Waterplus Responds to an Article in the Carmel Pine Cone, Feb. 4, 2011

1. Q. What are the data that the Pine Cone said it had to show that WaterPlus could be seriously underestimating the value of CalAm?
A. The Pine Cone provided only opinions, no data.
2. Q. Was Ron Weitzman behind a failed 2005 ballot measure to purchase Cal Am?
A. No, the measure that failed was a $550,000 study to purchase Cal Am. Monterey FLOW, of which Weitzman was a member, opposed the measure.
3. Q. Has WaterPlus said that Cal Am will "probably cost" $102.5 million, as the Pine Cone stated?
A. No, what we said is that $102.5 million, as the 2009 Cal Am CPUC-set rate base, is our working assumption of the value of Cal Am and that an adjudicated value may be higher or lower than this value depending on liabilities (like the San Clemente Dam) and assets not included in the determination of the rate base by the CPUC. Neither Cal Am nor the Pine Cone has suggested and defended a specific alternative value as a working assumption.
4. Q. Is the $102..5 million just a "meaningless" taxable "book" value, and is the true value likely to be much higher, as the Pine Cone suggested?
A. The Pine Cone did make that suggestion but offered nothing but opinion to defend it. As the Pine Cone was told but did not report, a 2005 appraisal of Cal Am conducted for Monterey FLOW yielded a value of Cal Am within a few million dollars of $102.5 million. Rather than a taxable "book" value, that $102.5 million is the physically depreciated replacement value of Cal Am representing one of the three standard methods of obtaining an appraisal, the other two methods having been used in the 2005 appraisal.
5. Q. Was Catherine Bowie, Cal Am spokeswoman, correct when she said, "Nobody can say what the [precise] cost will be at this time"?
A. Yes.
6. Q. Did Felton proponents of the public buyout of Cal Am underestimate its value by $10.5 million, as the Pine Cone claimed?
A. Perhaps, but the Pine Cone did not identify to which proponents it was referring. It did not say that all—or even most--proponents made that underestimation.
7. Q. Is the value of a public utility simply a multiple of the number of its customers, as the Pine Cone suggested in using Felton’s cost as a basis for estimating the cost of Cal Am?
A. If it were as simple as that, then why would it cost as much as $100,000 to obtain a utility appraisal in a condemnation proceeding?
8. Q. Are private companies always more efficient than public ones, as the Pine Cone asserted?
A. Absolutely not, especially in the case of monopolies like Cal Am. Publicly owned Marina Coast charges its customers one-thirteenth the amount that privately owned Cal Am charges its customers. The Pine Cone was informed of this fact but did not include it in its article.
9. Q. Does WaterPlus meet in Carmel Valley, as the Pine Cone said?
A. No, it meets in Carmel, for whatever difference that makes.
10. Q. Has WaterPlus hired a company to conduct its petition drive, as the Pine Cone said?
A. No, as the Pine Cone was told, it has hired an individual to coordinate the drive.


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