2. Background
Bear Valley Electric Service (Bear Valley Electric), a division of Golden State Water Company, is a small electric utility providing service to approximately 21,500 full-time and part-time residents and approximately 1,400 commercial, industrial, or public-authority customers in the Big Bear Lake resort area in the San Bernardino Mountains. Bear Valley Electric, and its parent company, Golden State Water Company, have a very small number of professional, legal and technical staff and, as such, must rely upon outside attorneys and experts for, among other things, assisting with regulatory issues before the Commission and other regulatory agencies.
On June 1, 2011 Bear Valley Electric filed and served Application
(A.) 11-06-002 seeking Commission approval of legal and outside service costs totaling $1,249,330 booked into its Renewables Portfolio Standard Memorandum Account (RPSMA)1 during the period September 1, 2007 through March 31, 2011, $6,536 of accumulated interest booked through March 31, 2011, and interest costs accrued to the effective date of a Commission decision on this matter.2
Bear Valley Electric requests that the costs be recovered via a per kilowatt-hour (kWh) surcharge amortized over one year. According to Bear Valley Electric, the
one-year effect on a typical residential customer bill with average consumption of
450 kWh would be a monthly surcharge of $3.74, or an approximate 3.09% increase over current rates. The surcharge, including interest through March 31, 2011, would be $0.00830/kWh. In addition, Bear Valley Electric requests permission to implement the surcharge rates via a Tier 1 advice letter filed within 30 days of a decision regarding this application, and Bear Valley Electric requests that any over- or under-collection of the Commission's authorization for recovery be booked into the Base Rate Revenue Adjustment Mechanism.
Bear Valley Electric states that the legal and outside service costs are associated with performing tasks related to advancing the RPS program and goals including soliciting requests for proposals for RPS resources, undertaking RPS contract negotiations with BioEnergy Solutions, the filing of A.10-07-012 seeking approval of the BioEnergy Solutions contract, undertaking RPS contract negotiations with County Sanitation District No. 2 of Los Angeles County (LACSD), the filing of A.10-06-003 seeking approval of the LACSD contract, exploration and analysis of potential RPS resources/projects, modeling renewables integration into the Bear Valley Electric portfolio, exploration of the Big Bear Area Regional Authority In-Line Hydro Project, preparation of RPS compliance filings, undertaking general RPS-related activities, conducting legal research and analysis of RPS laws and decisions, submitting filings to the Commission regarding RPS issues, responding to audit letters from Golden State Water Company regarding RPS matters, and exploration of and participation in Commission proceedings regarding renewable energy credits.
1 Golden State Water Company filed Advice Letter 218-E on behalf of Bear Valley Electric on July 31, 2007 requesting approval to create a Preliminary Statement, Part R, RPSMA to record Renewables Portfolio Standard (RPS) legal and outside service costs associated with performing tasks related to advancing RPS goals. These costs are not currently in rates. Advice Letter 218-E was approved with an effective date
September 1, 2007.
2 Bear Valley Electric's Preliminary Statement, RPSMA states: "Interest shall be calculated on the average of the balance at the beginning of the month and the balance after entry 3 at a rate equal to one-twelfth of the interest rate on a three-month Commercial Paper for the previous month, as reported in the Federal Reserve Statistical Release, H.15, or its successor publication."
