San Jose Water Company General Rate Case (A.24-01-001)
BACKGROUND
All investor-owned utilities must obtain approval from the California Public Utilities Commission (CPUC) of their budgeted expenses and investments before they can include those costs in rates charged to customers. Utilities receive CPUC's approval primarily through a General Rate Case (GRC) application justifying a proposed budget.
On January 1, 2024, San Jose Water Company submitted its GRC application to increase customer rates starting in 2025. The Company is seeking approval to raise its average system rates for water service by approximately 22% over the next three years. After reviewing and analyzing San Jose Water Company's GRC application, workpapers, and data request discovery, the Public Advocates Office provided its report and recommendations on May 15, 2024. The Public Advocates Office recommends the Commission authorize no more than a 6.95% increase over the next three years. Links to the reports are provided below.
PUBLIC ADVOCATES OFFICE’S POSITION
The following table compares San Jose Water Company’s requested and the Public Advocates Office’s recommended average system rate changes.
|
|
San Jose Water Company’s Request |
Public Advocates Office’s Recommendation |
||
|
Year |
Revenue Increase |
Percentage Increase |
Revenue Increase |
Percentage Increase |
|
2025 |
$55,196,000 |
11.11% |
$19,399,330 |
3.75% |
|
2026 |
$22,041,000 |
3.99% |
$7,754,950 |
1.44% |
|
2027 |
$25,809,000 |
4.49% |
$9,388,974 |
1.72% |
Note: Cal Advocates' recommended increase of 3.75% includes 3.48% of SJWC's under-forecasted budget of approximately $18 million related to purchased water, power, and pump taxes that SJWC tracks in the balancing accounts.
The Public Advocates Office recommends the Commission adopt a total revenue requirement increase of 3.75% for 2025 instead of San Jose Water Company’s requested increase of 11.11%. Our recommendations provide reasonable ratepayer funding for San Jose Water Company to maintain safe and reliable service levels. Additionally, 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 San Jose Water Company does not abuse its position as a natural monopoly.
- The Commission should limit alternative ratemaking mechanisms that result in surcharges on customers’ bills.
PUBLIC ADVOCATES OFFICE’S REPORTS
A2401001 (PUBLIC) Public Advocates Office Report and Recommendations on Capital Improvement Projects.