10. Summary of Earnings & Rate Design

Our adopted Summary of Earnings is shown in Appendix A. It reflects the operating revenues that would be provided at present rates and those that will be required to produce the 8.80% currently authorized rate of return on rate base for the test year. That rate of return will produce additional revenues of $18,597,000 in the test year, an increase of 9.24% over the revenues produced by existing rates. Appendix A also sets forth the resulting rates in the Tariff Schedules for the various classes of service.

Although the disposition of an under-collected balance in the Water Quality Expense Memorandum Account (WQMA) and over-collected balances in SJWC's balancing accounts were not addressed in the settlement agreements, no party opposed SJWC's proposal to recover its WQMA under-collected balance through a one-time $0.41 surcharge per service and disburse its balancing accounts' over-collected balances through a 12-month surcredit of $0.0278 per 100 cubic feet. We authorize these actions.