DRA Requests That Cal Am Shareholders, Not Customers, Pay For $138 Million San Clemente Dam Removal


SAN FRANCISCO, May 6, 2011 –  The Division of Ratepayer Advocates (DRA), an independent consumer advocacy division of the California Public Utilities Commission (CPUC) supports the goals of the removal of the San Clemente Dam on the Carmel River but has requested that the CPUC prevent California American Water Company (Cal Am) from charging its Monterey Peninsula customers for that project.  Cal Am proposes to collect $138 million over twenty years from its water customers to fund the project. 

In testimony filed Thursday, DRA argued that Cal Am shareholders – not customers – should foot the hefty bill due to the company’s imprudent handling of the sediment build-up behind the dam and failure to collect depreciation funds sufficient to cover the dam’s removal.

“The problems with the San Clemente Dam should have been dealt with years ago, but Cal Am stubbornly pursued an environmentally inferior alternative while costs for fixing the problem increased,” said DRA acting director Joe Como. “To ask customers to pay for Cal Am’s corporate mistakes is unjustified. The CPUC should reject Cal Am’s plan and send the bill to shareholders.”

DRA said that Cal Am neglected to plan for the end of San Clemente Dam’s useful life, allowing costs for a solution to the problem to rise from $15 million in 1992 to $138 million today.  Monterey Peninsula residents have not received a benefit from the dam since at least 2003, and will not see any further benefits to their water service when the San Clemente Dam is torn down.

“Cal Am has mismanaged the dam, and the corporate leadership should to be held accountable,” said DRA’s Como.

Visit DRA’s San Clemente Dam page for a copy of DRA’s testimony and more information on the proceeding.