California American Water Company GRC (A.22-07-001)

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 July 1, 2022, Cal Am filed its GRC application to change customer rates beginning 2024. Cal Am requests authorization to increase its current average system rates for water service by approximately 32% by 2026. On August 5, 2022, the Public Advocates Office protested Cal Am’s application and provided its report and recommendations on April 13, 2023. Cal Advocates report is based upon its independent analysis of Cal Am’s GRC application.  The links to the reports are provided below.

 

PUBLIC ADVOCATES OFFICE’S POSITION

The Public Advocates Office recommends a total revenue requirement of $312.6 million in 2024, $41.3 million less than Cal Am’s requested revenue requirement of $353.9 million in its application. These recommendations provide a reasonable level of ratepayer funding for Cal Am to maintain safe and reliable service levels.  In addition to recommending decreases in the average system rate for water services for 2024, 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 Cal Am does not abuse its position as a natural monopoly.
• The Commission should limit alternative ratemaking mechanisms that result in surcharges on customers’ bills.

 

CAL AM REQUEST, PUBLIC ADVOCATES OFFICE RECOMMENDATION, CPUC ADOPTED SETTLEMENT COMPARISON

	Cal Am’s Request		Public Advocates Office’s Recommendation		Settlement D. 24-12-025
Year	Revenue Increase	Percentage Increase	Revenue Increase	Percentage Increase	Revenue Increase	Percentage Increase
2024	$36.5 M	11.87%	-$11.3 M	-3.37%	$19.96 M	6.40%
2025	$20.1 M	5.81%	$10.1 M	3.08%	$15.51 M	4.65%
2026	$19.8 M	5.41%	$9.1 M	2.71%	$15.44	4.42%

 

CPUC Decision adopting Cal Am rates for 2024-26 GRC

 

Download:

The Public Advocates Office’s Protest

Testimony and Reports:

• Executive Summary and Special Requests 5, 9, and 15 (Sorensen)
• Results of Operations Summary (Adhikari)
• Rate Base and Taxes (Adhikari)
• Customers, Consumption, Revenues, Rate Design, and Special Requests 10, 12, 17, 18, 19, and 20 (Merida)
• Recorded & Proposed Plant (Northern & Central Division) and Tank Painting (Menda)
• Recorded & Proposed Plant (Southern Division and Corporate Office), Construction Work-In-Progress, and Special Request 4 (Ibrahim)
• Depreciation, Earthquake Insurance, Customer Service, and Wildfire and Safety (Portable Generator Study) (Gendler)
• Employee, Labor and Salaries, Benefits, Other Administrative and General Expenses, and Special Request 11 (Sweeney)
• Operation and Maintenance Expense (Gee)
• General Office and Service Company (Evans)
• Memorandum and Balancing Accounts and Special Requests 2, 3, 6, 13, 14, and 16 (Dawadi)
• Special Request 1, including WRAM/MCBA (Rauschmeier)

Additional information regarding this proceeding can be obtained from the CPUC’s docket.