Golden State Water Company General Rate Case (A.23-08-010)
BACKGROUND
All investor-owned utilities must obtain approval from the California Public Utilities Commission (CPUC) of their budgeted expenses and investments before utilities are able to include those costs in rates charged to customers. This is done primarily through a General Rate Case (GRC) application to the CPUC to justify a proposed budget.
On August 14, 2023, Golden State Water Company (GSWC) filed its GRC application to change customer rates beginning 2025. GSWC requests authorization to increase its current average system rates for water service by approximately 23% by 2025. On September 20, 2023, the Public Advocates Office protested GSWC’s application and provided its report and recommendations on February 27, 2024. Cal Advocates report is based upon its independent analysis of GSWC’s GRC application. The links to the reports are provided below.
PUBLIC ADVOCATES OFFICE’S POSITION
The Public Advocates Office recommends a total revenue increase of $22.87 million in 2025. This is $64.20 million less than GSWC’s requested increase of $87.06 million. Our recommendations provide a reasonable level of ratepayer funding for GSWC to maintain safe and reliable service levels. In addition to recommending decreases in the average system rate for water services for 2025, the Public Advocates Office also made the following recommendations to the Commission:
- The ratemaking process should be transparent to decision-makers and ratepayers and encourage utilities to operate efficiently and within a reasonable budget.
- As a substitute for competition, the Commission must ensure that GSWC does not abuse its position as a natural monopoly.
- The Commission should limit alternative ratemaking mechanisms that result in surcharges on customers’ bills.
CPUC DECISION, GOLDEN STATE WATER REQUEST, AND PUBLIC ADVOCATE OFFICE RECOMMENDATION COMPARISON
|
|
Golden State Water Company Request |
Public Advocates Office’s Recommendation |
CA Public Utilities Commission Decision 25-01-036 |
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|
Year |
Increased Revenue |
Percentage Change |
Increased Revenue |
Percentage Change |
Revenue Change |
Percentage Change |
|
2025 |
$87 million |
22.95% |
$22.8 million |
5.86% |
$44.2 million |
10.52% |
|
2026 |
$20.6 million |
4.42% |
$4.4 million |
1.07% |
$19.89 million |
4.26% |
|
2027 |
$22.4 million |
4.57% |
$4.8 million |
1.15% |
$19.88 million |
4.07% |
PUBLIC ADVOCATE OFFICE DOWNLOADABLE TESTIMONY AND REPORTS:
- Report and Recommendations on Water Quality (Special Request 4) and Construction Work in Progress (Sharma)
- Report on Region II Capital Projects Forecast (Sorensen)
- Report on Pipeline Replacements (Goldberg)
- Report on Revenue, Rate Design and Special Request #9 (Merida)
- Report on The General Office Plant and Cost Adders (Menda)
- Blanket Items, Special Request No. 7 and Attrition Year Rate Base (Evans)
- Executive Summary and Results of Operations Tables (Aslam)
- Report on Special Request #1 (Balancing and Memorandum Accounts), Special Request #8 (Modification of PFAS Memorandum Account), Taxes Other Than Income (AD Valorem Taxes), Income Taxes, Depreciation, and Working Cash (Baki)
- Report and Recommendations on Golden State Water Company's General Office Expenses Budget, Conservation Program Budget, Special Request #2 and #3 (Lam)
- Report and Recommendations on Customer Service, Environmental and Social Justice Action Plan and Robbins Expenses (Serwaa)
- Report on O&M, A&G, Supply Costs, District Labor & Payroll, Special Request #6, Customer Growth Factor, and Payroll & Local Taxes (Cunningham)
- Report and Recommendation on Region I - Capital Project Forecast: (Arden Cordova, Bay Point, Clearlake, Los Osos, Santa Maria & Simi Valley) (Nasserie)
- Report On Capital Project Cost Estimates and Cost Adders and Region III Capital Projects Forecast Early Retirements and Rate base, and RO Model (Ibrahim)