XI. Surcharge Rate Design

DRA recommends that the surcharges be structured as a volumetric charge on each unit of water rather than calculated as a percentage of the customer's bill as proposed by CalAm. DRA is concerned that there are inequities that need to be addressed in customers being charged different amounts for the same water usage.

CalAm opposes DRA's proposal, contending that its own proposal will maintain the per capita rates under which customers who consume more water will continue to pay more for increased usage.

We adopt CalAm's proposal for a flat rate percentage applied to the customer's bill because it is simple to understand and implement. Moreover, rate design for Monterey District is a controversial matter which belongs in the GRC proceeding. Accordingly, DRA's volumetric charge proposal is rejected.