California Water Service
2017 General Rate Case
Background
On
July 9, 2015, Cal Water filed its General Rate Case Application for
its General Office and 23 districts, requesting approval to increase rates by:
- 2017:
$94.8 million or 16.5%
- 2018:
$23.0 million or 3.4%
- 2019: $22.6
million or 3.3%
Specifically,
Cal Water proposes increases for each of its districts as summarized in
this Table from
Cal Water’s Application.
CPUC Public Participation Hearings
The
CPUC held Public Participation Hearings throughout its service districts:
Chico:
Manzanita Place • 1705 Manzanita Avenue • Chico, CA -- April 26, 2016,
6:00pm
Oroville:
Manzanita Place • 1705 Manzanita Avenue • Chico, CA -- April 26, 2016,
6:00pm
Willows:
Manzanita Place • 1705 Manzanita Avenue • Chico, CA -- April 26, 2016,
6:00pm
Marysville:
CalTrans District 3 Building • Sierra Nevada Room • 703 B Street •
Marysville, CA -- April 27, 2016, 6:30pm
Dixon:
Dixon City Council Chambers • 600 East A Street • Dixon, CA -- April 28,
2016, 6:00pm (Spanish
Version)
Unified, Coast Springs, and Lucerne districts in the following locations:
Guerneville:
Manzanita Place • Guerneville Veterans Memorial Building – Auditorium,16255 First & Church Street Guerneville, CA • Guerneville, CA -- August 23, 2016,
6:00pm
Lucerne:
Manzanita Place • Lucerne Alpine Senior Center – Barnes Hall Room, 3985
Country Club Drive • Lucerne, CA -- August 25, 2016, 1:00pm &
6:00pm
PROPOSED SETTLEMENT
On September 2, 2016 the Public Advocate's Office, Cal Water, and several other parties jointly filed a partial Settlement Agreement requesting CPUC approval to increase revenue requirement by $44.97 million or 7.5% on January 1, 2017.
Highlights of the Joint Settlement include reductions in Cal Water initial request:
- $294 million decrease in Capital Additions
- $79 million decrease in Main Replacement
- $89 million decrease in Rate Base
- $1.9 million decrease in Executive Incentive Compensation
The proposed Settlement also resolves most issues, including:
- Number of customers and sales per customer
- Operation & Maintenance and Administrative & General expenses
- Allocated Customer Support Services expenses
- Utility plant additions
- Depreciation expense and reserve
- Various taxes
- Rate design
- Bayshore and Redwood, Salinas and King City, and Palos Verdes and Antelope Valley districts Consolidation
- All of Cal Water’s special requests
There is one unresolved issue regarding Escalation / Attrition filings for 2018 and 2019.
CPUC Decision
A
final CPUC Decision is expected by the end of 2016.
The Public Advocates Office's Position
Public Advocates Office (the Office) supports the partial Settlement because it allows Cal Water to provide safe and reliable service to its customers while reducing costs.
The Office's Analysis
The Office
performed an in-depth analysis of Cal Water’s general rate case proposal to
ensure its requests are accurate, reasonable, and justified. The Office estimates Cal
Water company-wide revenue increases / decreases of:
- 2017:
$20.3 million (or 3.54%)
- 2018:
-$ 32,400 (or -0.01%); estimated, subject to change
- 2019:
-$ 69,900 (or -0.01%); estimated, subject to change
The Office's
Table
shows a comparison of its estimated revenue increases / decreases by district,
compared with Cal Water’s proposal.
The Office
finds that Cal Water has over-estimated its revenue needs, including in these
key areas:
- Plant
Investment: The Office recommends an annual average of $55 million,
compared with Cal Water’s company-wide proposal to construct an average of
$238.1 million of capital projects per year.
- Expenses: The Office estimates lower total Operating & Maintenance and Administrative
& General expenses, reflecting reductions in purchased services,
enhanced maintenance, and employee pensions.
See the Office's:
March 2, 2016 Testimony with its full analysis and report.
August 13, 2015 Protest
to Cal Water’s rate case Application.
Proceeding Docket
See
the CPUC's Proceeding docket.
Visit
the docket to subscribe to updates in this proceeding.
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