7. Assignment of Proceeding

John A. Bohn is the Assigned Commissioner and Hallie Yacknin is the assigned ALJ in this proceeding.

Findings of Fact

1. Park's proposed low-income rate relief program, known as California Alternative Rates for Water (CARW), is unopposed.

2. Park's proposed CARW program is consistent, in all aspects other than the proposed surcharge rate design, with the San Gabriel and Apple Valley CARW programs.

3. The Commission previously authorized the San Gabriel and Apple Valley CARW programs in D.05-05-015 and D.05-12-020, respectively, and found them to satisfy the directives contained in Pub. Util. Code § 739.8.

4. Park proposes a volumetric surcharge, in contrast to the flat surcharges previously approved for San Gabriel and Apple Valley.

5. Nothing in the record supports a finding that a volumetric surcharge is more equitable than a fixed rate surcharge.

6. Nothing in the record supports a finding that the proposed volumetric surcharge will encourage water conservation.

7. The Commission-authorized CARW program for Apple Valley provides a $4.88 monthly discount to low-income customers funded through an estimated flat surcharge rate of $2.27 for ineligible customers (D.05-12-020).

8. The Commission-authorized CARW program for San Gabriel provides a $5.00 monthly discount for low-income customers funded through a flat surcharge rate of $2.32 for ineligible customers (D.05-05-015).

9. A flat surcharge rate of $2.27 on ineligible customers is required to fund a $4.50 monthly discount for Park's low-income customers.

Conclusions of Law

10. The Commission should approve and authorize Park's proposed CARW program, with the exception of its proposed volumetric surcharge rate design and proposed subsidy amount.

11. The Commission should authorize a $4.50 monthly discount for Park's low-income customers, to be funded by a flat surcharge rate of $2.27 on ineligible customers.

12. The proceeding should be closed.

13. Today's decision should be effective immediately.

ORDER

IT IS ORDERED that:

14. Park Water Company (Park) is directed to file in accordance with General Order 96-A, or its successor, an advice letter with tariff schedules implementing its "California Alternative Rates for Water," or CARW, low-income rate relief proposal, except that the monthly subsidy amount for eligible customers shall be $4.50, and the monthly surcharge for ineligible customers shall be a flat rate of $2.27. The CARW tariff schedules shall apply to service rendered on and after their effective date.

15. The advice letter filing for CARW rates shall be made within 30 days of the date of this order. The advice letter shall be reviewed by the Water Division for conformity with this decision. CARW rates shall go into effect upon Water Division's determination of compliance. The Water Division shall inform the Commission if it finds the proposed increase does not comply with this decision or other Commission requirements.

16. Park is authorized to establish a balancing account to track the actual discounts granted through the CARW program, and the actual revenues generated by the surcharge.

17. Park is authorized to implement a memorandum account to record the initial and ongoing expenses of the low-income assistance program. This memorandum account will be audited for reasonableness at the next general rate case proceeding.

18. Application 06-01-004 is closed.

This order is effective today.

Dated October 19, 2006, at Fresno, California.

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