2. Background

The Commission regulates water service provided by Class A water utilities pursuant to Article XII of the California Constitution and the Public Utilities Code.¹ For Class A water utilities, Pub. Util. Code § 455.2, as implemented in Decision (D.) 04-06-018 and updated in D.07-05-062, provides for a general rate case proceeding every three years.

San Gabriel Valley Water Company (San Gabriel) is a Class A water company that provides public utility water service in the counties of Los Angeles and San Bernardino through two operating divisions and a general office division (the General Division). San Gabriel serves approximately 48,000 customers in the Los Angeles Division and an additional 44,000 customers in San Bernardino County through its Fontana Division as of December 2009. The General Division provides services common to the Los Angeles and Fontana Divisions, the costs of which are allocated to these divisions.

On July 16, 2010, San Gabriel filed the above-captioned application to increase rates charged for water service in its Los Angeles Division by $10,232,700 or 17.8% in July 2011, $1,767,700 or 2.6% in July 2012, and $2,245,800 or 3.2% in July 2013. In its application, San Gabriel also sought to increase rates charged for water service in its Fontana Division by $1,252,200 or 2.1% in July 2011, due to expenses in its General Division. This application involves only the Los Angeles Division and the General Division serving both areas.

¹ A Class A utility is defined as an investor-owned water utility with over 10,000 service connections.