A0807009 O'Donnell Comment Dec. Adopting Test Year 2009/10 Revenue Requirement and Rates for the Fontana Water Company Division of San Gabriel Valley Water Company

25. Reasonableness Review-Job No. 5025-Sierra Avenue North of Baseline Avenue-Install 24-Inch Pipeline, Services and Fire Hydrant

SGV installed 4,789 feet of 24-inch pipe, 85 feet of 12-inch pipe, 21 one-inch services, four 2-inch services and five 6-inch fire hydrants. The project was placed in service in 2006 at a recorded cost of $1,169,948.

25.1. Positions of Parties

COF represents the replacement of the pipeline was appropriate. However, COF argues the new pipeline is a larger diameter than needed because replacement was not identified by system modeling or included in the April 2005 Master Plan, which did not indicate system deficiencies. COF recommends the cost be reduced by the difference between the material costs for the original pipe size and the 24-inch pipe installed. COF recommends an exclusion of $110,000 from ratebase.

FUSD agrees with the position taken by COF.

SGV states the City of Fontana informed it in 2005 of plans to widen and reconstruct Sierra Avenue and install storm drains. SGV states that since its six-inch and eight-inch facilities under Sierra Avenue were not deep enough, they would have to be replaced. SGV states that the use of larger pipe enhanced its ability to transport lower cost water from the northeastern part of its service area.

SGV states a 24-inch pipe was chosen because it would keep the velocity of water in the pipe, at the current maximum day water requirement, at 5.2 feet per second. Use of a 16-inch pipe would yield a velocity of 11.6 feet per second. SGV states that the desired velocities are five to ten feet per second. Use of the 24-inch pipe results in velocities within the desired range.

25.2. Discussion

The higher the velocity of water flowing in a pipe, the greater its resistance to flow. Greater resistance to flow means more power is needed to pump the water through the pipe, resulting in higher energy costs. Use of the 24-inch pipe results in velocities within the desired range resulting in lower pumping costs. SGV's choice of 24-inch pipe is reasonable. The project is reasonable.