E. Low-Income Customer Assistance

Both Cal-Am and ORA testified that rate assistance for low-income customers is a technically complex issue with broad policy implications, and it should be decided in a generic proceeding that the Commission is expected to open soon. Cal-Am withdrew its low-income proposal from this proceeding, ORA did not withdraw its specific proposal but indicated it should remain in the record as its second choice. Further, ORA stated that it had not prepared an estimate of program costs due to the fact that the establishment of low-income water programs is relatively new ground.

After the close of the record here, the Commission in D.05-05-015 adopted a new low-income program for customers of San Gabriel Water Company (San Gabriel). This program is different from those initially sponsored by Cal-Am and ORA here, particularly in that the San Gabriel program does not include indirect residential customers who use water provided by San Gabriel through a master meter. These indirect residential customers are generally residents of apartments and other multi-family buildings. In D.05-05-015, the Commission expressed concern with excluding indirect customers but stated that the record in the proceeding did not provide sufficient facts to assess whether low-income residents of multi-family dwellings would be subsidizing other single-family low-income customers under the adopted program.

We recognize the complexity and importance of designing a low-income assistance program for residential water users of investor-owned utilities. We find that further information is needed before considering a program for Cal-Am's Sacramento and Larkfield districts, but that timeliness in addressing the issue is important. Therefore, if the Commission has not instituted a generic rulemaking on low-income assistance programs for residential water users within two months, Cal-Am is directed to file an application for the Sacramento and Larkfield districts that is similar to the program adopted for San Gabriel Water Company in D.05-05-015. In its application, Cal-Am must provide information on the number of low-income indirect customers in each district, and a comprehensive analysis of any subsidy these indirect customers are providing to Cal-Am's direct customers.