WATER/RSK/PTL/AAS/jrb
PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
DIVISION OF WATER AND AUDITS RESOLUTION NO. W-4701
Water & Sewer Advisory Branch August 21, 2008
(RES. W-4701), NACIMIENTO WATER COMPANY (Nacimiento) ORDER AUTHORIZING AN EXPENSE OFFSET REVENUE INCREASE PRODUCING AN INCREASE IN GROSS ANNUAL REVENUES OF $61,118 OR 13.6%.
SUMMARY
Nacimiento has requested an expense offset rate increase to cover additional labor and insurance costs by Advice Letter (AL) 30 received by Division of Water and Audits (Division) on April 11, 2008. This resolution grants an offset rate increase in gross annual revenue of $61,118, or 13.6%. This increase will not result in a rate of margin greater than last authorized for Nacimiento.
BACKGROUND
Nacimiento is a Class C utility which serves the community of Oak Shores adjacent to Lake Nacimiento. It is approximately 20 miles northwest of Paso Robles, in San Luis Obispo County. The present rates were established on April 18, 2008 by approval of AL 29, which authorized a Consumer Price Index (CPI) increase of $17,506 or 4.1%.
Nacimiento has been serving 632 metered customers as of 2007. In addition, it maintains 76 private fire protection services in its service area.
The last general rate increase (GRC) was on August 25, 2005 by Resolution W-4555 which approved a 68.1% increase with a rate of margin (ROM) of 24%.
Nacimiento has requested authority under General Order 96-B, Rule 7.6.2, Water Industry Rule 7.3.3(7) and Section 454 of the Public Utilities Code to increase its rates by $52,517 or 12.3%. The purpose of the rate increase is to recover the increased insurance cost plus pay for an additional certified Treatment and Distribution operator who is now required to keep the system in compliance with the requirements of the California Department of Public Health. Analysis of the Nacimiento request shows 2007 gross revenue, plus a CPI increase, to be $448,241. This will increase to $509,359 in 2008 at proposed rates to produce a rate of margin of 15.75%.
NOTICE AND PROTESTS
Notice of the proposed general rate increase was mailed to customers on April 10, 2008. Two protests were received by the Commission. Nacimiento responded to both protests.
DISCUSSION
The number of connections serviced has been increasing steadily since the last GRC. Nacimiento has hired an additional employee to handle the increasing workload. The company has increased the salary of present staff to retain personnel in face of an industry-wide shortage of certified operators. The additional $20,000 labor costs are for another certified operator and a $12,000 salary increase for present personnel. Another item, $12, 360 for employee benefits, reflects an increase in pension benefits. The $4,113 increase in insurance is Worker's Compensation Insurance at 7.91% of the increase in salaries. The taxes other than income are additional FICA and State Unemployment Insurance for the increased salaries amount to $4,328. The additional operating expense total for this expenditure is $52,801.
The Division recommends $61,118, or 13.6%, revenue increase based on the recorded ROM. This will not result in a ROM greater than last authorized for Nacimiento. The Division recommends the expense offset increases and resulting rates shown in Appendix A. Comparison of customer bills for present and recommended rates is shown in Appendix B.
A footnote in Schedule No. 4, Private Fire Protection has been deleted. It reads: "The utility undertakes to supply only such water at such pressure as may be available at any time through the normal operation of its system." Utilities are required to conform to local fire authorities standards per GO 103. Nacimiento has provided staff with results of previous fire flow tests and conducted a current test to indicate that they are in conformance with standards.
COMPLIANCE
Service by Nacimiento is satisfactory. There are no Commission orders requiring system improvements, nor are there any service problems requiring corrective actions. The utility has been filing annual reports as required.
COMMENTS
This is an uncontested matter in which the resolution grants the relief requested. Accordingly, pursuant to PU Code 311(g) (2), the otherwise applicable 30-day period for public review and comment is being waived.
FINDINGS
1. The Commission finds, after investigation by the Water Division, that the expense offset increase producing an increase in gross revenues of $61,118, or 13.6%, hereby authorized is justified, and the resulting rate increase is just and reasonable.
2. Nacimiento Water Company should delete the fire flow language that is not in conformance with GO 103 on its Schedule No. 4 - Private Fire Protection Service.
3. This is an uncontested matter subject to the public notice comment exclusion provided in the Public Utilities Code Section 311(g)(2).
THEREFORE IT IS ORDERED THAT:
1. Nacimiento Water Company, Inc. is authorized to file a supplement to Advice Letter No. 30 to make effective the revised schedules No. 1A, Annual Metered Service and No. 4, Private Fire Protection Service, attached to this resolution, and to concurrently cancel its presently effective rate schedule. The effective date of the revised rate schedules shall be five days after receipt of the supplement to Advice Letter No. 30.
2. This resolution is effective today.
I certify that the foregoing resolution was duly introduced, passed, and adopted at a conference of the Public Utilities Commission of the State of California held on
August 21, 2008; the following Commissioners voting favorably thereon:
/s/ PAUL CLANON
Paul Clanon
Executive Director
MICHAEL R. PEEVEY
President
DIAN M. GRUENEICH
JOHN A. BOHN
RACHELLE B. CHONG
TIMOTHY ALAN SIMON
Commissioners
APPENDIX A
Sheet 1
NACIMIENTO WATER COMPANY
Schedule No. 1A
ANNUAL METERED SERVICE
APPLICABILITY
Applicable to all metered water service.
TERRITORY
Tract Nos. 378, 379, 380 and 381 and Phase I of Tract 2162 and Cantinas Campground, all in the Oak Shores area of San Luis Obispo County.
RATES
Quantity Rate:
All water used per 100 cu. ft. $4.80 (I)
Service Charge: Per Meter Per Year
For 5/8 & 3/4-inch meter $366.71 (I)
For 1-inch meter $916.78 (I)
For 1-1/2-inch meter $1,833.55 (I)
For 2-inch meter $2,933.68 (I)
For 3-inch meter $5,500.65 (I)
The Service Charge is applicable to all metered service. It is a readiness-to-serve charge to which is added the charge computed at the Quantity Rate, for water used during the billing period.
SPECIAL CONDITIONS
1. The annual service charge applied to service during the 12-month period commencing on January 1 is due in advance. If a permanent resident of the area has been a customer of the utility for at least 12 months, they may elect, at the beginning of the calendar year, to pay prorated service charges in advance at intervals of less than one year (monthly, bimonthly, or quarterly) in accordance with the utility's established billing periods. Meters will be read and quantity charges billed monthly, bimonthly or quarterly in accordance with the utility's established billing periods except the meters may be read and quantity charges billed during the winter season at intervals greater than three months.
(continued)APPENDIX A
Sheet 2
NACIMIENTO WATER COMPANY
Schedule No. 4
PRIVATE FIRE PROTECTION SERVICE
APPLICABILITY
Applicable to all fire hydrant service rendered from fire hydrants on private property connected to utility owned mains.
TERRITORY
Tract Nos. 378, 379, 380 and 381 and Phase I of Tract 2162 and Cantinas Campground, all in the Oak Shores area of San Luis Obispo County.
RATES
Per Month
For each fire hydrant $83.16 (I)
SPECIAL CONDITIONS
1. The fire hydrant will be installed by the utility at the cost of the applicant.
2. The cost of relocation of any hydrant shall be paid by the party requesting relocation.
3. Water delivered for purposes other than fire protection shall be charged for at the quantity rates in Schedule No. 1A, Annual Metered Service.
(D)
4. All bills are subject to the reimbursement fee set forth in Schedule No. UF.
(End of Appendix A)
APPENDIX B
NACIMIENTO WATER COMPANY
COMPARISON OF RATES
ANNUAL METERED SERVICE:
Size Current Connect Rate/year Increase New Rate
5/8" & 3/4" $335.05 $31.66 $366.71
1" $838.68 $78.10 $916.78
1-1/2" $1,677.57 $155.98 $1,833.55
2" $2,683.57 $250.11 $2,933.68
3" $5,032.09 $468.56 $5,500.65
Current Quantity Rate (Ccf) Increase New Flow Rate
$4.23 $0.57 $4.80
PRIVATE FIRE PROTECTION SERVICE:
Current Connect Rate/month New Rate
$72.02 $83.16
(End of Appendix B)
