II. SJWC's Application

SJWC seeks to increase its water revenues by $14,093,000 or 12.63% in 2001, $2,950,000 or 2.34% in 2002, and $3,193,000 or 2.47% in 2003.

SJWC states that since its last authorized general rate increase became effective on July 22, 1996, the cost of providing water service has increased. According to SJWC, during the last four years, the same inflationary factors that have affected the general economy have also affected SJWC's operating costs and administrative expenses. Additionally, SJWC states that new costs associated with monitoring and the implementation of expanded regulatory requirements in the area of water quality, as well as improvements to and replacement of operational plant, have increased the costs of providing water service significantly.