Resolution W-4230 November 2, 2000
OVWC/DR AL/DRP/EYM:jrb
PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
WATER DIVISION RESOLUTION W-4230
Water Advisory Branch November 2, 2000
RESOLUTION
(RES. W-4230), OWENS VALLEY WATER CO. , INC. (OVWC). ORDER AUTHORIZING A GENERAL INCREASE IN RATES PRODUCING $12,714 OR 42.12% ADDITIONAL ANNUAL REVENUE.
By Draft Advice Letter Accepted on June 30, 2000
Summary
This Resolution grants an increase in gross annual revenue of $12,714, or 42.12%, which is estimated to provide earnings based on an operating ratio providing a margin of 13.75% over expenses.
Background
OVWC provides water utility service to 111 residential flat rate customers in an unincorporated area of Inyo County adjacent to the City of Bishop. Resolution No. W-3539, dated February 6, 1991, approved OVWC's present rates.
Notice
On July 1, 2000, OVWC mailed a notice to all customers advising of the proposed increase in rates and of a public meeting scheduled for the evening of July 12, 2000, at Our Lady of Perpetual Help Church, in Bishop.
Protests
Branch has not received any response to the notice. At the public meeting, attended by 15 people, a member of the Water Advisory Branch (Branch) described how rates are set. A consultant explained why OVWC needed an increase in rates and its owner answered questions and explained the system's operation.
Customers were generally satisfied with the service. They did, however, have certain specific concerns: sand in the water, low pressure, leaking fire hydrants, and lack of notification when service is interrupted for maintenance. OVWC explained that it had submitted an application for a loan under the State Revolving Fund program for the installation of apparatus to remove sand. It also states that it would call its maintenance contractor about repairing the items noted and would review with him procedures notifying when service would be interrupted.
Discussion
OVWC's draft advice letter requested a 43.42% increase in rates. The Branch made an independent analysis of OVWC's summary of earnings and issued its report on September 11, 2000. Appendix A shows OVWC's and the Branch's estimates of the summaries of earnings at present, requested, and recommended rates for test year 2000. Because of OVWC's low ratebase, it requested earnings are based on an operating ratio of 13.75% added to expenses. The 13.75% margin requested is within the range recommended for rate of return on ratebase recommended by the Audit and Compliance Branch of the Water Division. Decision No. 92-03-093 requires Branch to calculate rates using both a return on ratebase and operating ratio method for Class C and Class D water companies and to recommend the rate method that produces the higher result. The Branch agrees that the operating ratio method for OVWC yields the greater revenue. OVWC has indicated that it agrees with Branch's findings in all areas of expense and operating ratio percentage.
There are items in OVWC's tariffs, however, that are missing or obsolete and should be brought up to date. They are Table of Contents; Schedule LC, Late Payment Charge; Rule 5, Special Information Required on Forms; Rule 7, Deposits; Rule 8, Notices; Rule 9, Rendering and Payment of Bills; Rule 10, Disputed Bills; Rule 11, Discontinuance and Restoration of Service; Rule 15, Main Extensions; Rule 16, Service Connections, Meters, and Customer's Facilities; Rule 20, Water Conservation; Rule 21, Fire Protection; Sample Form 2, Customer's Deposit Receipt; and Sample Form 3, Bill for Service.
Comments
The County of Inyo Environmental Health Services in Bishop reports that OVWC's water meets all primary and secondary drinking water standards currently in effect.
A monthly bill for a customer on a residential flat rate service for a single-family residence would increase from $22.50 to $32.25.
Findings
1. The Branch's recommended Summary of Earnings (Appendix A) are reasonable and should be adopted.
2. The rates recommended by the Branch (Appendix B) are reasonable and should be authorized.
3. The quantities (Appendix D) used to develop the Branch's recommendations are reasonable and should be adopted.
4. The rate increase proposed by the Branch is justified; the resulting rates are just and reasonable.
5. OVWC should be required to revise the following outdated tariff schedules: Table of Contents; Schedule LC, Late Payment Charge; Rule 5, Special Information Required on Forms; Rule 7, Deposits; Rule 8, Notices; Rule 9, Rendering and Payment of Bills; Rule 10, Disputed Bills; Rule 11, Discontinuance and Restoration of Service; Rule 15, Main Extensions; Rule 16, Service Connections, Meters, and Customer's Facilities; Rule 20, Water Conservation; Rule 21, Fire Protection; Sample Form 2, Customer's Deposit Receipt; and Sample Form 3, Bill for Service.
Therefore it is ordered that:
1. The Owens Valley Water Company is granted authority under Section 454 of the Public Utilities Code to file an advice letter incorporating the Summary of Earnings and revised rate schedules attached to this resolution as Appendices A and B, respectively, and concurrently to cancel its presently effective rate Schedules Nos. 1, General Metered Service, 2R, Residential Flat Rate Service, and 4, Private Fire Protection Service. Its filing shall comply with General Order 96-A.
2. The Owens Valley Water Company shall file the following updated tariff schedules: Table of Contents; Schedule LC, Late Payment Charge; Rule 5, Special Information Required on Forms; Rule 7, Deposits; Rule 8, Notices; Rule 9, Rendering and Payment of Bills; Rule 10, Disputed Bills; Rule 11, Discontinuance and Restoration of Service; Rule 15, Main Extensions; Rule 16, Service Connections, Meters, and Customer's Facilities; Rule 20, Water Conservation; Rule 21, Fire Protection; Sample Form 2, Customer's Deposit Receipt; and Sample Form 3, Bill for Service. Its filing shall comply with General Order 96-A.
3. The effective date of the revised schedules shall be five days after the date of filing.
4. This resolution is effective today.
I certify that the foregoing resolution was duly introduced, passed and adopted at a conference of the Public Utilities Commission of the State of California held on November 2, 2000; the following Commissioners voting favorably thereon:
______
WESLEY M. FRANKLIN
Executive Director
LORETTA M. LYNCH
President
HENRY M. DUQUE
JOSIAH L. NEEPER
RICHARD A. BILAS
CARL W. WOOD
Commissioners
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Resolution W-4230 November 2, 2000
OVWC/DR AL/DRP/EYM:jrb
APPENDIX A
Owens Valley Water Co.
Summary of Earnings
Utility Estimated / Branch EstimatedPresent / Requested / Present / Requested / Adopted
Rates / Rates / Rates / Rates / Rates
OPERATING REVENUES
Flat Rate / $ 30,186 / $ 43,292 / $ 29,970 / $ 42,983 / $ 42,900
Metered Rate / - / - / - / - / -
Fire Protection / - / - / - / - / -
TOTAL REVENUE / $ 30,186 / $ 43,292 / $ 29,970 / $ 42,983 / $ 42,900
OPERATING EXPENSES
Purchased Water / $ - / $ - / $ - / $ - / $ -
Power / 4,696 / 4,690 / 4,690 / 4,690 / 4,690
Other Vol. Related Exp / - / - / - / - / -
Employee Labor-Contract / - / 3,000 / 3,000 / 3,000 / 3,000
Materials / - / - / - / - / -
Contract Work-Others / 4,616 / 7,160 / 7,160 / 7,160 / 7,160
Water Testing / 2,958 / 1,065 / 1,065 / 1,065 / 1,065
Inyo EHD Fees / - / 450 / 450 / 450 / 450
Transportation Exp / - / - / - / - / -
Other Plant Maint. / - / - / - / - / -
Office Salaries-Contract / - / 4,200 / 4,200 / 4,200 / 4,200
Management Salaries / 6,000 / 6,000 / 6,000 / 6,000 / 6,000
Employee Pens & Benefit / - / - / - / - / -
Uncollectibles / - / - / - / - / -
Office Services & Rent / 7,210 / 2,400 / 2,400 / 2,400 / 2,400
Office Supplies / 459 / 1,450 / 1,450 / 1,450 / 1,450
Professional Services / 2,581 / 1,200 / 1,200 / 1,200 / 1,200
Insurance / - / 1,500 / 1,500 / 1,500 / 1,500
Regulatory Expenses / - / 610 / 610 / 610 / 610
General Expenses / 645 / 45 / 45 / 45 / 45
Subtotal / $ 29,165 / $ 33,770 / $ 33,770 / $ 33,770 / $ 33,770
Franchise Tax / $ - / $ - / $ - / $ - / $ -
Depreciation Exp / 1,554 / 1,023 / 1,023 / 1,023 / 1,023
Property Taxes / 202 / 203 / 203 / 203 / 203
Payroll Tax / - / 1,577 / 1,577 / 1,577 / 1,577
Income Taxes / 800 / 1,690 / - / - / -
Total Deductions / $ 31,721 / $ 38,263 / $ 36,573 / $ 36,573 / $ 36,573
NET REVENUE / $ (1,535) / $ 5,029 / $ (6,603) / $ 6,410 / $ 6,327
Avg. Plant / $ 53,688 / $ 49,484 / $ 49,484 / $ 49,484 / $ 49,484
Avg. Accum. Deprec / 33,155 / 28,940 / 28,940 / 28,940 / 28,940
Net Plant / 20,533 / 20,544 / 20,544 / 20,544 / 20,544
Less: Advances / - / - / - / - / -
Contributions Bal. / - / - / - / - / -
Plus: Working Cash / - / - / - / - / -
Mat'l & Supplies / - / - / - / - / -
Rate Base / $ 20,533 / $ 20,544 / $ 20,544 / $ 20,544 / $ 20,544
Rate of Return / Not Calculated
Operating Ratio / (loss) / 13.75% / (loss) / 23.36% / 13.75%
APPENDIX B
Page 1 of 4
Owens Valley Water Co. Inc.
Schedule No. 1
GENERAL METERED SERVICE
APPLICABILITY
Applicable to all metered water service.
TERRITORY
Lazy A Estates and vicinity, adjacent to Highway 395, located approximately one and one-half miles north of Bishop, Inyo County.
RATES
Quantity Rate:
All water used per 100 cubic feet ...... $ 0.40 (R)
Per Meter
Service Charge: Per Month
For 5/8 x 3/4 inch meter ...... $ 27.50 (I)
For 3/4 inch meter ...... 28.35 |
For 1 inch meter ...... 31.65 |
For 1-1/2 inch meter ...... 35.80 (I)
The Service Charge is a readiness to serve charge which is applicable to all metered service and to which is added the charge for water used computed at the Quantity Rate.
SPECIAL CONDITION
(D)
1. All bills are subject to the reimbursement fee set forth in Schedule No. UF (L)
APPENDIX B
Page 2 of 4
Owens Valley Water Co. Inc.
Schedule No. 2R
RESIDENTIAL FLAT RATE SERVICE
APPLICABILITY
Applicable to all flat rate residential water service.
TERRITORY
Lazy A Estates and vicinity, adjacent to Highway 395, located approximately one and one-half miles north of Bishop, Inyo County.
RATES
Per Service Connection
Per Month
For a single-family residential unit
including premises $ 32.25 (I)
For each additional single-family
residential unit, on the same premises
and served from the same service
connection 24.75 (I)
SPECIAL CONDITIONS
(D)
- The above flat rates apply to service connections not larger than one (L)
inch in diameter. | - All service not covered by the above classification shall be furnished |
only on a metered basis. | - A meter may be installed at the option of the utility in which event |
service thereafter will be furnished under Schedule No. 1, General |
Metered Service. | - All bills are subject to the reimbursement fee set forth in Schedule |
No. UF. (L)
APPENDIX B
Page 3 of 4
Owens Valley Water Co. Inc.
Schedule No. 4
PRIVATE FIRE PROTECTION SERVICE
APPLICABILITY
Applicable to all water service furnished to privately owned fire protection systems.
TERRITORY
Lazy A Estates and vicinity, adjacent to Highway 395, located approximately one and one-half miles north of Bishop, Inyo.
RATE
Per Month
For each inch of diameter of service connection $ 2.85 (I)
SPECIAL CONDITIONS
- The fire protection service connection shall be installed by the utility and the cost paid by the applicant. Such payment shall not be subject to refund.
- The minimum diameter for fire protection service shall be three inches, and the maximum diameter shall be not more than the diameter of the main to which the service is connected.
- If a distribution main of adequate size to serve a private fire protection system in addition to all other normal service does not exist in the street or alley adjacent to the premises to be served, then a service main from the nearest existing main of adequate capacity shall be installed by the utility and the cost paid by the applicant. Such payment shall not be subject to refund.
APPENDIX B
Page 4 of 4
Owens Valley Water Co. Inc.
Schedule No. 4
(continued)
PRIVATE FIRE PROTECTION SERVICE
SPECIAL CONDITIONS (continued)
- Service hereunder is for private fire protection systems to which no connections for other than fire protection purposes are allowed and which are regularly inspected by the underwriters having jurisdiction, are installed according to specifications of the utility, and are maintained to the satisfaction of the utility. The utility may install the standard detector type meter approved by the Board of Fire Underwriters for protection against theft, leakage or waste of water and the cost paid by the applicant. Such payment shall not be subject to refund.
- The utility undertakes to supply only such water at such pressure as may be available at any time through the normal operation of its system.
(End of Appendix B)
APPENDIX C
Owens Valley Water Co. Inc.
COMPARISON OF RATES
A comparison of the present and recommended rates is shown below:
Residential Flat Rate Service:
Per Service Connection Per Month
Present Recommended Percent