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California American Water
Monterey District Rate Design


On July 14, 2015, Cal Am submitted its Application to the CPUC requesting to change their rate design, surcharge collections, and implement modifications to their Conservation and Rationing Plan. Cal Am proposes these changes outside of its general rate case cycle to timely address critical water supply shortages related to the ongoing drought, as well as to a State Water Resources Control Board Cease and Desist Order which limits the amount of water Cal Am is legally able to draw from the Carmel River. Cal Am also states that the changes are necessary to ensure that it collects through rates each year the amount determined by the Commission to be necessary for Cal Am to meet its operating costs and earn a reasonable return.

On November 4, 2015, the CPUC issued a Ruling setting the scope of the proceeding and dividing it into two phases:


Phase 1: Outdoor Summer Landscaping Allotment

This phase considered Cal Am’s request to eliminate the current practice of customer water allotment based on lot size.

Phase 2: Remaining Rate Design, Water Revenue Adjustment Mechanism (WRAM) surcharges, Consumption Forecasting and Conservation and Rationing Plan Issues

This phase will consider Cal Am’s other requests related to rate design, the way it forecasts customer consumption to set appropriate rates, its Conservation and Rationing Plan (Rule 14.1.1) and its current significant WRAM balances. WRAM is an accounting mechanism, a method of tracking the difference between the forecasted and actual revenues derived from water sales and recovering the difference through surcharges.