ALJ/DUG/tcg/gd2 Date of Issuance 9/13/2011

Decision 11-09-017 September 8, 2011

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

In the matter of the Application of the GOLDEN STATE WATER COMPANY (U133W) for an order authorizing it to increase rates for water service by $2,911,400 or 29.9% in 2011 and by $321,200 or 2.5% in 2012 in its Arden Cordova Service Area; to increase rates for water service by $1,782,400 or 33.2% in 2011 and by -$66,200 or -0.9% in 2012 in its Bay Point Service Area; to increase rates for water service by $409,100 or 22.6% in 2011 and by $23,300 or 1.0% in 2012 in its Clearlake Service Area; to increase rates for water service by $1,467,000 or 48.5% in 2011 and by $50,100 or 1.1% in 2012 in its Los Osos Service Area; to increase rates for water service by $1,647,900 or 38.8% in 2011 and by $343,200 or 5.9% in 2012 in its Ojai Service Area; to increase rates for water service by $2,350,700 or 25.2% in 2011 and by $363.200 or 3.1% in 2012 in its Santa Maria Service Area and; to increase rates for water service by $799,500 or 6.5% in 2011 and by $213,000 or 1.6% in 2012 in its Simi Valley Service Area.

Application 10-01-009 (Filed January 13, 2010)

(See Appendix A for List of Appearances.)

DECISION ON THE RATEMAKING TREATMENT FOR THE
ABANDONED HILL STREET WATER TREATMENT FACILITY AND THE AGREEMENT WITH THE CONTRA COSTA WATER DISTRICT TO ACQUIRE REPLACEMENT WATER TO SERVE THE BAY POINT SERVICE AREA

Summary

In Decision (D.) 10-06-031 the Commission found that a water purchase agreement between Golden State Water Company (Golden State) and Contra Costa Water District (Contra Costa) was the most viable option to replace the abandoned Hill Street Water Treatment Facility (Hill Street). Today's decision finds that Golden State must remove from rate base and amortize the undepreciated book value of its abandoned Hill Street facility over a six-year period, with interest, accrued at its 2011 incremental cost of debt from Golden State's Temporary Interest Rate Balancing Account adopted in its recent cost of capital proceeding, D.09-05-019. Additionally, Golden State must collect in rates the prepaid capacity cost for replacement water, acquired from Contra Costa, over a six-year period on the ratemaking presumption that Golden State made a single payment to Contra Costa.

This proceeding remains open to address an unrelated proposed settlement involving Golden State and the Commission's Division of Water and Audits.