4. Summary of Test Year Settlement Agreement
On September 15, 2010 DRA and Alco filed a joint motion for the adoption of a proposed settlement agreement (settlement) resolving most of the disputed issues in the proceeding.2 The City of Salinas was granted party status and was a relatively inactive party. It did not serve testimony, examine witnesses in the evidentiary hearings, or file briefs. The City of Salinas did affirm that it supported the settlement. We will note that the settlement is unopposed and hereafter refer to it as a settlement between DRA and Alco, the most active parties and the parties necessary and able to satisfy Rules 12.1, 12.5, 12.6,3 and 12.7.
The proposed settlement includes revenue requirement and rate design for test year 2010 and escalation years 2011 and 2012 for Alco's operations in its certificated service area in and around Salinas, California. The settlement addresses all significant elements of Alco's revenue requirement, including number of customers, sales and supply, rate design, operations and maintenance expenses, administrative and general expenses, allocated expenses, utility plant additions, depreciation expense and reserve, various taxes, the net-to-gross
multiplier, and Alco's ten special requests4 included in its application. (Settlement Motion at 3.)
2 The proposed settlement agreement is filed and available at http://docs.cpuc.ca.gov/efile/motion/12351.pdf.
3 Rule 12.6 Confidentiality and Inadmissibility, imposes limitations on the settling parties to protect the confidentiality of the settlement process and that if the settlement is not adopted its terms are not generally admissible. Rule 12.6 does apply to the City of Salinas.
4 The application listed the following special requests: 1. Tiered Rate Design and Water Conservation Memorandum Account; 2. Increased Rate of Return for Energy Efficiency Upgrades; 3. Increased Reconnection Fees and Incorporation of Fire Flow Test Fee; 4. Recovery of $20,000 Incurred in Defending Against Division of Ratepayer Advocates' Motion of Sanctions in I.07-06-020; 5. Customer Information and Billing System; 6. Amortization of Purchased Power Memorandum Account; 7. Amortization of Engineering, Legal and other Professional Fees and Expenses for the Water/Energy Nexus Demonstration Project Memorandum Account; 8. Inclusion of Rosehart Industrial Park Water System in Alco's Certificated Service Area and Authority to Charge Commission Authorized Rates; 9. Water Quality Finding; 10. Ratebase Offset of Construction Projects Provided as Proposed Projects; and 11. Water Conservation Program Expansion Balancing Account and Surcharge. (Application at 2 7.)
