California Public Utilities Commission Issues Proposed Decision On Cal Water’s 2015 General Rate Case

Commission Will Also Consider a Resolution Approving Recovery of $2.9 Million in Drought Costs from 2014 and 2015; Update to Travis Air Force Base Water Service Contract Status

Late yesterday, an Administrative Law Judge at the California Public Utilities Commission (Commission) released a proposed decision adopting the agreed-upon settlement on the 2015 General Rate Case application filed by Cal Water, the largest subsidiary of California Water Service Group.

If the Commission approves the proposed decision, which adopts the settlement agreement reached in September between Cal Water, the Commission’s Office of Ratepayer Advocates, and other parties to the case, Cal Water would be authorized to invest $658.8 million in districts throughout California over the three-year period of 2016-2018 in order to continue to provide safe and reliable water to its customers. Included in this figure are $197.3 million of water system infrastructure improvements that would be recovered through the Commission’s advice letter procedure when qualified projects are completed. The decision would authorize 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 2017 increase equates to an approximate 7.5% revenue increase overall; however, rate increases would vary by service area.

The Commission is expected to consider the proposed decision at its meeting on December 15, 2016. If approved at that meeting, final rates would become effective January 1, 2017.

At the same meeting, the Commission will consider a separate resolution authorizing Cal Water to recover $2.9 million in statewide drought expenses incurred in 2014 and 2015 through surcharges on customers’ bills over the next 12 months. Surcharges, which would range from 1.8 to 2.3 cents per hundred-cubic-feet of water, would vary by district.

Finally, on November 10, 2016, Cal Water was informed that the Defense Logistics Agency (DLA) plans to reevaluate the final proposals submitted for the contract to operate the water system for the Travis Air Force Base (Travis), in response to another bidder’s protest. The DLA, after its re-review of the proposals, is expected to make its selection on the service provider for Travis utilizing criteria it included in the contract solicitation.