ALJ/MAB/avs Date of Issuance 7/10/2009
Decision 09-07-021 July 9, 2009
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
Application of California-American Water Company (U210W) for Authorization to Increase its Revenues for Water Service in its Monterey District by $24,718,200 or 80.30% in the year 2009; $6,503,900 or 11.72% in the year 2010; and $7,598,300 or 12.25% in the year 2011 Under the Current Rate Design and to Increase its Revenues for Water Service in the Toro Service Area of its Monterey District by $354,324 or 114.97% in the year 2009; $25,000 or 3.77% in the year 2010; and $46,500 or 6.76% in the year 2011 Under the Current Rate Design. |
Application 08-01-027 (Filed January 30, 2008) |
And Related Matters. |
Application 08-01-024 (Filed January 30, 2008) |
(See Appendix E for List of Appearances.)
FINAL DECISION AUTHORIZING RATE INCREASE IN
MONTEREY WATER DISTRICT AND TORO SERVICE AREA
TABLE OF CONTENTS
FINAL DECISION AUTHORIZING RATE INCREASE IN MONTEREY
WATER DISTRICT AND TORO SERVICE AREA 22
3. Summary of the Applications Addressed in this Decision 44
3.1. A.08-01-024 (General Office Application) 44
3.2. A.08-01-027 (General Rate Case Application) 55
5. Summary of the Testimony Presented at the
Public Participation Hearings and Written Comments 77
6. Resolution of Remaining Issues 88
6.1. Utility Plant in Service 99
6.1.1. American Water Company Asset Investment Strategy 99
6.1.2. Water Supply Capacity 1212
6.1.2.1. Winter Maximum Day Demand 1616
6.1.2.2. Summer Maximum Day Demand 1818
6.1.2.3. General Issues With Comprehensive Planning Study 2121
6.1.2.4. Potential for Stranded Assets 2323
6.1.2.5. Playa Well No. 4 2424
6.1.3. Well Rehabilitation 2525
6.1.6. Pipeline Replacement 3636
6.1.7. Polybutylene Services 4040
6.1.8. Combining and Coordinating the "Low Hanging Fruit"
Proactive Infrastructure Replacement Programs 4242
6.2. Expenses: Operations and Maintenance,
Administrative and General, and Payroll 5858
Title Page
6.2.1.1. Sand City Desalinization Plant Lease- Background
and Positions of the Parties 5959
6.2.1.2. Sand City Desalinization Plant - Discussion 6363
6.2.2. Regulatory Expense 7171
6.2.2.1. Fine for Failure to File Reports Ordered in Decision 7676
6.3.1. Commission Direction for Evaluating
Cal-Am's General Office Proposed Cost Increases 9494
6.3.2. DRA's Proposed Adjustments 9696
6.3.2.1. Annualize Labor Expense Based on
May 31, 2008, Actual Staff Levels, Reduces 2009 Revenue Requirement by $338,581 9797
6.3.2.2. Reducing Incentive Compensation to 2007
Actual Award Levels Reduces Revenue Requirement
by $589,158 100100
6.3.2.3. Remove Business Development Expense of $383,185 102102
6.3.2.4. Corporate Contributions and
Sales and Marketing Expenses 103103
6.3.2.5. Legislative Influence 104104
6.3.2.6. Unsupported NSC Functions 107107
6.3.2.7. Local Service Company Employees
Re-Assigned to CalCorp 107107
6.3.2.8. Service Company Allocations to Cal-Am 109109
6.3.2.9. Customer Service Center 111111
6.3.2.10. Payroll Reserve 114114
6.3.2.11. Reverse Double Counting of CalCorp
Rate Case Expense 115115
6.3.2.12. Four-Factor Methodology - California District Allocations 115115
6.4. Monterey Peninsula Water Management District 116116
Title Page
7. Rate Design Settlement 123123
7.1. Summary of the Rate Design Settlement 123123
7.2. Comments on the Rate Design Settlement 125125
7.3. Evaluating and Approving the
Rate Design Settlement Agreement 127127
8. Water General Rate Case Partial Settlement 128128
8.1. Description of the Settlement Agreement
Provisions that Apply to the Water General Rate Case 128128
8.2. Evaluating and Approving the Water
General Rate Case Settlement Agreement Provisions 130130
9. Reducing Use of Potable Water for Landscape Irrigation 131131
APPENDIX A - Conservation Rate Design Settlement Agreement
APPENDIX B - Comparison Tables
APPENDIX C - Cal-Am General Office Table
APPENDIX D - Tariffs
APPENDIX E - List of Appearances
FINAL DECISION AUTHORIZING RATE INCREASE IN
MONTEREY WATER DISTRICT AND TORO SERVICE AREA
1. Summary
This decision authorizes California American Water Company (Cal-Am) to increase rates in its Monterey Water District and Toro Service Area as follows:
Monterey District1 |
||
Year |
Revenue Increase Over Last Adopted |
Percentage Increase Over Last Adopted |
2009 |
$11,201,000 |
36.39% |
2010 |
$1,077,900 |
2.53% |
2011 |
$1,572,200 |
3.62% |
Toro Service Area of Monterey District | ||
Year |
Revenue Increase Over Last Adopted |
Percentage Increase Over Last Adopted |
2009 |
$365,524 |
118.6% |
2010 |
$25,600 |
3.8% |
2011 |
$47,000 |
6.7% |
1 The Monterey Water District includes Cal-Am's Monterey Main System as well as the Ambler, Bishop, Chualar, Hidden Hills, and Ralph Lane subsystems. For ratemaking purposes, the recently acquired Toro Service Area is separate.
