Findings of Fact

1. Suburban provides public utility water service to 74,000 customers in its San Jose Hills and Whittier/LaMirada service areas.

2. Suburban's last general rate increase occurred in January 1998, as authorized in D.96-04-076.

3. ORA has confirmed the accuracy of Suburban's actual and estimated costs for DHS fees.

4. A proposed new FMCT tariff would save BH Properties approximately $14,200 per year, and this amount would be recovered by increasing the rates of Suburban's other customers.

5. The capital structure, cost of debt, rate of return on equity, and rate of return on rate base shown in Table 3 are reasonable for ratemaking.

6. The Public Health Security and Bioterrorism Preparedness and Response Act of 2002 requires Suburban and other water companies to make investments for improving security.

7. All of Suburban's wells serving the San Jose Hills service area have been decommissioned because of contamination.

8. The BPOU Project Agreement requires CRs to reimburse Suburban for costs attributable to groundwater contamination.

9. An audit of Suburban's books show that environmental expenses and CR reimbursements have been accurately recorded.

10. No Class A water utility has a single district manager for a system with 74,000 customers.

11. The cost of Suburban's current insurance policies has increased by 35% because of an increasingly restrictive insurance market.

12. Recovery of extraordinary legal fees was authorized by the Commission in Suburban's last general rate case.

13. Suburban did not file a revised service map following its acquisition of Maple Water Company.

14. Suburban's water system facilities are in good condition, and service complaints are few.

15. Suburban faces severe water contamination problems in its San Jose Hills service area.