ALJ/MAB/eap Mailed 1/17/2006
Decision 06-01-025 January 12, 2006
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
In the Matter of the Application of the Southern California Water Company (U 133 W) for an order authorizing it to increase rates for water service by $18,972,300 or 24.17% in 2006; by $1,534,500 or 1.57% in 2007; and by $1,493,900 or 1.50% in 2008 in its Region III Service Area. |
Application 05-02-004 |
(See Appendix A for List of Appearances.)
OPINION AUTHORIZING RATE INCREASES
TABLE OF CONTENTS
Title Page
OPINION AUTHORIZING RATE INCREASES 1
1. Summary 2
2. Background 2
2.1. Procedural History 3
2.2. Public Participation Hearings and Written Comment
Submitted to the Commission 6
3. Rate Case Plan 8
4. Recommendations of the City of Claremont 9
5. Discussion 10
5.1. Burden of Proof Under Statutes and Rate Case Plan 10
5.2. Calipatria Plant 11
5.2.1. Summary and Background 11
5.2.2. Total Plant Cost 12
5.2.3. Grading, Paving, SCADA 17
5.2.4. Electrical and Instrumentation and Chemical Feeding Equipment 20
5.2.5. Pump Station (Calipatria) 22
5.2.6. Two 1.1 MG Reservoirs (Calipatria) 23
5.2.7. In-line Pump Station 24
5.2.8. 32,000 Foot 12-inch Water Transmission Main 25
5.2.9. Engineering and Other Professional Services 27
5.2.10. Office/Lab/Electrical Building 30
5.2.11. Backwash Decant Basins 31
5.2.12. Summary of Calipatria Niland Upgrade Project 32
5.3. Capital Overheads 32
5.4. Ten Percent Contingency Adder on Capital Budget 38
5.5. Construction Work in Progress 2005 39
5.6. Adder for Design of Water Supply and Distribution Plant 42
5.7. Urban Water Management Plan 44
5.8. Replacement Vehicles 45
5.9. Well Replacements 46
5.10. Main Replacements 50
5.11. Demolition of No Longer Used Wells 51
5.12. Permanent Electrical Generators at Via Blanca (San Dimas)
and Jefferies (San Gabriel) 52
5.13. Relocating Pressure Regulating Valve in San Dimas 53
5.14. Outside Service Expense and Other Operation - Orange County 54
5.15. Tool Clearing 54
5.16. Labor Expenses 57
5.17. Other Maintenance Expenses 58
5.18. Working Cash 59
5.19. Contract to Serve the Calipatria Prison 60
5.20. Cost of Capital 63
5.21. General Office Stipulation 66
5.22. Overall Stipulation 69
5.23. Rate and Efficiency Comparison Metrics 70
6. Categorization and Need for Hearings 71
7. Comments on Proposed Decision 71
8. Assignment of Proceeding 77
Findings of Fact 78
Conclusions of Law 82
ORDER 86
Appendix A - Appearances
Appendix B - General Office Stipulation
Appendix C - Overall Stipulation
Appendix D - Summary of Earnings
Appendix E - Tariff Schedules
Appendix F - Adopted Quantities - Purchased Power and Water
Appendix G - Adopted Quantities - Rate Base, Customer Count, Consumption
Appendix H - Bill Comparison
Appendix I - Income Taxes
Appendix J - Requirements of Urban Water Management Plan Cost Recovery Request
Appendix K - Water Supply Analysis
1. Summary
Southern California Water Company (SCWC)1 is authorized to increase its Region III service area rates as follows:
Amount |
Percentage | |
2006 |
$5,351,700 |
6.69 |
2007 (estimated) |
$1,878,400 |
2.19 |
2008 (estimated) |
$2,333,700 |
2.66 |
As we discuss in more detail below, SCWC and our Office of Ratepayer Advocates (ORA) were able to reach agreements that resolve some issues in this proceeding. The bulk of the requested rate increase remains in dispute. This decision addresses each of the disputed issues.
On some issues, we find that SCWC has demonstrated that its costs are reasonable. On many issues, however, we find that SCWC inadequately documented its position. As noted below, we have accepted SCWC's inadequate documentation, in two instances locating record evidence on our own initiative, in furtherance of long-term customer interests. On other issues, we must disallow costs where SCWC presented superseded, inconsistent, or no documentation.
1 Effective October 1, 2005, SCWC changed its name to Golden State Water Company. As the record was developed before the name change, we will continue to use SCWC.
