Background

In Decision (D.) 02-10-058, the Commission rejected San Gabriel's low-income rate proposal for its Los Angeles district and ordered San Gabriel to file an application with a low-income water rate proposal that "...fully and completely addresses the matters discussed in this Order and contained in Pub. Util. Code § 739.8 including but not limited to: availability of the program to all

low income families served with water directly or indirectly¹ by San Gabriel; costs of the program; conservation effects of the program; and ratemaking treatment of program costs." In D.04-07-034, San Gabriel was ordered to implement in its Fontana district an "identical" low-income rate relief program to the one authorized by the Commission for its Los Angeles district.

On April 22, 2003, San Gabriel filed this application in compliance with the order contained in D.02-10-058 seeking Commission authorization to implement "California Alternative Rates for Water (CARW)," designed to offer discounted rates to San Gabriel's low-income customers.

CARW is patterned after the CARE program offered by electric utilities to assist its low-income customers. San Gabriel proposes to reduce monthly service charges by 50% for all qualifying customers, while maintaining the same quantity rate. The program will be available to applicants (1) in a residential water classification, (2) living in a single family dwelling or duplex, (3) being served through a 1-inch or smaller meter, and (4) meeting the income criteria established each year by the Commission.

San Gabriel assumes a 45% participation rate in the program and all service charges are proposed to be increased proportionately in order to offset the expected revenue loss. San Gabriel further requests a balancing account to track the actual discounts provided during the rate case cycle for later true-up, as well as to track any other costs of the program.

For 2003, San Gabriel estimates that existing rates provide service charge revenues of $10,764,560 and that CARW discounts will total $2,065,016. The representative impact on monthly bills will be as follows. For 5/8-inch CARW customers, monthly bills will decrease from $43.34 to $38.46 ($4.88 decrease or 11.3%). For 1-inch CARW customers, monthly bills will decrease from $61.45 to $49.24 ($12.21 decrease or 19.9%). Conversely, for 5/8-inch non-CARW customers, monthly bills will increase from $43.34 to $45.66 ($2.32 increase or 5.4%). While 1-inch non-CARW customers will see their bills increase from $61.45 to $67.23 ($5.78 increase or 9.4%).

San Gabriel will require customers to file an application and eligibility declaration on a Commission approved form. Renewal of eligibility will be required every two years. Income requirements will be based on household size and will follow Commission approved requirements for the CARE program for electric utilities.