.250 Based on the purchase agreement, there will be no rate 00:21:29.259 --> 00:21:32.779 impact related to the acquisition for East Pasadena 00:21:32.779 --> 00:21:35.859 Water customers or California American Water customers 00:21:35.869 --> 00:21:40.069 until 2024, when our next general rate case is expected 00:21:40.069 --> 00:21:43.349 to be approved by the California Public Utilities Commission. 00:21:44.740 --> 00:21:47.450 As part of the acquisition, California American Water 00:21:47.450 --> 00:21:50.829 has proposed to allocate a portion of the acquisition 00:21:50.829 --> 00:21:54.039 cost to all customers statewide through its general 00:21:54.049 --> 00:21:58.119 office allocation. This will distribute cost impacts 00:21:58.289 --> 00:22:02.319 over a large customer base, which would result in 00:22:02.319 --> 00:22:08.349 a cost increase of approximately 0.71% for all customers, 00:22:09.140 --> 00:22:12.849 including current California American Water and current 00:22:13.240 --> 00:22:17.500 East Pasadena Water Company customers. California 00:22:17.500 --> 00:22:20.400 Legislature has found that public water systems face 00:22:20.400 --> 00:22:24.099 the need to replace or upgrade system infrastructure 00:22:24.640 --> 00:22:28.190 to meet increasingly stringent state and federal drinking 00:22:28.190 --> 00:22:31.660 laws and regulations related to fire flow and protection. 00:22:33.990 --> 00:22:37.140 The Legislature has also found that increasing amounts 00:22:37.140 --> 00:22:40.470 of capital are required to finance the necessary investment 00:22:40.759 --> 00:22:44.720 in such infrastructure and scale economies are achievable 00:22:44.970 --> 00:22:48.059 in the operation of public water systems and providing 00:22:48.059 --> 00:22:51.349 corporations with incentive to achieve these scale economies 00:22:51.740 --> 00:22:55.640 will provide benefits to ratepayers. California American 00:22:55.640 --> 00:22:58.960 Waters requested statewide allocation ensures that 00:22:59.250 --> 00:23:02.789 increased revenue due to the acquisition be spread 00:23:02.799 --> 00:23:06.599 over all customers of California American Water and 00:23:06.599 --> 00:23:09.069 not just be spread among the customers within the Los 00:23:09.069 --> 00:23:12.339 Angeles district. This spreading of costs will help 00:23:12.339 --> 00:23:15.730 achieve the legislature's intent that scale economies 00:23:15.730 --> 00:23:20.049 provide benefits to all ratepayers without disproportionately 00:23:20.059 --> 00:23:23.839 impacting a smaller set of customers. 00:23:23.839 --> 00:23:26.519 The purchase of the East Pasadena Water Company is 00:23:26.519 --> 00:23:30.160 expected to produce significant cost savings and expected 00:23:30.160 --> 00:23:33.660 benefits, including access to water right that will 00:23:33.660 --> 00:23:37.339 accrue to both customers of the East Pasadena system 00:23:37.470 --> 00:23:40.759 as well as existing California American Water customers. 00:23:41.890 --> 00:23:45.029 In addition, current East Pasadena Water customers 00:23:45.039 --> 00:23:48.049 will benefit from our robust water conservation rebate, 00:23:48.640 --> 00:23:51.940 free water saving devices, our customer service center, 00:23:52.140 --> 00:23:56.640 and our web self-service option, My Account. 00:23:56.640 --> 00:23:59.910 We also have more payment options, longer customer 00:23:59.910 --> 00:24:03.160 service hours, and more tools available online. 00:24:03.680 --> 00:24:07.849 Most important, we have a program for low income customers. 00:24:08.539 --> 00:24:11.000 When that is paired with our extensive conservation 00:24:11.000 --> 00:24:14.059 programs, we can help reduce bills for disadvantaged 00:24:14.069 --> 00:24:17.690 customers by a large margin. We're happy to be here. 00:24:17.960 --> 00:24:21.420 We look forward to serving our new East Pasadena customers 00:24:21.430 --> 00:24:24.269 and ensuring that their water quality meets or surpasses 00:24:24.279 --> 00:24:27.710 state and federal standards. My colleagues and I are 00:24:27.710 --> 00:24:30.269 available to answer any questions you may have. Thank 00:24:30.269 --> 00:24:32.640 you. 00:24:32.640 --> 00:24:37.339 Thank you, Mr Baretto. Before we turn to the public, 00:24:37.349 --> 00:24:42.210 we have, with us on the line, Mr Edward Share from 00:24:42.210 --> 00:24:46.207 the Public Advocate's office. Mr. Share, please go ahead. 00:24:46.231 --> 00:24:49.140 Thank you, Judge. Ah, Good evening, everyone. 00:24:49.170 --> 00:24:51.900 My name is Edward Share. I'm an analyst with the Public 00:24:51.910 --> 00:24:55.599 Advocate's Office. The Public Advocate's office is 00:24:55.599 --> 00:24:59.029 an independent unit within the California Public Utilities 00:24:59.029 --> 00:25:03.079 Commission. We are statutorily mandated to represent 00:25:03.089 --> 00:25:07.400 the California ratepayers. Our mission is to obtain the 00:25:07.400 --> 00:25:11.509 lowest possible rates while ensuring safe and reliable 00:25:11.509 --> 00:25:15.980 utility service. My office reviewed the CalAm-East 00:25:15.990 --> 00:25:20.109 Pasadena joint application. On May 11, 2020, we 00:25:20.109 --> 00:25:24.190 submitted a protest to the Commission. Our concern 00:25:24.380 --> 00:25:27.710 is whether this acquisition is fair to California rate 00:25:27.720 --> 00:25:31.730 payers. We reviewed the record, requested additional 00:25:31.730 --> 00:25:34.720 data from the California American Water Company and 00:25:34.720 --> 00:25:38.759 East Pasadena Water Company and performed our own analysis. 00:25:39.839 --> 00:25:42.480 On July 6, we submitted our recommendations to the 00:25:42.480 --> 00:25:46.970 Commission. We have two goals. One is to ensure that 00:25:46.980 --> 00:25:49.779 East Pasadena customers receive the benefits of the 00:25:49.779 --> 00:25:53.980 proposed transaction. Second goal is that CalAm's other 00:25:53.980 --> 00:25:57.759 customers are not unreasonably burdened by this acquisition 00:25:59.539 --> 00:26:02.579 We recommend that the gain on the sale of the East 00:26:02.579 --> 00:26:06.250 Pasadena Water Company should also be distributed to 00:26:06.250 --> 00:26:11.130 its rate payers. Over the years, East Pasadena ratepayers 00:26:11.140 --> 00:26:14.890 absorbed the risks of investment by contributing the 00:26:14.890 --> 00:26:18.849 cost of the system. East Pasadena ratepayers should receive 00:26:18.849 --> 00:26:22.269 their fair share of the benefits of the sale of this 00:26:22.269 --> 00:26:27.680 system to CalAM. A gain would be the 00:26:27.680 --> 00:26:29.839 amount of the purchase price that is greater than the 00:26:29.839 --> 00:26:33.049 original cost in the cost of a non-depreciable assets, 00:26:33.640 --> 00:26:37.650 one like land or water rights. In the case of a depreciable 00:26:37.650 --> 00:26:41.410 asset, we're talking about the gain is the amount 00:26:41.420 --> 00:26:46.049 greater than the net book value. CalAdvocates calculates 00:26:46.640 --> 00:26:52.210 the gain on sale is approximately 27.7 million of the 00:26:52.220 --> 00:26:56.740 $34 million purchase price. 00:26:56.740 --> 00:27:00.960 East Pasadena ratepayers should receive 18.8 million 00:27:00.970 --> 00:27:07.450 of the total 27.7 million gain on sale. That 18.8 million 00:27:07.839 --> 00:27:11.349 customer share of gain on sale should be returned to 00:27:11.849 --> 00:27:15.380 East Pasadena customers as a surcredit to offset 00:27:15.380 --> 00:27:18.930 the increase in rates due to the purchase system by 00:27:18.930 --> 00:27:21.240 CalAm. 00:27:21.240 --> 00:27:24.849 Finally, in addition, we recommend that CalAm's request 00:27:25.440 --> 00:27:28.279 on East Pasadena acquisition contingency memorandum 00:27:28.279 --> 00:27:32.279 account and for a transaction memorandum account are 00:27:32.289 --> 00:27:37.539 unnecessary. Thank you very much for your time. 00:27:37.539 --> 00:27:40.869 Thank you, Mr Share. And thank you for those waiting 00:27:40.869 --> 00:27:45.440 on the line to speak. I remind you, you may join this 00:27:45.450 --> 00:27:48.650 line by pressing *1, if you have called the telephone 00:27:48.650 --> 00:27:53.309 number. If you do speak, please start with your name 00:27:53.599 --> 00:27:58.339 and also your city and spell your name for the 00:27:58.339 --> 00:28:01.509 record. 00:28:01.509 --> 00:28:04.690 Each speaker will have a time limit of four minutes and 00:28:04.690 --> 00:28:09.559 a chime will sound when your time is up. We will be 00:28:09.569 --> 00:28:13.950 able to hear your best if you take yourself off speakerphone 00:28:14.680 --> 00:28:18.990 and speak directly into the receiver. With that operator, 00:28:19.000 --> 00:28:21.153 would you please announce our first speaker? 00:28:21.177 --> 00:28:23.390 The public 00:28:23.400 --> 00:28:27.900 comment line is now open. Our first speaker will be 00:28:27.910 --> 00:28:40.720 Gay Jones. Miss Jones, your line is open. 00:28:40.720 --> 00:28:45.369 Thank you very much. My name is Gay Jones. I live in 00:28:45.369 --> 00:28:49.829 the unincorporated area of Sacramento County. I am 00:28:49.829 --> 00:28:53.000 co-chair for the Butterfield Riviera East Community 00:28:53.000 --> 00:28:58.380 Association. My association, myself and my association, 00:28:58.380 --> 00:29:02.750 concur with all the comments from the Public Advocate's 00:29:02.759 --> 00:29:07.339 office. And I have a question. 00:29:07.339 --> 00:29:13.029 What are the direct and indirect water rights 00:29:13.029 --> 00:29:17.230 contained within the purchase, within this proposed 00:29:17.240 --> 00:29:25.339 purchase? Thank you. 00:29:25.339 --> 00:29:30.539 Thank you, Miss Jones. And I actually will refer 00:29:30.539 --> 00:29:34.339 you to a representative from California American Water 00:29:34.680 --> 00:29:39.430 who has provided a direct line, so that your question may be answered. 00:29:40.339 --> 00:29:42.940 And 00:29:42.940 --> 00:29:46.339 the name with California American Water is Gabrielle 00:29:46.349 --> 00:29:57.759 Castaneda, and his phone number is 619-446-5520. 00:30:02.029 --> 00:30:05.509 With that, we will turn to the next speaker. Operator 00:30:05.599 --> 00:30:06.387 go ahead. 00:30:06.411 --> 00:30:11.619 Our next speaker is Tammy Jennings. Please 00:30:11.630 --> 00:30:16.640 go ahead. 00:30:16.640 --> 00:30:20.990 Yes. Hello. My name is Tammy Jennings. I live in Monterey, 00:30:20.990 --> 00:30:29.720 California. I oppose this purchase by CalAm. Members 00:30:29.720 --> 00:30:35.819 of the Pasadena area, please beware. I live in Monterey, 00:30:35.819 --> 00:30:44.450 California, and CalAm has been here for decades. And 00:30:44.940 --> 00:30:51.400 they have never found, they have not found a new water 00:30:51.400 --> 00:30:55.660 source. They want to build a de-sal plant up here. 00:30:56.940 --> 00:31:00.259 Our water rates are the most expensive in the country, 00:31:00.640 --> 00:31:06.049 not just in California. If you, if CalAm purchases 00:31:07.240 --> 00:31:13.039 your water system, be prepared for exorbitant water 00:31:13.039 --> 00:31:18.599 rates. Water and air should not be for profit. They 00:31:18.599 --> 00:31:24.759 are things that we need to survive to live. And CalAm 00:31:25.339 --> 00:31:34.539 is making money hand over fist with basically 00:31:34.539 --> 00:31:38.390 nothing, they haven't done anything to help us in decades. 00:31:39.339 --> 00:31:43.630 And I'm just really concerned about the people in Pasadena 00:31:43.630 --> 00:31:46.640 and what's gonna happen in your future. They're saying 00:31:46.640 --> 00:31:51.849 that the rate increases won't happen till 2024. Well, 00:31:53.539 --> 00:31:58.390 expect your rates to quadruple because mine have, 00:31:58.400 --> 00:32:05.759 and I am a single woman, I'm on disability, and it's 00:32:05.769 --> 00:32:11.849 very, very difficult to live when you don't know 00:32:12.440 --> 00:32:15.980 if you're going to be able to afford water. I have 00:32:15.980 --> 00:32:20.380 had dirt in my backyard for 24 years because I cannot 00:32:20.380 --> 00:32:24.490 afford the water prices. 00:32:24.490 --> 00:32:28.319 Just be prepared and be aware. And I listened to this 00:32:28.420 --> 00:32:35.019 at two oclock and I tried to speak, and when I 00:32:35.019 --> 00:32:38.450 heard that the, there was nobody in the waiting room 00:32:38.450 --> 00:32:43.299 and I was still on hold. So just CPUC, be aware that 00:32:43.309 --> 00:32:46.230 there are people out there that I want to speak and 00:32:46.230 --> 00:32:51.349 might not have had the opportunity. So just 00:32:51.349 --> 00:32:55.990 FYI. But please be aware, Pasadena people, and the 00:32:56.000 --> 00:32:59.259 state of California, everybody, all the rate ship payers 00:32:59.259 --> 00:33:06.240 should not have to pay for this. 00:33:06.240 --> 00:33:10.039 This purchase. I'm sorry. It's wrong. 00:33:10.039 --> 00:33:12.140 Thank you. 00:33:12.140 --> 00:33:17.480 Miss Jennings. Thank you for your perseverance. And in fact, 00:33:19.039 --> 00:33:25.500 I would urge those listening in now to feel free 00:33:25.509 --> 00:33:30.329 to join the line of commenters. I believe it is a very 00:33:30.329 --> 00:33:34.660 short line, and I will let you know now how you may 00:33:34.670 --> 00:33:39.559 do, so that we do not inadvertently close the line 00:33:39.569 --> 00:33:43.180 or end the meeting without all those who wish to speak 00:33:43.420 --> 00:33:47.339 having such a chance to speak. 00:33:47.339 --> 00:33:56.349 You may call 1-800-857-1917 and use the pass code 00:33:56.839 --> 00:34:06.180 5248329 to reach the line by which 00:34:06.180 --> 00:34:09.960 you can make a comment. And finally, you musst press 00:34:10.840 --> 00:34:15.849 *1 to make your comment. I apologize for the 00:34:15.849 --> 00:34:19.420 repetitive nature of this announcement, but I do want 00:34:19.429 --> 00:34:23.250 to make sure everybody who intends to can make a comment. 00:34:24.179 --> 00:34:28.429 I also would like to remind those listening of Spanish 00:34:28.429 --> 00:34:33.010 translation available. And we will also make this announcement 00:34:33.010 --> 00:34:38.440 now in Spanish. If Miss Sanchez is available. 00:34:38.440 --> 00:35:13.039 (speaks in Spanish) 00:35:13.039 --> 00:35:14.763 Thank you, Miss 00:35:14.775 --> 00:35:16.809 Sanchez. And we will now ask the operator 00:35:16.820 --> 00:35:20.739 if there are others who wish to speak. 00:35:20.739 --> 00:35:28.210 Our next speaker is Gay Jones, please go ahead. 00:35:28.210 --> 00:35:31.300 Thank you, ma'am. Again. Thanks for all in attendance 00:35:31.300 --> 00:35:35.809 for your patience and perseverance. The, in response 00:35:35.820 --> 00:35:41.059 to my question about direct and indirect water rights 00:35:41.070 --> 00:35:44.460 that come with this purchase, a phone number was given 00:35:44.460 --> 00:35:48.719 out and I did not get it down. And additionally, I 00:35:48.730 --> 00:35:54.469 cannot, can we take that answer live on the phone 00:35:54.480 --> 00:35:58.840 for the recording purposes, please? 00:35:58.840 --> 00:36:05.550 Miss John, I believe that we may have time to ask 00:36:06.230 --> 00:36:10.579 one of the CalAm representatives, if they are 00:36:10.590 --> 00:36:13.920 able to share this information for the benefit of all 00:36:13.920 --> 00:36:18.989 those listening. I will start by asking, Mr Barreto, 00:36:19.000 --> 00:36:23.650 if he would like to weigh in on the question of water 00:36:23.650 --> 00:36:28.909 rights. And if Mr Barreto finds it necessary, 00:36:28.920 --> 00:36:31.840 he can refer us to someone else who is also with us 00:36:32.019 --> 00:36:33.034 from the company. 00:36:33.058 --> 00:36:34.823 Thank you. 00:36:34.847 --> 00:36:38.219 Yes, this is Brian. 00:36:38.230 --> 00:36:43.989 Again. To answer your question, Miss Jones, East 00:36:44.260 --> 00:36:48.949 Pasadena holds a prescriptive pumping right of 00:36:49.429 --> 00:36:55.380 1407 acre feet in the main basin. And East Pasadena holds 00:36:55.659 --> 00:37:02.360 decreed rights of 515 acre feet in the Pasadena-Subera 00:37:02.460 --> 00:37:06.230 of the Raymond Basin Western Unit. This total of 00:37:06.230 --> 00:37:10.650 1768 acre feet of water rights is included in the purchase. 00:37:11.130 --> 00:37:15.210 And, I know that Wes Owens is on the call and 00:37:15.219 --> 00:37:18.219 if he, there's more information that you need, we can, 00:37:18.230 --> 00:37:21.250 or Nick, is on the call, Nick Suvious is on the call as 00:37:21.250 --> 00:37:23.550 well. We can add some more context to that, if you 00:37:23.550 --> 00:37:24.285 would like. 00:37:24.309 --> 00:37:28.250 Thank you very much. What was the adjective 00:37:28.260 --> 00:37:34.280 description for the first water right? Presiding. 00:37:36.030 --> 00:37:38.362 I missed the descriptive. 00:37:38.386 --> 00:37:40.480 Prescriptive pumping rights. 00:37:40.860 --> 00:37:46.170 Prescriptive. Gotcha. Thank you. And so what is the, 00:37:46.309 --> 00:37:51.630 could you please repeat the total acre feet for 00:37:51.630 --> 00:37:54.949 water rights, both direct and indirect, in regards to 00:37:54.949 --> 00:37:58.650 this purchase. Just the final total number, please. 00:38:00.820 --> 00:38:06.648 Sure. It's 1768.2 acre feet. 00:38:06.672 --> 00:38:09.550 Okay, thank you very 00:38:09.550 --> 00:38:11.272 much. I appreciate that information. 00:38:11.296 --> 00:38:13.659 Thank you all 00:38:13.670 --> 00:38:18.250 for going a little bit more into detail, and I'm glad 00:38:18.260 --> 00:38:21.860 we have such an opportunity to do so. However I do 00:38:21.860 --> 00:38:24.599 you want to give an opportunity to others who (inaudible) 00:38:25.500 --> 00:38:28.269 Operator, would you please call in our next speaker, 00:38:29.920 --> 00:38:34.260 Our next speaker is Marley Milton. Please go ahead 00:38:34.429 --> 00:38:37.107 Could you please repeat the total acre 00:38:37.119 --> 00:38:39.705 feet for water rights, both direct and indirect-- 00:38:39.729 --> 00:38:41.480 Let's go off the 00:38:42.550 --> 00:38:44.829 record for a moment. 00:38:44.829 --> 00:38:46.860 --final total number-- 00:38:46.884 --> 00:38:49.010 I hear a 00:38:49.010 --> 00:38:53.019 recording being (inaudible crosstalk) 00:38:53.019 --> 00:38:57.989 --while that gets fixed up and then we will next try again. 00:38:57.989 --> 00:39:03.949 I appreciate that Information. 00:39:03.949 --> 00:39:09.619 a little bit more into detail, and I'm glad we have-- 00:39:09.619 --> 00:39:12.159 Your Honor, this is the court reporter. I believe Miss 00:39:12.199 --> 00:39:17.619 Jones does not have a line muted. 00:39:17.619 --> 00:39:24.599 This is coming from Marley Milton's line. 00:39:24.599 --> 00:39:27.989 Hello. 00:39:27.989 --> 00:39:32.769 Hello. This is Marley Melton from Carmel Valley. Can 00:39:32.769 --> 00:39:35.900 you hear me? 00:39:35.900 --> 00:39:37.115 Miss Milton, it 00:39:37.127 --> 00:39:38.599 appears there's a recording being played. 00:39:38.623 --> 00:39:42.840 Yes, there's another conversation 00:39:42.840 --> 00:39:47.630 going on in the background and I can't quite get rid 00:39:47.630 --> 00:39:53.035 of it. Can you still hear me? Hello? 00:39:53.059 --> 00:39:54.309 Yes, we hear 00:39:54.309 --> 00:39:57.210 you. But if you would hold one moment, and I would like 00:39:57.210 --> 00:40:00.369 to ask the operator if it's possible for them to mute 00:40:00.380 --> 00:40:04.257 all other lines, and perhaps we will then here you more clearly. 00:40:04.281 --> 00:40:08.099 All lines are muted. The only open 00:40:08.099 --> 00:40:10.119 line is Marley Milton. 00:40:10.143 --> 00:40:12.829 Thank you very much. And thank 00:40:12.829 --> 00:40:17.400 you, Judge Camille Watts-Zaghara and Commissioner 00:40:17.400 --> 00:40:19.980 Genevive Shiroma who has come to a community-- 00:40:20.004 --> 00:40:21.679 Court Reporter, 00:40:21.829 --> 00:40:24.353 I didn't hear if we're back on the record yet. 00:40:24.377 --> 00:40:27.137 Oh, sorry. Are we back on the record? 00:40:27.161 --> 00:40:28.250 You're now back on 00:40:28.250 --> 00:40:30.730 the record. And Miss Milton, if you would start from the 00:40:30.739 --> 00:40:31.646 beginning. 00:40:31.670 --> 00:40:35.150 Yes. My name is Marley. M-A-R-L-I, 00:40:35.550 --> 00:40:39.519 Milton, M-E-L-T-O-N. And I wanted to thank 00:40:39.909 --> 00:40:43.909 Judge Camille Watts-Zegarra and Commissioner Genevieve 00:40:43.920 --> 00:40:50.059 Shiroma for this meeting. Please do not 00:40:50.059 --> 00:40:54.360 approve the $34 million fair value price or 00:40:54.369 --> 00:40:58.920 so-called fair value price for this acquisition. 00:40:58.920 --> 00:41:02.289 If it is approved, a fair, publicly-controlled, well 00:41:02.289 --> 00:41:06.500 documented process, not CalAm or the seller, should 00:41:06.500 --> 00:41:11.480 determined the current actual value of EPWC, noting 00:41:11.480 --> 00:41:14.420 that its equipment has depreciated and it no longer 00:41:14.420 --> 00:41:18.969 meets California's standards in law. Fair market value 00:41:18.969 --> 00:41:22.340 is the price at which property would change hands between 00:41:22.340 --> 00:41:25.989 the hypothetical willing buyer and the hypothetical 00:41:25.989 --> 00:41:30.940 willing seller acting at arm's length in an open and 00:41:30.940 --> 00:41:36.429 unrestricted, that is competitive, market. Fair value can't 00:41:36.429 --> 00:41:39.840 exist in markets where there are monopolies or oligopolies. 00:41:40.739 --> 00:41:45.360 In California, a so-called fair value legislation has 00:41:45.369 --> 00:41:49.230 not resulted in savings or benefits for statewide ratepayers. 00:41:49.909 --> 00:41:53.090 Instead, it tends to favour ownership transfers that 00:41:53.380 --> 00:41:57.469 produce windfall profits for shareholders that we ratepayers 00:41:57.469 --> 00:42:02.050 have to pay for. But we are not wealthy. Please say no to 00:42:02.050 --> 00:42:06.599 these types of transfers. The wealthy city of Pasadena 00:42:06.599 --> 00:42:10.050 is right next door to East Pasadena and could help out 00:42:10.050 --> 00:42:13.530 its less fortunate neighbours, but its municipal water 00:42:13.530 --> 00:42:17.949 company is not interested. It is not incentivized to 00:42:17.960 --> 00:42:23.349 overspend on acquisitions in order to inflate, or over 00:42:23.349 --> 00:42:28.389 price, its capital investments. So please do not incentivise 00:42:28.400 --> 00:42:33.420 overpriced investments to benefit CalAm's already very 00:42:33.420 --> 00:42:38.099 profitable monopoly, and please say no to CalAm's 00:42:38.099 --> 00:42:41.340 proposed statewide billing of this and other acquisitions. 00:42:41.800 --> 00:42:46.789 Water rights to pump less than 2000 acre feet in East 00:42:46.800 --> 00:42:49.900 Pasadena do not benefit that people of Monterry 00:42:49.900 --> 00:42:54.730 County. CalAm's purchase of EPWC, even at a 00:42:54.730 --> 00:42:58.800 reduced price, will not be connected to or benefits 00:42:58.809 --> 00:43:02.460 if Monterey Peninsula operations and should not be 00:43:02.460 --> 00:43:06.110 billed to or paid for by Monterrey Peninsula ratepayers 00:43:06.599 --> 00:43:09.519 We are already paying for some of the most expensive 00:43:09.519 --> 00:43:12.079 water in the nation because of the high costs of the 00:43:12.079 --> 00:43:16.219 local CalAm system. Loading us ratepayers with 00:43:16.230 --> 00:43:20.760 debt for CalAm's out of area acquisitions is simply 00:43:20.760 --> 00:43:24.440 another example of unreasonable and exploitive 00:43:24.449 --> 00:43:28.409 profit seeking. If the State of California wants 00:43:28.409 --> 00:43:31.809 to assure safe drinking water for low income communities, 00:43:32.300 --> 00:43:35.820 and I support this, the state should develop reasonable 00:43:35.820 --> 00:43:40.079 ways to pay for this. More than 80% of Californians 00:43:40.079 --> 00:43:43.559 get their water from public utilities, so they won't 00:43:43.559 --> 00:43:47.510 be billed to support little income communities. Burdening 00:43:47.510 --> 00:43:51.869 only 20% of California's who get water from for-profit 00:43:51.869 --> 00:43:56.170 companies with this costly and immense statewide need, 00:43:56.179 --> 00:44:00.539 especially with the pandemic still going on, is simply 00:44:00.539 --> 00:44:05.730 not reasonable. In 2015, Senate Bill 88 provided, in 00:44:05.730 --> 00:44:09.280 section three, the consolidated water system shall 00:44:09.280 --> 00:44:13.449 not increase charges on existing companies of the receiving 00:44:13.449 --> 00:44:17.789 water system solely as a consequence of the consolidation 00:44:17.789 --> 00:44:21.550 or extension of service unless the customers receive 00:44:21.550 --> 00:44:26.889 a corresponding benefit. Doing other, and we will not, 00:44:27.340 --> 00:44:31.619 doing otherwise amounts to what is, in effect, a tax 00:44:31.619 --> 00:44:37.760 that is malapportioned and grossly unfair. 00:44:37.760 --> 00:44:42.320 Thank you very much. Please don't approve the $34 million 00:44:42.500 --> 00:44:48.179 price. Don't bill us. Don't provide windfall profits 00:44:48.190 --> 00:44:52.420 for shareholders. And please don't bill nonlocal 00:44:52.889 --> 00:44:57.199 ratepayets or don't allow CalAm to bill us for this 00:44:57.199 --> 00:45:01.190 acquisition. Thank you very much, 00:45:01.190 --> 00:45:07.320 Mrs Milton. Thank you for the comment. We do have 00:45:07.329 --> 00:45:11.070 additional time to hear from others, and there is no 00:45:11.070 --> 00:45:14.109 waiting if you would like to speak by pressing-- 00:45:14.133 --> 00:45:15.559 Your honor, 00:45:15.559 --> 00:45:17.699 this is Nick Suvious, I just wanted to 00:45:17.699 --> 00:45:21.670 make a quick comment on the water right. Just 00:45:21.670 --> 00:45:24.860 a quick clarification with regards to the water rights 00:45:24.860 --> 00:45:31.000 in the basin. East Pasadena holds 515 acre feet 00:45:31.010 --> 00:45:34.880 in the Raymond basin, but those rights were reduced 00:45:34.889 --> 00:45:40.710 by 30% in 2009, by order of a pumping reduction 00:45:40.710 --> 00:45:45.130 decree from the Basin management. So that number, that 00:45:45.130 --> 00:45:51.579 leaves 360.5 acre feet of decreed rights currently 00:45:51.590 --> 00:45:55.000 available before withdrawal in the Raymond basin. 00:45:55.429 --> 00:46:01.030 So that's just a clarification. 00:46:01.030 --> 00:46:04.880 Thank you, Mr Suvious. And could you remind us all 00:46:04.889 --> 00:46:07.261 of your title with California American? 00:46:07.285 --> 00:46:08.449 Sure. I am 00:46:08.449 --> 00:46:12.579 Director of Corporate Counsel. 00:46:12.579 --> 00:46:17.210 Thank you. I'd like to inquire with the operator if there 00:46:17.210 --> 00:46:22.579 are others on the line waiting to speak. 00:46:22.579 --> 00:46:26.829 There are no more speakers on the public comment telephone 00:46:26.829 --> 00:46:31.679 line. 00:46:31.679 --> 00:46:36.059 Then we will go off the record. And I would also like 00:46:36.070 --> 00:46:39.780 to wait a moment and I will make one more announcement 00:46:40.079 --> 00:46:44.590 before we adjourn our meeting so as not to miss anyone. 00:46:44.980 --> 00:46:48.360 So, if all of those with us would just wait approximately 00:46:48.369 --> 00:46:51.920 three minutes, I will make another announcement and 00:46:51.920 --> 00:46:56.260 we will offer the opportunity for the public to speak 00:46:56.269 --> 00:47:05.079 again. 00:47:05.079 --> 00:47:08.719 And I will also ask the operator, as well as Miss Sanchez, 00:47:08.730 --> 00:47:11.639 if you are able to announce to those listening on the 00:47:11.639 --> 00:47:16.860 line, they should press *1 and make the 00:47:16.869 --> 00:47:20.400 same announcement in Spanish, that would be quite helpful. 00:47:25.679 --> 00:47:28.739 If you would like to make a comment, please press *1 00:47:32.360 --> 00:48:07.269 (speaks in Spanish) 00:48:21.030 --> 00:48:22.861 This is Administrative 00:48:22.873 --> 00:48:24.190 Law Judge Camille Watts-Zagha. 00:48:24.769 --> 00:48:28.269 And while we continue to be off the record, I would 00:48:28.269 --> 00:48:31.269 like to announce for all those listening that this 00:48:31.269 --> 00:48:35.510 is the Public Participation Hearing of the California 00:48:35.510 --> 00:48:41.349 Public Utilities Commission in application 2004003, 00:48:42.119 --> 00:48:45.360 the joint application of California American Water 00:48:45.360 --> 00:48:51.320 Company and East Pasadena Water Company for CalAm 00:48:51.329 --> 00:48:54.769 to acquire East Pasadena. 00:48:54.769 --> 00:48:59.210 We are going to offer one more opportunity. If there 00:48:59.210 --> 00:49:05.429 is any customer of CalAm or East Pasadena or a member 00:49:05.429 --> 00:49:08.550 of the public who would like to make a comment about 00:49:08.559 --> 00:49:11.889 this application that the Commission is considering, 00:49:12.369 --> 00:49:23.800 to please call 1-800-857-1917. You will be put through 00:49:23.909 --> 00:49:26.989 to this meeting, and we will be able to hear your comments. 00:49:27.869 --> 00:49:35.230 The access code for this phone line is 5248329, 00:49:36.369 --> 00:49:41.969 and in order to speak, you must press *1. 00:49:41.969 --> 00:49:48.969 I would like to go back on the record now. 00:49:48.969 --> 00:49:52.079 This is Administrative Law Judge Camille Watts-Zagha, 00:49:52.119 --> 00:49:58.300 and I am making one last call for any members of the 00:49:58.300 --> 00:50:01.880 public who wish to address the Commission with their comments 00:50:03.159 --> 00:50:07.269 to please be put through now by the operator. 00:50:09.360 --> 00:50:11.920 Your Honor, I do have some speakers that are ready. 00:50:13.260 --> 00:50:16.070 Wonderful. Please go ahead with the first speaker. 00:50:16.860 --> 00:50:20.500 Thank you. Our first speaker is Nancy Soleil. Please 00:50:20.510 --> 00:50:23.460 go ahead. 00:50:23.460 --> 00:50:26.869 Hi, this is Nancy Soliel. I live in Monterey, so 00:50:26.869 --> 00:50:32.699 I'm a customer of CalAm and I am supporting the Public 00:50:32.710 --> 00:50:37.449 Advocates position to be against the purchase of CalAm. 00:50:37.829 --> 00:50:44.070 This passing on these costs to the public is unfair. 00:50:44.429 --> 00:50:48.090 There's no other kinds of investments where those costs 00:50:48.090 --> 00:50:51.130 aren't already absorbed by the principles. And to pass 00:50:51.130 --> 00:50:55.170 them on to the ratepayers, I believe, is unfair and 00:50:55.179 --> 00:50:57.373 unjust. Thank you very much. 00:50:57.397 --> 00:51:00.170 Thank you for your comment, 00:51:00.340 --> 00:51:04.679 Miss Soliel. Operators, do we have another commenter 00:51:04.679 --> 00:51:05.396 on the line? 00:51:05.420 --> 00:51:10.119 Yes. Our next speaker is Gay Jones. Please 00:51:10.130 --> 00:51:13.179 go ahead. 00:51:13.179 --> 00:51:16.159 Thank you. 00:51:16.159 --> 00:51:21.000 I am sorry that there are not more public speakers. 00:51:21.019 --> 00:51:24.500 I would like to reiterate total support for the previous 00:51:24.510 --> 00:51:29.599 public speakers. We have a, because we have a continuous 00:51:29.610 --> 00:51:33.909 situation with California American Water where the 00:51:33.920 --> 00:51:39.559 risk of investment is, has always been shouldered by 00:51:39.750 --> 00:51:44.639 the customers, by the ratepayers. And yet any gain on 00:51:44.639 --> 00:51:50.150 investment or return on investment is not returned 00:51:50.250 --> 00:51:55.500 to the ratepayers. And this inequity is a large and 00:51:55.500 --> 00:52:00.039 ubiquitous problem, challenge for all of us within the 00:52:00.039 --> 00:52:08.250 state of California. Thank you for your time. 00:52:08.250 --> 00:52:13.070 Thank you, Miss Jones, for sticking with us. Do we have 00:52:13.079 --> 00:52:16.013 another commenter on the phone, Operator? 00:52:16.037 --> 00:52:21.969 Yes, our next speaker is Maria Hernandez. Please, go ahead. 00:52:23.650 --> 00:52:26.389 Thank you very much. I just want to say, as a paying 00:52:26.389 --> 00:52:32.190 customer, already, CalAm's water rates as a resident, 00:52:32.199 --> 00:52:37.369 a single parent, single individual, in a home with 00:52:37.369 --> 00:52:42.010 my only water company option, CalAmerican, that my 00:52:42.010 --> 00:52:46.199 household, as a disabled, Hispanic-American woman, is 00:52:46.210 --> 00:52:50.030 not able to maintain such outrageous costs, monthly 00:52:50.030 --> 00:52:53.530 costs, for my water bill that continues to rise and 00:52:53.530 --> 00:52:57.880 rise. And I'm speaking out in complete negative 00:52:57.889 --> 00:53:03.550 comment about CalAm's proposal for the East Pasadena 00:53:03.550 --> 00:53:07.550 Water Company. 00:53:07.550 --> 00:53:08.550 Thank you. 00:53:22.550 --> 00:53:25.949 Mr Hernandez. If you're still able to be on the line, 00:53:25.960 --> 00:53:28.469 would you mind sharing the city from which you're calling? 00:53:28.849 --> 00:53:29.581 Sacramento, California. Out Grove, California. 00:53:29.605 --> 00:53:29.841 Thank you, 00:53:32.909 --> 00:53:37.260 Mr Hernandez. Operator, we're ready for the next speaker. 00:53:40.650 --> 00:53:43.849 Your honor, there are no more speakers on the public 00:53:43.849 --> 00:53:52.550 comment telephone line. 00:53:52.550 --> 00:53:56.280 I believe then it is time to conclude this public 00:53:56.280 --> 00:54:01.539 forum, and I finally would like to remind those listening 00:54:01.550 --> 00:54:08.449 that you may follow the activities in this case throughout, 00:54:08.599 --> 00:54:13.190 and you have the opportunity, until the final decision 00:54:13.199 --> 00:54:17.420 is put out, to add additional comments. And you may 00:54:17.420 --> 00:54:21.969 tell your neighbors and other people who are customers 00:54:21.980 --> 00:54:25.730 of a company that they to have this opportunity to submit 00:54:25.739 --> 00:54:29.920 written comments through the California Public Utilities 00:54:29.929 --> 00:54:35.369 Commissions Docket Card on our website for this application. 00:54:37.349 --> 00:54:41.670 We thank you very much for joining us tonight, and we 00:54:41.670 --> 00:54:46.449 will take your comments into consideration. 00:54:46.449 --> 00:54:50.159 We are now adjourned and we're off the record. Good 00:54:50.159 --> 00:54:50.469 night.