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STATE OF CALIFORNIA EDMUND G. BROWN JR, Governor

PUBLIC UTILITIES COMMISSION
505 VAN NESS AVENUE
SAN FRANCISCO, CA 94102-3298
June 12, 2012 Draft Resolution W-4924
Agenda ID #11403
TO: All Interested Persons
Enclosed is draft Resolution W-4924 of the Division of Water and Audits (DWA) for Erskine Creek Water Company's request for a general rate increase Test Year 2011. Draft Resolution W-4924 will be on the Commission's July 12, 2012 Agenda. The Commission may act then on this resolution or it may postpone action until later.
When the Commission acts on a draft resolution, the Commission may adopt all or part of the draft resolution, as written, or amend or modify the draft resolution; or the Commission may set the draft resolution aside and prepare a different resolution. Only when the Commission acts does the resolution become binding.
Interested persons may submit comments on draft Resolution W-4924. An original of the comments, with a certificate of service, should be submitted to:
Division of Water and Audits, Third Floor Division of Water and Audits, Third Floor
Attention: Oge Enyinwa Attention: Rami Kahlon
California Public Utilities Commission California Public Utilities Commission
505 Van Ness Avenue 505 Van Ness Avenue
San Francisco, CA 94102 San Francisco, CA 94102
Interested persons must serve a written or electronic copy of their comments on the utility on the same date that the comments are submitted to the Division of Water and Audits. Interested persons may submit comments on or before June 30, 2012.
Comments should focus on factual, legal, or technical errors or policy issues in the draft resolution.
Persons interested in receiving comments submitted to the Division of Water and Audits may write to Oge Enyinwa, e-mail her at oe2@cpuc.ca.gov, or telephone her at (415) 355-5564.
RAMI S. KAHLON, Director
Division of Water and Audits
Enclosures: Draft Resolution W-4924
Certificate of Service
Service List
DWA/RSK/BMD/OE2/drs DRAFT AGENDA ID #11403
DIVISION OF WATER AND AUDITS RESOLUTION NO. W-4924
Water and Sewer Advisory Branch July 12, 2012
(RES. W-4924), ERSKINE CREEK WATER COMPANY (ECWC). ORDER AUTHORIZING A GENERAL RATE INCREASE (GRC), PRODUCING ADDITIONAL ANNUAL REVENUE OF $132,930 OR 25.7% FOR TEST YEAR (TY) 2012 AND $50,000 OR 7.70% FOR ESCALATION YEAR 2013.
By Advice Letter (AL) 80-W, filed on February 8, 2012, ECWC seeks an increase of $214,630 in revenue or 41.50% above current rates to recover increased operating expenses and earn a reasonable return. For TY 2012, this Resolution grants an increase in gross annual revenues of $132,930 or 25.70% over revenues earned under current rates, and additional revenue of $50,000 or 7.70% above revenue earned under 2012 rates for Escalation Year 2013. The rate schedules to implement the 2012 revenue increase and the escalation revenue increase for year 2013 are set forth in Appendix B. This increase in revenue, inclusive of escalation years, is estimated to provide a rate of margin of 21.12% by 2013.
ECWC, a Class C water utility, has requested authority to increase its rates under Rule 7.6.2 of General Order (GO) 96-B, Water Industry Rule 7.3.3(5), and Section 454 of the Public Utilities Code in order to increase its water revenues by $214,630 or 41.50% for TY 2012, over the revenues received under current rates. The purpose of the rate increase is to recover increased operating expenses and to provide an adequate rate of return. ECWC's request was based on a rate of margin of 23.40%. ECWC attributes the magnitude of its increase request to the absence of increases for over 5 years, and the increase in Employee Labor. ECWC is presently under staffed and plans to recruit one water operator this test year.
ECWC's present rates became effective on November 21, 2011, by approval of AL 79-W, which authorized a Consumer Price Index (CPI) rate increase resulting in increased revenues of $9,499, or a 1.5% increase in revenues. The last GRC for ECWC was granted on July 20, 2006, pursuant to Res. W-4608, which granted an increase in revenues of $164,924 or 41.40%.
ECWC serves approximately 1153 customers. ECWC is a corporation providing water service to the unincorporated community of Lake Isabella and vicinity, located approximately 45 miles east of Bakersfield, in Kern County. Water is provided by three treated wells. The system has two storage tanks with a total capacity of 164,000 gallons. ECWC's distribution system consists of 5,562 feet of 12-inch mains, 3,900 feet of 10-inch mains, 1,960 feet of 8-inch mains, 22,860 feet of 6-inch mains, 4,625 feet of 5-inch mains, 30,771 feet of 4-inch mains, 7,775 feet of 3-inch mains and 250 feet of 2-inch mains.
On January 21, 2012, a notice of the proposed rate increase was mailed to each customer's permanent address and to the general service list. In accordance with GO 96-B ,AL 80-W was served on February 8, 2012, on adjacent utilities and persons on the general service list. Four customer letters and a petition/protest signed by thirty-three customers questioning the rate increase and complaining about the amount requested were timely received, and the utility replied.
An informal public meeting was held on Thursday, February 16, 2012, at 6:00 PM at Kern River Valley Senior Center located at 6405 Lake Isabella Blvd, Lake Isabella, CA. Approximately thirteen customers attended the meeting. The Division of Water and Audits (Division) staff explained the Commission's procedure for reviewing AL 80-W. ECWC representatives explained the need for the proposed rate increase. The Division staff and ECWC representatives answered questions until approximately 7:25 PM.
Much of the customer feedback, in both the letters and from the public meeting, was concerned with the magnitude of the increase request of 41.50%. Some of the customers acknowledged that some increase was warranted because the customer service was very good and because improvements had been made to the water system. Others complained that because of the bad economy such a high increase was not appropriate, especially since many of the customers were retired and had fixed incomes.
In setting rates in this Resolution, we have balanced the financial requirements of ECWC with the rate concerns of its customers.
ECWC's current request to increase revenues by 41.50% stems largely from the absence of a general rate increase for over 5 years and a new hire. The magnitude and timing of ECWC's GRC request justifies a more gradual revenue increase than that proposed by ECWC. To mitigate the impact that this large increase may have on its customers, ECWC agreed1 to phase-in its revenue increase over a period of two years, from 2012 through 2013, instead of one year as it originally proposed. As commonly practiced by the Commission, ECWC should not be allowed to recover the CPI increase for 2012 because this would exceed the allowed revenue of $649,5002.
The Division made an independent analysis of ECWC's operations. Appendix A shows ECWC's and the Division's estimated summary of earnings at present, proposed, and recommended rates for TY 2012, to be phased in during years 2012 and 2013. Appendix B includes the Division's tariff rates for TY 2012, and Escalation Year 2013. The Division informed ECWC of how the methodologies it used differed from those used in ECWC's request. ECWC is now in agreement with the Division's recommended revenue requirement, shown in Appendix A, and the Division's recommended rates, shown in Appendix B. The Division recommends that the Commission approve the rate increases and resulting rates shown in Appendix B.
The Division's estimate of ECWC's operating expenses, excluding purchased power, contract work, insurance and management salaries, is based on data from years 2008-2010. For estimating purchased power costs, ECWC used the most recent twelve months of usage ending in September 2011, and applied the cost per kilowatt-hour of Southern California Edison Company's rates 3(, and the Division agrees. The Division used current actual costs for insurance and reviewed and accepted ECWC's estimate for office and management salaries. For estimating all other expense categories, the Division escalated4 and averaged 2008-2010 expenses using factors from the March 31, 2012 escalation memorandum from the Division of Ratepayer Advocates. The Division's estimate differed from ECWC's in employee labor, materials, transportation, and regulatory expenses due to ECWC's application of a different escalation factor for the three-year average of these expenses from 2008-2010.
The Division's recommendation includes used and useful plant and applies the 3.00% depreciation rate adopted in the last GRC to arrive at the rate base shown in Appendix A.
ECWC requested a 23.40% rate of margin. The recommended rate of margin for a Class C utility is 21.12%5. Since there are no customer service complaints and ECWC is in compliance with all Commission rules and procedures, the Division based its analysis on a rate of margin of 21.12%, which is the recommended rate of margin. With the two-year phase in, these revenue increases will yield a rate of margin of 15.79% in TY 2012, and 21.12% by Escalation Year 2013.
ECWC's rate structure consists of two schedules: 1, General Metered Service and 4, Private Fire Protection Service. The rates proposed by the Division are shown in Appendix B. At the Division's recommended rates, the increase in revenues will be $132,930 or 25.70% for TY 2012 and $50,000 or 7.70% for Escalation Year 2013. At the recommended rates shown in Appendix B, bi-monthly rates for an average consumption of 15 Ccf (one Ccf is equal to one hundred cubic feet) will increase from $48.52 to $61.22, a difference of $12.70 or 26.20% in TY 2012; and $61.22 to $66.12, a difference of $4.90 or 8.00% in Escalation Year 2013. A comparison of customer bills at present, recommended, and escalation rates is shown in Appendix C. The projections, adopted quantities, and tax calculations are shown in Appendix D. The Division recommends that the Commission require ECWC to file a Tier 2 advice letter on or before November 20, 2012, to reflect escalation rates for 2013 and that the revised tariffs reflecting these escalation rates be made effective on January 1, 2013.
A review of ECWC's 2010 California Department of Public Health's (CDPH) Consumer Confidence Report (CCR) shows that its water meets the required quality standards set by the CDPH. ECWC provides customers the annual CCR regarding testing and water quality issues, and customers have expressed confidence in the water quality.
The utility has been filing annual reports as required.
Public Utilities Code Section 311(g) (1) provides that resolutions generally must be served on all parties and subject to at least 30 days public review and comment prior to a vote of the Commission.
Accordingly, the draft resolution was mailed to the utility, all protestants (whether or not they filed timely protests), and those requesting service at the public meeting, and made available for public comment on June 12, 2012.
1. ECWC has requested authority to increase its water revenue by $214,630 or 41.50% for TY 2012.
2. On January 21, 2012, a notice of the proposed rate increase was mailed to each customer and to the general service list. On February 8, 2012, AL 80-W was served in accordance with General Order 96-B.
3. ECWC agreed to phase-in its revenues over a period of two years from 2012 through 2013.
4. ECWC should not be allowed to recover Consumer Price Index cost increases for years 2012.
5. In reviewing ECWC's request, the Division made an independent analysis of ECWC's operations.
6. For estimating purchased power costs, the Division used 12 months of actual electricity usage and applied the average cost per kilowatt-hour of ECWC's energy provider for 2010-2011.
7. The Division used current costs to estimate test year insurance.
8. The Division reviewed and accepted ECWC's estimate of office and management salaries.
9. For estimating all other expense categories, the Division applied factors from the Division of Ratepayer Advocates' Escalation Memorandum, dated March 31, 2012.
10. The Division recommendation includes used and useful plant additions and applies the 3.00% depreciation rate ordered in the last GRC.
11. The Division informed ECWC of how the methodologies and escalation rates it used differed from those used in ECWC's request.
12. ECWC agrees with the Division's recommended revenue requirement.
13. The Division's recommended summary of earnings (Appendix A) is reasonable and should be adopted.
14. The rates recommended by the Division (Appendix B) are reasonable and should be adopted.
15. The quantities (Appendix D) used to develop the Division's recommendations are reasonable and should be adopted.
16. ECWC requested a rate of margin of 23.40%. The recommended for rate of margin for a Class C utility is 21.12%. The Division`s recommended rate of margin for ECWC is 21.12%.
17. For TY 2012, it is appropriate to grant ECWC an increase in gross annual revenues of $132,930 or 25.70% over current rates, and additional revenues of $50,000 or 7.70% for Escalation Year 2013.
18. These revenue increases will yield a rate of margin of 15.79% in Test Year 2012 and 21.12% by Escalation Year 2013.
19. At the recommended rates shown in Appendix B, bi-monthly rates for an average consumption of 15 Ccf (one Ccf is equal to one hundred cubic feet) will increase from $48.52 to $61.22, a difference of $12.70 or 26.20% in TY 2012; and $61.22 to $66.12, a difference of $4.90 or 8.00% in Escalation Year 2013.
20. By November 20, 2012, ECWC should be required to file a Tier 2 advice letter to reflect escalation in 2013. It should be required that the rates in this advice letter be made effective on January 1, 2013.
1. Authority is granted under Public Utilities Code Section 454 to Erskine Creek Water Company to file a supplemental advice letter with the revised rate schedules attached to this Resolution as Appendix B and concurrently cancel its presently effective rate Schedules Nos. 1, General Metered Service and 4, Private Fire Protection Service. The effective date of the revised schedules shall be five days after the date of filing.
2. The quantities (Appendix D) used to develop the Division of Water and Audits' recommendations are adopted.
3. By November 20, 2012, Erskine Creek Water Company shall file a Tier 2 advice letter for the Escalation Year 2013. The escalation rates will be made effective on January 1, 2013.
4. This Resolution is effective today.
I certify that the foregoing Resolution was duly introduced, passed, and adopted at a conference of the Public Utilities Commission of the State of California held on July 12, 2012; the following Commissioners voting favorably thereon:
PAUL CLANON
Executive Director

(END OF APPENDIX A)
APPENDIX B
SCHEDULE NO. 1
GENERAL METERED SERVICE
Test Year 2012
APPLICABILITY
Applicable to all metered water service.
TERRITORY
The unincorporated community of Lake Isabella and vicinity, Kern County.
RATES
Test Year 2012
Quantity Rates: Per Meter
Bi-Monthly
For all water delivered, per 100 cubic feet $ 1.29 (I)
Service Charge:
For 5/8 x ¾-inch meter $ 41.87 (I)
For 3/4-inch meter $ 62.81 |
For 1-inch meter $ 104.68 |
For 1-1/2-inch meter $ 209.35 |
For 2-inch meter $ 334.96 |
For 3-inch meter $ 628.05 |
For 4-inch meter $1,046.75 |
For 6-inch meter $2,093.51 (I)
The Service Charge is a readiness-to-serve charge which is applicable to all metered service and to which is to be added the charge computed at the Quantity Rates.
SPECIAL CONDITIONS
1. All bills are subject to the reimbursement fee set forth in Schedule No. UF.
(D)
APPENDIX B
SCHEDULE NO. 4
PRIVATE FIRE PROTECTION SERVICE
Test Year 2012
APPLICABILITY
Applicable to all water service furnished to privately owned fire protection systems.
TERRITORY
The unincorporated community of Lake Isabella and vicinity, Kern County.
RATES Every Two Months
For all each diameter of service connection $ 12.50 (I)
SPECIAL CONDITIONS
1. The fire protection service and connection shall be installed by the utility at the utility's discretions. Cost for the entire fire protection installation, excluding the connection at the main shall be paid for by the applicant. Such payment shall not be subject to refund.
2. The expense of maintaining the private fire protection facilities on the applicant's premises (including the vault, meter, and backflow devise) shall be paid for by the applicant.
3. All facilities paid for by the applicant shall be the sole property of the applicant. The utility and its duly appointed agents shall have the right to ingress to, and egress from the premises for all purposes relating to said facilities.
4. The minimum diameter for fire protection service shall be four inches, and the maximum diameter shall not be more than the diameter of the main to which the service is connected.
5. If a distribution main of adequate size to serve a private fire protection system in addition to all other normal service does not exist in the street or alley adjacent to the premises to be served, then a main extension from the nearest existing main of adequate capacity shall be required by the utility.
6. Service hereunder is for private fire protection systems to which no connections for other than fire protection purposes are allowed and which are regularly inspected by the underwriters having jurisdiction. All facilities are to be installed according to the utility's specifications and maintained to the utility's satisfaction. The utility may require the installation of a backflow prevention device and a standard detector type meter approved by the Insurance Services Office for protection against theft, leakage, or waste of water.
7. No structure shall be built over the fire protection service and the customer shall maintain and safeguard the area occupied by the service from traffic and other hazardous conditions. The customer will be responsible for any damage to the fire protection service facilities.
8. Subject to the approval of the utility, any change in the location or construction of the fire protection service as may be required by public authority or the customers will be made by the utility following payment to the utility of the entire cost of such change
9. Any unauthorized use of water through the fire protection service will be charged for at the applicable tariff rates and may be grounds for the utility's discontinuing fire protection service without liability.
APPENDIX B
SCHEDULE NO. 1
GENERAL METERED SERVICE
ESCALATION YEAR 2013
APPLICABILITY
Applicable to all metered water service.
TERRITORY
The unincorporated community of Lake Isabella and vicinity, Kern County.
RATES Escalation Year
2013
Per Meter
Bi-Monthly
Quantity Rates:
For all water delivered, per 100 cu. ft. from 1 to 5 units $ 1.37 (I)
Service Charge:
For 5/8 -inch meter $ 45.57 (I)
For ¾ -inch meter $ 68.35 |
For 1-inch meter $ 113.92 |
For 1-1/2-inch meter $ 227.84 |
For 2-inch meter $ 364.55 |
For 3-inch meter $ 683.53 |
For 4-inch meter $1,139.22 |
For 6-inch meter $2,278.45 (I)
The Service Charge is a readiness-to-serve charge which is applicable to all metered service and to which is to be added the charge computed at the Quantity Rates.
SPECIAL CONDITIONS
1. All bills are subject to the reimbursement fee set forth in Schedule No. UF.
(D)
APPENDIX B
SCHEDULE NO. 4
PRIVATE FIRE PROTECTION SERVICE
Escalation Year 2013
APPLICABILITY
Applicable to all water service furnished to privately owned fire protection systems.
TERRITORY
The unincorporated community of Lake Isabella and vicinity, Kern County.
RATES Every Two Months
For all each diameter of service connection $ 13.31 (I)
SPECIAL CONDITIONS
1. The fire protection service and connection shall be installed by the utility at the utility's discretions. Cost for the entire fire protection installation, excluding the connection at the main shall be paid for by the applicant. Such payment shall not be subject to refund.
2. The expense of maintaining the private fire protection facilities on the applicant's premises (including the vault, meter, and backflow devise) shall be paid for by the applicant.
3. All facilities paid for by the applicant shall be the sole property of the applicant. The utility and its duly appointed agents shall have the right to ingress to, and egress from the premises for all purposes relating to said facilities.
4. The minimum diameter for fire protection service shall be four inches, and the maximum diameter shall not be more than the diameter of the main to which the service is connected.
5. If a distribution main of adequate size to serve a private fire protection system in addition to all other normal service does not exist in the street or alley adjacent to the premises to be served, then a main extension from the nearest existing main of adequate capacity shall be required by the utility.
6. Service hereunder is for private fire protection systems to which no connections for other than fire protection purposes are allowed and which are regularly inspected by the underwriters having jurisdiction. All facilities are to be installed according to the utility's specifications and maintained to the utility's satisfaction. The utility may require the installation of a backflow prevention device and a standard detector type meter approved by the Insurance Services Office for protection against theft, leakage, or waste of water.
7. No structure shall be built over the fire protection service and the customer shall maintain and safeguard the area occupied by the service from traffic and other hazardous conditions. The customer will be responsible for any damage to the fire protection service facilities.
8. Subject to the approval of the utility, any change in the location or construction of the fire protection service as may be required by public authority or the customers will be made by the utility following payment to the utility of the entire cost of such change
9. Any unauthorized use of water through the fire protection service will be charged for at the applicable tariff rates and may be grounds for the utility's discontinuing fire protection service without liability.
(END OF APPENDIX B)
APPENDIX C
Erskine Creek Water Company
COMPARISON OF RATES
Test Year 2012

APPENDIX C
Erskine Creek Water Company
COMPARISON OF RATES
Escalation Year 2013

(END OF APPENDIX C)
APPENDIX D
Erskine Creek Water Company
ADOPTED QUANTITIES
TEST YEAR 2012 AND ESCALATION YEAR 2013
ADOPTED QUANTITIES
1. Purchased Power
Total Cost $54,228
2. Water Sales in Ccf 212,080
3. Payroll
Management Salaries $54,767
4. Property Taxes $12,378
5. Service Connections
5/8 - inch by 3/4 inch 1071
3/4 inch 13
1 - inch 23.5
11/2 - inch 30
2 - inch 13
3 - inch 0
4 - inch 1
6 - inch 1
Total 374
6. Tax Calculation Test Year Escalation Year
2012 2013
Taxable Income for State Tax $82,782 $132,782
State Tax $ 7,318 $ 11,738
Taxable Income for Federal Tax $75,464 $121,044
Federal Tax $10,431 $ 28,207
Total Income Tax $17,749 $ 39,945
(END OF APPENDIX D)
CERTIFICATE OF SERVICE
I certify that I have by postal mail this day served a true copy of draft Resolution W-4924 on all parties in these filings or their attorneys as shown on the attached list.
Dated June 12, 2012, at San Francisco, California.
/s/ DARLENE SUSTAITA
Darlene Sustaita
NOTICE
Parties should notify the Division of Water and Audits, Third Floor, Public Utilities Commission, 505 Van Ness Avenue, San Francisco, CA 94102, of any change of address to ensure that they continue to receive documents. You mush indicate the resolution number of the service list on which your name appears.
SERVICE LIST
DRAFT RESOLUTION W-4924
Shank 2807 Erskine Creek Rd, Space 90 Lake Isabella CA 93240 |
Kenn Gates PO Box 2917 Lake Isabella, CA 93240-2017 |
Chris Berardenelli 1837 & 1912 Williams Ct. Lake Isabella, CA 93240 | ||
Gary Mondenhauer 1900 Edith Avenue Lake Isabella, CA 93240 |
Mrs. Georgia Mosier 2301 Harnage St. Lake Isabella, CA 93240 |
Larry and Judith Sabat 2807 Erskine Creek Rd, Space 23 Lake Isabella, CA 93240 | ||
Mary Senko 2807 Erskine Creek Rd, Space 24 Lake Isabella, CA 93240 |
Richard and Donna McClatchey 2807 Erskine Creek Rd, Space 22 Lake Isabella, CA 93240 |
Kelly Corrigan 2807 Erskine Creek Rd, Space 75 Lake Isabella, CA 93240 | ||
Norma Standridge 2807 Erskine Creek Rd, Space 72 Lake Isabella, CA 93240 |
Louise Garrett 2807 Erskine Creek Rd, Space 71 Lake Isabella, CA 93240 |
Michael and Virginia Smith 2807 Erskine Creek Rd, Space 69 Lake Isabella, CA 93240 | ||
William Ford 2807 Erskine Creek Rd, Space 67 Lake Isabella, CA 93240 |
Steve Hall 2807 Erskine Creek Rd, Space 66 Lake Isabella, CA 93240 |
David and Sandra Smith 2807 Erskine Creek Rd, Space 103 Lake Isabella, CA 93240 | ||
Virginia Dunning 2807 Erskine Creek Rd, Space 68 Lake Isabella, CA 93240 |
John and Kathleen Troolines 2807 Erskine Creek Rd, Space 17 Lake Isabella, CA 93240 |
Elizabeth Ragozzo 2807 Erskine Creek Rd, Space 89 Lake Isabella, CA 93240 | ||
Sandy Garrigan 2807 Erskine Creek Rd, Space 19 Lake Isabella, CA 93240 |
Don Randleman 2807 Erskine Creek Rd, Space 13 Lake Isabella, CA 93240 |
Shirley Brown 2807 Erskine Creek Rd, Space 91 Lake Isabella, CA 93240 | ||
Bruce Shank 2807 Erskine Creek Rd, Space 90 Lake Isabella, CA 93240 |
LaRose Bering 2807 Erskine Creek Rd, Space 15 Lake Isabella, CA 93240 |
Donna Douglas 2807 Erskine Creek Rd, Space 86 Lake Isabella, CA 93240 | ||
Lora Riggan 2807 Erskine Creek Rd, Space 108 Lake Isabella, CA 93240 |
Darlene Shockey 2807 Erskine Creek Rd, Space 70 Lake Isabella, CA 93240 |
Pat Edwards 2807 Erskine Creek Rd, Space 101 Lake Isabella, CA 93240 | ||
Steve and Karen Peterson 2807 Erskine Creek Rd, Space 99 Lake Isabella, CA 93240 |
Marjorie Kiskeep 2807 Erskine Creek Rd, Space 74 Lake Isabella, CA 93240 |
Dorothy Stpierre 2807 Erskine Creek Rd, Space 84 Lake Isabella, CA 93240 | ||
Eldena Eike 2807 Erskine Creek Rd, Space 94 Lake Isabella, CA 93240 |
Skip and Shirley Campos 2807 Erskine Creek Rd, Space 18 Lake Isabella, CA 93240 |
Frank B & Associates Water Management Consulting 134 Davis Street Santa Paula, CA 93050 | ||
Erskine Creek Water Company Nick Silicz, Vice President PO Box 656 / 2095 Edith Ave Lake Isabella, CA 93240 |
1 Per email from Frank Brommenschenkel dated 3/1/2012.
2 Per Resolution W-4710.
3 Southern California Edison Company is ECWC's energy provider.
4 Escalation was to 2012 dollars.
5 This recommendation is set forth in a March 6, 2012 memorandum from the Division of Water and Audits to the Commission entitled Rates of Return and Rates of Margin for Class C and Class D Water Utilities.