6. Comments on Proposed Decision
The proposed decision of the ALJ in this matter was mailed to the parties in accordance with Pub. Util. Code § 311(d)(1) and Rule 77.1 of the Rules of Practice and Procedure. SCWC and ORA filed comments on November 29, 2001, and SCWC filed reply comments on December 4, 2001.
SCWC's initial comments note that in June of this year the Commission increased the low-income eligibility guidelines for energy utilities to 175% of the
federal poverty level and we have revised the body of the decision to acknowledge this revision. ORA's initial comments argue that, by approving SCWC's lifeline rate proposal instead of ORA's, the draft decision rejects conservation as a state policy objective. ORA's comments presuppose two facts that no party established in this proceeding - that ORA's proposal would result in conservation and that SCWC's would not. ORA's comments also ignore significant conceptual defects in its own proposal, specifically that conservation measures should be imposed only on low-income customers (not on customers who can afford to pay full rate) and that eligible residents in mobilehome parks should be excluded from the low-income benefits we adopt today.
1. D.00-06-075 directed SCWC to file a lifeline rate plan for its Region III service territory.
2. SCWC's CARW proposal is based on the CARE program currently authorized by the Commission for small energy utilities in that it:
a. provides a 15% rate reduction to eligible residential customers on each component of the water bill; and
b. requires a CARW customer to confirm continuing eligibility at least every two years and to notify the utility if he or she becomes ineligible.
3. SCWC's CARW proposal should set eligibility guidelines at 175% of federal poverty guidelines, which is the level currently applicable to energy utilities in accordance with the procedure established in Resolution E-3524, dated February 19, 1998.
4. In both Regions II and III, the sizeable (15%) discount to eligible CARW customers can be achieved at a relatively modest cost increase (1.5% to 3%) to nonparticipating customers.
5. The record does not establish that SCWC's CARW proposal will increase consumption. To date, the Commission has not directed SCWC to develop a comprehensive conservation plan of the type adopted in California-American Water Company's Monterey district.
6. The record does not establish that the CARW creates an improper double-subsidy to low-income customers.
7. Within 18 months of the establishment of the CARW program, SCWC should gain sufficient program experience to build program cost into base rates and discontinue the CARW balancing account.
8. The record in this proceeding does not permit us to determine whether feasible means exist to establish a lifeline program in Region I.
9. The record in this proceeding does not permit us to determine whether feasible means exist to transfer ratemaking for SCWC's lifeline rate program to a company-wide mechanism.
10. No policy reason exists to bar submeter customers at MHPs, who meet low-come eligibility criteria, from participating in the CARW program.
11. WMA's Ex. 100 describes the steps necessary to extend the CARW program to MHPs, by adjusting the master-meter rate to account for a 15% discount on the bill to all eligible submeter customers and then passing the discount through to those submeter customers.
12. Successful extension of the CARW to MHPs requires the cooperation of MHP master-meter customers.
1. SCWC has complied with D.00-0-075 by filing this application for establishment of the proposed CARW program in Region III.
2. SCWC's CARW program is consistent with Pub. Util. Code §739.8 and is not inconsistent with Pub. Util. Code §701.10.
3. SCWC's CARW proposal for Region III is reasonable and we should adopt it, as in the public interest.
4. SCWC's proposal to file an advice letter for authority to establish CARW program in Region II based on the CARW program adopted for Region III, is reasonable.
5. In order to permit timely establishment of the CARW program in Region III, and the filing of an advice letter for authority to establish the CARW program in Region II, this decision should be effective immediately.
IT IS ORDERED that:
1. The amended application of Southern California Water Company (SCWC) to establish a lifeline water rate known as California Alternative Rates for Water (CARW) in Region III of its service territory is granted. This approval includes:
a. the draft CARW tariff attached as Exhibit A to SCWC's amended application, as corrected (i) to require that at least every two years all customers on the CARW rate be required to confirm their continuing eligibility; (ii) to permit a reduction in the bill of master-meter customer at a manufactured housing community or mobilehome park (collectively, MHP) by the amount equal to the lifeline rate discounts to be passed through to eligible submeter customers at the MHP, as described in the text of this decision; and to show the numbers of persons in the household and total gross annual income at 175% of the federal poverty guidelines.
b. the proposed notice and application form for the CARW program, Form No. 20, attached as Exhibit B to SCWC's amended application, and as corrected to show the numbers of persons in the household and total gross annual income at 175% of the federal poverty guidelines.
2. SCWC shall establish a CARW balancing account for Region III and record in it the costs of the CARW program, including revenue shortfall attributable to the discounts and administrative costs. The CARW program costs shall be moved into base rates, and the balancing account shall be eliminated, in the first Region III general rate case that occurs after the program has been in existence in the region for 18 months.
3. Within forty-five (45) days of the effective date of this decision, SCWC shall file an advice letter for authority to implement in its Region II service territory the CARW program we approve in this decision.
4. In the next general rate case application for its Region I service territory, SCWC shall review options:
a. for implementing a lifeline rate program in Region I; and
b. for transferring the lifeline rate program for all regions to a company-wide ratemaking mechanism. Application 00-09-048 is closed.
This order is effective today.
Dated January 9, 2002, at San Francisco, California.
LORETTA M. LYNCH
President
HENRY M. DUQUE
RICHARD A. BILAS
CARL W. WOOD
GEOFFREY F. BROWN
Commissioners
