COM/JB2/tcg Date of Issuance 11/22/2010
Decision 10-11-034 November 19, 2010
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
In the Matter of the Updated and Corrected Application of GREAT OAKS WATER CO. (U162W) for an Order Authorizing an Increase in Rates Charged for Water Service, increasing the revenue requirement by $1,846,100 or 14.94% in 2010, by $254,425 or 1.79% in 2011, and by $165,822 or 1.14% in 2012. |
Application 09-09-001 (Filed September 3, 2009) (Updated and corrected caption filed November 12, 2009) |
(See Appendix E for List of Appearances.)
DECISION RESOLVING GENERAL RATE CASE
TABLE OF CONTENTS
Title Page
DECISION RESOLVING GENERAL RATE CASE 1
1. Summary 2
2. Background 3
3. Public Participation 9
4. Discussion of Application 12
5. Results of Operations 14
5.1. Sales Forecast 14
5.2. Other Revenue Issues 19
5.3. Non-Labor Operations and Maintenance Expenses 20
5.4. Labor Expenses 21
5.5. Administrative and General Expenses 32
5.6. Capital Additions, Rate Base and Depreciation 46
5.7. Taxes 48
5.8. Rate Design 52
5.9. Revenue Requirement and Rate Tables 62
6. Division of Water and Audits' Verification Report 62
7. Comments on Alternate Proposed Decision 69
8. Assignment of Proceeding 70
Findings of Fact 70
Conclusions of Law 73
ORDER 78
Appendix A - Adopted Revenue Requirement
Appendix B - Rate Tables
Appendix C - Resolution W-4534 and Related Tariff
Appendix D - Division of Water and Audits' Verification Report
Appendix E - List of Appearances
DECISION RESOLVING GENERAL RATE CASE
1. Summary
This decision resolves the general rate case application of Great Oaks Water Company (Great Oaks) for the test year July 1, 2010 - June 30, 2011 and the following two escalation years. The increases in revenue requirement we adopt here are:
Increase in Revenue Requirement1 |
Percentage | |
Test Year 2010/2011 |
$820,250 |
6.97% |
Escalation Year 2011/2012 |
($73,520) |
(0.58%) |
Escalation Year 2012/2013 |
$47,490 |
0.38% |
In this decision, we adopt a conservation rate design for single family residential customers. For this pilot program, we have lessened the rate impact customers will experience at the highest tier of usage under the rate design proposed by the Commission's Division of Ratepayer Advocates. Together with this rate design, we adopt a revenue adjustment mechanism that will protect the utility from revenue shortfalls due to the conservation rate design.
We decline to adopt additional revenue protection measures requested by Great Oaks, finding that the utility is not under a mandatory production limitation and has not actively promoted conservation in its service territory.
After the record in this proceeding closed, the Commission learned that Great Oaks had been withholding monthly payments to Santa Clara Valley Water District (SCVWD) of ratepayer-provided pump tax funds since April 2009. Great Oaks states it took this action as a litigation strategy related to a lawsuit it has against the SCVWD over the legality of the pump tax. The pump tax charge represents approximately 38% of the average customer bill and is treated for ratemaking purposes as a direct pass-through expense; Great Oaks had withheld approximately $5,000,000 as of March 2010. Based on a Verification Report prepared by our Division of Water and Audits and comments submitted by Great Oaks and the Division of Ratepayer Advocates, we find that good cause exists to open an Order Instituting Investigation to further review Great Oaks' actions and to possibly impose fines for Great Oaks' failure to properly disclose its actions to the Commission and its staff.
This proceeding is closed.
1 These increases are calculated from the Division of Ratepayer Advocates' revenue requirement at present rates, as shown in Appendix A and use Great Oaks' current authorized rate of return. The revenue requirement will be updated to reflect any changes adopted by the Commission in Great Oaks' pending cost of capital proceeding, Application (A.) 09-05-007.
