ALJ/JPO/sid Date of Issuance 6/22/2009
Decision 09-06-027 June 18, 2009
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
In the Matter of the Application of San Gabriel Valley Water Company (U337W) for Authority to Increase Rates Charged for Water Service by its Fontana Water Company Division by $12, 859,900 or 26.5% in July 2009, $1,726,300 or 2.8% in July 2010, and $1,679,400 or 2.7% in July 2011. |
Application 08-07-009 (Filed July 1, 2008) |
Best, Best & Krieger, LLP, by Kendall H. Macvey, Attorney at Law, for City of Fontana; Endeman, Lincoln, Turek & Heater, LLP, by James P. Allen, Attorney at Law and Marvin T. Sawyer, for Fontana Unified School District; Nossaman, LLP, by Martin A. Mattes, Attorney at Law, Timothy J. Ryan, and Daniel A. Dell'Osa, for San Gabriel Valley Water Company; Selina Shek, for the Division of Ratepayer Advocates; interested parties.
Fred Curry, for the Division of Water and Audits and Patrick Hoglund, for the Division of Ratepayer Advocates.
DECISION ADOPTING TEST YEAR 2009/10 REVENUE REQUIREMENT
AND RATES FOR THE FONTANA WATER COMPANY DIVISION OF
SAN GABRIEL VALLEY WATER COMPANY
TABLE OF CONTENTS
Title Page
DECISION ADOPTING TEST YEAR 2009/10 REVENUE REQUIREMENT
AND RATES FOR THE FONTANA WATER COMPANY DIVISION OF
SAN GABRIEL VALLEY WATER COMPANY 2
1. Summary 2
2. Background 3
3. The Settlement 4
4. Number of Customers 6
5. Sales Per Customer 7
6. Miscellaneous Expense-Litigation Expenses Not
Related to Water Quality 9
7. Regulatory Commission Expense 10
8. Ratemaking Treatment of Investments in Shares of
Fontana Union Water Company 11
9. Treatment of Facilities Fees 15
10. Plans for Developing Recycled Water Service 17
11. Plant F13 18
12. Plant F16 20
13. Plant F17 21
14. Plant F21 23
15. Plant F23 25
16. Mains-Account 343 26
17. Services-Account 345 28
18. Reasonableness Review-Burden of Proof 29
19. Reasonableness Review-Job No. 4761-Plant
F16-Install Electrical Panel 31
20. Reasonableness Review-Job No. 4822-Plant-F53
Acquisition of Land Parcel No. 215 32
21. Reasonableness Review-Job No. 4870-F7-Plant Drill
and Equip Well F7B, Construct Reservoir F7A, Booster Station
and Site Improvements 34
22. Reasonableness Review-Job No. 4895-Plant F51
Acquisition of Land Parcel No. 221 36
23. Reasonableness Review-Job No. 4901-Linden Avenue North of
Casmalia Street Install 42-Inch Pipeline 38
24. Reasonableness Review-Job No. 4982-Cherry Avenue
South of Foothill Boulevard-Install 24-Inch and 16-Inch Pipelines 40
25. Reasonableness Review-Job No. 5025-Sierra Avenue North
of Baseline Avenue-Install 24-Inch Pipeline,
Services and Fire Hydrant 41
26. Reasonableness Review-Job No. 5089-Baseline Avenue East
of Cypress Avenue-Install 24-Inch Pipeline, Services
and Fire Hydrants 42
27. Reasonableness Review-Job No. 5111-Walnut Avenue
West of Sierra Avenue-Install 24-Inch Pipeline 43
28. Reasonableness Review-Job No. 5199-Plant F13-Recoat
Interior and Exterior of Reservoir F13(L) 45
29. Reasonableness Review-Job No. 5205 and Job No. 5316-Systemwide-
Install Services, Plastic Service Replacement 2007 and 2008 48
30. Reasonableness Review-Headquarters Office Complex
(Office Complex) 49
30.1. Positions of Parties 49
30.2. Discussion 52
30.2.1. Contractor Costs 54
30.2.2. Space Allocation 55
30.2.3. Construction Method 55
30.2.4. Building A-Costs and GO Allocation 56
30.2.5. Costs for the Remaining 16 GO Employees 59
30.2.6. Building B-Costs 62
30.2.7. Affiliate Costs Not Properly Attributable to SGV 63
30.2.8. Total Office Complex Costs to be Used in
Setting a Revenue Requirement for this Decision 63
30.2.9. Treatment of Old Office Site 64
31. Reasonableness Review-Sandhill 65
32. Water Quality 74
33. Customer Service 74
34. Master Plan 75
35. Balancing and Memorandum Accounts 75
35.1. Discussion 76
36. Comments on the Proposed Decision 77
37. Assignment of Proceeding 77
Findings of Fact 77
Conclusions of Law 99
ORDER.. 111
ATTACHMENT A - Settlement Agreement
ATTACHMENT B - Summary of Earnings (Appendix A)
Quantities - 2009-2010 (Appendix B)
Comparison of Bills (Appendix C)
DECISION ADOPTING TEST YEAR 2009/10 REVENUE REQUIREMENT
AND RATES FOR THE FONTANA WATER COMPANY DIVISION OF
SAN GABRIEL VALLEY WATER COMPANY
1. Summary
By this decision, San Gabriel Valley Water Company is authorized a revenue requirement for its Fontana Water Company Division of $55,500,800, an increase of $6,993,900 (14.42%) for the 12 months beginning July 1, 2009.1 The average residential customer with average water use will experience a bill increase of 15.4%.2 Rates will be adjusted for 2010 and 2011 consistent with the existing water company rate case plan (Decision 07-05-062).
This decision declines to adopt a settlement, included herein as Attachment A, between San Gabriel Valley Water Company and the Commission's Division of Ratepayer Advocates addressing forecast issues. Pursuant to Rule 12.4 of the Commission's Rules of Practice and Procedure, this decision adopts the settlement with several alternative terms. In addition, the reasonableness review of post-2002 plant additions is addressed.
The most significant monetary differences between the application, as modified by the settlement filed by the settling parties, and the revenue requirement adopted herein are:
· A reduction in Miscellaneous Expense of $202,300;
· A reduction in ratebase for the proposed ratemaking treatment of Shares in Fontana Unified Water Company from $4,200,000 to $1,585,920;
· A reduction in capitalized expenditures for Mains of $1,000,000 for 2011;
· A ratebase reduction of $537,868 for a retaining wall included in Job No. 4870;
· A ratebase reduction of $1,158,602 for a pipeline installed as Job No. 5111;
· A reduction in the amount included in ratebase for the new Office Complex from $18,124,864 to $15,001,733, allocated between the Fontana Water Company Division and General Office; and
· An increase in General Office rental expense of $156,718.
This proceeding is closed.
1 Attachment B contains the summary of earnings, quantities used to calculate the summary of earnings, bill comparisons, rate tables and tariffs.
2 Residential customers with a 3 /4 x 5/8-inch meter using 23 hundred cubic feet of water per month.
