Great Oaks Water Company GRC (A.24-07-001)

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 1, 2024, Great Oaks Water Company (Great Oaks) submitted its GRC application to increase customer rates starting in 2025/26. Great Oaks requested to increase rates charged for water service by $1,669,527 or 6.2% in 2025/2026. The Company is seeking approval to raise its average system rates for water service by approximately 22% over the next three years. On August 8, 2024, the Public Advocates Office protested Great Oaks' application and provided its report and recommendations on November 12, 2024. Cal Advocates report is based upon its independent analysis of Great Oaks' GRC application.

PUBLIC ADVOCATES OFFICE’S POSITION

The following table compares Great Oaks' Revenue at Present Rates and Proposed Rates vs Public Advocates Office’ Recommendation.

		Great Oaks Water Company’s Request		Public Advocates Office’s Recommendation
Fiscal Year	Revenues at Present Rates	Revenue Increase	Percentage Increase	Revenue Increase	Percentage Increase
2025/2026	$26,829,983	$28,396,390	5.84%	$22,355,541	-20.35%
2026/2027	$28,396,390	$30,548,852	7.58%	$24,073,347	7.68%
2027/2028	$30,548,852	$32,975,701	7.94%	$26,067,811	8.28%

Great Oaks does not provide revenues at present rates in its application and used previous-year revenues to calculate the increase to the revenue requirement. The Public Advocates Office received the revenues at present rates through the discovery process. Our office recommends the CPUC adopt a total revenue requirement decrease of 20.35% for 2025/26 instead of Great Oaks Water Company’s requested increase of 5.84%. These recommendations provide a reasonable level of ratepayer funding for Great Oaks 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 Great Oaks does not abuse its position as a natural monopoly.
The CPUC should limit alternative ratemaking mechanisms that result in surcharges on customers’ bills.

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The Public Advocates Offices' Protest

Testimony and Reports: