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Marina Coast Water District Reply Brief a.12!04!019

Marina Coast Water District Reply Brief a.12!04!019

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In the Matter of the Application of California-American Water Company (U 210 W) for Approval of the Monterey Peninsula Water Supply Project and Authorization to Recover AllPresent and Future Costs in Rates.A.12-04-019(Filed April 23, 2012)
MARK FOGELMANRUTH STONER MUZZINFRIEDMAN & SPRINGWATER LLP33 New Montgomery Street, Suite 290San Francisco, CA 94105Telephone: (415) 834-3800Facsimile: (415) 834-1044Email: mfogelman@friedmanspring.comEmail: rmuzzin@friedmanspring.comAttorneys for Marina Coast Water District
Date: July 25, 2012
07-25-1204:59 PM
Marina Coast Water District (“MCWD”) hereby submits its reply brief on legal issuesthat affect the feasibility of the instant Application.
The County Ordinance Is Not Preempted by Commission Authority in this Case.
California American Water (“Cal-Am”) has failed to meet its burden to demonstrate howthe Commission’s exclusive jurisdiction over investor-owned public utilities either expressly or impliedly preempts Monterey County Code section 10.72.030, subdivision (B) (the “CountyOrdinance”).
A. Cal-Am ignores clear legislative mandate concerning water sources.
Cal-Am states that the County Ordinance conflicts with state law vesting the Commissionwith exclusive regulatory authority over investor-owned utilities, but it cites no basis for extending that authority to encompass regulation of water sources, particularly desalinationfacilities. (Opening Brief of Cal-Am, pp. 1-6.) Cal-Am’s superficial argument points to nofactually analogous case in which the Commission’s broad, general powers were sufficient tooverride a local law that did not contradict or undermine general law or Commission authority.Rather, Cal-Am relies on several cases in which zoning or city ordinances were preempted.Those cases are readily distinguished, because in each instance the Commission had clear  jurisdiction over the public utility activity at issue, and specific constitutional or legislativelanguage supported the exemption. None of those cases purports to extend the Commission’sregulatory authority to encompass determining the ownership of water sources, includingdesalination facilities, as Cal-Am seeks to do here.For instance, Cal-Am cites
Southern California Gas Co. v. City of Vernon
(1995) 41Cal.App.4th 209, to support its argument for express preemption. In that case the gas companywas under the exclusive jurisdiction of the Commission, and the Commission had promulgatedspecific rules establishing minimum requirements for pipelines.
at 216-17.) The Courtnoted that the city did not object on other, permissible grounds such as traffic or safety concernsrelated to location, but rather impermissibly denied the utility an encroachment permit based on purportedly improper pipeline design and construction plans, an area that is fully occupied by theCommission. (
at 219.)Cal-Am’s reliance on
California Water & Telephone Co. v. County of Los Angeles
(1967)253 Cal.App.2d 16, is also misplaced. There, the preempted local ordinance, as applied to the public utility, impermissibly attempted to regulate design and operation of water utility
transmission systems
, not
the utility’s source of water, in contravention of Commission authorityunder specific sections of the Public Utilities Code. (
at 29-31.) Similarly,
 Los Angeles Ry.Corp. v. Los Angeles
(1940) 16 Cal.2d 779, 787, was a case in which a local regulation was preempted because it conflicted with specific Commission rules concerning streetcar operations.Likewise, in
 Public Utilities Com. v. Energy Resources Conservation & Dev. Com.
(1984) 150Cal.App.3d 437, 454, the Commission’s exclusive jurisdiction over power transmission lines wasupheld pursuant to a specific provision of the Public Utilities Code. Finally, in
 Harbor Carriers, Inc. v. City of Sausalito
(1975) 46 Cal.App.3d 773, 775-76, a local zoning ordinance was preempted only to the extent that it prohibited location within the city limits of a project elementthat was a “necessity” to Commission-certificated ferry service. (
Pub. Util. Code § 1001 (noutility may begin construction of a system “without having first obtained from the commission acertificate that
the present or future public convenience and necessity require or will require
 such construction”)
emphasis added 
.)In contrast, in
Orange County Air Pollution Control Dist. v. Public Util. Com.
(1971) 4Cal.3d 945, there was no preemption despite the Commission’s statewide regulatory authorityover public utilities. In that case, Supreme Court found that both the Commission and the localair pollution control district had jurisdiction over the proposed construction of electric generationfacilities, and it annulled the Commission’s order granting a CPCN on account of the project’sfailure to comply with existing air pollution regulations. (
at 954.)Cal-Am’s argument that the Commission’s comprehensive regulation of investor-owned public utilities expressly or impliedly extends to exclusive regulation of the ownership of water sources, including desalination facilities, mischaracterizes the reach and scope of theCommission’s authority. To the contrary, regulation of water sources is vested in the StateWater Resources Control Board and the local and regional water agencies (
 see, e.g.
Water Code,§§ 174-188.5; 380-387; 13200-13208). As MCWD noted, specific regulatory authority over desalination facilities has yet to be delegated by the Legislature, but existing legislation indicatesthat it will not likely be the Commission that is ultimately vested with such authority. (
Opening Brief of MCWD, p. 7,
Water Code §§ 10004.5, 10537 and Sen. Amend. toAssem. Bill No. 2595 (2011-2012 Reg. Sess.) June 14, 2012 (proposing an amendment to thePublic Resources Code that would delegate management of desalination plant permitting to localwater boards).)

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