Commissioners Also Approve Recovery of $2.9 Million in Drought Costs from 2014 and 2015
At its meeting today, the California Public Utilities Commission (Commission) issued a decision on Cal Water’s 2015 General Rate Case, marking the end of an extensive, 18-month review of the utility’s rates, water system improvement plans, and costs.
Cal Water is the largest subsidiary of California Water Service Group. The Commission is the governmental body responsible for providing independent oversight and setting rates that reflect that actual costs of providing water service.
The Commission’s decision authorizes Cal Water to invest $658.8 million in water system improvements throughout California over the three-year period of 2016-2018 in order to continue to provide safe and reliable water to its customers. This figure includes $197.3 million of water system infrastructure improvements that will be subject to the Commission’s advice letter procedure.
The Commission’s decision, which adopts the proposed decision issued by the presiding Administrative Law Judge in November 2016, authorizes Cal Water to increase gross revenue by approximately $45.0 million in 2017, $17.2 million in 2018, $16.3 million in 2019, and up to $30.0 million upon completion and approval of the company’s advice letter projects. The 2018 and 2019 revenue increases are subject to the Commission’s earning test protocol.
The 2017 increase equates to an approximate 7.5% revenue increase overall; however, rate increases vary by service area. The 2017 increases become effective on January 1.
The Commission also approved a separate resolution authorizing Cal Water to recover $2.9 million in drought expenses from 2014 and 2015 through surcharges on customers’ bills.
“We are committed to keeping customers’ rates as affordable as possible while making the water system improvements necessary to ensure that the water we provide is reliable and safe. The Commission shares this commitment, as evidenced by its lengthy and thorough review process,” said Martin A. Kropelnicki, President and Chief Executive Officer.