James Hunter

Wednesday, August 13, 2014

What is our water rate going to be? (SJWC GRC A1201003, Rate Increase)

The following is from the published agenda for tomorrow's CPUC Consent Hearing, page 19.

 CPUC Consent Hearing, 14 August 2014, page 19

We can easily see that San Jose Water Company has proposed $95,154.000 million, the ALJ Proposed Decision is $48,998,000 million and the very misleading "Estimated Cost" of $22,063,000?

CPUC must buy their calculators at the same place I got mine....................................

ORA (Office of Ratepayer Advocates aka DRA) in their "Comments" to the Proposed Decision pointed out  as follows: (refer to page 2)
A. The Commission Commits Technical Error if it Does not
Ensure That the PD Is Consistent With Amounts
Presented in Attachment A 
On pages 2, 126, and 130, the PD’s summary of the increase in an average residential customer’s bill should match the amounts indicated in the PD’s Attachment A. Additionally, the PD should clarify that the summarized increase in a customer’s monthly bill pertains only to base rates and does not include any authorized surcharges that may also appear on a monthly bill. Using the rates indicated in Table I of the PD’s Attachment A, a residential customer with a 5/8” by 3/4” meter using 15 ccf per month would incur base rate charges of $67.41 (not including surcharges), which is significantly higher than the $46.20 indicated on page 2 of PD. 
I reviewed the published documents and wasn't able to confirm this was taken into consideration by either CPUC or the ALJ.

The $22,063,000 in 2013 was also questioned by ORA (Office of Ratepayer Advocates aka DRA) in their "Comments" to the Proposed Decision: (refer to page 4)
SJWC’s most recent annual report4 with the Commission, on pages 8 and 9, indicates that SJWC earned an actual return on equity in 2013 of 8.14%. Since the PD increases rates by amounts designed to increase revenue by $22,063,000 in 2013 (a year now concluded—in which no new expenses or capital costs will be incurred) an additional $22,063,000 of revenue translates into additional income of approximately $13,000,000, after taxes, and an effective return on equity of 12.16%. 
The Commission’s PD implicitly endorses a return on equity of 12.16% for SJWC, and the PD should provide an explanation on how such implicit endorsement reconciles with SJWC’s most recent cost of capital decision. In that decision, the Commission expressed concern that the settled 9.99% return on equity “may be somewhat excessive.  
 If the Commission is not prepared to implicitly endorse a return on equity greater than 12% for a regulated monopoly, the PD should consider further adoption of ORA’s recommendations contained within the evidentiary record. 


Please send email, make your opinion heard!

 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 the simple fact that we don't know how much were going to pay monthly, to SJWC, for our water and we're not sure CPUC knows! and they plan to vote in four days.

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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