Liberty Utilities Apple Valley Ranchos Water and Liberty Utilities Park General Rate Case (A.24-01-002 et al.)
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 January 1, 2024, Liberty Utilities Apple Valley Ranchos Water Corp. (AVR) and Liberty Utilities Park (Liberty Park) filed its GRC application to change customer rates beginning 2025. Liberty Park and AVR request authorization to increase current average system rates for water service by approximately 33% and 24% respectively by 2027. On February 5, 2024, the Public Advocates Office protested Liberty’s application and provided its report and recommendations on July 24, 2024. The Public Advocates Office' report is based upon its independent analysis of Liberty’s GRC application. The links to the reports are provided below.
PUBLIC ADVOCATES OFFICE’S POSITION
The following table compares Liberty Park’s and Liberty AVR's proposed average system rate changes and the Public Advocates Office recommended average system rate changes.
Recommendation: The Public Advocates Office recommends a total revenue requirement of $41.35 million for Liberty Park in 2025, $9.86 million less than Liberty Park’s requested revenue requirement of $51.21 million in its application.
|
|
Liberty Park’s Request |
Public Advocates Office’s Recommendation |
||
|
Year |
Increased Revenue |
Percentage Increase |
Revenue Change |
Percentage Change |
|
2025 |
$9.26 million |
22.08% |
($2.42 million) |
-5.53% |
|
2026 |
$2.18 million |
4.42% |
$245 thousand |
0.59% |
|
2027 |
$2.14 million |
2.96% |
$115 thousand |
0.27% |
Recommendation: The Public Advocates Office recommends a total revenue requirement of $27.08 million for Liberty AVR in 2025, $6.65 million less than Liberty AVR’s requested revenue requirement of $33.73 million in its application.
|
|
Liberty AVR’s Request |
Public Advocates Office’s Recommendation |
||
|
Year |
Increased Revenue |
Percentage Increase |
Revenue Change |
Percentage Change |
|
2025 |
$3.11 million |
10.15% |
($3.87 million) |
-12.51% |
|
2026 |
$2.14 million |
6.31% |
$696,000 |
2.55% |
|
2027 |
$2.24 million |
6.18% |
$475,000 |
1.69% |
The recommendations above provide a reasonable level of ratepayer funding for Liberty to maintain safe and reliable service levels. The Public Advocates Office also made the following recommendations to the CPUC:
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The ratemaking process should be transparent to decisionmakers and ratepayers and encourage utilities to operate efficiently and within a reasonable budget.
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As a substitute for competition, the CPUC must ensure that Liberty does not abuse its position as a natural monopoly.
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The CPUC should limit alternative ratemaking mechanisms that result in surcharges on customers’ bills.
REPORTS AND TESTIMONY
- Executive Summary and Escalation Year Increases (Ibrahim)
- Report on Utility Plant in Service and Water Quality (Andrade)
- Report on Liberty Park and Liberty Apple Valley's General Office Expenses and Rate Base (Keowen)
- Report and Recommendations on Customer Service, Environmental Social Justice & Action Plan, and Admin & General Other Expenses (Serwaa)
- Report and Recommendations on Operations and Maintenance Expenses, Admin & General Expenses, Payroll, and Conservation (Nguyen)
- Report on Sales & Revenue, Rate Design, and Balancing and Memorandum Accounts (Ronco)
- Report on Pipeline Replacement, Depreciation Reserve & Expense, Rate Base and PFAS Memo Account (Sarkar)