6. Removal of Basin Facilities From Rate
Base

Initially, SCWC proposed to keep its Basin wells and other facilities in rate base until formal transfer of those assets to the City. Ratepayers would continue to pay depreciation and a rate of return on the facilities for up to five years. ORA objected, arguing that the facilities obviously are no longer necessary or useful for SCWC's service to its customers.

SCWC's tariffs expert agreed at hearing that the facilities being transferred to the City should be removed from rate base once the agreement with the City became final. At the conference on October 29, 2003, counsel for SCWC stated that the Commission's approval of the transfer of facilities in D.03-05-001 substantially finalizes the settlement and permits the removal of Basin facilities from rate base. SCWC has already taken steps in its current general rate case for the region (Application 03-10-006) to remove the Basin facilities from rate base.

In view of SCWC's commitment to remove the relevant assets from rate base, and without ORA objection, this issue is resolved.