Cal Water applies for another big rate increase


LUCERNE – California Water Service (CWS), which owns the Lucerne water district as part of its Redwood Valley District, has filed an application with the California Public Utilities Commission (CPUC) for a 21.3 percent rate increase, to become effective on July 1, 2008 or later, and a 3.4-percent increase the following year.

In its announcement of the application, which covers several other districts, the company said that for the average residential customer using 7 Ccf (700 cubic feet), or 5,236 gallons, of water per month, the monthly water bill would be $14.31 (48 cents per day) higher the first year and $2.76 (9 cents per day) higher the following year.

The application is for review of CWS centralized services costs, which were last reviewed in 2004. The company said costs for centralized services provided to all districts have increased, including those for water quality testing, engineering, maintenance, information systems, accounting, and conservation

programming. After the CPUC reviews these costs, Cal Water will be allowed to allocate them proportionally to all districts.

The CPUC recently adopted a streamlined processing plan to review Cal Water’s entire operations starting in 2009. The current application is an interim request to transition to the new schedule.

Among increased costs the company hopes to cover with the new rates are: Increased allocated company benefits costs for health care, pension, and retiree health care,$25.5 million; increased other general expenses, $8.3 million, and increased allocated general payroll expense, $8.3 million.

Lucerne Community Water Organization (LCWO), which intervened in the company's last rate increase request, is reviewing the current application. At its monthly meeting Thursday, July 12, LCWO made no decision on whether to intervene in the current request. Scheduling decisions made on Thursday by an administrative law judge for the CPUC are not yet available. LCWO's next meeting is scheduled for Thursday, August 9, 7 p.m. at the Lucerne Alpine Senior Center,Country Club Drive at 10th Ave.

The company's proposed schedule would open settlement negotiations on December 26, 2007, with hearings before the CPUC in San Francisco from January 11 through 15, 2008.

In an apparent effort to avoid the kind of public outcry which occurred in Lucerne in 2005 when CWS announced its request for a 273-percent rate increase, the company is asking that some increases be deferred and recovered subsequently.

It requests “authority to institute a rate deferral with subsequent recovery for the Salinas and Visalia districts to avoid rate shock issues associated with requested large percentage increases. Applicant requests recovery of $4,856,600 deferred from rates in Salinas by instituting a $0.126 surcharge on all water sold for a period of sixty months. Applicant requests recovery of $8,078,600 deferred from rates in Visalia by instituting a $0.111 surcharge on all water sold (and an equivalent flat rate surcharge) for a period of sixty months.”

The rate increases proposed in other districts covered by this application are: