5. Discussion

The structure of CWS's proposed discount program for low-income customers is consistent, in all aspects other than the surcharge rate design, with the low-income programs previously authorized for San Gabriel and Park. To this extent, we find CWS's proposal to be reasonable.

A volumetric surcharge rate design is consistent with that proposed by DRA, and has been used by CWS in its GRCs. CWS argues that a volumetric surcharge is more equitable than a fixed rate as it ties the surcharge to consumption level where customers with higher water usage would pay a higher surcharge. Under a fixed rate surcharge, a residential customer who is slightly over the LIRA eligibility requirements would pay the same as a large industrial user. Assessing a volumetric surcharge to support low-income programs does not conflict with our Water Action Plan.

In D.06-10-034, authorizing Park's low-income program, we recommended that the relative impact of the competing surcharge rate designs should consider household size and income levels should be considered. The surcharge here is relatively small (pennies a month in some cases). Though CWS did not do such an analysis here, we see no reason to deny its volumetric surcharge for metered customers.