4. Number of Customers

The settlement proposes SGV's customer estimate, which is the number of customers at year-end 2007.

4.1. Positions of Parties

COF agrees that there will be no increase in the number of residential and commercial customers. However, if its recommendations regarding plant additions are not adopted, it recommends that the five-year historical growth be used. COF states the plant additions it opposes are intended to serve growth, and it is inappropriate to allow plant additions to serve growth while projecting that growth will not occur.

COF states that the number of small and large public authority customers grew in 2007 by more than the five-year average. Thus, COF recommends the five-year average growth be used.

FUSD agrees with the positions taken by COF.

4.2. Discussion

The parties agree that there will be no increase in the number of residential and commercial customers during the forecast period. Customer growth may result in plant additions, not vice versa. The assumption in the settlement of no growth in the number of residential and commercial customers is reasonable. COF's recommendations regarding forecast plant additions will be addressed separately on their merits.

As to public authority customers, the record does not indicate the public sector is immune to the financial situation affecting the public at large. It is common knowledge that the current economic downturn is hurting the public. It is reasonable to assume this will result in lower tax revenues for local government. Therefore, it is reasonable to assume the number of public authority customers will not increase during the forecast period. The number of public authority customers in the settlement is reasonable.