ALJ/MAB/jva Mailed 7/15/2004

Decision 04-07-033 July 8, 2004

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

In the Matter of the Application of CALIFORNIA WATER SERVICE COMPANY (U 60 W), a corporation, for an order authorizing it to increase rates charged for water service in the Salinas District by $1,353,600 or 12.4% in 200; by $1,112,300 or 9.1% in 2003; by $745,100 or 4.5% in 2004; and by $756,800 or 4.5% in 2005.

Application 01-09-071 (Filed September 10, 2001)

(See Appendix I for List of Appearances)

FINAL OPINION APPROVING RATE INCREASE
AND IMPOSING FINE

I. Summary

In this decision, the Commission finds that California Water Service Company (Cal Water) has justified a total rate increase of $1,120,600 or 10.10% for water service in its Salinas District. The Commission also finds that Cal Water acquired three water systems without authorization, and in two of the water systems charged unapproved rates, in violation of the Public Utilities Code and Commission decisions. The Commission orders a fine of $75,000 for the violations, and adopts a reduced return on equity (ROE) for the Salinas District.