2. Description of Application
On January 30, 2009, California American Water Company (Cal-Am) filed this application, along with Application (A.) 08-01-024 (the General Office application) and A.08-01-027 (the General Rate Case Application).
The Division of Ratepayer Advocates (DRA) filed a protest to this application.
In its initial application, Cal-Am sought Commission authorization to increase the total revenues from its approximately 2,000 wastewater customers by 83.47% in 2009, 6.32% in 2010, and 6.40% in 2011. Cal-Am justified its proposed approximately $1.5 million increase largely based on labor-related cost increases. Payroll increases accounted for almost $500,000 of the cost increase, allocated General Office (which is mostly labor) added in $384,000, and pensions and benefits about $200,000.1
In addition to the aggregate revenue increase, Cal-Am presented "Special Request # 1 - Proposals to Improve Existing Tariffs" in which Cal-Am sought Commission authorization to bill all wastewater customers "at the same rate and at the same billing frequency." Cal-Am explained that it acquired its wastewater systems at different times and from different owners. Pursuant to the various acquisition agreements, the systems are billed on different frequencies and at different rates. In this application, Cal-Am proposed to begin billing all systems on a monthly basis and at the same rate. As a consequence of this request, Cal-Am's proposed rate increase varied among the various systems with three systems proposed to receive 2009 rate increases substantially higher than the rate increase for all other systems:
System |
2009 Proposed Increase |
2010 |
2011 |
Oak Hills |
135.41% |
6.32% |
6.31% |
Spreckels |
161.62% |
6.32% |
6.31% |
Indian Springs |
91.02% |
6.32% |
6.31% |
All Others |
66.17% |
6.32% |
6.31% |
As described below, customers served by the systems with the greater proposed rate increase, Spreckels and Oak Hills, comprised the majority of the public comments at the Chualar Public Participation Hearing.
1 See Exhibit 1, Chapter 4, Section 1, Table 3.
