WATER/RSK/PTL/LEP/jlj
PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
DIVISION OF WATER AND AUDITS RESOLUTION NO. W-4816
Water & Sewer Advisory Branch December 17, 2009
(RES. W-4816), AGATE BAY WATER COMPANY (Agate Bay). ORDER AUTHORIZING A RATE BASE OFFSET REVENUE INCREASE PRODUCING AN INCREASE IN GROSS ANNUAL REVENUES OF $9,156 OR 3.0%.
SUMMARY
This Resolution authorizes Agate Bay's request by Advice Letter (AL) 28 filed on September 3, 2009, for a rate base offset rate increase of $9,156 or 3.0% . The increase will not result in a rate of return greater than last authorized for Agate Bay.
The majority of the ratepayers, three quarter-inch flat rate customers, will see their annual rate increase from $508.47 to $523.72 or 3.0%.
BACKGROUND
Agate Bay is a Class C water utility. Agate Bay has requested authority under General Order (G.O.) 96-B, Rule 7.6.2 and Water Industry Rule 7.3.3(8), and Section 454 of the Public Utilities (P.U.) Code to increase its water rates by $9,906 or 3.26% primarily to recover investment in new plant water mains and equipment which includes a Wacker ditch compactor. Agate Bay replaced over 200 feet of steel pipe that has had a history of leaks. The compactor was needed to install backfill material over new pipe when repairing leaks.
Agate Bay last general rate case (GRC), Res. W-4598 dated April 27, 2006, authorized an increase of $51,572 or 23.10% with a 12.40% rate of return. The present rates were established on November 1, 2008 by Res. W-4717 which authorized a rate base offset of $11,393 or 3.89 % and a one-time surcharge of $1.26 per connection to recover annual Department of Public Health fees.
NOTICE AND PROTESTS
Notice of the proposed rate increase was mailed to customers on September 2, 2009. No letters protesting the increase were received by the Commission.
DISCUSSION
Agate Bay serves a residential subdivision area in the north end of Lake Tahoe near Carnelian Bay in Placer County. The system does not serve any business commercial or industrial premises; only single family homes and a recreation private club. Many of the houses are occupied only in summer or on weekends. The utility has requested $750 for regulatory Commission expense which is not allowed since the regulatory Commission expense was included in the last GRC. Agate Bay has been notified.
The system currently has 580 flat rate service connections, of which 579 pertain to single family homes and one to a recreation private club. The 579 single family total does not include 16 additional single family unit connections served on the same premises.
On October 21, 2009, the Division of Water and Audits (Division) representative verified the improvements during a field site visit. The Division also investigated the costs through follow up and data request and found that they were appropriate.
A field inspection conducted by staff verifies that these plant additions are used and useful. The $45,704 plant additions are summarized below:
Pipeline Ophir Road $13,371
Excavation and replacement of water main 28,823
Placer County Encroachment 55
Inspections 268
Multiquip compactor 3,187
Total 45,704
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The new rate base is shown in Appendix A and the new rates are shown in Appendix B. In light of this new rate base, the total revenue requirement for the company has increased from $301,131 to $310,287 which is a $9,156 or 3.0% increase.
COMPLIANCE
Service by Agate Bay is satisfactory. There are no Commission orders requiring system improvements, nor are there any service problems requiring corrective actions. The utility has been filing annual reports as required.
COMMENTS
This is an uncontested matter that pertains solely to a water corporation. Accordingly, pursuant to PU Code 311(g) (3), the otherwise applicable 30-day period for public review and comment is not required.
FINDINGS
1. The rate base additions total $45,704.
2. The requested rate base offset increase and resulting rates are reasonable and should be adopted.
3. Additional annual revenues of $9,156 result from a 12.50% rate of return.
4. The utility has requested $750 for regulatory Commission expense which is not allowed since the regulatory Commission expense was included in the last GRC.
5. The Commission finds, after investigation by the Division of Water and Audits, that the rate increase hereby authorized is justified, and the resulting rate increase is just and reasonable.
6. The Division's recommended Summary of Earnings (Appendix A) is reasonable and should be adopted.
7. The rates recommended by the Division (Appendix B) are reasonable and should be adopted.
8. This is an uncontested matter that pertains solely to a water corporation. Accordingly, pursuant to PU Code 311 (g) (3), the otherwise applicable 30-day period for public review and comment is not required.
THEREFORE IT IS ORDERED THAT:
1. Agate Bay Water Company is authorized to file an advice letter containing, Schedules 1, General Metered Service; 2A, Annual Flat Rate Service; 2AL, Limited Annual Flat Rate Service; and 4, Private Fire Protection Service, attached to this resolution as Appendix B, and cancelling its presently effective rate schedules, all of these changes to be effective five days after the filing of the advice letter.
2. This resolution is effective today.
I certify that the foregoing resolution was duly introduced, passed, and adopted at a conference of the Public Utilities Commission of the State of California held on
December 17, 2009; the following Commissioners voting favorably thereon:
/s/ PAUL CLANON
Paul Clanon
Executive Director
MICHAEL R. PEEVEY
President
DIAN M. GRUENEICH
JOHN A. BOHN
RACHELLE B. CHONG
TIMOTHY ALAN SIMON
Commissioners
APPENDIX A
AGATE BAY WATER COMPANY
SUMMARY OF EARNINGS
Res. W-4717 Rate Base Proposed
10/16/2008 Offset Rates
Adjustments
Operating Revenues $301,131 $9,156 $310,287
Operating expenses:
Power 5,433 5,433
Other Volume Related 4,247 4,247
Employee Labor 18,139 18,139
Materials 3,552 3,552
Contract Work 27,545 27,545
Transportation 4,025 4,025
Other Plant Maintenance 1,534 1,534
Office Salaries 17,084 17,084
Management Salaries 22,779 22,779
Employee Pension 20,192 20,192
Office Services & Rentals 4,800 4,800
Office Supplies & Expenses 6,112 6,112
Professional Services 4,333 4,333
Insurance 11,008 11,008
Regulatory Commission 1,400 1,400
General Expenses 3,151 3,151
Depreciation 25,510 1,148 26,658
Property Taxes 7,604 448 8,052
Taxes Other than Income 5,348 5,348
Income Taxes 31,530 1,912 33,442
Total Deductions 225,326 228,834
Net Revenue 75,805 81,453
Rate Base:
Average Plant 901,855 45,704 947,559
Accumulated Depreciation 302,015 1,148 303,163
Net Plant 599,840 644,396
Plus Materials 4,915 4,915
Rate Base 604,755 649,311
Rate of Return 12.5% 12.5%
(END OF APPENDIX A)
APPENDIX B
Schedule No. 1
GENERAL METERED SERVICE
APPLICABILITY
Applicable to all water service furnished on a metered basis.
TERRITORY
Agate Bay and vicinity, on the northwest shore of Lake Tahoe, Placer County.
RATES
Quantity Rate:
All water used per 100 cu. ft. $ 1.63 (I)
Service Charge: Per Meter Per Month
For 5/8 x ¾-inch meter $ 21.16 (I)
For ¾-inch meter $ 23.05 |
For 1-inch meter $ 31.14 |
For 1-1/2 inch meter $ 41.85 |
For 2-inch meter $ 55.85 (|)
The Service Charge is a readiness-to-serve charge which is applicable to all metered service and to which is added the monthly charge computed at the Quantity Rate.
SPECIAL CONDITIONS
1. All bills are subject to the reimbursement fee set forth in Schedule No. UF.
APPENDIX B
Schedule No. 2A
ANNUAL FLAT RATE S SERVICE
APPLICABILITY
Applicable to all flat rate residential water service furnished on an annual basis.
TERRITORY
Agate Bay and vicinity, on the northwest shore of Lake Tahoe, Placer County.
RATES
Annual Flat Rate:
For a single family residential unit, including premises
Residential use, payable in advance on or before
January 1 of each year
Served through a ¾-inch $ 523.72 (I)
For 1-inch meter $ 552.85 |
For 1-1/4 inch meter $ 590.86 |
For 1-1/2 inch meter $ 621.91 |
For 2 -inch meter $ 688.09 (I)
For each additional single family
residential unit on the same premises
and served from the same service connection $ 366.42 (I)
SPECIAL CONDITIONS
1. For service covered by the above classification, if the utility so elects, a meter shall be installed and service provided under Schedule No.1, Metered Service, effective as of the first day of the following calendar month. Where the flat rate charge for a period has been paid in advance, refund of the prorated difference between such flat rate payment and the minimum metered charge for the same period shall be made on or about the same day.
APPENDIX B
Schedule No. 2AL
LIMITED ANNUAL FLAT RATE SERVICE
APPLICABILITY
Applicable to flat rate service only to the Sun Club furnished on an annual basis.
TERRITORY
Agate Bay and vicinity, on the northwest shore of Lake Tahoe, Placer County.
RATES
Annual Flat Rate
Recreation Private Club use, five services plus one
swimming pool, payable in advance on or before
January 1 of each year $ 1,486.03 (I)
SPECIAL CONDITIONS
1. For service covered by the above classification, if the utility so elects, a meter shall be installed and service provided under Schedule No.1, Metered Service, effective as of the first day of the following calendar month. Where the flat rate charge for a period has been paid in advance, refund of the prorated difference between such flat rate payment and the minimum metered charge for the same period shall be made on or about the same day.
2. All bills are subject to the reimbursement fee set forth on Schedule No. UF.
APPENDIX B
Schedule No. 4
PRIVATE FIRE PROTECTION SERVICE
APPLICABILITY
Applicable to water service furnished for private fire systems and to private fire hydrants.
TERRITORY
Agate Bay and vicinity, on the northwest shore of Lake Tahoe, Placer County.
RATES
Per Service Connection
Per Month
For each inch of diameter of service connections... $ 10.71 (I)
SPECIAL CONDITIONS
1. The facilities for service connection to a privately-owned fire protection system will be installed by the utility or under the utility's direction and the cost paid by the applicant. Such cost will not be subject to refund. The facilities paid for will be the sole property of the applicant.
2. The minimum diameter for the private service connection will be 4 inches. The maximum diameter will not be larger than the diameter of the water main to which the service is connected.
3. If a main of adequate size to serve a private fire protection system in addition to all other normal service does not exist adjacent to the premises to be served, then a new main from the nearest existing main of adequate capacity will be installed by the utility and the cost paid by the applicant. Such cost will not be subject to refund. The main where located in the public right-of-way or utility easement will be the sole property of the utility.
(END OF APPENDIX B)
