4. Uncontested Issues

4.1. General Rates in 2004, 2005 and 2006

Park maintains that the increases sought in this General Rate Case are intended to recover operating expenses as well as to provide a fair return on rate base. Park and ORA agree that Park's water system facilities are in good condition, and service complaints are few. Capital expenditures planned through 2006 consist largely of replacements in kind to maintain the condition of the water system and ensure water quality. Park has submitted its current Urban Water Management Plan as part of this proceeding.

4.2. Consumption

The Commission's Standard Practice U-25 contains guidelines for estimating consumption for water utilities. Consistent with that, the parties agreed on the following consumption estimates for both of the test years:

Residential 159.6 Ccf per year

Business 802.5 Ccf per year

Industrial 8,158.0 Ccf per year

Public Authority 1,814.6 Ccf per year

Temporary 707.0 Ccf per year

Resale 71 25,291.7 Ccf per year

Resale 72 25,746.0 Ccf per year

Reclaimed 6,305.8 Ccf per year

4.3. Number of Customers

Park estimated a growth of 20 customers per year, based on the built-out nature of its service territories. ORA estimated customer growth of 70 customers per year, based on the average growth over the past six years. Park has accepted ORA's estimate, and we agree that the record supports this higher growth rate. Total number of customers is 27,242 for Test Year 2004 and 27,319 for Test Year 2005.

4.4. Unaccounted-For Water

ORA based its estimate of unaccounted water loss at 1.80% on the average water loss experienced by Park in the past five years. Park had rounded that number to 2% but has agreed, as do we, that ORA's estimate is the more reasonable one.

4.5. Purchased Power (Unit Costs)

Following testimony at hearing, Park and ORA agreed that the per unit cost of purchased power will be the current rate of Southern California Edison Company. The parties agreed that the adopted expense for the supply mix will determine the test year estimates adopted by the Commission in this proceeding.

4.6. Leased Water Rights (Unit Costs)

The parties agreed to use Park's estimate of the per unit cost of leased water rights of $232.56 per acre foot for Test Year 2004 and $237.21 per acre foot for Test Year 2005. The supply mix adopted by the Commission determines the adopted expense for the test years.

4.7. Replenishment Charges (Unit Costs)

The parties agreed on a per unit cost of replenishment charges of $117.60 per acre foot, which is the current rate of the Water Replenishment District of Southern California. The adopted expense for the test years is determined by the supply mix adopted by the Commission.

4.8. Utility Plant in Service - 2003 Capital
Projects

During hearing, the parties agreed to use Park's estimates of plant additions for 2003. ORA originally recommended disallowance of $85,000 in replacement vehicles, $85,000 in miscellaneous tools, and $388,000 in replacement main projects, along with the deferral of $380,000 in additional replacement main projects. Park provided additional justification for these projects and reduced its expense estimates to reflect $16,000 in cost savings associated with replacement vehicles and miscellaneous tools. Park also provided additional information demonstrating that all of the plant items originally in dispute would be completed during 2003.

4.9. Utility Plant in Service - Advances and
Contributions

ORA estimated that Park will have Advances for Construction of $209,310 and Contributions in Aid of Construction of $87,168 for the test years, based on a six-year average of recorded data. Park's estimates had been substantially lower, but the utility agreed to ORA's estimates. The parties also agreed to increase total plant additions in estimated year 2003 and Test Years 2004 and 2005 by $228,487, representing the difference between the parties' original estimates. The record supports these adjustments.

4.10. Rate Base - Deferred Investment Tax Credit

ORA agreed to use Park's estimates for deferred investment tax credit of $117,330 for Test Year 2004 and $110,299 for Test Year 2005. The estimates are based on a methodology adopted by the Commission in prior decisions.

We now turn to the contested issues (Sections 5-12 below).