James Hunter

Monday, July 14, 2014

SJWC "Proposed" Decision 22% on Rate Increase (A1201003)

ALJ Wilson filed a Proposed Decision on A.12-01-003, filing date 7/11/2014, 12:08 PM. The document with Appendixes is 153 pages long so the information in the post will be updated over several days.
San Jose Water Company (SJWC) is authorized to increase rates by amounts designed to increase revenue by $22,063,000 or 9.79% in its test year 2013, $11,579,000 or 4.72% in 2014, and $15,356,000 or 6.02% in 2015. As a result of the revenue increase granted by this decision, the monthly bill for the average SJWC residential customers using 1500 cubic feet (CCF)1 of water with a 5/8” by 3/4” meter would increase by $7.96 or 20.8% to $46.20 from $38.24 for the test year 2013
The initial topics, this Blog covers, will be the size of the rate  increase, Proposed Decision 
Summary page 2:

SJWC Request
ORA/DRA Recommendation
ALJ Proposed
21.51% (1)
39.98% (2)

Note 1, reference Proposed Decision, page 8, Section 5.1, during the course of  discussions

SJWC and ORA agreed to use 18.56%
Note 2, percentage increase is compounded

It looks like SJWC got roughly 58% of the original adjusted request. For the year 2013 the 9.79% after adjustments based on interim increases, as well as 2014, will appear on the ratepayers monthly bill as a surcharge or credit, for previous periods that were not billed in accordance with the final CPUC Decision.

The second topic is the WRAM/MCBA, SJWC requested a full decoupling of revenue (profits) from operations/revenues. This is the "conserve, use less water and pay more for what you use".

Several sections of the Proposed Decision, page 118, Section 70:
29.3. Discussion The Commission does not adopt SJWC’s proposed change in its current Monterey-Style WRAM at this time. SJWC is correct that its current revenue decoupling mechanism (Monterey-Style WRAM) does not fully protect the utility against reduced sales, although it is also true that SJWC benefits through increased revenues from its Monterey Style WRAM when sales are increasing. While the Commission seeks to reduce risks both to water utilities and their customers from changes in sales through appropriate revenue and sales mechanisms which may help in conservation efforts, ORA is correct that similar mechanisms used by other water utilities were achieved through negotiated settlements which reflected many other considerations before these were adopted. Furthermore, the results of these programs, including the advantages and disadvantages to water utilities and their customers, has not been fully analyzed, so that the Commission can determine which sales risk mechanism best serves the interests of utilities and their customers. As the current dry years persist, and the need for conservation of water resources continues, the Commission will consider in SJWC’s next GRC, if not before, whether SJWC’s current Monterey-Style WRAM is a useful water conservation mechanism that balances the risks of lost or increasing sales between the utility and its customers. 
70. SJWC’s current Monterey-Style WRAM does not fully protect SJWC against reduced water sales. However, SJWC’s Monterey-Style WRAM also allows SJWC to benefit when sales increase. 
71. It is uncertain whether SJWCs’ Monterey-Style WRAM, rather than those WRAMs used by other water utilities, is an adequate mechanism to encourage conservation and whether it serves and balances the interests of the utility and its customers due to increased or decreased sales.
Basically this is a "holding pattern" there doesn't appear there is a decision, rather let's wait and see if the drought continues, how the other utilities that have revenue decoupling do over more time. SJWC did file an advise letter #456 and did get the MCRAMA, Mandatory Conservation Revenue Adjustment, to track the revenue impact of mandatory conservation.

I also haven't found any specific reference to how much SJWC is being paid by Homeserv USA and where the proceeds are going. ORA did oppose and recommend:
25.2. ORA ORA estimates gross revenue derived from NTP&S activities that are allocated to ratepayers to be $576,943 for the Test Year 2013, plus an additional $100,000 per provisions of Rules X.C.5 and X.C.6 of D.10-10-019
At least SJWC appears to be accounting for NTP&S activities and ORA/DRA is aware. Which ones are still an open question? Homeserv USA is not mentioned.

The next steps are:
The application and recommendation then go to an administrative law judge, in this case Seaneen M. Wilson. Once Wilson has announced her decision, the public has 30 days to comment before the CPUC votes. However, the CPUC can decide to allow an additional 30 days for comment, according to Christopher Chow, public information officer for the CPUC in San Francisco.
We the Rayepayers have 30 (actually only) 21days to let CPUC, Public Officials and the Press/TV aware of our concerns.  As well both SJWC and ORA/DRA 

 If you are concerned about these issues, send email to CPUC at: District 5 United eForm eMail  Simply click on the "eForm eMail" and you will get a page to fill out the information and specify the reason for your opposition to the SJWC Rate Increase and continuing requests to de-couple their revenue from the requirement to do business efficiently and your concern about lack of openness and transparency, as well as concerned that we are not being informed in a timely manner, of the status the water reduction recommended or mandatory!

You can also send an email to CPUC Public Advisopublic.advisor@cpuc.ca.gov  The Public Adviser will insure your email will be sent to all the appropriate CPUC staff members.

Other people to drop an email (note) and express your opinion are:
  • Scott Herhold, San Jose Mercury News, sherhold@mercurynews.com
  • Julie Putnam, NBC Channel 5, julie.putnam@nbcuni.com

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