ALJ/MFG/rbg Date of Issuance 8/22/2008

Decision 08-08-018 August 21, 2008

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

In the Matter of the Application of SAN GABRIEL VALLEY WATER COMPANY (U337W) for approval of Implementation by its Fontana Water Company Division of the Commission's Water Action Plan objectives, including a request to utilize existing Facilities Fees revenues, for such purposes or in the alternative, for authority to increase rates not to exceed $882,200 or 2.0%.

Application 07-08-017 (Filed August 10, 2007)

DECISION ON FONTANA WATER COMPANY'S IMPLEMENTATION
OF A WATER ACTION PLAN

TABLE OF CONTENTS

Title Page

DECISION ON FONTANA WATER COMPANY'S IMPLEMENTATION
OF A WATER ACTION PLAN 22

1. Summary 22

2. Background 33

3. Request 33

4. Procedural History 33

5. Protests 44

6. Settlement 55

7. Discussion 66

7.1. Resolution of Active Parties' Issues 77

7.2. Sponsoring Parties Reflective of Affected Interests 88

7.3. No Term Contravenes Prior Commission Decisions 88

7.4. Sufficient Information 88

7.5. Conclusion 99

8. Reduction of Comment Period 99

9. Assignment of Proceeding 1010

Findings of Fact 1010

Conclusions of Law 1111

ORDER 1111

Appendix A - Settlement Agreement Between the Division of Ratepayer Advocates and San Gabriel Valley Water Company, Fontana Water Company Division

DECISION ON FONTANA WATER COMPANY'S IMPLEMENTATION
OF A WATER ACTION PLAN

1. Summary

This decision adopts a settlement agreement between San Gabriel Valley Water Company's Fontana Water Company Division (Fontana Water Company) and the Division of Ratepayer Advocates.

Fontana Water Company is authorized a maximum $305,000 annual budget to fund conservation programs and activities from the effective date of this decision through June 30, 2009 as set forth in a settlement agreement attached to this decision as Appendix A. It is also authorized a maximum $90,522 annual budget for a customer serviceman/conservation specialist when hired and $43,000 for payroll expenses associated with conservation expense. The $438,522 maximum total of conservation expenses being approved is less than 50.0% of Fontana Water Company's initial $882,200 conservation request.¹

Fontana Water Company is authorized to establish an interim surcharge consisting of three components (conservation programs, conservation specialists, and additional payroll-related expenses) to fund the conservation programs and activities authorized by this decision. These surcharge collections shall be tracked in a one-way conservation balancing account.

The surcharge and one-way conservation balancing account will end on the latter of July 1, 2009 or the effective date of new rates to be authorized in Fontana Water Company's 2008 general rate case. Any over-collection will be refunded to the extent that revenues collected exceed the lower of the annualized limit or the actual expense. Any under-collection to the extent that revenues collected fall short of the lower of the actual expense or the annualized limit may be collected by Fontana Water Company.

¹ The $438,522 amount consists of a $305,000 conservation program budget plus a $43,000 associated payroll expenses budget plus $90,522 budgeted for a customer serviceman/conservation specialist position.