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ALJ/DUG/jva Mailed 12/16/2005

Decision 05-12-020 December 15, 2005

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

In the Matter of the Application of Apple Valley Ranchos Water Company (U346W) for Authority to Increase Rates Charged for Water Service by $2,748,100 or 18.56% in 2006, $496,580 or 2.69% in 2007, and $1,075,879 or 5.46% in 2008.

Application 05-02-005

(Filed February 1, 2005)

Fulbright & Jaworski, L.L.P., by David A. Ebershoff, Attorney at Law,
and Edward N. Jackson, Park Water Company, applicants.

Jason Reiger, Attorney at Law, for Office of Ratepayer Advocates.

OPINION ADOPTING TEST YEAR 2006 REVENUE REQUIREMENTS
FOR APPLE VALLEY RANCHOS WATER COMPANY

Table of Contents

OPINION ADOPTING TEST YEAR 2006 REVENUE REQUIREMENTS FOR APPLE VALLEY RANCHOS WATER COMPANY 22

Table of Contents

Findings of Fact 4747

Conclusions of Law 5151

ORDER 5252

Appendix A Summary of Earnings Test Year 2006

Appendix B Schedule No. 1 - General Metered Service
Schedule No. 2 - Gravity Irrigation Service
Schedule No. 4 - Non-Metered Fire Service
Schedule No. LC - Late Payment Charge
Schedule No. UF - Surcharge to Fund

Appendix C Comparison of Rates Test Year 2006

Appendix D Adopted Quantities

OPINION ADOPTING TEST YEAR 2006 REVENUE REQUIREMENTS
FOR APPLE VALLEY RANCHOS WATER COMPANY

1. Summary

Apple Valley Ranchos Water Company seeks a significant rate increase in 2006 and approval of a method to adjust rates for Escalation Years 2007 and 2008. This decision adopts a test year revenue requirement of $ $16,331,400, an increase of 9.19%, for 2006 and approves the formulaic adjustment method for 2007 and 2008 consistent with the existing water company rate case plan, Decision (D.) 04-06-018. The rate of return for Test Year 2006 is 9.45% including a 10.15% return on equity. In addition, this decision adopts a low-income ratepayer assistance plan consistent with Pub. Util. Code § 739.8, granting a $5/month bill credit to Apple Valley customers who meet income eligibility requirements. (Citations to statute refer to the Public Utilities Code unless otherwise noted.) This proceeding is closed.

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