STATE OF CALIFORNIA ARNOLD SCHWARZENEGGER, Governor
PUBLIC UTILITIES COMMISSION
505 VAN NESS AVENUE
SAN FRANCISCO, CA 94102-3298
November 21, 2003 Agenda ID #3021
TO: PARTIES OF RECORD IN APPLICATION 02-11-007
RE: NOTICE OF AVAILABILITY OF PROPOSED DECISION IN SOUTHERN CALIFORNIA WATER COMPANY'S GENERAL RATE CASE APPLICATION, TEST YEARS 2003 AND 2004, ATTRITION YEAR 2005
Consistent with Rule 2.3(c) of the Commission's Rules of Practice and Procedure, I am issuing this Notice of Availability of the above-referenced proposed decision. The proposed decision was issued by Administrative Law Judge (ALJ) Fukutome on November 21, 2003. An Internet link to this document was sent via e-mail to all the parties on the service list who provided an e-mail address to the Commission. An electronic copy of this document can be viewed and downloaded at the Commission's Website ( www.cpuc.ca.gov). A hard copy of this document can be obtained by contacting the Commission's Central Files Office [(415) 703-2045].
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.
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. Pursuant to Rule 77.3 opening comments shall not exceed 25 pages.
Consistent with the service procedures in this proceeding, 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 David Fukutome at dkf@cpuc.ca.gov. Service by U.S. mail is optional, except that hard copies should be served separately on ALJ Fukutome, and for that purpose I suggest hand delivery, overnight mail or other expeditious methods of service. In addition, if there is no electronic address available, the electronic mail is returned to the sender, or the recipient informs the sender of an inability to open the document, the sender shall
immediately arrange for alternate service (regular U.S. mail shall be the default, unless another means - such as overnight delivery-- is mutually agreed upon). The current service list for this proceeding is available on the Commission's Web page, www.cpuc.ca.gov.
ANGELA K. MINKIN by KH
Angela K. Minkin, Chief
Administrative Law Judge
ANG:tcg
Attachment
ALJ/DKF/tcg DRAFT Agenda ID #3021
Ratesetting
Decision PROPOSED DECISION OF ALJ FUKUTOME (Mailed 11/21/2003)
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
In the Matter of the Application of SOUTHERN CALIFORNIA WATER COMPANY |
Application 02-11-007 (Filed November 4, 2002) |
OPINION RESOLVING APPLICATION
OPINION RESOLVING APPLICATION 2
1. Summary 2
2. Background 3
2.1. Procedural History 3
2.2. SCWC's Request 6
2.3. ORA's Recommendation 7
2.4. Position of the City of Claremont 7
2.5. Position of the City of San Dimas 8
2.6. Position of WPOA 8
3. Stipulation 8
3.1. Plant 9
3.2. Sales 15
3.3. Labor 16
3.4. Administrative and General (A&G) Expenses 16
3.5. Operation and Maintenance 17
3.6. Supply 18
3.7. Common Issues 19
3.8. Audit 19
3.9. Other Issues 20
3.10. Tariff Rules 20
POLICY ISSUES 20
4. Regional or Single Tariff Rates 20
5. Allocation of GO Costs to Non-GRC Districts 25
6. Allocation of GO and Other Costs to Unregulated Operations 26
6.1. Discussion 28
7. Cash Preservation Plan 30
8. Earnings Test 36
9. Attrition 37
9.1. Discussion 38
10. Water Quality Memorandum Accounts 38
10.1. Discussion 39
11. Water OII Amortization 41
12. Water Quality Compliance 41
13. Lease of Water Rights to the City of Folsom 42
COST OF SERVICE ISSUES 52
14. Cost of Capital 52
14.1. Cost of Debt 52
14.2. Return on Equity 53
14.3. Return on Equity - Discussion of Models 55
14.4. Return on Equity - Discussion of Risk 59
15. Sales 64
15.1. Discussion 64
16. Water Supply Mix 65
16.1. Discussion 66
17. Supply Cost Increases 67
17.1. Discussion 68
18. General Office Labor 69
18.1. Discussion 69
19. Security Plan 71
19.1. Discussion 72
20. Customer Information System Software 74
20.1. Discussion 74
21. Pensions and Benefits 76
21.1. Discussion 77
22. Reconnection Fees 78
23. Comments on Proposed Decision 79
24. Assignment of Proceeding 79
Findings of Fact 79
Conclusions of Law 86
ORDER 90
Appendices A - I
1. Summary
This decision grants Southern California Water Company (SCWC) authority to increase rates by $8,093,500 or 12.05% in the year 2003; by $1,849,700 or 2.45% in the year 2004; and by $2,738,900 or 3.54% in the year 2005 in its Region III Service Area. Rates for Region III will continue to be determined on a regional, rather than district specific, basis. SCWC's request to also increase rates for the General Office Allocation to customer service areas (CSAs) in Regions I and II is denied. Beginning in 2003, revenues derived from the lease of water rights to the City of Folsom will be used to offset the cost of service for the Arden-Cordova CSA. The following table summarizes the authorized rate increases for Region III.
District |
2003 |
|
2004 |
|
2005 |
|
Region III |
|
|
|
|
|
|
Orange |
$4,647,200 |
17.69% |
$ 899,300 |
2.89% |
$ 1,186,100 |
3.71% |
Claremont |
520,800 |
4.83% |
332,700 |
2.93% |
434,300 |
3.71% |
San Dimas |
1,021,400 |
7.90% |
145,500 |
1.04% |
525,000 |
3.72% |
San Gabriel |
720,000 |
11.40% |
332,300 |
4.71% |
273,900 |
3.71% |
Barstow |
1,184,100 |
17.80% |
87,900 |
1.12% |
307,500 |
3.89% |
Calipatria-Niland |
- |
0.00% |
52,000 |
4.89% |
12,100 |
1.53% |
Desert |
- |
0.00% |
- |
0.00% |
- |
0.00% |
Wrightwood |
- |
0.00% |
- |
0.00% |
- |
0.00% |
|
|
|
|
|
|
|
Total Region III |
$8,093,500 |
12.05% |
$1,849,700 |
2.45% |
$2,738,900 |
3.54% |
