STATE OF CALIFORNIA ARNOLD SCHWARZENEGGER, Governor
PUBLIC UTILITIES COMMISSION
505 VAN NESS AVENUE
SAN FRANCISCO, CA 94102-3298
May 7, 2009 Agenda ID #8534
Ratesetting
TO PARTIES OF RECORD IN APPLICATIONS (A.) 08-01-027 AND A.08-01-024
This is the proposed decision of Administrative Law Judge (ALJ) Maribeth A. Bushey, previously designated as the presiding officer in this proceeding. It will not appear on the Commission's agenda for at least 30 days after the date it is mailed. This matter was categorized as ratesetting and is subject to Pub. Util. Code § 1701.3(c). Upon the request of any Commissioner, a Ratesetting Deliberative Meeting (RDM) may be held. If that occurs, the Commission will prepare and publish an agenda for the RDM 10 days beforehand. When the RDM is held, there is a related ex parte communications prohibition period. (See Rule 8.2(c)(4).)
The proposed decision includes the revenue requirement tables on which rates will be calculated but the tariff sheets showing such rates are not included. The tariff sheets will be included with the final decision.
When the Commission acts on the proposed decision, it may adopt all or part of it as written, amend or modify it, or set it aside and prepare its own decision. Only when the Commission acts does the decision become binding on the parties.
Parties to the proceeding may file comments on the proposed decision as provided in Article 14 of the Commission's Rules of Practice and Procedure (Rules), accessible on the Commission's website at www.cpuc.ca.gov. Pursuant to Rule 14.3, opening comments shall not exceed 15 pages.
Comments must be filed either electronically pursuant to Resolution ALJ-188 or with the Commission's Docket Office. Comments should be served on parties to this proceeding in accordance with Rules 1.9 and 1.10. Electronic and hard copies of comments should be sent to ALJ Bushey at mab@cpuc.ca.gov and assigned Commissioner. The current service list for this proceeding is available on the Commission's website at www.cpuc.ca.gov.
/s/ PHILIP S. WEISMEHL for
Karen V. Clopton, Chief
Administrative Law Judge
KVC:avs
Attachment
ALJ/MAB/avs DRAFT Agenda ID #8534
Ratesetting
Decision PROPOSED DECISION OF ALJ BUSHEY (Mailed 5/7/2009)
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
Application of California-American Water Company (U210W) for Authorization to Increase its Revenues for Water Service in its Monterey District by $24,718,200 or 80.30% in the year 2009; $6,503,900 or 11.72% in the year 2010; and $7,598,300 or 12.25% in the year 2011 Under the Current Rate Design and to Increase its Revenues for Water Service in the Toro Service Area of its Monterey District by $354,324 or 114.97% in the year 2009; $25,000 or 3.77% in the year 2010; and $46,500 or 6.76% in the year 2011 Under the Current Rate Design. |
Application 08-01-027 (Filed January 30, 2008) |
And Related Matters. |
Application 08-01-024 (Filed January 30, 2008) |
FINAL DECISION AUTHORIZING RATE INCREASE IN
MONTEREY WATER DISTRICT AND TORO SERVICE AREA
TABLE OF CONTENTS
FINAL DECISION AUTHORIZING RATE INCREASE IN MONTEREY WATER DISTRICT AND TORO SERVICE AREA 22
3. Summary of the Applications Addressed in this Decision 44
3.1. A.08-01-024 (the General Office Application) 44
3.2. A.08-01-027 (the General Rate Case Application) 55
5. Summary of the Testimony Presented at the
Public Participation Hearings and Written Comments 77
6. Resolution of Remaining Issues 88
6.1. Utility Plant in Service 99
6.1.1. American Water Company Asset Investment Strategy 99
6.1.2. Water Supply Capacity 1212
6.1.2.1. Winter Maximum Day Demand 1616
6.1.2.2. Summer Maximum Day Demand 1818
6.1.2.3. General Issues With Comprehensive Planning Study 2121
6.1.2.4. Potential for Stranded Assets 2323
6.1.2.5. Playa Well No. 4 2424
6.1.3. Well Rehabilitation 2525
6.1.6. Pipeline Replacement 3535
6.1.7. Polybutylene Services 4040
6.1.8. Combining and Coordinating the "Low Hanging Fruit"
Proactive Infrastructure Replacement Programs 4242
6.2. Expenses: Operations and Maintenance,
Administrative and General, and Payroll 5555
Title Page
6.2.2. Regulatory Expense 6969
6.2.2.1. Fine for Failure to File Reports Ordered in Decision 7474
6.3.1. Commission Direction for Evaluating
Cal-Am's General Office Proposed Cost Increases 9393
6.3.2. DRA's Proposed Adjustments 9595
6.3.2.1. Annualize Labor Expense Based
on May 31, 2008, Actual Staff Levels,
Reduces 2009 Revenue Requirement by $338,581 9595
6.3.2.2. Reducing Incentive Compensation to 2007
Actual Award Levels Reduces Revenue
Requirement by $589,158 9999
6.3.2.3. Remove Business Development Expense of $383,185 100100
6.3.2.4. Corporate Contributions and
Sales and Marketing Expenses 102102
6.3.2.5. Legislative Influence 102102
6.3.2.6. Unsupported NSC Functions 105105
6.3.2.7. Local Service Company Employees
Re-Assigned to CalCorp 106106
6.3.2.8. Service Company Allocations to Cal-Am 108108
6.3.2.9. Customer Service Center 110110
6.3.2.10. Payroll Reserve 113113
6.3.2.11. Reverse Double Counting
of CalCorp Rate Case Expense 113113
6.3.2.12. Four-Factor Methodology - California District Allocations 114114
6.4. Monterey Peninsula Water Management District 115115
7. Rate Design Settlement 122122
7.1. Summary of the Rate Design Settlement 122122
7.2. Comments on the Rate Design Settlement 124124
7.3. Settlement Agreement and Use of Potable
Water for Outdoor Landscape Irrigation 125125
Title Page
7.4. Evaluating and Approving the
Rate Design Settlement Agreement 130130
8. Water General Rate Case Partial Settlement 131131
8.1. Description of the Settlement Agreement
Provisions that Apply to the Water General Rate Case 132132
8.2. Evaluating and Approving the Water
General Rate Case Settlement Agreement Provisions 133133
APPENDIX A - Conservation Rate Design Settlement Agreement
APPENDIX B - Comparison Tables
APPENDIX C - Cal-Am General Office Table
APPENDIX D - List of Appearances
FINAL DECISION AUTHORIZING RATE INCREASE IN
MONTEREY WATER DISTRICT AND TORO SERVICE AREA
1. Summary
This decision authorizes California American Water Company (Cal-Am) to increase rates in its Monterey Water district and Toro Service Area as follows:
Monterey District1 |
||
Year |
Revenue Increase Over Last Adopted |
Percentage Increase Over Last Adopted |
2009 |
$10,811,000 |
35.1% |
Toro Service Area of Monterey District | ||
Year |
Revenue Increase Over Last Adopted |
Percentage Increase Over Last Adopted |
2009 |
$365,524 |
118.6% |
2010 |
$25,600 |
3.8% |
2011 |
$47,000 |
6.7% |
1 The Monterey District includes Cal-Am's Monterey Main System as well as the Ambler, Bishop, Chualar, Hidden Hills, and Ralph Lane subsystems. For ratemaking purposes, the recently acquired Toro Service Area is separate.
