WATER/KPC/rhg Ratesetting
Decision 05-01-048 January 27, 2005
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
In the Matter of the Application of SAN JOSE WATER COMPANY U-168-W for authority to borrow $1,660,250 under the Safe Drinking Water State Revolving Fund and to add a surcharge to water rates to repay the principal and interest on such loan. |
Application 04-10-033 (Filed October 26, 2004) |
OPINION ON BORROWING UNDER THE SAFE DRINKING WATER STATE REVOLVING FUND AND REPAYMENT THROUGH A SURCHARGE
I. Summary
This order authorizes San Jose Water Company (SJWC) to enter into a loan contract with the Department of Water Resources (DWR) for (1) the purpose of borrowing $1,660,250 from the Safe Drinking Water State Revolving Fund (SDWSRF) to be used to finance the design and construction of additional washwater handling facilities in the Montevina water treatment plant as required under the United States Environmental Protection Agency's (EPA's) Filter Backwash Recycling Rule (FBRR) and the California Cryptosporidium Action Plan, (2) to provide a stand-by letter of credit, as collateral for the loan, and (3) to impose a surcharge1 to repay the loan, pursuant to Pub. Util. Code § 454, §§ 816 - 830, and 8512.
The surcharge for a typical residential customer with a ¾-inch meter would be $0.03 per month, an increase in the average monthly bill of approximately 0.07%.
II. Background
SJWC is a Class A water utility subject to the jurisdiction of this Commission. SJWC provides water to a population of approximately one million residents through approximately 212,500 service connections. It serves the cities of Campbell, Saratoga, Monte Sereno, the Town of Los Gatos, portions of the cities of San Jose and Cupertino, and in the adjacent territory within the County of Santa Clara. SJWC provides water supply to its customers through several facilities, including its Montevina plant.
The Montevina plant serves approximately 100,000 people in the communities of Los Gatos, Monte Sereno, Saratoga, Campbell, and San Jose. It is located at the base of the Santa Cruz Mountains in Santa Clara County. Its source of supply is runoff water from winter storms. Water is filtered and disinfected in accordance with the requirements of the Interim Enhanced Surface Water Treatment Rule (IESWTR), and then either stored on site or used immediately in the distribution system3.
III. Notice and Protests
Notice of the filing appeared on the Commission's Daily Calendar of October 29, 2004. On October 30, 2004, the proposed loan and surcharge was published in the San Jose Mercury News. On November 17, 2004, the customers were notified of the filing by bill insert as required by Rule 24 of the Commission's Rules of Practice and Procedure (Rules). No protests have been received.
1 DWR requires that the Commission, by ordinance or resolution, dedicate a source of revenue to be used for the repayment of a SDWSRF loan. 2 All statutory references are to the Public Utilities Code unless otherwise indicated. 3 Decision (D.) 03-07-013 dated July 10, 2003, as modified by D.04-08-022 dated August 19, 2004, granted SJWC the authority to borrow $2,474,000 under the SDWSRF to finance the design and construction of an off-spec water diversion at the Montevina plant (SDWSRF Project No. 4310011-07) that would bring it in compliance with the IESWTR. The loan will be repaid by rate surcharge over a 20-year term at 2.39% annual interest rate.
