ALJ/BMD/jva Mailed 4/8/2005
Decision 05-04-016 April 7, 2005
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
In the Matter of the Application of Southern California Water Company (U 133 E) for an Order authorizing it to increase rates for electric service in its Bear Valley Electric Service division to recover the costs of the new 8.4 MW generator facility. |
Application 04-10-003 (Filed October 1, 2004) |
OPINION AUTHORIZING AN INCREASE IN RATES, AND ESTABLISHING MEMORANDUM ACCOUNTS TO RECOVER COSTS OF A GENERATING FACILITY IN BEAR VALLEY ELECTRIC SERVICE DISTRICT
I. Summary
Our decision today authorizes Southern California Water Company (SCWC) to increase rates by approximately $2.7 million or about 10% in current revenues, in order to recover capital-related and operational and maintenance (O&M) costs of a new 8.4 megawatt (MW) electric generating facility for its Bear Valley Electric Service Division (BVES). Adopted rates are subject to refund after a reasonableness review in SCWC's next general rate proceeding.
Our decision also authorizes SCWC to establish two "one-way" memorandum accounts to record the capital-related revenue requirement and O&M costs incurred to construct and operate the generation facility. Each of these memorandum accounts are "capped," so that if actual costs exceed the authorized capped amount, the additional costs above the caps are borne by SCWC and not by ratepayers. The capital-related memorandum account is capped at a revenue requirement of $2,255,500, and the O&M memorandum account is capped at an annual amount of $444,000. These caps protect BVES ratepayers from any cost increases above the cap amounts adopted herein. In addition, BVES customers benefit if actual capital-related or O&M costs are less than estimated costs, as the difference will be returned to BVES customers. Our decision provides that a reasonableness review of all generation facility costs will be conducted in SCWC's next general rate case for its Bear Valley Electric Service division.
This decision also authorizes SCWC to record fuel costs for the electric generating facility in the existing BVES Purchase Power Adjustment Clause (PPAC) Balancing Account. This method recognizes that power from the facility will replace power that would otherwise be purchased and transported into the BVES territory and recorded in the PPAC.
Our adopted rate design to implement the rate increase for BVES customers is based on the relationship between costs and customer energy demand and usage. The capital-related revenue requirement is allocated to customer classes in proportion to the electric demand of each customer class during peak times when the generation facility must operate. O&M costs are allocated according to electric usage on a per kilowatt-hour (kWh) basis.
This proceeding is closed.
