2. Background
The application on which this proceeding is based, Application
(A.) 08-09-010, has several relevant antecedents. First, Golden State filed
A.06-09-006 on September 5, 2006, seeking authority to implement changes in ratesetting mechanisms and for reallocation of rates for all of Golden State's regions, including Region I that is the subject of the instant proceeding.1 Second, A.06-09-006 was consolidated with Investigation 07-01-022 and other water conservation proceedings for Class A water companies (OII Proceedings). Third, an amended A.06-09-006 was filed on April 23, 2007, in which Golden State focused its request variously on a water revenue adjustment mechanism (WRAM)2 decoupling sales and revenues, increasing block rates with reduced service charges, and a modified cost balancing account (MCBA). Fourth, a settlement agreement in A.06-09-006 (as amended on March 21, 2008, in ways immaterial here) between Golden State and the Commission's Division of Ratepayer Advocates (DRA) was among the settlement agreements in Phase 1B of the OII Proceedings that were adopted in Decision (D.) 08-08-030. That adopted settlement provides for a pilot program containing a conservation rate design and related decoupling mechanisms. Four3 of the seven ratemaking areas within Golden State's Region I were designated for the pilot program, with implementation of the program delayed pending the determination of a new revenue requirement in Region I. (A precedent General Rate Case (GRC) for Golden State's Region I concluded on January 31, 2008, with D.08-01-043.) The settlement adopted in D.08-08-030 provided that each ratemaking area in
Region I is to have a separate WRAM4 and a separate MCBA,5 and required conservation rate designs for Region I to be proposed within 20 days of the decision's issuance. The instant application was filed on September 15, 2008, in response to this requirement.6
On November 10, 2008, a prehearing conference was held before Administrative Law Judge (ALJ) Jonathan Lakritz to determine parties, identify issues, consider the schedule, and address other matters as necessary to proceed with this application. An all-party telephonic settlement conference was held on November 21, 2008, and a joint Motion to Approve the Settlement Agreement between the Division of Ratepayer Advocates and Golden State Water Company on WRAM & Conservation Rate Design Issues was filed on December 11, 2008, with the settlement agreement (Settlement Agreement) attached.7 Protestant Trimble filed comments on the Settlement Agreement on January 5, 2009, to which the joint proponents replied on January 27, 2009. On January 15, 2009, the proceeding was reassigned to ALJ Gary Weatherford.
On February 11, 2009, assigned Commissioner Bohn issued a Scoping Memo that among other things denied Protestant Trimble's motions to set aside a prehearing ruling and to conduct public participation hearings.
Commissioner Bohn concluded that there would be no hearing on the proposed settlement because the contested issues were ones of law, not of material facts that presently could be adjudicated.
By joint motion, DRA and Golden State8 have sought to adjust the conservation rates that were set forth in the Settlement Agreement. The recalculation was prompted by a change in escalation factors in connection with Commission-approved 2009 revenue requirements. The adjustment results generally in equal or lower rates9 compared to those contained in the schedules attached to the Settlement Agreement. The joint motion is herby granted.10
Table 1 and Table 2 herein reflect the rate adjustments. References hereafter to the settlement or Settlement Agreement are to the settlement or Settlement Agreement as so modified.
1 Golden State consists of three regions which include multiple distinct ratemaking areas. In total, Golden State has nine ratemaking areas.
2 If revenues are coupled with sales, reduced sales resulting from reduced consumption can result in reduced revenues. Water revenue adjustment mechanisms are means of decoupling revenues and sales, enabling revenue requirements to be met in the face of changing patterns of consumption. Differences between authorized revenue (based on forecasts) and actual revenue are tracked in such accounts, allowing any over-collection or under-collection of revenues, plus interest, to be either recovered from ratepayers or refunded to them.
3 Bay Point, Los Osos, Santa Maria and Simi Valley. The three ratemaking areas excluded were Ojai, Arden Cordova and Clearlake, subject to reconsideration in the next General Rate Case for Region I.
4 A water revenue adjustment mechanism is a ratemaking account used to track the differences between an authorized revenue requirement and actual revenues collected from customers.
5 A modified cost balancing account is a ratemaking account used to track the difference between adopted costs and actual costs of purchased water, purchased power and pump taxes, and to recover related changes in prices and quantities.
6 Golden State's testimony in support of the application is identified as Exhibit 1 and was received into evidence on April 1, 2009.
7 The adjusted rate schedules to the Settlement Agreement may be viewed at http://docs.cpuc.ca.gov/EFILE/MOTION/100389.htm. (See Attachments 1-6 to the efiled motion.)
8 Joint Motion of the Division of Ratepayer Advocates and Golden State Water Company to Update Escalation Factors and Tables, served April 27, 2009.
9 The one slight exception relates to Ojai. In order to round up the proposed service charge for Ojai to the closest five-cent increment, the adjustment resulted in a rate increase of one cent.
10 The joint motion to have the decision in this proceeding reflect the rate adjustments also sought a shortening of time for responding to the motion. That relief was granted on April 29, 2009, setting May 4, 2009, as the due date for responses.
