11. Water OII Amortization

In 1998, the Commission issued Resolutions W-4089, W-4094 and W-4257, authorizing the establishment of memorandum accounts for the Water Quality OII (I.98-03-013) and water quality litigation expenses. While the water quality lawsuits are still active, a final decision in the OII was issued by the Commission on November 2, 2000. The Commission concluded that the California Department of Health Services requirements governing drinking water quality adequately protect public health and safety, and that regulated water utilities, including SCWC, have satisfactorily complied with past and present drinking water quality requirements. SCWC seeks in this proceeding to amortize the balance of the OII expenses. The current balance as of March 31, 2003 is $1,052,480 as shown in Schedule 4 of Exhibit 37.

SCWC seeks to amortize the Water Quality OII portion of the memorandum account through a special condition surcharge over a 12-month period, applied to the quantity rate throughout the company. Based on the current balance, the surcharges for each CSA are shown in Schedule 4 of Exhibit 37. ORA does not oppose SCWC's request, and we will grant it.