Comments on Proposed Decision

On February 13, 2001, a principal hearing officer's proposed decision was filed with the Commission and served on the parties in accordance with Section 311(d) of the Public Utilities Code and Rule 77.1 of the Commission's Rules of Practice and Procedure.

Findings of Fact

1. Applicant has entered into a settlement with RRB for its application that resolves every issue between Applicant and RRB in this proceeding.

2. The settlement commands the sponsorship of all parties in this proceeding.

3. The parties are fairly reflective of the affected interests in this proceeding.

4. No term of the settlement contravenes statutory provisions or prior Commission decisions.

5. The settlement conveys sufficient information to permit the Commission to discharge its future regulatory obligations with respect to the parties and their interests.

6. The summaries of earnings presented in the settlement and the quantities and calculations included in the settlement which support them are reasonable for ratemaking purposes.

Conclusions of Law

1. The settlement is an uncontested settlement as defined in Rule 51(f) and an all-party settlement as defined in D.92-12-019.

2. The settlement is reasonable in light of the whole record, consistent with law, and in the public interest.

3. The revised rates, step increases, and tariffs set forth in the settlement are justified.

4. The settlement should be adopted.

5. This decision should be made effective immediately to enable Applicant to implement the settlement without delay.

O R D E R

IT IS ORDERED that:

1. The joint motion for adoption of the revised amended settlement (settlement) between California-American Water Company (Applicant) and the Ratepayer Representation Branch of the Commission's Water Division is granted. The settlement, included with this decision as Attachment A, is adopted.

2. Except as specifically provided for in the settlement, the application is denied.

3. Applicant is authorized to file in accordance with General Order 96-A, and make effective on not less than five days' notice, tariffs containing the test year 2001 increases as provided for in the settlement. The revised rates shall apply to service rendered on and after the tariffs' effective date.

4. The rate increases for 2002 and 2003 shall be implemented as specified in Attachment A to Appendix B of the Settlement.

5. Applicant is authorized to file advice letters seeking to recover in rates the reasonable costs of the capital additions specified in the settlement.

6. This proceeding is closed.

7. This order is effective today.

Dated _____________________, at San Francisco, California.

ATTACHMENT A

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

In the Matter of the Application of California-American Water Company (U 210 W) for an Order Authorizing it to Increase Its Rates for Water Service for its Los Angeles Division to Increase Revenues by $1,938,500 in the Year 2001; $782,100 in the Year 2002; and $642,800 in the Year 2003.

Application 00-04-023

REVISED AMENDED SETTLEMENT

1.00 Introduction

1.01 The Parties to this Settlement before the California Public Utilities Commission ("Commission") are California-American Water Company ("Cal-Am") and the Ratepayer Representation Branch ("RRB") of the Water Division - collectively, "the Parties." The Parties, desiring to avoid the expense, inconvenience, and uncertainty attendant to litigation of the matters in dispute between them have agreed on this Settlement which they now submit for approval.

1.02 In addition, since this Settlement represents a compromise by them, the Parties have entered into each Stipulation on the basis that its approval by the Commission not be construed as an admission or concession by any Party regarding any fact or matter of law in dispute in this proceeding. Furthermore, the Parties intend that the approval of this Settlement by the Commission not be construed as a precedent or statement of policy of any kind for or against any Party in any current or future proceeding.

1.03 The Parties agree that no signatory to this Settlement or any member of RRB assumes any personal liability as a result of their agreement. The Parties agree that no legal action may be brought by any Party in any state or federal court, or any other forum, against any individual signatory representing the interests of RRB, attorneys representing RRB, or the RRB itself related to this Settlement. All rights and remedies of the Parties are limited to those available before the Commission.

1.04 Cal-Am acknowledges that RRB is charged with representing the interests of customers of public utilities in the State of California, as required by Public Utilities Code Section 309.5, and nothing in this Settlement is intended to limit the ability of RRB to carry on that responsibility.

1.05 No Party to this Settlement should provide, either privately or publicly, before this Commission any rationale or strategy for support of any compromise reached herein beyond that stated herein unless otherwise agreed to by the Parties.

1.06 The Parties' negotiations have resulted in the resolution of all issues raised in Application 00-04-023 and in RRB's reports dated August 23, 2000. In summary, the annual increases proposed by the Parties and those agreed to in the Settlement are as follows:

2001 2002 2003  

Cal-Am $1,938,500 or 12.22% $782,100 or 4.92% $642,800 or 3.46%

RRB $ (53,400) or (0.33)% $375,900 or 2.37% $233,100 or 1.40%

Settlement $ 890,000 or 5.60% $387,800 or 2.31% $416,900 or 2.43%

1.07 Attached to this Settlement are the following appendices showing the calculations, quantities, and rates that have been agreed to by the Parties:

Appendix A Summary of Earnings

Appendix B Schedules of Rates

Appendix C Comparison of Rates

Appendix D Adopted Quantities, Ratebase, and Calculation of Income Tax Appendix E Attrition Allowance

1.08 Differences between Cal-Am's and RRB's estimates are, for the most part (except as specifically noted), due to the findings in RRB's audit and, in some instances, later data available to RRB. Some stipulated expenses are the consequence of additional discussion between RRB and Cal-Am, with results which are no greater than Cal-Am's estimates.

2.00 Operating Revenues

2.01 Average Consumption per Customer and Total Production RRB accepts Cal-Am's estimates of average consumption for each class in the Los Angeles Division, except for commercial customers in the Duarte District. For commercial customers, Cal-Am and RRB stipulate to an average consumption of 1,298 hundred cubic feet (Ccf) for Test Years 2001 and 2002, based on the average of normalized consumption and customers from 1996 through 1999.

Original Positions (Ccf) Settlement (Ccf)

Cal-Am RRB

2001 1,268.7 1,336.2 1,298.0

2002 1,268.7 1,336.2 1,298.0

2.02 Present Rates Cal-Am and RRB agree that operating revenues at present rates for 2001 should be based upon stipulated consumption and Cal-Am's present approved tariffs. Cal-Am and RRB agree that operating revenues at present rates for 2002 should be based upon stipulated consumption and the proposed rates per this Settlement for 2001.

Original Positions (000s) Settlement (000s)

Cal-Am RRB

2001 $15,870.8 $15,915.1 $15,889.1

2002 $15,877.6 $15,867.9 $16,787.2

2.03 Proposed Rates Cal-Am and RRB agree that operating revenues at proposed rates should be based on all other items in this Settlement to produce the stipulated rate of return.

Original Positions (000s) Settlement (000s)

Cal-Am RRB

2001 $17,807.4 $15,847.9 $16,780.0

2002 $18,597.6 $16,229.5 $17,175.0

3.00 Operation and Maintenance

3.01 Cal-Am accepts RRB's estimates for Operation and Maintenance, except for the following items:

3.02 Purchased Water RRB and Cal-Am agree that Purchased Water should reflect the stipulated production and use of the current tariffs and safe yield of the Main San Gabriel Basin, Raymond Basin, Central Basin, and Metropolitan Water District.

Original Positions (000s) Settlement (000s)

Cal-Am RRB

2001 $2,777.1 $2,599.5 $2,643.9

2002 $2,780.7 $2,603.1 $2,647.4

3.03 Purchased Power RRB and Cal-Am agree that Purchased Power should be based on current rates applied to the stipulated level of production.

Original Positions (000s) Settlement (000s)

Cal-Am RRB

2001 $1,473.4 $1,252.2 $1,473.4

2002 $1,474.0 $1,252.2 $1,474.0

3.04 Customer Accounts-Uncollectibles Cal-Am and RRB agree that Uncollectibles should be calculated by applying the historic rate of 0.3475% to stipulated revenues.

Original Positions (000s) Settlement (000s)

Cal-Am RRB

2001 $61.8 $44.6 $58.3

2002 $64.6 $51.0 $59.7

3.05 Balancing Account Cal-Am and RRB agree that the Purchased Water and Purchased Power Balancing Account should not be considered in this proceeding because the current balance is de minimis. The Parties agree that Cal-Am should continue to track the undercollection and overcollection of Purchased Water and Purchased Power in the balancing account.

4.00 Administrative and General Expenses

4.01 RRB agrees to Cal-Am's estimates for Administrative and General Expenses for the Test Years except where settlement was reached as follows:

4.02 Office Supplies & Expenses Cal-Am and RRB agree to a reduction from their original positions based on the use of historical averages adjusted for stipulated inflation.

Original Positions (000s) Settlement (000s)

Cal-Am RRB

2001 $131.3 $131.3 $123.9

2002 $132.5 $132.5 $124.1

5.00 Taxes other than Income

5.01 Ad Valorem Cal-Am and RRB agree that ad valorem taxes should be adjusted to reflect stipulated additions.

Original Positions (000s) Settlement (000s)

Cal-Am RRB

2001 $400.7 $362.9 $381.1

2002 $448.1 $382.7 $385.8

5.02 Payroll Taxes Cal-Am and RRB agree that taxes on payroll should be adjusted to reflect stipulated payroll for Test Years 2001 and 2002.

Original Positions (000s) Settlement (000s)

Cal-Am RRB

2001 $116.9 $116.9 $114.6

2002 $120.2 $120.2 $116.7

5.03 Franchise Taxes Cal-Am and RRB agree that a surcharge should be recovered from all customers in each jurisdiction imposing a Franchise Tax.

6.00 Depreciation

RRB and Cal-Am agree that Depreciation should be based on stipulated additions and Cal-Am's current authorized depreciation rates for each account for Test Years 2001 and 2002.

Original Positions (000s) Settlement (000s)

Cal-Am RRB

2001 $2,224.6 $1,979.8 $2,101.0

2002 $2,494.8 $2,071.6 $2,258.4

7.00 State and Federal Income Taxes

Cal-Am and RRB agree that state and federal taxes on income should be based on all stipulations in this Settlement. The Adopted Calculation is shown on page 9 of 9 of Appendix D.

8.00 Plant

8.01 RRB accepts Cal-Am's estimates of Plant in Service, except for the following items where a stipulation was reached.

8.02 Pumping: Cal-Am accepts RRB's estimates for Test Years 2001 and 2002 which are based on an average of the last five years' additions.

Original Positions (000s) Settlement (000s)

Cal-Am RRB

2000 $200.0 $155.0 $155.0

2001 $200.0 $155.0 $155.0

2002 $200.0 $155.0 $155.0

8.03 Monitoring RRB accepts Cal-Am's total estimate of $1,800,000 for the Distribution Monitoring System. RRB agrees that the project is necessary to replace obsolete telemetric equipment which is expensive to maintain. The Parties stipulate that expenditures will be $200,000 for 2000 and $600,000 for Test Year 2001. The stipulated amount for Test Year 2002 would then be $1,000,000 and should be included in ratebase upon the filing and acceptance of an advice letter.

Original Positions (000s) Settlement (000s)

Cal-Am RRB

2000 $900.0 $100.0 $200.0

2001 $500.0 $100.0 $600.0

2002 $400.0 $100.0 $1,000.0 (Advice Letter)

8.04 Hypochlorite Generators RRB accepts Cal-Am's estimates for the installation of hypochlorite generators at various wells at a cost of $50,000 in Test Year 2000, $300,000 in Test Year 2001, and $350,000 in Test Year 2002 to meet requirements of the Department of Health Services.

Original Positions (000s) Settlement (000s)

Cal-Am RRB

2000 $50.0 $0.0 $50.0

2001 $300.0 $0.0 $300.0

2002 $350.0 $0.0 $350.0

8.05 Garth Tank Zone RRB recommended that the Garth Tank Zone Pressure Improvement Project be included in ratebase upon its completion by filing an advice letter. Because the project is substantially complete and will be in service by the end of 2000, RRB accepts Cal-Am's position that the project should be included in ratebase in the year 2000 at Cal-Am's estimate of $325,000.

Original Positions (000s) Settlement (000s)

Cal-Am RRB

2000 $325.0 $350.0 (Advice Letter) $325.0

8.06 Hall Well The Hall Well was authorized in Decision 97-12-018 as a project to be included in ratebase upon completion by filing an advice letter. Because the project is substantially complete and will be in service before the end of 2000, RRB accepts Cal-Am's position to include the project in ratebase in 2000 at Cal-Am's estimate of $1,300,000.

Original Positions (000s) Settlement (000s)

Cal-Am RRB

2000 $1,300.0 $0.0 $1,300.0

8.07 Advice Letters RRB agrees with Cal-Am that the following projects are necessary to serve its customers in the Los Angeles Division. Due to RRB's concerns that the projects may not be completed in a timely manner and placed in service as planned, RRB and Cal-Am stipulate that the following projects should be included in ratebase upon filing and acceptance of an advice letter: a) Distribution Monitoring System improvements - $1,000,000; b) Richardson Well - $950,000; c) low pressure improvements to Mt. Vernon Reservoir Zone - $750,000; d) re-equip Mountain Avenue Well - $350,000; e) new Oswego Well - $950,000; f) 3,300 feet of 12-inch main in Sherwood Street, St. Albans Road and Coolidge Drive - $400,000; and g) treatment of volatile organic chlorides at Ivar Well No. 1 - $1,500,000.

9.00 Ratebase

9.01 RRB and Cal-Am agree that Ratebase for Test Years 2000 and 2001 should be determined by the results of stipulated issues as follows:

9.02 Weighted Average Plant in Service RRB and Cal-Am agree that the Weighted Average Plant in Service should be based on the stipulated annual additions and the historic weighting factor of 35.41%.

Original Positions (000s) Settlement (000s)

Cal-Am RRB

2001 $59,366.1 $55,450.5 $57,447.8

2002 $63,857.3 $57,374.9 $59,932.9

9.03 Working Cash--Operational RRB accepts Cal-Am's estimate of prepaid items after a showing by Cal-Am that various prepaid items were not included as part of RRB's calculation.

Original Positions (000s) Settlement (000s)

Cal-Am RRB

2001 $581.6 $490.7 $581.6

2002 $610.3 $518.7 $610.3

9.04 Working Cash--Lead/Lag Cal-Am and RRB agree that Working Cash--Lead/Lag should be based on the stipulated estimates of expense and a lag of 60 days for state and federal taxes on income, which reflects the current requirements of the Internal Revenue Service and the California Franchise Tax Board.

Original Positions (000s) Settlement (000s)

Cal-Am RRB

2001 $541.1 $434.3 $401.5

2002 $573.5 $450.5 $408.6

9.05 Weighted Average Depreciation Reserve RRB and Cal-Am agree that Weighted Average Depreciation Reserve should be based on the stipulated annual additions and the historic weighting factor of 58.41%.

Original Positions (000s) Settlement (000s)

Cal-Am RRB

2001 $18,949.7 $18,770.5 $18,871.4

2002 $20,910.1 $20,501.0 $20,761.4

9.06 Accumulated Deferred Taxes RRB and Cal-Am agree that deferred federal and state taxes on income should be based on stipulated additions and deferrals.

Original Positions (000s) Settlement (000s)

Cal-Am RRB

2001 $2,354.2 $1,912.9 $2,278.3

2002 $2,386.1 $1,887.5 $2,241.7

10.00 Cost of Capital

RRB and Cal-Am agree to a return on ratebase of 8.89% for 2001 and 8.88% for 2002 and 2003.

11.00 Verification

The signatories to this Settlement personnally and independently verify that all elements of it, including the tables and tariffs, are correct, complete and internally consistent with each other.

RATEPAYER REPRESENTATION BRANCH OF THE WATER DIVISION By: /s/ VICTOR D. MOON                Victor D. Moon Project Manager Ratepayer Representation Branch of the Water Division California Public Utilities Commission 320 West 4th Street, Suite 500 Los Angeles, CA 90013 (213) 576-7045 Dated: November 22, 2000	CALIFORNIA-AMERICAN WATER COMPANY By: /s/ DAVID P. STEPHENSON               David P. Stephenson Assistant Treasurer for California-American Water Company California-American Water Company 880 Kuhn Drive Chula Vista, CA 91914 (619) 656-2436 Dated: November 22, 2000

APPENDIX A

APPENDIX A
Page 1 0f 2
CALIFORNIA-AMERICAN WATER COMPANY
LOS ANGELES DIVISION
SUMMARY OF EARNINGS AT PRESENT AND PROPOSED RATES
Test Year 2001
(Dollars in Thousands)
		RRB			Utility
Item		Present	Proposed		Present		Proposed		Settlement
Operating Revenues (*)		$15,915.1	$15,847.9		$15,870.8		$17,807.4		$16,780.0
Operation and Maintenance
Payroll		$1,615.4	$1,615.4		$1,657.3		$1,657.3		$1,615.4
Source of Supply Expense		$38.1	$38.1		$42.2		$42.2		$38.1
Purchased Water		$2,599.5	$2,599.5		$2,777.1		$2,777.1		$2,643.9
Pumping Expense - Electric		$237.9	$237.9		$247.6		$247.6		$237.9
Purchased Power		$1,252.2	$1,252.2		$1,473.4		$1,473.4		$1,473.4
General Water Treatment		$40.1	$40.1		$43.6		$43.6		$40.1
Chemicals		$15.5	$15.5		$20.5		$20.5		$15.5
Trans. & Dist.		$531.2	$531.2		$549.8		$549.8		$531.2
Customer Accounting		$20.0	$20.0		$20.9		$20.9		$20.0
Customer Accts. - Uncollectibles		$44.5	$44.6		$55.1		$61.8		$58.3
Sub-Total O&M		$6,394.4	$6,394.5		$6,887.5		$6,894.2		$6,673.8
Administrative & General
Office Supplies & Expenses		$131.3	$131.3		$131.3		$131.3		$123.9
Employee Expenses		$17.9	$17.9		$17.9		$17.9		$17.9
Employee Memberships		$1.4	$1.4		$1.4		$1.4		$1.4
Workers' Comp.		($12.2)	($12.2)		($12.2)		($12.2)		($12.2)
Injuries & Damages		$2.4	$2.4		$2.4		$2.4		$2.4
Pensions & Benefits		$440.8	$440.8		$440.8		$440.8		$440.8
Regulatory Expenses		$10.4	$10.4		$10.4		$10.4		$10.4
Outside Services		$26.2	$26.2		$26.2		$26.2		$26.2
Miscellaneous General		$197.9	$197.9		$197.9		$197.9		$197.9
Other Mtnc of Gen Plant		$28.6	$28.6		$28.6		$28.6		$28.6
Rent		$158.6	$158.6		$158.6		$158.6		$158.6
Sub-Total A & G		$1,003.3	$1,003.3		$1,003.3		$1,003.3		$995.9
General Office Allocation		$2,315.9	$2,315.9		$2,315.9		$2,315.9		$2,315.9
Ad Valorem Taxes		$362.9	$362.9		$400.7		$400.7		$381.1
Payroll Taxes		$116.9	$116.9		$116.9		$116.9		$114.6
Depreciation & Amortization		$1,979.8	$1,979.8		$2,224.6		$2,224.6		$2,101.0
CA Income Taxes		$198.8	$192.8		$115.6		$286.2		$236.8
Federal Income Taxes		$712.8	$689.3		$383.2		$1,058.7		$839.7
TOTAL EXPENSES		$13,084.8	$13,055.4		$13,447.7		$14,300.5		$13,658.8
NET REVENUES		$2,830.3	$2,792.5		$2,423.1		$3,506.9		$3,121.2
RATE BASE
Wtd Avg Plant in Service		$55,450.5	$55,450.5		$59,366.1		$59,366.1		$57,447.8
Materials & Supplies		$143.6	$143.6		$143.6		$143.6		$143.6
Working Cash Operational		$490.7	$490.7		$581.6		$581.6		$581.6
Working Cash Lead/Lag		$434.3	$434.3		$541.1		$541.1		$401.5
Wtd Avg Depreciation Reserve		($18,770.5)	($18,770.5)		($18,949.7)		($18,949.7)		($18,871.4)
Advances		($330.7)	($330.7)		($330.7)		($330.7)		($330.7)
Contributions		($2,651.3)	($2,651.3)		($2,651.3)		($2,651.3)		($2,651.3)
General Office Allocation		$680.4	$680.4		$680.4		$680.4		$680.4
Accumulated Deferred Taxes		($1,912.9)	($1,912.9)		($2,354.2)		($2,354.2)		($2,278.3)
TOTAL RATE BASE		$33,534.1	$33,534.1		$37,026.9		$37,026.9		$35,123.2
Rate of Return		8.44%	8.33%		6.54%		9.47%		8.89%
(*) Franchise Fees are not included in Operating Revenues or the revenue requirement. This is because they differ by community and are collected as surcharge on each customers bill.

APPENDIX A
Page 2 0f 2
CALIFORNIA-AMERICAN WATER COMPANY
LOS ANGELES DIVISION
SUMMARY OF EARNINGS AT PRESENT AND PROPOSED RATES
Test Year 2002 (Dollars in Thousands)
			RRB				Utility
Item			Present	Proposed			Present		Proposed					Settlement
Operating Revenues (*)			$15,867.9	$16,229.5			$15,877.6		$18,597.6					$17,175.0
Operation and Maintenance
Payroll (**)			$1,699.3	$1,699.3			$1,707.0		$1,707.0					$1,649.3
Source of Supply Expense			$38.4	$38.4			$41.9		$41.9					$38.4
Purchased Water			$2,603.1	$2,603.1			$2,780.7		$2,780.7					$2,647.4
Pumping Expense - Electric			$232.5	$232.5			$249.8		$249.8					$232.5
Purchased Power			$1,252.2	$1,252.2			$1,474.0		$1,474.0					$1,474.0
General Water Treatment			$40.2	$40.2			$44.0		$44.0					$40.2
Chemicals			$15.6	$15.6			$21.6		$21.6					$15.6
Trans. & Dist.			$540.9	$540.9			$576.2		$576.2					$540.9
Customer Accounting (**)			$64.0	$64.0			$21.0		$21.0					$19.5
Customer Accts. - Uncollectibles			$50.0	$51.0			$55.1		$64.6					$59.7
Sub-Total O&M			$6,536.2	$6,537.2			$6,971.3		$6,980.8					$6,717.5
Administrative & General
Office Supplies & Expenses			$132.5	$132.5			$132.5		$132.5					$124.1
Employee Expenses			$18.1	$18.1			$18.1		$18.1					$18.1
Employee Memberships			$1.4	$1.4			$1.4		$1.4					$1.4
Workers' Comp.			($12.5)	($12.5)			($12.5)		($12.5)					($12.5)
Injuries & Damages			$2.4	$2.4			$2.4		$2.4					$2.4
Pensions & Benefits			$489.8	$489.8			$489.8		$489.8					$489.8
Regulatory Expenses			$10.4	$10.4			$10.4		$10.4					$10.4
Outside Services			$26.5	$26.5			$26.5		$26.5					$26.5
Miscellaneous General			$199.7	$199.7			$199.7		$199.7					$199.7
Other Mtnc of Gen Plant			$28.8	$28.8			$28.8		$28.8					$28.8
Rent			$163.7	$163.7			$163.7		$163.7					$163.7
Sub-Total A & G			$1,060.9	$1,060.9			$1,060.9		$1,060.9					$1,052.5
General Office Allocation			$2,358.6	$2,358.6			$2,358.6		$2,358.6					$2,358.6
Ad Valorem Taxes			$382.7	$382.7			$448.1		$448.1					$385.8
Payroll Taxes			$120.2	$120.2			$120.2		$120.2					$116.7
Depreciation & Amortization			$2,071.6	$2,071.6			$2,494.8		$2,494.8					$2,258.4
CA Income Taxes			$161.4	$193.3			$60.7		$300.3					$241.4
Federal Income Taxes			$556.6	$681.7			$125.1		$1,073.9					$856.4
TOTAL EXPENSES			$13,248.2	$13,406.2			$13,639.7		$14,837.6					$13,987.3
NET REVENUES			$2,619.7	$2,823.3			$2,237.9		$3,760.0					$3,187.7
RATE BASE
Wtd Avg Plant in Service			$57,374.9	$57,374.9			$63,857.3		$63,857.3					$59,932.9
Materials & Supplies			$145.0	$145.0			$145.0		$145.0					$145.0
Working Cash Operational			$518.7	$518.7			$610.3		$610.3					$610.3
Working Cash Lead/Lag			$450.5	$450.5			$573.5		$573.5					$408.6
Wtd Avg Depreciation Reserve			($20,501.0)	($20,501.0)			($20,910.1)		($20,910.1)					($20,761.4)
Advances			($301.1)	($301.1)			($301.4)		($301.4)					($301.4)
Contributions			($2,593.0)	($2,593.0)			($2,593.0)		($2,593.0)					($2,593.0)
General Office Allocation			$691.6	$691.6			$691.6		$691.6					$691.6
Accumulated Deferred Taxes			($1,887.5)	($1,887.5)			($2,386.1)		($2,386.1)					($2,241.7)
TOTAL RATE BASE			$33,898.1	$33,898.1			$39,687.1		$39,687.1					$35,890.9
Rate of Return			7.73%	8.33%			5.64%		9.47%					8.88%
(*) Franchise Fees are not included in Operating Revenues or the revenue requirement. This is because they differ by community and are collected as surcharge on each customers bill.
(**) RRB's report contained typographical errors in its "Present" and "Proposed" figures: the figures in the "Settlement" column for each of these items represent Staff's correct recommendations to which the Company agrees.

APPENDIX B

APPENDIX B

Page 1 of 6

California-American Water Company

Schedule No. LA-1

Los Angeles District Tariff Area

GENERAL METERED SERVICE

APPLICABILITY

Applicable to all metered water service.

TERRITORY

Baldwin Hills Service Area consisting of Baldwin Hills, Windsor Hills, View Park, Ladera

Heights, and vicinity, Duarte Service Area consisting of Bradbury, Duarte, portions of

Irwindale, Monrovia, and vicinity, and San Marino Service Area consisting of San Marino,

Rosemead, portions of San Gabriel, Temple City, and vicinity, Los Angeles County

RATES

Quantity Rates:

For all water delivered Baldwin Hills, per 100 cu. ft. $1.9773 (I)

For all water delivered Duarte, per 100 cu. ft. $1.1535 I

For all water delivered San Marino, per 100 cu. ft. $0.9722 (I)

Service Charge:

Per Meter Per Month

For 5/8 x 3/4-inch meter $8.75 (I)

For 3/4-inch meter 13.12 |

For 1-inch meter 21.87 |

For 1-1/2-inch meter 43.74 |

For 2-inch meter 69.99 |

For 3-inch meter 131.23 |

For 4-inch meter 218.71 |

For 6-inch meter 437.42 |

For 8-inch meter 699.87 |

For 10-inch meter 1,006.07 |

For 12-inch meter 1,443.49 (I)

The Service Charge is a readiness-to-serve charge which is applicable to all metered service and to which is added the charge for water used computed at the Quantity Rates.

(continued)



APPENDIX B

Page 2 of 6

California-American Water Company

Schedule No. LA-3M

Los Angeles District Tariff Area

MEASURED IRRIGATION SERVICE

APPLICABILITY

Applicable to all measured service for irrigation purposes as defined in the special conditions

below. Applicable only to premises serviced under Schedule No. LA-3M on a continued

basis on and after January 1, 1969.

TERRITORY

Bradbury, Duarte, portions of Irwindale, Monrovia, and vicinity, Los Angeles County.

RATES

Quantity Rates:

A. Pressure service all water,

per 100 cu. ft. $0.76465 (I)

B. Gravity service all water,

per 100 cu. ft. $0.59036 (I)

Service Charge:

Per Meter Per Month

For 5/8 x 3/4-inch meter $2.27 (I)

For 3/4-inch meter 3.39 |

For 1-inch meter 5.65 |

For 1-1/2-inch meter 11.30 |

For 2-inch meter 18.09 |

For 3-inch meter 33.91 |

For 4-inch meter 56.50 |

For 6-inch meter 113.12 |

For 8-inch meter 181.00 (I)

The Service Charge is a readiness-to-serve charge which is applicable to all metered service and to which is to be added the charge for water used computed at the Quantity Rates.

(continued)



APPENDIX B

Page 3 of 6

California-American Water Company

Schedule No. LA-4

Los Angeles District Tariff Area

PRIVATE FIRE PROTECTION SERVICE

APPLICABILITY

Applicable to all water service furnished for privately owned fire protection systems.

TERRITORY

Baldwin Hills Service Area consisting of Baldwin Hills, Windsor Hills, View Park, Ladera Heights, and vicinity, Duarte Service Area consisting of Bradbury, Duarte, portions of Irwindale, Monrovia, and vicinity, and San Marino Service Area consisting of San Marino, Rosemead, portions of San Gabriel, Temple City and vicinity, Los Angeles County.

RATE Per Inch / Per Month

For each inch of diameter of private fire protection

service, monthly minimum charge based on 4" service . $7.29 (I)

The rates for private fire service are based upon the size of the service and no additional charges will be made for fire hydrants, sprinklers, hose connections or standpipes connected to and supplied by such private fire service.

SPECIAL CONDITIONS

1. The fire protection service and connection shall be installed by the Utility or under the Utility's

direction. Cost of the entire fire protection installation shall be paid for by the applicant. Such

payment shall not be subject to refund.

2. The installation housing, the detector type check valve and meter and appurtenances, thereto,

shall be in a location mutually agreeable to the applicant and the Utility. Normally such

installation shall be located on the premises of applicant, adjacent to the property line. The expense of maintaining all facilities which are the sole property of the applicant (including the

vault, meter detector type check valves, backflow device and appurtenances) shall be paid

for by the applicant.

3. All facilities paid for by the applicant, excluding the connection at the main and any service pipe

located in a public right-of-way, shall be the sole property of the applicant. The utility and its duly authorized agents shall have the right to ingress to and egress from the premises for all purposes relating to said facilities.

(continued)

APPENDIX B Page 4 of 6 CALIFORNIA-AMERICAN WATER COMPANY LOS ANGELES DIVISION SCHEDULE NO. LA -1 GENERAL METERED SERVICE AUTHORIZED STEP RATE INCREASE
	Each of the following increases in rates may be put into effect on the indicated date by filing a rate
schedule which adds the appropriate increase to the rate which would otherwise be in effect on that date. Such
filings shall be pursuant to Attachment A to Appendix B.
							Rates to be Effective
Quantity Rates:							1/1/02			1/1/03
For all water delivered Baldwin Hills, per 100 cu. ft.							$0.0313			$0.0488
For all water delivered Duarte, per 100 cu. ft.							$0.0236			$0.0286
For all water delivered San Marino, per 100 cu. ft.							$0.0224			$0.0244
							Per Meter Per Month
Service Charge:							1/1/02			1/1/03
For	5/8 x 3/4	- inch meters					$0.25			$0.22
For	3/4	- inch meters					$0.38			$0.33
For	1	- inch meters					$0.63			$0.55
For	1-1/2	- inch meters					$1.27			$1.09
For	2	- inch meters					$2.02			$1.75
For	3	- inch meters					$3.79			$3.28
For	4	- inch meters					$6.33			$5.47
For	6	- inch meters					$12.66			$10.94
For	8	- inch meters					$20.25			$17.50
For	10	- inch meters					$29.10			$25.15
For	12	- inch meters					$41.76			$36.09

APPENDIX B
Page 5 of 6
CALIFORNIA-AMERICAN WATER COMPANY
LOS ANGELES DIVISION
SCHEDULE NO. LA -3M
MEASURED IRRIGATION SERVICE
AUTHORIZED STEP RATE INCREASE
	Each of the following increases in rates may be put into effect on the indicated date by filing a rate
schedule which adds the appropriate increase to the rate which would otherwise be in effect on that date. Such
filings shall be pursuant to Attachment A to Appendix B.
							Rates to be Effective
Quantity Rates:							1/1/02			1/1/03
Pressure Service all water, per 100 cu. ft.							$0.0166			$0.0190
Gravity Service all water, per 100 cu. ft.							$0.0129			$0.0147
							Per Meter Per Month
Service Charge:							1/1/02			1/1/03
For	5/8 x 3/4	- inch meters					$0.05			$0.06
For	3/4	- inch meters					$0.08			$0.08
For	1	- inch meters					$0.12			$0.14
For	1-1/2	- inch meters					$0.25			$0.28
For	2	- inch meters					$0.39			$0.45
For	3	- inch meters					$0.74			$0.84
For	4	- inch meters					$1.23			$1.40
For	6	- inch meters					$2.46			$2.81
For	8	- inch meters					$3.94			$4.49

APPENDIX B

Page 6 of 6

CALIFORNIA-AMERICAN WATER COMPANY

LOS ANGELES DIVISION

SCHEDULE NO. LA -4

PRIVATE FIRE PROTECTION SERVICE

AUTHORIZED STEP RATE INCREASE

Each of the following increases in rates may be put into effect on the indicated date by filing a rate schedule which adds the appropriate increase to the rate which would otherwise be in effect on that date. Such filings shall be pursuant to Attachment A to Appendix B.

Rates to be Effective

SCHEDULE NO. LA-4, PRIVATE FIRE PROTECTION SERVICE

1/1/02

1/1/03

Rates

For each inch in diameter of service connection

$0.16

$0.18

APPENDIX C

APPENDIX C
Page 1 of 3
CALIFORNIA-AMERICAN WATER COMPANY - LOS ANGELES DIVISION
BALDWIN HILLS DISTRICT
COMPARISON OF BILLS *
2001
Usage		Present		Adopted		Amount of		Percent
CCF		Rates		Rates		Increase		Increase
0		$8.35		$8.75		$0.40		4.57%
10		$27.04		$28.52		$1.48		5.19%
17	Avg	$40.13		$42.36		$2.23		5.26%
20		$45.73		$48.30		$2.57		5.32%
25		$55.08		$58.18		$3.10		5.33%
50		$101.81		$107.62		$5.81		5.40%
2002
Usage		Present **		Adopted		Amount of		Percent
CCF		Rates		Rates		Increase		Increase
0		$8.75		$9.00		$0.25		2.78%
10		$28.52		$29.09		$0.57		1.96%
17	Avg	$42.36		$43.15		$0.79		1.83%
20		$48.30		$49.17		$0.87		1.77%
25		$58.18		$59.22		$1.04		1.76%
50		$107.62		$109.43		$1.81		1.65%
2003
Usage		Present ***		Adopted		Amount of		Percent
CCF		Rates		Rates		Increase		Increase
0		$9.00		$9.22		$0.22		2.39%
10		$29.09		$29.79		$0.70		2.35%
17	Avg	$43.15		$44.20		$1.05		2.38%
20		$49.17		$50.37		$1.20		2.38%
25		$59.22		$60.66		$1.44		2.37%
50		$109.43		$112.09		$2.66		2.37%
*	Comparison based on Schedule No. LA-1, General Metered Service
	for a 5/8 x 3/4 meter.
**	Present Rates are those rates proposed to be in effect for the Test Year 2001.
***	Present Rates are those rates proposed to be in effect for the Test Year 2002.
Note - Rates do not include franchise fees. This is because they differ by community and
are collected as a surcharge on each customer's bill.

APPENDIX C
Page 2 of 3
CALIFORNIA-AMERICAN WATER COMPANY - LOS ANGELES DIVISION
DUARTE DISTRICT
COMPARISON OF BILLS *
2001
Usage		Present		Adopted		Amount of		Percent
CCF		Rates		Rates		Increase		Increase
0		$8.35		$8.75		$0.40		4.57%
10		$19.32		$20.29		$0.97		4.78%
15		$24.80		$26.05		$1.25		4.80%
20	Avg	$30.28		$31.82		$1.54		4.84%
25		$35.77		$37.59		$1.82		4.84%
50		$63.18		$66.43		$3.25		4.89%
2002
Usage		Present **		Adopted		Amount of		Percent
CCF		Rates		Rates		Increase		Increase
0		$8.75		$9.00		$0.25		2.78%
10		$20.29		$20.77		$0.48		2.31%
15		$26.05		$26.66		$0.61		2.29%
20	Avg	$31.82		$32.54		$0.72		2.21%
25		$37.59		$38.43		$0.84		2.19%
50		$66.43		$67.86		$1.43		2.11%
2003
Usage		Present ***		Adopted		Amount of		Percent
CCF		Rates		Rates		Increase		Increase
0		$9.00		$9.22		$0.22		2.39%
10		$20.77		$21.28		$0.51		2.40%
15		$26.66		$27.31		$0.65		2.38%
20	Avg	$32.54		$33.33		$0.79		2.37%
25		$38.43		$39.36		$0.93		2.36%
50		$67.86		$69.51		$1.65		2.37%
*	Comparison based on Schedule No. LA-1, General Metered Service
	for a 5/8 x 3/4 meter.
**	Present Rates are those rates proposed to be in effect for the Test Year 2001.
***	Present Rates are those rates proposed to be in effect for the Test Year 2002.
Note - Rates do not include franchise fees. This is because they differ by community and
are collected as a surcharge on each customer's bill.

APPENDIX C
Page 3 of 3
CALIFORNIA-AMERICAN WATER COMPANY - LOS ANGELES DIVISION
SAN MARINO DISTRICT
COMPARISON OF BILLS *
2001
Usage		Present		Adopted		Amount of		Percent
CCF		Rates		Rates		Increase		Increase
0		$8.35		$8.75		$0.40		4.57%
10		$17.48		$18.47		$0.99		5.36%
15		$22.04		$23.33		$1.29		5.53%
20		$26.60		$28.19		$1.59		5.64%
27	Avg	$32.99		$35.00		$2.01		5.74%
50		$53.98		$57.36		$3.38		5.89%
2002
Usage		Present **		Adopted		Amount of		Percent
CCF		Rates		Rates		Increase		Increase
0		$8.75		$9.00		$0.25		2.78%
10		$18.47		$18.95		$0.48		2.53%
15		$23.33		$23.93		$0.60		2.51%
20		$28.19		$28.91		$0.72		2.49%
27	Avg	$35.00		$35.88		$0.88		2.45%
50		$57.36		$58.77		$1.41		2.40%
2003
Usage		Present ***		Adopted		Amount of		Percent
CCF		Rates		Rates		Increase		Increase
0		$9.00		$9.22		$0.22		2.39%
10		$18.95		$19.42		$0.47		2.42%
15		$23.93		$24.51		$0.58		2.37%
20		$28.91		$29.61		$0.70		2.36%
27	Avg	$35.88		$36.75		$0.87		2.37%
50		$58.77		$60.20		$1.43		2.38%
*	Comparison based on Schedule No. LA-1, General Metered Service
	for a 5/8 x 3/4 meter.
**	Present Rates are those rates proposed to be in effect for the Test Year 2001.
***	Present Rates are those rates proposed to be in effect for the Test Year 2002.
Note - Rates do not include franchise fees. This is because they differ by community and
are collected as a surcharge on each customer's bill.

APPENDIX D

APPENDIX D
Page 1 of 9
CALIFORNIA-AMERICAN WATER COMPANY - LOS ANGELES DIVISION
ADOPTED QUANTITIES
Net-to-Gross Multiplier						1.78684
Uncollectibles						0.3475%
Franchise Tax Rates						0.0000%
State Income Tax Rate						8.8400%
Federal Income Tax Rate						35.0000%
Water Loss Factors:
	Baldwin Hills District					4.98%
	Duarte District					11.46%
	San Marino District					4.69%
1. WATER CONSUMPTION (Ccf/Cust.)						2001			2002
	Baldwin Hills
	Residential					202.6			202.6
	Commercial					409.1			409.1
	Public Authority					1,717.2			1,717.2
	Industrial					23,032.5			23,032.5
	Other					456.3			456.3
	Duarte
	Residential					235.8			235.8
	Commercial					1,298.0			1,298.0
	Public Authority					1,675.2			1,675.2
	Golf Courses					38,176.0			38,176.0
	Industrial					1,676.9			1,676.9
	Irrigation
	Gravity					1,154.0			1,154.0
	Pressure					3,062.8			3,062.8
	Other					1,698.9			1,698.9
	San Marino
	Residential					318.3			318.3
	Commercial					833.8			833.8
	Public Authority					1,549.7			1,549.7
	Industrial					1,643.7			1,643.7
	Other					3,247.2			3,247.2
APPENDIX D
Page 2 of 9
CALIFORNIA-AMERICAN WATER COMPANY - LOS ANGELES DIVISION
ADOPTED QUANTITIES
2. WATER PRODUCTION (Kccf)								2001		2002
Baldwin Hills
Residential								1,123.4		1,123.4
Commercial								259.8		260.2
Public Authority								39.5		39.5
Golf Courses								0.0		0.0
Industrial								46.1		46.1
Irrigation								0.0		0.0
Total Metered Sales								1,468.8		1,469.2
Other								0.0		0.0
TOTAL ANNUAL CONSUMPTION								1,468.8		1,469.2
UNACCOUNTED FOR WATER 4.98%								77.0		77.0
TOTAL PRODUCTION								1,545.8		1,546.2
Duarte
Residential								1,489.5		1,491.9
Commercial								776.2		777.5
Public Authority								199.3		199.3
Golf Courses								38.2		38.2
Industrial								26.8		26.8
Irrigation
Gravity								4.6		4.6
Pressure								186.8		186.8
Total Metered Sales								2,721.5		2,725.2
Other								10.2		10.2
TOTAL ANNUAL CONSUMPTION								2,731.7		2,735.4
UNACCOUNTED FOR WATER 11.46%								353.6		354.0
TOTAL PRODUCTION								3,085.3		3,089.4
San Marino
Residential								3,862.9		3,863.6
Commercial								1,194.1		1,194.1
Public Authority								206.1		206.1
Golf Courses								0.0		0.0
Industrial								88.8		88.8
Irrigation								0.0		0.0
Total Metered Sales								5,351.8		5,352.5
Other								32.5		32.5
TOTAL ANNUAL CONSUMPTION								5,384.3		5,385.0
UNACCOUNTED FOR WATER 4.69%								265.0		265.0
TOTAL PRODUCTION								5,649.3		5,649.9

APPENDIX D
Page 3 of 9
CALIFORNIA-AMERICAN WATER COMPANY - LOS ANGELES DIVISION
ADOPTED QUANTITIES
3. PURCHASED WATER		2001	2002
Baldwin Hills Service Area
Water Production: in Acre Feet (AF)
Pumping Rights		2,067	2,067
Purchased Water		1,482	1,483
Total AF		3,549	3,550
Purchased Water Rates
Purchased Water Cost per AF		$528	$528
West Basin Municipal Water District (WBMWD)
Replenishment Costs per AF		$155	$155
Monthly Meter Charge		$1,400	$1,400
Annual Central Basin Management Fees		$2,300	$2,300
Purchased Water Costs
WBMWD Costs		$782,496	$783,024
Replenishment Costs		$320,385	$320,385
Meter Charge		$16,800	$16,800
Central Basin Management Fees		$2,300	$2,300
Total Purchased Water Costs		$1,121,981	$1,122,509
Duarte Service Area
Water Production:AF
Main San Gabriel Basin Safe Yield		220,000	220,000
Duarte's Safe Yield Percentage		1.84634%	1.84634%
Duarte's Safe Yield		4,062	4,062
Surface Diversion Rights		1,672	1,672
Total Pumping Rights		5,734	5,734
Replenishment Water		1,349	1,360
Total Production in AF		7,083	7,094
Purchased Water Rates
Main San Gabriel Basin
Replenishment Cost Per AF ($/AF)		$246.65	$246.65
Administrative Assessment per AF of Pumping Rights		$8.45	$8.45
In-Lieu-Assessment per AF of Pumping Rights		$1.40	$1.40
Main San Gabriel Basin Water Quality
Administrative Assessment per AF of Safe Yield		$2.40	$2.40
Capital Projects Assessment per AF of Safe Yield		$10.91	$10.91
San Gabriel Valley Water Association
Assessment per AF of Total Production		$0.38	$0.38
Purchased Water Costs
Replenishment Costs		$332,731	$335,444
Administrative Assessments		$48,452	$48,452
In-Lieu-Assessments		$8,028	$8,028
Water Quality Administrative Assessments		$9,749	$9,749
Water Quality Capital Projects Assessments		$44,316	$44,316
San Gabriel Valley Water Assoc Assessment		$2,692	$2,696
Total Purchased Water Costs		$445,968	$448,685