4. Recommendations of the City of Claremont

The City of Claremont participated as a formal party and presented its Mayor, who testified that Claremont is a community of about 37,000 residents located in east Los Angeles County that is exclusively served by SCWC. The City has been actively participating in SCWC's rate cases since 1995 to protect the interests of its businesses, residents, and non-profit community organizations, including its many colleges. The City of Claremont criticized SCWC for charging rates that were shown in 2001 to be 60% higher than surrounding water purveyors, and 40% higher in 2002, and opposed the requested 24% increase as unwarranted and burdensome for its residents and businesses.

In its brief, the City of Claremont addressed the burden of proof, and attacked SCWC's use of three across-the-board adders to its capital budgets. It also questioned SCWC proposal to include capital projects in rate case regardless of whether the project had been built, and opposed the requested rate of return. Each of these substantive contentions is addressed in the discussion section of today's decision.

In response to the assigned Commissioner's invitation, the City offered several suggestions for encouraging ratepayer participation in water rate cases. The suggestions focus on making information about the proposed rate increase available to ratepayers. We have forwarded these suggestions to our Public Advisor for consideration and implementation as appropriate.

Substantively, the City also recommended that the Commission include in the hearing process a comparative rate survey and analysis of other water purveyors in the region. Such a comparison would begin with systematic operational comparisons with other purveyors, i.e., leakage rates, and efficiency assessments for personnel and resources. We direct our staff to fully consider this proposal.