14. Rate Design

14.1 Single District Rates

Rates for customers in the Whittier/La Mirada service area are higher than the rates in the San Jose Hills service area. ORA recommends a uniform rate for customers in both service areas. Suburban opposes a uniform rate, citing a long-standing policy of the Commission stating that districts should not be combined for the express purpose of having one district subsidize another.³

Suburban points out that the two service areas are not geographically connected and cannot share their supplies of water. The settlement approved by the Commission in Suburban's last rate case addressed this issue:

Due to complexities of the computations of the cost of water from different sources for the existing two districts and the complexity of the rules affecting these costs, which complexities can be expected to continue, the Parties agree that respective rates for the San Jose Hills and Whittier/La Mirada Districts will reflect the cost differences in source of supply, and that production cost balancing accounts will be maintained separately by district. (In re Suburban Water Systems (1996) 66 CPUC2d 59, 97-98.)

ORA has not presented evidence that would justify a change in the Commission's position on permitting separate rates for the San Jose Hills and Whittier/La Mirada service areas. We decline to adopt a uniform rate for these two service areas.

14.2 Low-Income Assistance

Noting that Pub. Util. Code § 739.8 requires the Commission to consider programs to provide relief for low-income water customers, ORA recommends that Suburban amend its tariffs to offer a 50% service charge reduction to customers currently receiving low-income assistance from other utilities. Suburban responds that because of a preponderance of low-income families in much of Suburban's service areas, establishing a low-income assistance program would unfairly burden customers who do not qualify. Moreover, according to Suburban, occupants of apartments and other multi-family housing would be ineligible for the discount under the approach recommended by ORA and could actually wind up paying more for their service. Suburban notes that a similar reduction in service charge for low-income customers was rejected by the Commission last year in In re San Gabriel Valley Water Company, supra..

Because of the unusual demographics of Suburban's customer base, we decline at this time to direct the proposed change in tariff.