5. Assignment of Proceeding
John A. Bohn is the assigned Commissioner and Linda A. Rochester is the assigned ALJ in this proceeding.
1. This decision resolves all issues in Phase II of Cal Am's GRC application for its Coronado, Village, and Larkfield districts.
2. Introducing increasing tiered rates for residential customers and shifting 50% of the current fixed cost recovered from the service charge to the quantity rate, is consistent with the goals of our Water Action Plan and the conservation principles being developed in our Conservation OII, I.07-01-022.
3. The conservation rate design proposal for residential customers gives important price signals to customers to reduce their usage.
4. The conservation rate design proposal for non-residential customers is more limited than the proposal for residential customers. It does not include tiered rates.
5. Moving the Coronado and Larkfield districts from bi-monthly to monthly billing would further conservation efforts by providing customers with more frequent usage feedback.
6. The proposed WRAM and MCBA mechanisms ensure recovery of the adopted fixed costs recovered in quantity rates and the actual variable costs for purchased power, purchased water, and pump taxes.
7. The conservation rate design is expected to have an impact on consumption levels while meeting the adopted revenue requirement.
8. The settlement provides for adjustments to the Pilot Program if the Pilot Program results in a disparate impact on ratepayers or shareholders.
9. If the decision in A.08-05-003 adopts a generic basis point adjustment to return on equity for water utilities that have WRAM and MCBA mechanisms similar to those approved for California Water Service Company and Park Water Company in D.08-02-036, then the same generic return on equity adjustment will be applied to the WRAMs and MCBA adopted here.
10. The WRAM/MCBA balancing accounts adopted here are subject to true-up to the date of a final decision on a return on equity adjustment.
11. The settlement provides for monitoring and data collection for use in analyzing customer response to the proposed conservation rates and conservation programs.
1. The proposed settlements for the Coronado, Village, and Larkfield districts are reasonable in light of the whole record, consistent with the law and in the public interest, and should be adopted.
2. The motions to shorten or waive the comment periods on the settlements should be granted.
3. If a review of the Pilot Program indicates a disparate impact on ratepayers or shareholders, Parties should file a petition to modify this decision.
4. If the Commission issues a decision regarding a return on equity adjustment in A.08-05-003 that is not consistent with the generic adjustment adopted here, the Parties should meet and confer within 30 days and then, jointly or separately, file a petition to modify this decision with 15 days after the meeting.
5. Cal Am should make every effort to implement the new rate design as soon as possible. It should begin the process of customer notification and billing system modifications when the proposed decision is issued.
6. Cal Am should schedule a meeting every four to six months with interested Parties to discuss the customer response data it is tracking and whether there should be any changes in conservation programs in response to the results.
7. Cal Am should be directed to file a Tier 1 advice letter, in accordance with General Order 96-B, and make effective on not less than five days' notice, revised tariff schedules reflecting the adopted conservation rate design and rates and the adopted WRAM and MCBA mechanisms, as well as the schedule of recovery for the balances under these mechanisms.
IT IS ORDERED that:
1. The June 28, 2007 settlement for the Coronado and Village districts, attached at Appendix A, is adopted and the motion to reduce the comment period is granted.
2. The June 30, 2008, settlement for the Larkfield district, attached at Appendix B, is adopted and the motion to waive the comment period is granted.
3. Parties shall meet to develop cost effective methods to move customers in the Coronado and Larkfield districts to monthly billing. During the Pilot Program, California American Water Company (Cal Am) shall collect the necessary data and present a proposal for this in its next general rate case (GRC) filing for the two districts.
4. Cal Am shall meet and confer with all interested Parties to determine the types of data collection necessary in order for the Commission to consider further conservation rate design proposals for non-residential customers in the next GRC proceeding.
5. Cal Am shall make every effort to implement the conservation rate design adopted here as soon as possible.
6. If the Commission issues a decision regarding a return on equity adjustment in Application (A.) 08-05-033 that is not consistent with the generic adjustment described in the settlement, Cal Am shall meet and confer with all interested Parties within 30 days and then, jointly or separately, file a petition to modify this decision within 15 days after the meeting.
7. The Water Revenue Adjustment Mechanism (WRAM) and Modified Cost Balancing Account (MCBA) balancing accounts adopted here shall be subject to true-up to the date of a final decision on a return on equity adjustment.
8. Cal Am shall schedule a meeting every four to six months with interested Parties to discuss the results of the customer response data it is tracking and whether there should be any changes in the conservation programs in response to the results.
9. Cal Am is directed to file a Tier 1 advice letter, in accordance with General Order 96-B, and make effective on not less than five days notice, revised tariff schedules reflecting the adopted conservation rate design and rates and the adopted WRAM and MCBA mechanisms, as well as the schedule of recovery for the balances under these mechanisms.
10. A.07-01-036, A.07-01-037, A.07-01-038, and A.07-01-039 are closed.
This order is effective today.
Dated November 6, 2008, at San Francisco, California.
MICHAEL R. PEEVEY
President
DIAN M. GRUENEICH
JOHN A. BOHN
RACHELLE B. CHONG
TIMOTHY ALAN SIMON
Commissioners
