STATE OF CALIFORNIA GRAY DAVIS, Governor

PUBLIC UTILITIES COMMISSION

505 VAN NESS AVENUE

SAN FRANCISCO, CA 94102-3298

September 16, 2003 Agenda ID #2714

TO: PARTIES OF RECORD IN APPLICATION (A.) 02-11-021 AND
A.02-11-022

This is the proposed decision of Administrative Law Judge (ALJ) Galvin. It will not appear on the Commission's agenda for at least 10 days after the date it is mailed. The Commission may act then, or it may postpone action until later.

When the Commission acts on the proposed decision, it may adopt all or part of it as written, amend or modify it, or set it aside and prepare its own decision. Only when the Commission acts does the decision become binding on the parties.

Pursuant to Rule 77.7(f)(9), comments on the proposed decision must be filed within 10 days of its mailing and no reply comments will be accepted.

Parties to the proceeding may file comments on the proposed decision as provided in Article 19 of the Commission's "Rules of Practice and Procedure." These rules are accessible on the Commission's website at http://www.cpuc.ca.gov. In addition to service by mail, parties should send comments in electronic form to those appearances and the state service list that provided an electronic mail address to the Commission, including ALJ Galvin at mfg@cpuc.ca.gov. Finally, comments must be served separately on the Assigned Commissioner, and for that purpose I suggest hand delivery, overnight mail, or other expeditious methods of service.

/s/ ANGELA K. MINKIN

Angela K. Minkin, Chief

Administrative Law Judge

ANG:hkr

Attachment

ALJ/MFG/hkr DRAFT Agenda ID #2714

Ratesetting

Decision PROPOSED DECISION OF ALJ GALVIN (Mailed 9/16/2003)

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

In the Matter of the Application of CALIFORNIA WATER SERVICE COMPANY (U 60 W), a corporation, for an order authorizing it to increase rates charged for water service in the ANTELOPE VALLEY district by $60,300, or 5.8%, in 2003, by $130,600 or 11.8%, in 2004, by $126,900, or 10.2%, in 2005, and $127,500, or 9.3% in 2006.	Application 02-11-021 (Filed November 8, 2002)
In the Matter of the Application of CALIFORNIA WATER SERVICE COMPANY (U 60 W), a corporation, for an order authorizing it to increase rates charged for water service in the KERN RIVER VALLEY district by $913,200, or 46.9%, in 2003, by $148,800 or 5.3%, in 2004, by $137,500, or 4.6%, in 2005, and $139,000, or 4.4% in 2006.	Application 02-11-022 (Filed November 8, 2002)

Bingham McCuthen LLP, by Gregory Bowling, Attorney at Law, for California Water Service Company, applicant.

Jack L. Chacanaca and Roger Berger, for Leona Valley Cherry Growers Association; and, Roger Berger, for Leona Valley Town Council, interested parties.

Monique Steele and Monica L. McCrary, Attorneys at Law, for the Office of Ratepayer Advocates.

OPINION RESOLVING GENERAL RATE CASES

OPINION RESOLVING GENERAL RATE CASES

I. Summary

This decision adopts an all-party settlement agreement entered into by California Water Service Company (CWS), the Office of Ratepayer Advocates (ORA), the Leona Valley Cherry Growers Association (CGA), and the Leona Valley Town Council (LVTC).¹ The settlement agreement resolves all issues in the Antelope Valley District and Kern River Valley District rate increase applications of CWS.

CWS is authorized to change its Antelope Valley District rates by amounts designed to reduce revenue by $151,800, or 14.05% for 2003 and to increase revenue by $95,300, or 10.27% for 2004; $68,800, or 6.72% in 2005; and $68,800, or 63% for 2006. CWS is also authorized to change its Kern River Valley District rates by amounts designed to increase revenue by $183,100, or 9.36% for 2003; $230,100 or 10.76% for 2004; $131,600, or 5.56% in 2005; and $131,600, or 5.26% for 2006. The adopted rates are based on an interim 8.90% return on rate base (ROR) and a 9.70% return on equity (ROE).

CWS shall file advice letters revising the rates adopted in this order to reflect adoption of a revised ROR and ROE in CWS' pending Application (A.) 03-01-034 et al. Those advice letters shall be filed within 30 days after the effective date of a decision in A.03-01-034, and shall go into effect upon the Water Division determination that they conform to this order.

As a result of the revenue changes granted by this decision, the 2003 average residential customer's monthly bill in the Antelope Valley District using 34 hundred cubic feet (Ccf) of water with a 5/8" by 3/4" meter would decrease by $6.83, or 13.11% from $52.10 to $45.27. The 2003 average residential customer's monthly bill in the Kern River Valley District using 11 Ccf of water with a 5/8" by 3/4" meter would increase by $3.52, or 9.16% from $79.15 to $84.52 for the remainder of 2003.