Discussion

According to Res. W-4736, LBWC received a general rate increase of $142,146 or 33.6% with adopted total gross revenues of $565,800. The rate design adopted in Res. W-4736 was designed to produce the authorized revenue based on 98% of the system operating on ¾-inch meters. The rates authorized in Res. W-4736 were implemented through Advice Letter 50, dated January 30, 2009 with an effective date of February 7, 2009.

Billing ratepayers under the 5/8 x ¾-inch meter rates in Res. W-4736 would result in annual revenue of $492,185 or $73,615 lower than the adopted revenue of $565,800.

To correct this loss of revenue, the Application shows a new billing design with the same quantity rates, but proposes to adjust the service charge component for each and every meter size in each of the two pressure zones.

The modified rate design that we adopt in this decision recognizes that the most efficacious revision applies the current billing rate of the ¾-inch meter to the 5/8 x ¾-inch meter. The Commission authorized in Res. W-4736 the rates for the ¾-inch sized meter as the just and reasonable bill for the LBWC customers. By applying the currently authorized ¾-inch sized meter rates to the size actually in use (5/8 x ¾-inch), the justification for the rates passed in Res. W-4736 remains, keeps the other active meter connections with the same rates as passed in Res. W-4736 and offers the least disruption in billing for both the company and the ratepayers.

According to this modification, the rate for the Lower Canyon 5/8 x ¾-inch meter in Res. W-4736 of $17.39 will increase to $26.09 and the Upper Canyon 5/8 x ¾-inch meter will go from $19.10 to $28.64.

Shown below are rates before the GRC resolution, the GRC rates in Res. W-4736 and the rates authorized in this modification.

Lower Canyon

Service Charge Pre-

For 5/8 x 3/4-inch meters 19.89 17.39 26.09

For ¾-inch meters 19.89 26.09 26.09

For 1-inch meters 33.22 43.48 43.48

For 1-1/2 inch meters 66.21 86.97 86.97

For 2-inch meters 105.99 139.15 139.15

Upper Canyon

Service Charge Pre-

For 5/8 x 3/4-inch meters 32.32 19.10 28.64

For ¾-inch meters 32.32 28.64 28.64

For 1-inch meters 53.96 47.74 47.74

For 1-1/2 inch meters 107.60 95.48 95.48

For 2-inch meters 172.25 152.77 152.77

By adopting the same rate design analysis granted in Res. W-4736, the same authorized revenue requirement of $565,800 is produced.

This modification does not grant LBWC any increase in the gross revenue established in Res. W-4736. The Cost of Service Charge for the 5/8 x ¾-inch meter reflects the same rates as the ¾-inch meter established in Res. W-4736.

The average customer's bill for a 5/8 x ¾-inch meter that consumes 19 hundred cubic feet per month will increase by $8.70 or 18.5% in the Lower Canyon pressure zone and by $9.54 or 13.9% in the Upper Canyon.

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