San Clemente Dam
With the PUC scheduled to make a decision today about how much of the cost of removing the silted up and unsafe San Clemente Dam to pass on to Cal-Am ratepayers (and how much profit for Cal-Am to add on top of that), Cal-Am is once again threatening to derail the project unless they get their way. Their way, of course, meaning the ratepayers foot the bill for pretty much everything, including the years of expense and delay caused by Cal-Am’s pursuit of a dam buttressing project that everyone knew (and the PUC specifically warned) would never get a federal permit. If the PUC doesn’t go along with that (unlikely, considering the PUC’s record of subservience to utilities), then Cal-Am will contrive to delay the project long enough to endanger the grant funding that it is hoped will cover approximately $35 million of the cost.
Sound familiar? It should. The last time Cal-Am pulled this stunt was in 2009, when they suddenly announced they were pulling out of the dam removal project (again threatening loss of grant money) … then rejoined again several months later. Rumor has it they extracted an agreement shielding themselves from liability that time.
As the Division of Ratepayer Advocates has meticulously documented, Cal-Am has mismanaged the San Clemente Dam and run up costs to the point that the shareholders, rather than the ratepayers, should bear the costs (which would have been much, much lower had Cal-Am dealt with the aging dam in a reasonable and timely fashion). Don’t expect the PUC to see it that way, though. These are the same people, remember, who found the now discredited operating agreements for the Regional Desal Project reasonable.
Look for Cal-Am to recover not only expenses that should never have been run up in the first place, but also a tidy percentage of profit added onto those expenses. Intransigence pays.
Evening Update: Exactly as expected, the PUC voted 4-1 to give Cal-Am what they demanded. At least they won’t have any reason to further delay the project.