1. Summary
The Commission approves a comprehensive settlement agreement entered into by Southern California Water Company (SCWC) and the Commission's Office of Ratepayer Advocates (ORA) that resolves all issues in SCWC's general rate case (GRC) application for Region II, its Metropolitan District. SCWC and ORA are the only parties to this proceeding.
Table 1 shows the impact of today's decision on the average bill in the Metropolitan District for both tariffs, ME-1 (potable water) and ME-3 (recycled water) for each of the two test years (2004 and 2005) and for the attrition year (2006), as a result of the revenue requirement change. The bill impact is calculated as an increase over the rates in effect at the time of each rate change. The test year data is taken from the bill impact calculations prepared by the Commission's Water Division found in Attachment B to today's decision. Attrition year data is an estimate, based upon calculations the parties submitted as late-filed Exhibit 7.
Table 1
Summary of Bill Increases for ME-1 and ME-3 Tariffs
|
Year |
ME-1 Tariff (Average consumption @ 23 Ccf) |
ME-3 Tariff (Average consumption @ 588 Ccf) | ||
2004 |
$2.12 |
3.68% |
$62.69 | 9.28% |
2005 |
$3.31 |
5.54% |
$84.54 |
11.45% |
2006 |
$3.57 |
5.67% |
$96.15 |
11.68% |
Four capital additions projects approved for advice letter treatment will add approximately 45 cents to the average monthly bill for potable water.
Table 2 compares the parties' initial positions on revenue requirement increases for each year in the GRC cycle with the revenue requirement that results from the inputs to the parties' settlement.
Table 2
Revenue Requirement Increases
($ thousands)
|
Year |
Utility Requested |
ORA Recommended |
Settlement/ Adopted | |||
$ |
% |
$ |
% |
$ |
% | |
2004 |
15,377.0 |
19.34 |
-4.5 |
0.0 |
5,201.3 |
6.4 |
2005 |
6,642.0 |
6.98 |
2,970.0 |
1.4 |
5,388.9 |
6.3 |
2006 |
6,629.7 |
6.51 |
n/c |
n/c |
5,168.5 |
5.7 |
The cost of equity for all years is set at 9.90% for ratemaking purposes, and the authorized rate of return on ratebase is 8.77% in 2004, 8.75% in 2005, and 8.74% in 2006.
