LUCERNE, Calif. – On Thursday the California Public Utilities Commission approved a proposed decision that will raise water rates in Lucerne and other coverage areas throughout the state.

The general rate case decision will allow the corporation to raise rates in its 24 California districts. That will add $25.44 million to annual gross revenues beginning Jan. 1, 2011, and an additional $8 million in rate relief that may be obtained after completion of certain capital projects, according to a statement from Cal Water.

The document included a settlement between Cal Water and the CPUC's Division of Ratepayer Advocates that also allows Cal Water to file for smaller increases in the second and third years of the three-year rate case cycle, 2012 and 2013, respectively.

“We believe the decision is balanced and will help ensure that we have adequate resources to continue to provide a reliable supply of high-quality water while providing a reasonable return to stockholders for capital they invest in our water systems,” said Cal Water President and Chief Executive Officer Peter C. Nelson.

Cal Water owns the water system in the Northshore town of Lucerne, which is included in the company's Redwood Valley District. The company previously reported it has 1,279 customers in Lucerne.

The proposed decision stated that Cal Water requested a revenue requirement increase of $683,000 or 54.9 percent for 2011, $135,000 or 7.0 percent for 2012, and $135,000 or 6.6 percent for 2013, for the Redwood Valley District.

The authorized increase for the district will be $516,600 or 41.6 percent for 2011, $39,600 or 2.2 percent for 2012 and $39,200 or 2.2 percent for 2013.

Residential customers with an average annual usage of 15 cubic fee per month can expect their bills to increase by 41.6 percent in 2011, according to the document.

As part of the settlement, Cal Water is allowed to make water main replacements.

Redwood Valley District Manager Gay Guidotti said Thursday that Cal Water had asked for permission for three water main replacement projects in Lucerne, and was approved for two.

One of those – on First Avenue – was just completed, she said.

The second, which is supposed to take place next year, will be on Country Club Drive, between 13^th and 17^th avenues, she said.

Guidotti said the third project – which it was agreed would be put off for a few years – would tie in the other end of Country Club Drive, crossing the creek and tying into Foothill Drive. She said that is part of finishing off a water main section on First Avenue.

The CPUC's Rate Case Plan requires utilities like Cal Water to file for a general rate case every three years.

The company reported that its next general rate case is scheduled to be filed in July of 2012, with rates effective in January 2014.

Nelson said the company recognizes that some of it customers are struggling in the tough economy, so they provide a range of conservation programs and a low-income rate assistance program. He said the company continues to focus on operational efficiencies in an effort to minimize rate increases.

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