• Water Revenue Adjustment Mechanism

  • Background

    The Water Revenue Adjustment Mechanism (WRAM) and Modified Cost Balancing Accounts (MCBA) were first implemented in 2008 and were developed as part of a pilot program to promote water conservation. The CPUC adopted the mechanisms as part of conservation rate design pilot programs. The goals of the WRAM/MCBA are to sever the relationship between sales and revenue to remove any disincentive to implement conservation rates and programs; ensure cost savings are passed on to ratepayers; and reduce overall water consumption.

    In September 2011, the Class A water utilities with WRAM/MCBAs filed an application requesting changes to accounting-related issues, including a shortened time period for the amortization schedule.

    A Proposed Decision was issued on March 19, 2012. The PD implements a safeguard that establishes a limit on WRAM/MCBA surcharges of 7.5% a year with review and recovery of residual amounts in each applicant’s general rate case (GRC).

  • Current Proceeding Status

    A CPUC decision is expected in May 2012.

    See the proceeding docket.

    Other Resources

    For more information, see the CPUC’s 2008 report to the legislature: Progress and Achievements Towards Water Conservation Goals 


  • Public Advocates Office's (the Office) Policy Position

    The Office recommends the CPUC adopt the Proposed Decision with modifications. The Office proposes that a requirement be added to include pending amounts held in the WRAM/MCBA for review in the GRC to be included in GRC customer notices.

    See the Office’s filings:

    Comments on February 13, 2012

    Reply Brief on October 24, 2011

    Opening Brief on October 17, 2011