California Water Service Company GRC (A.24-07-003)

BACKGROUND

All investor-owned utilities must obtain approval from the California Public Utilities Commission (CPUC) of their budgeted expenses and investments before utilities are able to include those costs in rates charged to customers.  This is done primarily through a General Rate Case (GRC) application to the CPUC to justify a proposed budget.

On July 8, 2024, California Water Service Company (Cal Water) submitted its GRC application to increase customer rates starting in 2026. The company is seeking to raise customer rates for water service by more than 30% over the three-year GRC period. It is important to note that Cal Water chose not to include extensive new water treatment investments required to comply with federal standards for per- and polyfluoroalkyl substances (PFAS) in its application. These costs will increase customer bills above and beyond the rate changes approved in this GRC by an additional 25% over the same period.

PUBLIC ADVOCATES OFFICE’S POSITION

The following table compares Cal Water's proposed and the Public Advocates Office's recommended average system rate changes.

The Public Advocates Office recommends a total revenue requirement of $816 million in 2026, $148 million less than Cal Water’s requested revenue requirement of $964 million in its application. These recommendations provide a reasonable level of ratepayer funding for Cal Water to maintain safe and reliable service levels.  In addition to recommending decreases in the average system rate for water services, the Public Advocates Office also made the following recommendations to the CPUC:

• The ratemaking process should be transparent to decision-makers and ratepayers and encourage utilities to operate efficiently and within a reasonable budget.
• As a substitute for competition, the CPUC must ensure that Cal Water does not abuse its position as a natural monopoly.
• The CPUC should limit alternative ratemaking mechanisms that result in surcharges on customers’ bills.

Download:

The Public Advocates Offices' Protest

Testimony and Reports:

• A2407003 Public Advocates Office Executive Summary and Results of Operations Table Scher Nasserie
• A2407003 Public Advocates Office Report and Recommendations on Plant for Bakersfield Kern River Vall
• A2407003 Public Advocates Office Report on Administrative General Expenses SR 7 Keowen
• A2407003 Public Advocates Office Report on Balancing and Memorandum Accounts SR 8 9 and 10 Evans
• A2407003 Public Advocates Office Report on Customer Service ESJ Plan Plant Chico Oroville and Multip
• A2407003 Public Advocates Office Report on ELA LAR SBR Common Plant and SR11 Sorensen
• A2407003 Public Advocates Office Report on Percentage Cost Adders PUBLIC Ibrahim
• A2407003 Public Advocates Office Report on Plant for Bayshore PUBLIC Menda
• A2407003 Public Advocates Office Report on Production Operations and Maintenance Expenses and SR 3
• A2407003 Public Advocates Office Report on Sales ForecastConservation BudgetsRate Design and SRs 1 2

Additional information regarding this proceeding can be obtained from the CPUC’s Proceeding Details.