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Contingencies: | 3 Months Ended
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Mar. 31, 2017
Commitments and Contingencies Disclosure [Abstract] |
Contingencies and Assets Held for Sale | Contingencies and Assets Held for Sale: Condemnation of Properties: The laws of the State of California provide for the acquisition of public utility property by governmental agencies through their power of eminent domain, also known as condemnation, where doing so is necessary and in the public interest. In addition, these laws provide that the owner of utility property (i) may contest whether the condemnation is necessary and in the public interest, and (ii) is entitled to receive the fair market value of its property if the property is ultimately taken. Claremont System: In December 2014, the City of Claremont, California filed a complaint in eminent domain against GSWC. The trial determining the City of Claremont's right to seize the system by eminent domain concluded in August 2016. On December 9, 2016, the County of Los Angeles Superior Court issued a decision rejecting the City of Claremont’s attempt to take over GSWC’s Claremont water system. On February 2, 2017, the City of Claremont filed an appeal to the decision. Registrant is unable predict the outcome of the appeal. GSWC serves approximately 11,000 customers in Claremont. Ojai System: On April 12, 2017, the Board of Directors of Casitas Municipal Water District (“Casitas”) approved a settlement agreement with GSWC, and a group of citizens referred to as Ojai Friends of Locally Owned Water (“Ojai FLOW”) to resolve the eminent domain action and other litigation brought by Casitas and Ojai FLOW against GSWC. Under the terms of the settlement agreement, Casitas will acquire the operating assets of GSWC’s Ojai water system by eminent domain for approximately $34.5 million in cash, including payments for customer receivables and regulatory assets subject to a post-closing final reconciliation. Under the agreement, Casitas and Ojai FLOW have also agreed to dismiss all claims against GSWC, which claims sought damages against GSWC stemming from Casitas’ proposal to issue bonds to finance the acquisition of GSWC’s Ojai water system. The transaction is expected to close in June 2017 following satisfaction of all closing conditions. Upon closing, GSWC expects to recognize a pretax gain on the sale of assets of approximately $8.0 million. As of March 31, 2017, the assets and liabilities related to the Ojai water system to be acquired and assumed by Casitas have been classified as assets and liabilities held for sale on Registrant's balance sheets as follows:
Assets and liabilities held for sale |  |
(dollars in thousands) |  | March 31, 2017
Net utility plant, including CWIP |  | $ | 22,435 |
Accounts receivable and unbilled revenues |  | 399 |
Regulatory assets |  | 4,004 |
Assets held for sale |  | $ | 26,838 |
Advances |  | $ | (383 | )
Contribution in aid of construction - net |  | (555 | )
Liabilities directly associated with assets held for sale |  | $ | (938 | )
Environmental Clean-Up and Remediation: GSWC has been involved in environmental remediation and cleanup at a plant site ("Chadron Plant") that contained an underground storage tank which was used to store gasoline for its vehicles. This tank was removed from the ground in July 1990 along with the dispenser and ancillary piping. Since then, GSWC has been involved in various remediation activities at this site. Analysis indicates that off-site monitoring wells may be necessary to document effectiveness of remediation. As of March 31, 2017, the total spent to clean-up and remediate GSWC’s plant facility was approximately $5.2 million, of which $1.5 million has been paid by the State of California Underground Storage Tank Fund. Amounts paid by GSWC have been included in rate base and approved by the CPUC for recovery. As of March 31, 2017, GSWC has a regulatory asset and an accrued liability for the estimated additional cost of $1.4 million to complete the cleanup at the site. The estimate includes costs for two years of continued activities of groundwater cleanup and monitoring, future soil treatment and site-closure-related activities. The ultimate cost may vary as there are many unknowns in remediation of underground gasoline spills and this is an estimate based on currently available information. Management also believes it is probable that the estimated additional costs will be approved in rate base by the CPUC. Other Litigation: Registrant is also subject to other ordinary routine litigation incidental to its business, some of which may include claims for compensatory and punitive damages. Management believes that rate recovery, proper insurance coverage and reserves are in place to insure against, among other things, property, general liability, employment, and workers’ compensation claims incurred in the ordinary course of business; however, insurance coverage may not cover certain claims involving punitive damages. Registrant is unable to predict an estimate of the loss, if any, resulting from any pending suits or administrative proceedings.

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