V. AB1X REQUIREMENTS FOR RATE INCREASE

Leprino argues that AB 1X requires that any rate increase done as an exception to the rate freeze must be based on information provided by DWR regarding the revenue requirements occasioned by its power purchases. As Leprino notes, Water Code section 80110, enacted as part of AB 1X, states that DWR shall be entitled to recover its revenue requirement "...and shall advise the commission as the department determines to be appropriate." At the time of the Accounting Decision, DWR had not advised the Commission regarding the revenue requirement. According to Leprino, since the Commission created no record with respect to DWR's revenue requirements, it was not authorized by section 80110 to increase rates.

Leprino's arguments are without merit. Water Code section 80110 merely requires that DWR provide the Commission information substantiating its revenue requirement in order for the Commission to determine the amount of the DWR Fixed Set Aside. It does not prevent us from increasing rates when necessary and when consistent with its other statutory obligations. We have other statutory duties to maintain a safe and adequate supply of energy, and we found that the emergency situation warranted an immediate increase in rates. In addition, AB 1X expressly continues the Utilities' obligation to serve their customers. Since the Utilities were not released from procurement responsibilities for their net short, we determined a rate increase was necessary to fulfill this statutory obligation given the financial status of the Utilities at the time. And as explained above, we will have further hearings implementing DWR's revenue requirements.