CEQA
12. The issuance of a CPCN to Casmite is exempt from CEQA because the approval is not a governmental activity that will result in a direct or reasonably foreseeable indirect physical change in the environment.
13. Casmite's operation without a CPCN and avoiding rate review at least since 1994 warrants a reduction of the rate of return range authorized for Class D water companies in D.92-03-093.
14. A 9.7% rate of return under the circumstances of this case should be authorized as a constitutionally acceptable, reasonable, and just rate of return for Casmite. To adequately sanction Casmite for its impermissible operation without a CPCN, mitigate rate shock, and reduce adverse community impacts, this rate of return should be phased in over a four-year period.
15. The rate increase for the first year (test year 2004) should be calculated to cover expenses only (0%). The rate of return for the second year should be 3.26%. The rate of return for the third year should be 6.52%. The rate of return for the fourth year should be 9.7%.
16. Casmite's proposed rate design, modified as necessary by the determinations made in this decision, satisfies our criteria for water utility rate design.
17. The specific ratesetting calculations set forth in Appendices A and B should be adopted by the Commission.
IT IS ORDERED that:
1. The Casmite Corporation (Casmite) is granted a Certificate of Public Convenience and Necessity for operation of a water utility within the service area known as the Casmalia subdivision, Santa Barbara County, as generally described by that map titled "Vicinity Map w/1996 Thomas Bros. Map, Casmite Fresh Water System, Casmalia, California," dated November 6, 2003, and set forth in Exhibit D to Casmite's Application in this proceeding (Dec. 22, 2003). Casmite shall fulfill its obligation to serve, as set forth the Public Utilities Code and prior decisions and orders of the Commission.
2. Casmite's rate of return shall be phased-in, in the manner described in this decision, as a sanction imposed under this decision.
3. As an additional sanction, the addition of one-half of the water main replacement project ($35,000) to Casmite's rate base is disallowed.
4. Official notice is taken, pursuant to California Evidence Code Section 452(h), of Unocal's Quarterly Report for Quarter Ending Sept. 30, 2004, Form 10-Q, filed with the U.S. Securities and Exchange Commission, Common File No. 1-8483 (filed Nov. 5, 2004).
5. For violation of Public Utilities Code Section 2111, a penalty of $1.8 million is assessed against Unocal, calculated at $500 per day for the ten-year period it aided and abetted Casmite in the operation of a water utility without a CPCN. The imposition of a monetary sanction against Unocal for the violation of Section 2111, is suspended on the condition that Unocal submit to the Executive Director (copy to the Director of the Water Division), within 60 days of the effective date of this decision, an unconditional release of any and all claims against Casmite for any loans or advances made before the effective date of this decision. If the unconditional release is timely submitted, the imposition of the $1.8 million penalty will be permanently rescinded.
6. The summary of earnings and rates for test year 2004 are authorized in conformance with this decision and as set forth in Appendices A and B. Casmite is authorized to file in accordance with General Order (GO) 96-A (or its successor), and to make effective on no less than five days' advance notice, a tariff containing the test year 2004 increase as provided in this decision. The revised rates shall apply to service rendered on or after the tariff's effective date.
7. Subject to pro forma tests after the 2004 increases are effective, Casmite also is authorized to file in accordance with GO 96-A (or its successor), and to make effective on not less than five days' advance notice, a tariff setting forth rates for year 2005 (Appendix B), calculated in conformance with this decision. The revised rates shall apply to service rendered on or after the tariff's effective date.
8. Advice letters for revised rate increases for years 2006 and 2007 (Appendix B), resulting from the annual increases in the rate of return authorized in this decision, may be filed in accordance with GO 96-A (or its successor) no earlier than November 1st of the preceding year. The filing will include appropriate work papers. The increase will be the amount authorized herein, or a proportionate lesser increase if Casmite's rate of return on rate base, adjusted to reflect the rates then in effect, normal ratemaking adjustments, and pro forma test results, for the twelve months prior to the advice letter filing, exceeds the rate authorized by this decision. The Commission's Water Division will review the advice letter for conformity with this decision.
9. Casmite shall file an application for ratemaking no later than 18 months prior to the end of the fourth year of ratesetting made under this decision.
10. This proceeding remains open to ensure compliance with the Commission's orders.
This order is effective today.
Dated November 18, 2005, at San Francisco, California.
MICHAEL R. PEEVEY
President
GEOFFREY F. BROWN
SUSAN P. KENNEDY
DIAN M. GRUENEICH
Commissioners
Commissioner Bohn recused himself
from this agenda item and was not
part of the quorum in its consideration.
ATTACHMENT A
LIST OF APPERANCES
************ APPEARANCES ************ Los Angeles Docket Office CALIFORNIA PUBLIC UTILITIES COMMISSION 320 W. 4TH STREET, SUITE 500 LOS ANGELES, CA 90013
|
Izetta C. R. Jackson |
(END OF ATTACHMENT A)
